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Planning: Chapter-2

Planning involves looking ahead to establish goals and adjust present actions accordingly. It bridges gaps from the present to the future. Planning has several characteristics - it is primary, results-oriented, future-oriented, continuous, pervasive, interdependent, intellectual, and requires analysis of past, present and future. The main types of plans are long, medium, and short-range plans based on time, and company-wide, functional, and single-use plans based on scope. Objectives, policies, procedures, rules, and strategies are key standing or repeated use plans that guide managerial actions and decision-making.

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36 views

Planning: Chapter-2

Planning involves looking ahead to establish goals and adjust present actions accordingly. It bridges gaps from the present to the future. Planning has several characteristics - it is primary, results-oriented, future-oriented, continuous, pervasive, interdependent, intellectual, and requires analysis of past, present and future. The main types of plans are long, medium, and short-range plans based on time, and company-wide, functional, and single-use plans based on scope. Objectives, policies, procedures, rules, and strategies are key standing or repeated use plans that guide managerial actions and decision-making.

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umeshmalla2006
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CHAPTER-2

PLANNING

Definiton & Meaning of planning


George R. Terry, Planning is a method or a technique of
looking ahead a constructive reviewing of future needs so
that present actions can be adjusted in view of the
established goals.
Planning bridges the gaps from where we are to & where
we want to go.
In simple word planning is deciding in advance what to do,
how to do, when to do & who is to do it.

CHARACTERSTICS OF PLANNING:
1. Planning is primary function.
2. Planning is result oriented.
3. Planning is future oriented.
4. Planning is a continuous activity.
5. Planning is pervasive
6. Inter-dependent activity.
7. Intellectual process.
8. Planning requires past, present and future analysis.
9. Basis of control.
10. Flexible in nature.

advantages of planning
1.it offsets future uncertainty & change.
2.it tackles increasing complexity in modern business.
3.it helps in co-ordination.
4.it helps in exercising effective control.
5.it helps in the proper uitolisation of the company's resources.
6.it facilitates unity of action.
7.it helps in avoiding business failures.
8.focuses attention on organisation's goals.
9.improves competative strength.
10.improves adaptability.
11.guides decision making.

limitaions of planning.
1) Lack of Dependable Information.
2) Time Consuming & Expensive.
3) Internal Inflexibility.
4) Rigidity.
5) limited scope.

Types of plans,
1. on the basis of time.
a) long range plans.
b) medium range plans.
c) short range plans.
2. on the basis of scope:
a) company wise plan.
b) functional plan.
3. on the basis of repetitiveness of operation:
a) standingplans-objectives, policy, procedures, rules,strategiesetc.
b) single use plans- programmes,budgets.

1.standing or repeated use plans


a. objectives:
Objectives are the goals or targets what management wants to achieve.

characteristics of business objectives:


I.
II.
III.
IV.
V.
VI.
VII.

multiple in nature.
objectives have hierarchy.
objectives may be long range or short range.
objectives are interdepedent.
objectives are either tangible or intangible.
objectives have priority.
objectives some times clash with each other.

Requirements of sound objectives.


1.
2.
3.
4.
5.

objectives must be clear.


they must support one another.
they must be precise & measurable.
they should always remain valid.
they shoul encourage higher performance, yet be
realistic.
6. they must be balanced.

Advantages of objectives:
1.
2.
3.
4.
5.
6.
7.
8.

unified planning.
individual motivation.
co-ordination.
standards for control.
basis for decentralisation.
basis for planning.
eliminate haphazard action.
reduces misunderstaning & conflict.

b. POLICY:
a policy is a verbal, written or implied overall guide setting up
boundaries that supply the general limits & directions in which
managerial action will take place.
Features of a good policy:
i. it should help in achieving the business objectives.
ii. it should provide only a broad outline.
iii. they should not be mitually contradictory.
iv. they should be sound, logical, felxible.
v. they should reflect the internal & external business
environment.
vi. polices should be in writting.

c. Procedures:
a procedure is a series of related tasks that make up the chrono;ogical
sequence & the established way of performing the work to be
accomplished.
d. Rules:
a prescriptive directive to people on their conduct & action.
e. Method:
it is a prescribed process in which a particular operation of a task is to
be performed.
f. strategy:
it is the determination of the basic long term goals & objectives of an
enterprise & adoption of course of action & the allocation of resource to
carry out these goals.

Types of single use plans:


1. programes:
step by step approach to guide the action necessary to reach a
pre-determined goal.
characteristics of programme:
I. it is a single use but comprehensive plan.
II. lay down steps to accomplish the mission.
III. it is guided by the objective & strategies.
IV. it is time table for future action.
V. it involves an integrated & coordinated planning approach.

2. Budget:
it is a statement of expected results expressed in numerical
terms.
it may be prepared in terms of time , money, materials or other
units required to perform work & accomplish specific results.
3. schedule:
a proces of establishing time sequence for work to be done.

steps in planning or process of planning.


1. classifying the problems.
2. detrmining the objectives.
3. collecting complete information & data.
4. analysing & classifying the information.
5. establishing planning premises.
6. determining alternative plans.
7. selecting operating plan & preparign derivative plans.
8. arranging timing & sequence of operations.
9. securing participation of employees.
10.follow up of the proposed plam

Decision Making

Meaning & definition:


according to james stoner,
Decision making is the process of identfying & selecting a
course of action to slove a specific problem.
according to GR terry,
Decision making is the selection based on some criteria from
two or more possible alternatives.
Therefore decision making means choice of best solution
among various alternatives.

Characteristics of Decision-Making

Decision making implies choice.


Continuous activity/process.
Intellectual activity.
Based on reliable information/ feedback.
Goal oriented process.
A means and not the end.
Related to specific problem.
Time consuming activity.
Needs effective communication.
Pervasive process.

Decision-Making process

Types of decisions:
1. Programmed & non programed decisions:
A routine or repetitive decision that can be handled
by established business rules or procedures.
The Non-programmed decisions in management are
concerned with unique or unusual problems. They are
encountered in a very non-frequent manner.
2. Major & Minor decisions:
decisions involving huge amout of money and time are called
major decisions.
decisions involving small amount of money & time are called
minor decisions.

3. Strategic & Tactical decisions:


Decisions taken at top level,having long term implications. they
are related to growth, development & profitablity.
Decisions taken at lower level, having short term implications. they
are related to routine & repetitive problems.
4. individual & group decisions.
5. departmental, interdepartmental & enterprise decisions.

Importance of Decision Making

Better utilisation of resources


Business growth
Achieving objectives
Increases efficiency
Facilitates innovation
Motivates employees
Solving problems in management
Teamwork

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