CHAPTER 3

PLANNING
GROUP 1
 LESSON 1
DEFINITION AND NATURE OF
PLANNING
 LEARNING OBJECTIVES

•The learners shall be able to discuss

the nature of planning
 WHAT IS PLANNING?

• Planning is the first step of the function of management . It

consists of deciding in advance what has to be done, how and
whom is has to be done and how the results are to be
evaluated. A Plan is a present course of action to realize a
particular goal and objective. It is an intellectual process
described as thinking prior to doing
 NATURE OF PLANNING

• Planning is a complex, comprehensive intellectual

management process, focused on proper selection of goals
and objectives and developing a course of action on the tasks
and resources to be employed to achieve these goals and
objective for future organizational performance
 THE ESSENTIAL
CHARACTERISTICS OF
PLANNING
 WE HAVE 12 CHARACTERISTICS OF
PLANNING

1. Planning is crucial 7.Future is always full of

2. An intellectual process uncertainties
3. A continuous function 8.Better utilization of resources
4. Planning is flexible 9.Increases organizational
5. For all managerial functions effectiveness
6. Planning contributes to the 10.Reduce the cost of performance
objectives 11.Helps in coordination
12Delegation is facilitated
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PLANNING IS
CRUCIAL
- Planningis the most basic management
function with all other function of
management largely interconnected to it
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AN INTELLECTUAL
PROCESS
- Planning is a prudent choice of the proper
course of action from among alternatives.
It is a process where a number of steps are
to be taken to choose the best future course
of action
 A CONTINUOUS
FUNCTION
- Planning is a dynamic process that needs
frequent revisions owing to the changing
nature of the business environment
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PLANNING IS
FLEXIBLE
- In Planning, any one of the
available alternatives is selected,
though the best option is
implemented based on certain
assumptions
 FOR ALL
MANAGERIAL
FUNCTIONS
- In Planning is an all encompassing
function of management which is
present at all levels and all
departments of an organization
 PLANNING
CONTRIBUTES TO
THE OBJECTIVES
- A decisive, sound and efficient
planning process recognizes how and
when to tackle a problem that will
lead to he attainment of goals and
objective
 FUTURE IS ALWAYS
FULL OF
UNCERTAINTIES
- Planning helps in foreseeing
uncertainties in the business
organization which may be caused by
changes in technology, fashion and
taste of people, government rules and
regulations, among others
BETTER UTILIZATION
OF RESOURCES
- Planning makes useful and
appropriate use of organization
resources though identification of all
such available resources and make
optimal utilization of these resources.
 INCREASES
ORGANIZATIONAL
EFFECTIVENESS
- Effectives guarantees that the
organization is in the best position to
attain its goals and objective owing to
improved efficiency of the
organization via planning.
REDUCE THE COST OF
PERFORMANCE
- The choice of only one course of
action among the different courses of
action would yield the greatest
outcome at minimum cost due to
planning
 HELP IN
COORDINATION
- Various departments work based
with the general plans of the
organization which creates harmony
in the organization and avoid
duplication of efforts and conflict of
jurisdiction.
 DELEGATION IS
FACILITATED
- An excellent plan constantly makes
possible delegation of authority in a
better approach of subordinates
 IMPORTANCE OF PLANNING

• Planning is the most important function of management, It is

required at every level of management. In the lack of planning
all the business activities of the organization will turn useless.
The significance of planning has increased all the more in
view of the increasing size of organizations and their
complications
 WE HAVE 6 IMPORTANCE OF PLANNING
FOR A BUSINESS ORGANIZATION :

1. Planning provides direction 4. Planning promotes innovative

2. Planning reduces risk of uncertainty ideas
3. Planning reduces overlapping and 5. Planning facilitates decision
wasteful activities making
6. Planning establishes standards
for controlling
 PLANNING PROVIDES
DIRECTION
- Under the process of planning the
objectives of the organization are
described in easy and understandable
words.
- The clear outcome of this is that all the
employees acquire a direction and all
their efforts are alerted towards an
exacting end.
 PLANNING REDUCES
RISK OF
UNCERTAINTY
- Planning is always prepared for
future and future is unsure
- With the help of planning likely
changes in future are projected and
various activities are planned in the
best promising way.
 PLANNING REDUCES
OVERLAPPING AND
WASTEFUL ACTIVITIES
- Under planning, future activities are
deigned in order to accomplish objectives.
Accordingly, the problem of when, where,
what and why are almost determined.
- This puts a stop to disorder and suspicion.
In such a condition synchronization is
established among different activities and
department.
 PLANNING PROMOTES
INNOVATIVE IDEAS
- It is obvious that planning chooses
the best option out of the numerous
available. All these option do not
come to the manager on their own,
but they have to be discovered.
 PLANNING FACILITATED
DECISION MAKING
- The process of taking decisions.
Under it, a variety of options are
discovered and the best option
selected. The planning sets the
target of decision making.
 PLANNING
ESTABLISHES
STANDARDS FOR
CONTROLLING
- By determining the objectives of
the organisation through planning
the entire people working in the
organisation and all the
departments are informed about
when , what and how to do things
 STEPS INVOLVED IN PLANNING

• Planning is a process which requires a number of steps to be

taken . The planning process may differ from organization to
organization or from plan to plan
 DEFINING THE
CURRENT SITUATIONS
- The first primary step in planning
process is to know the present
situation of the organization
- It is imperative to know where the
business is at present before
formulating goal and objectives
 ESTABLISHING GOALS
AND OBJECTIVES
- The second step in planning
process is the establishment of
planning goals and identifying
definite objectives that will
contribute to the realization of
goals
 GOALS AND OBJECTIVES

• A goal is the broad and general and outcome that the

organization aspires to accomplishment. While objectives is
the specific result based on organizational goal.
• Example of GOAL : to earn profit through limiting expenses
• Example of OBJECTIVE : to increase profit by to 5% in 12
months
 ESTABLISHMENT OF
PLANNING PREMISES
- Are assumption about the future
understanding of the expected
situation under which planning
activities are to be carried out
- These premises may be internal
and external
 INTERNAL AND EXTERNAL PREMISES

• Internal premises are the internal variables that influence the

planning like policies , some resources and the capability of
the organisation to endure the environmental force
• External premises are the factors like political, social,
technological , competitor’s plans and actions, government
policies and market condition.
 DETERMINING
ALTERNATIVE COURSES
OF ACTION
- The next reasonable step in
planning is to find out and asses
alternative courses of action. There
will always be available
alternatives for any situations.
 EVALUATING ALL
ALTERNATIVES
- After knowing the strong and weak points
of the available alternatives, planners are
obligated to appraise the alternatives
giving due weight to various factor
involved
- For instance, one alternative may emerge to
be profitable yet heavy cash outlay is
necessary, while the other not as much as
profitable involves slightest risk.
 CHOOSING A COURSE
OF ACTION
- The 6th step in planning is selecting
a course of action from among
options. This is already the point of
decision- making .
 DEVISING SUPPORT
PLANS
- In order to create any planning
process complete, the ultimate step
is to devise supporting plans to
give effect to and sustain the
central plan
 ESTABLISHING
SUCCESSION OF
ACTIVITIES
- Time series of activities must be
determined, so that plans may be
put into action. timing is necessary
to give practical shape and
concrete forms to the programs.
Failure is the result of bad timing
of programs
 FEEDBACK ACTION
- Crafting plans and implementing
them through programs are not
enough, if feedback action is not
done. This is to see that plans
prepared and programs
implemented are being executed
based on what has been plan.