PLANNING - CONCEPT,

OBJECTIVES, STEPS
INVOLVED IN PLANNING
PROCESS
INTRODUCTION
• Planning is the basic function of management. Planning is done to achieve the
objectives of the organisation. Without planning no business can function
smoothly. Whenever there is a goal to achieve, planning is required otherwise the
activities will go haywire. Plans are set within a timeframe and they set out how
various resources of the organisation will work towards achieving the objectives.
Planning forms that part of management which lays down the objectives and
various activities to be performed for the attainment of these objectives. It helps in
deciding in advance, What is to be done, How it is to be done, When it is to be done,
and By whom it is to be done? Answering all these things is called planning. It
bridges the gap between where we are and where we want to go. It can also be said
that plans are related to creativity.
• The other functions of management like organising, staffing, directing & controlling
depends on planning. Without planning these all are meaningless. Planning
provides direction to all managerial functions.
• Definitions of planning: Some important definitions of planning as given by various
experts are:
• According to M.E Harley,” Planning is deciding in advance what is to be done. It
involves the selection of objectives, Policies, Procedures and Programmes from
among alternatives.”
• According to Koontz and O’ Donnell,” Planning is deciding in advance what to do,
how to do it, when to do it and who is to do it.” Planning bridges the gap between
where we are and where we want to go. It makes possible things to occur which
would not otherwise occur”.
NATURE OF PLANNING
• The planning has following aspects:
• Contribution to purpose: – Planning helps in the achievement of enterprise goals and objectives.
Plans focus on purposes. Planning identifies irrelevant actions and helps in determining actions
which will lead toward the accomplishment of objectives and thus reduces wastages as well.
Planning focus on desired ends. Without plans, actions become merely random activity, leading
to chaos.
• (a) Primacy of planning:- Planning is the first function of management. All other functions like
organising, staffing, leading and controlling follow planning. Without planning, other function of
management cannot be completed. Apart from being the first function, planning is required
continuously for performance of every function of management for example, organisation
structure requires planning , so does staffing. Similarly, planning is needed in case of leading and
controlling as well.
• (b) Pervasive: Planning is not the job of high-level managers only but planning is a function of all
managers. However, nature of planning varies with the hierarchical levels. Higher level managers
formulate strategic plans while lower level managers are engaged in day to day planning within
the framework of top level plans. Also, higher level managers spend more time in planning as
compared to the middle level or lower level managers. It is therefore, clear that all managers
working in an enterprise are involved in planning but the breath of planning vary with the level of
authority.
• (c) Planning considers limiting factors: – Planning should be realistic. Planning should be done
keeping in mind the available resources. Unrealistic plans can never achieve the desired result. If
a manager ignores the limiting resources, planning is bound to fail. For example, if the raw
material is scarce in supply, then the raw material will be a limiting factor. Keeping in mind the
availability of raw material, production planning and sales target should be decided.
• (d) Efficiency of plans: Plans must be efficient. Efficient plans contribute to purpose and
objectives by offsetting the costs and other unsought consequences. A plan can contribute to
the attainment of objectives, but if it does so at too high or unnecessarily high costs, it is not
efficient. It should aim at eliminating all wastages. Efficiency implies the normal ratio of input to
output.
IMPORTANCE Of PLANING
• Planning function has four important goals: To offset uncertainty and
changes, focus attention on objectives, gain economical operation and to
facilitate control. These have been discussed in detail below:
• (a) To offset uncertainty and changes: – Planning is always made in respect
to future. Future is uncertain. Planning assumes more importance in wake of
increasing size and complexities of business organizations. Business
environment is constantly changing, new techniques are being deployed.
Buying behaviour of customers is changing. So in all these cases planning is
important to offset the risks of changes and uncertainty. Planning helps us to
anticipate changes and plan actions accordingly.
• (b) To focus attention on objectives: – Planning helps in defining the
objectives of the organization clearly. Its directs all efforts towards
achievement of the specified goals. In this way planning contributes to the
attainment of the objectives of the organizations by eliminating unnecessary
actions and focussing on the desired ends .
• (c) Minimise cost – Planning minimizes costs because by emphasising on
efficient operations. It clearly specifies what is required to done and directs
the efforts toward the attainment of the goals. It coordinates the efforts of
the entire organisation by clearly specifying the goals which eliminates
wastages.
• (d) To facilitate control:-Planning facilitates the function of controlling and
therefore it is considered as the foundation of control. Planning prescribes
standards with respect to work, time and cost. By comparing the actual work
performance with the standards laid down, deviations are identified and in
case the work performance is not as desired, the person concerned is held
responsible.
PRINCIPLES OF PLANNING
• During the last few years many principles of planning have emerged which make
planning more effective and also serve as a guide to managers. Following
principles of planning have special significance:-
• (1) Principle of time: – Planning is done for the achievement of the objectives of
the organization. According to this principle, planning should be done for particular
period of time. Plans should specify the time frame within which the task should be
accomplished otherwise the purpose of planning cannot be achieved.
• (2) Principle of flexibility: – Plans relate to future. Planning should be flexible to
incorporate necessary changes as and when desired as plans are made by
anticipating the possible future events. Estimates about future can undergo some
changes necessitating changes in the plans. Rigid plans make entire planning
exercise ineffective.
• (3) Principle of policy framework: Planning is effective only when the planners
understand the basic policies which influence determination of the plans of the
organization. The clarity and soundness of the policies make planning strong and
effective.
• (4) Principle of Limiting Factor: –According to this principle, planning should be
formulated keeping in mind the limiting factors since feasible plans cannot be
formulated without keeping in mind the available resources. The plans formulated
by ignoring the limiting factors are always unsuccessful.
• (5) Principle of selection of the best alternative: – There can be many alternatives
to complete any activity. All alternatives should be deeply evaluated before
selecting the best one because effective planning is the backbone for achieving the
end results. The best alternative will enable to achieve the objectives of the
organization at the minimum cost and in the most effective manner.
FACTORS THAT MAY MAKE
PLANNING EFFECTIVE
• It is important function of management and sufficient attention to it is necessary. The question
that needs consideration is not whether the plans should be made or not but how well or
effective they should be made. Following factors helps to make planning more effective.
• (a) Giving more consideration to obtaining reliable facts: – Correct forecasting is the foundation
of the successful planning. The correctness or otherwise of the plan depends on the adequacy
and truth of those facts on the basis of which forecast is made. Hence, the planner must
ensure the validity of the collected facts otherwise entire resources and efforts on planning
exercise will get wasted.
• (b) Ensuring employees’ participation in planning: Plans should not be imposed. Rather, they
should be formulated after consulting all the persons concerned as far as possible. When plans
are formulated with the participation and cooperation of all, they will be more attached to them
and make all efforts to implement them. Apart from this, even after the plans have been
implemented and there have been some suggestions from the persons concerned, they should
be kept reserved, and as the opportunity arises they should be made a part of the pre
determined plans.
• (c) Studying deeply the external environment: – All those factors which are beyond the control
of the planners must be studied deeply. External environment includes the policies of the
government, political changes, competition, change in the consumers’ taste etc. Statements
issued by government from time to time and political situations should be carefully studied.
Market survey should be conducted to know the taste of consumers.
• (d) Adopting the regular training system: – The lack of adequate mental ability and resistance
to changes in plans are the problems which can be overcome by giving regular training to the
employees. They should be made to learn about the importance planning, and should be made
aware of the art of planning, its implementation and adapting to changes as per the need of the
hour.
• (e) Making plans simple and practical: – Plans should be simple so that any individual with a
general ability can easily understand them. Apart from being simple, plans should be practical
also. In other words, their objectives should not be so high that they are not within the realm of
being realised. Plans should be formulated keeping in view the available resources of the
organization.
PLANING
PROCESS OR
STEPS IN
PLANNING
STEPS IN PLANNING
• The planning process consists of the following steps:
• (1) Being aware of opportunity:
• Awareness of an opportunity is the real starting point for planning. It
includes identifying all possible future opportunities and then analysing
them in the light of the organisation’s strengths & weaknesses. Awareness
of the opportunity in terms of organisational capabilities helps in setting
realistic objectives. So, as a first step, planning requires realistic diagnosis
of the opportunity situation.
• (2) Establishing objectives:
• Opportunities provide the path for setting objectives. Objectives specify the
end points of what is to be done, where the primary emphasis is to be
placed and what is to be accomplished by the network of strategies,
policies ,procedures, rules, budgets and programs. At first overall objectives
of the organization are determined and based on that, the objectives of
each department are laid down. Objectives should be clear, definite and
simple. The objectives should be communicated to everyone in the
organisation so that they fully contribute to the successful attainment of
objectives.
• (3) Considering the planning premises:
• Planning premises is the boundary under which plans will operate. This
boundary is determined by both anticipated internal and external
environment. These factors affect the practicality of planning and need to
be forecasted. The accuracy with which these factors are forecasted
determines the success of planning.
• (4) Identifying the alternative courses: –
• There are many methods of doing a work. On the basis of objectives of the organisation and the boundaries
identified alternative courses of achieving the objectives are discovered. For example, if the objective is to
expand the organisation, it can be done by either expanding the existing business by adding a new product
line eg. if a company is engaged in producing only men’s products then it can start manufacturing women’s
products or by purchasing or taking over any other business. Keeping in mind the limiting factors all
alternative courses of action should be identified. More the alternatives, better it is as firm has many choices
out of which best option could be explored.
• There is other side of it as well. It is not as difficult to find out alternative courses as it is to reduce the list of
alternative courses. Limiting factor should be considering while finding out alternatives for example if finance
is limiting factor then while identifying alternatives availability of finance should be kept in mind.
• (5) Comparing the alternatives in the light of goals sought: –
• All those alternative courses which meet the expectations of the minimum preliminary criteria are selected for
intensive study. It will be seen as to what extent a particular alternative can help in the attainment of the
objectives of the organisation. Every alternative has merits and demerits. For example, one course may
appear to be the more profitable but require a large cash outlay and a slow payback, another may be less
profitable but involve less risk still another may better suit the company in long-range objectives. After
comparing all alternatives, the best alternative is selected.
• (6) Formulating Supportive plans:
• To give practical shape to the main plan, many subsidiary plans are needed. These subsidiary plans or sub
plans are not independent plans but only a reflection of the main plan. For example, different plans for the
purchase department, sales department, finance department, personnel department etc are prepared in light
of the objectives of the organisation.
• (7) Implementing the plans:
• After the main plan and the subsidiary plans are formulated, they remain to be implemented. Implementation
should be done carefully. Even the best plan will not achieve the objectives if badly implemented. For
successful implementation plans should be communicated to everyone in the organisation.
• (8) Reviewing plans:
• The process of planning does not end with the implementation of plans. It is of great importance that there is
a constant review of plans so as to ensure success in the uncertain future. The moment there appears to be
changes in the internal and external environment, plans should be moulded accordingly. In this way we can
say planning is a continuously moving process.
TYPES OF PLANS
• Plans can be classified on the basis of time
(long term and short term plans), on the basis
of level (upper level, middle level and lower
level plans) and on the basis of repetitiveness
(plans used only once and plans used many
times). But main organizational plans can be
categorized as under:-
• Those include plans that are used over and
over again because they focus on
organizational situations that occur repeatedly.
• 1. Standing Plans: Standing plans are used over a
long period of time , and can be altered as per the
change in circumstances.
• (a) The policy: – Policy is a standing plan that
furnishes broad guidelines for action which are
consistent with reaching organizational
objectives. For e.g policy for employee
interaction
• (b) Procedures: – Procedures are standing plans
that outline a series of related actions that must
be taken to accomplish a particular task. For ex.
Procedures for internal reporting.
• (c) Rules: – Rules designate specific required
action. A rule indicates what an organization
member should or should not do. For ex. No
smoking in the office or prescribing a dress code
• 2. Single used plans: Single used plans are
created to address short term challenges. They
are narrow in scope as compared to standing
plans.
• (a) Program: – Program is a single used plan
encompassing a range of projects. e.g Budget,
which is a statement that expresses the
expected results in numerical terms. It may be
referred to as ‘a numberized program’.
• (b) Project: A project is a single used plan
having less scope than a programme. e.g an
outline for an advertising campaign .
WHY DO PLANS FAIL?
• If managers know why plan fail, they can take steps to eliminate the
factors that cause failure and thereby increase the probability that their
plans will be successful. Plans fail when:-
• (1) Corporate planning is not integrated into the management system.
• (2) Lack of understanding of the different steps of planning process.
• (3) Lack of participation of managers at different levels in the
organization in planning activities.
• (4) Lack of coordination of different departments in planning and vesting
the Responsibility for planning to the planning department only.
• (5) Management expects that plans developed will be realized with little
effort.
• (6) Over ambitious planning. At the starting phase, too much is attempted
at once.
• (7) Faulty implementation of the plans.
• (8) Lack of understanding of the plans which may be due to poor
communication of the plans or because of failure to grasp the overall
planning process.
• (9) Financial projections are confused with planning.
• (10) Inadequate inputs are used for planning.
SUMMARY
• Planning is the process by which an individual or an organization
decide upon the future course of action.
• The purpose of every plan and derivative plans is to facilitate the
accomplishment of enterprise purpose and objectives
• Planning is the primary management function, but it is included in the
other managerial functions.
• The efficiency of a plan is measured by the amount it contributes to
purpose and objectives.
• There are many steps for developing any plan. They are:-
• Being aware of opportunity
• Establishing objectives
• Considering the planning premises
• Identifying the alternative courses
• Comparing the alternatives in the light of goals sought Formulating
Supportive plans
• Implementing the plans
• Reviewing plans
• Planning is a continuous process; it does not end. It goes on with
every step.
CONCLUSION
• In conclusion, planning is a critical aspect of
both organizational success and personal goal
achievement. The process of planning ensures
that goals are achieved efficiently by utilizing
available resources wisely, anticipating
potential risks, and making informed decisions.
By following the structured steps of the
planning process, individuals and organizations
can improve their effectiveness and achieve
long-term success.
REFERENCE
• References (for academic use)
• Koontz, H., & O'Donnell, C. (1976). Management:
A Systems and Contingency Analysis of
Managerial Functions. McGraw-Hill.
• Stoner, J. A. F., & Wankel, C. (1986).
Management. Prentice-Hall.
• Robinson, D. (1991). Strategic Planning: The
Competitive Edge. Oxford University Press.
• This outline can be expanded with additional
case studies, examples, and theoretical
frameworks depending on the assignment
requirements.