The Planning and

Organizing Functions of
Management
We are living in an economic, technological, political, social era. In
which planning is pre-requisite for the growth of organization. In
simple words, Planning is deciding in advance what is to be done
for the future period of time. In this sense, planning is basic
activity. Almost everyone is involved in planning to some extent.
E.g.: - A student plans his studies for coming examinations. College
authority plans for smooth conduct of examinations. Political leader
plans for his elections. Government plans too proper utilization of
resources to achieve a desire economic growth.
Meaning and Nature of
Planning
Meaning of Nature of Planning
Planning
In simple word planning is deciding in advance what to • Planning is the beginning of the management
do, how to do, when to do & who is to do it. • process
Planning is an intellectual process which requires
Planning is a bridge between present & future. It is an thinking before acting. It is thinking in advance.
intellectual process & thinking before doing. Planning Through planning, managers decide what is to be
bridges the gaps from where we are to & where we done, when, how and by who
want to go. It involves the selection of the course of
• Planning involves decision making- i.e. process of
action to achieve desired result. In this change
choosing among alternative courses of action
planning is projected course of action.
• Planning is a continuous process- a manager must
constantly watch the progress of his plans
• Planning is an all pervasive function- planning is
important to all managers regardless of their level in
the organization
Steps in the Planning
Process
Identification of Problems & Awareness of
Opportunities
Before starting the actual planning process, it’s important to take a good look at what’s happening around you. Think of it like checking the weather before deciding
to plant crops. If there’s no rain expected, planting might fail. In the same way, if there’s no opportunity in the environment, a plan may not work. i.e Understand
Changes in Customer Mindset ; keep Up With Technology; assess competition; examine the Industry’s Current Position. By studying these factors and identifying
both problems and opportunities, the planning process becomes more informed and successful.
Establishing
InObjectives
any organization, planning begins with deciding what you want to achieve. These are called objectives, and they serve as the guiding light
for the entire planning process. Once the main objectives are set, specific goals for different departments are decided to ensure everyone works
toward the same direction.E.g. 1. Increase sales by 30% or 40% 2. Provide better working conditions to workers. 3. Reduction in cost of
production by 25%
Establishing Planning
Premises
When planning, we need to make educated guesses about what might happen in the future based on the information we have. These guesses are called
planning premises. Think of them as the foundation or assumptions we use to build a plan.Normally, internal premises are controllable & external are
uncontrollable. By considering both controllable and uncontrollable factors, organizations can create plans that are more realistic and better prepared for the
future
Determining and Selecting Courses of
Action
In this step various possible course of action or plans are developed to achieve a particular object. After the careful examination of various
alternatives ideal course of action, the most suitable course of action or plan is selected to achieve pre-determine objective-choosing the best path
to reach your goal
Formulating Supporting Plans and Measuring
Progress
Once you have chosen the plan to be implemented, managers will have to come up with one or more supporting plans. These secondary plans help
with the implementation of the main plan. It is important to check the progress of their plans so that one can either take corrective action if necessary
or change the original plan if it is unrealistic.
Advantages and Limitations of
Planning
Facilitates Management by Minimizes Facilitates Co-
Objectives Uncertainties ordination
Planning begins with determination of Business is full of uncertainties. There are Planning revolves around organizational
objectives. It highlights the purposes for risks of various types due to uncertainties. goals. All activities are directed towards
which various activities are to be undertaken. Planning helps in reducing uncertainties of common goals. There is an integrated effort
In fact, it makes objectives more clear and future as it involves anticipation of future throughout the enterprise in various
specific. Planning helps in focusing the events. Although future cannot be predicted departments and groups. It avoids duplication
attention of employees on the objectives or with cent percent accuracy but planning of efforts. In other words, it leads to better
goals of enterprise. Without planning an helps management to anticipate future and co-ordination. It helps in finding out problems
organization has no guide. prepare for risks by necessary provisions to of work performance and aims at rectifying
meet unexpected turn of events. the same.
Facilitates Provides Competitive
Controlling Edge
Planning facilitates existence of certain planned goals and standard of Planning provides competitive edge to the enterprise over the others
performance. It provides basis of controlling. We cannot think of an which do not have effective planning. This is because of the fact that
effective system of controlling without existence of well thought out planning may involve changing in work methods, quality, quantity
plans. Planning provides pre-determined goals against which actual designs, extension of work, redefining of goals, etc.
performance is compared. In fact, planning and controlling are the two
sides of a same coin. If planning is root, controlling is the fruit.

Limitations of planning include: Planning is an expensive and time consuming process; Rigidity- planning sometimes restricts the organization to the most
rational and risk-free opportunities; Planning may lead to delayed decision making; The scope of planning is limited in some organizations like those operating in
rapidly changing situations; Plans become obsolete when the environment is volatile.
The Organizing
Function
Identification of
Activities
In any organization, there are many tasks that need to be done. The first step is to figure out all the activities required for the
organization to run smoothly. For example:For example, preparation of accounts, making sales, record keeping, quality control,
inventory control, etc. All these activities have to be grouped and classified into units.

Departmentally Organizing
Activities
In this step, the manager tries to combine and group similar and related activities into units or departments. This organization of
dividing the whole concern into independent units and departments is called departmentation.

Classifying the
Authority
Once the departments are made, the manager likes to classify the powers and its extent to the managers. This activity of giving a
rank in order to the managerial positions is called hierarchy. The top management is into formulation of policies, the middle level
management into departmental supervision and lower level management into supervision of foremen.

Co-ordination between Authority and

Responsibility
Relationships are established among various groups to enable smooth interaction toward the achievement of the organizational
goal. Each individual is made aware of his authority and he/she knows whom they have to take orders from and to whom they are
accountable and to whom they have to report.
Principles of Principle of
Organizing Functional
In any organization, it’s important that
everyone knows what they’re supposed
to do. This means:
Principle of • Clearly stating what tasks or
responsibilities managers and
Specialization
In any organization, the work should be subordinates have.
shared among team members in a way • Making sure there is no confusion
Principle of Span of
about who does what.
that matches their qualifications, abilities
Control
Span of control refers to the number of
and skills. This ensures tasks are done
employees a manager can supervise
efficiently and effectively.
effectively. For instance, in a bank, a
branch manager might oversee a team of
five loan officers. If the team grows too
Principle of Unity of large, it becomes harder for the manager
Command
Every subordinate is answerable and to ensure all employees are performing
Principle of Scalar
accountable to one boss at one time. 4 well.
Chain
Scalar chain is a chain of command or
authority which flows from top to
bottom.
The organizing process can be done efficiently if the managers have certain guidelines so that they can take decisions and can act.
These principles help in achieving co-ordination and thereby organization can take place effectively. Clarifications in authority-
responsibility relationships helps in achieving co-ordination and thereby organization can take place effectively.
Types of Organizational
Structures
Functional Structure Product Structure Geographic
Also called traditional design. It This involves bringing together all
Structure
Results when an organization is
groups personnel and other activities necessary for the departmentalized according to the
resources according to the types of production and marketing of a location of the customers served in
work they carry out. Similar particular product together. Useful terms of their Geographical
activities are identified and grouped in companies with a wide range of location. Activities to be performed
under the same department. products e.g. banks, are identified as per the territory of
• It takes into consideration the
Pharmaceuticals, petroleum need.
employees professional skills • The manager of a given region
products, coca cola etc.
• It applies the principle of • A manager heads each product interacts with the consumers
specialization and enhances job • It facilitates a close coordination • directly
Adjustment to specific consumer
satisfaction of activities requirements may be adhered to
• Employees are limited to their • It is easy to respond to specific easily
areas of specialization consumer needs • Communication breakdown may
• Product groups compete with result leading to conflicts
each other
Delegation and Committees in
Organizations
Authority
The power and right to use resources, make decisions, and
give orders

Responsibility
The duty to complete assigned
tasks

Accountability
Giving explanations for any variance in
performance

Delegating is giving another the authority and responsibility to carry out a task. This is seen as a power sharing process in which individual managers
transfer part of their legitimate authority to subordinates or team members but without passing on their own ultimate responsibility for the
completion of the overall task which has been entrusted to them by their superiors.

Benefits of delegation include: The supervisor will look best when they draw on the expertise of their employees; Delegation allows more time for a
supervisor to do the jobs only a supervisor can do; Delegation of work gives the employees a chance to develop their skills and their value to the
organization; It helps to build individual confidence and increase motivation; To encourage independence, initiative, and creative problem solving.

A committee is a group of people who have been formally assigned some task or some problem for their decision and/or implementation.
Committees can be broadly classified into advisory committees and executive committees. Advisory committees have only recommendatory role and
cannot enforce implementation of their advice or recommendation. Executive committees have line authority vested in them.