PLANNING “Well plan is half done”

Meaning

• Planning means looking ahead and chalking out future courses of action to be followed.

• It is a preparatory step.

• It is a systematic activity which determines when, how and who is going to perform a specific job.

• It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.

Principles of Managerial Planning • Plans should be based upon clearly defined objectives

and make use of all available information.

• Plans should consider factors in the environment which will help or hinder the organization in reaching its goal.

• Plans should be based on the existing organization and facilitate control in order to cross check performance with established standards.

• Plans should be precise, practical and simple to understand and operate.

• Plans must be flexible because if circumstances are changing, the initial plan must still be valid.

Nature & Purpose of Planning PLANNING is a process for accomplishing purpose.

• It is a blue print of business growth and a road map of development.

• It helps in deciding objectives both in quantitative and qualitative terms.

• It is setting of goals on the basis of objectives and keeping in view the resources.

• It predicts what the future should look like.

• Formal procedures used in such an endeavor, such as

• The creation of documents,

• Diagrams,

• Or meetings to discuss

• The important issues to be addressed,

• The objectives to be met,

• And the strategy to be followed.

Steps in Planning Function Planning function of management involves

following steps:-

• Establishment of objectives

• Establishment of Planning Premises

• Choice of alternative course of action

• Formulation of derivative plans

• Securing Co-operation

• Follow up/Appraisal of plans

Establishment of objectives

• Planning starts with the setting of goals and objectives to be achieved.

• Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.

• Objectives should be stated in a clear, precise and unambiguous language.

• As far as possible, objectives should be stated in quantitative terms. • For example, Number of men working, wages given,

units produced, etc.

Establishment of Planning Premises • Planning premises are the assumptions about the lively

shape of events in future.

• Determining where one tends to deviate from the actual plans and causes of such deviations.

• What obstacles are there in the way of business during the course of operations.

• Planning premises may be internal or external. Internal includes

• Capital investment policy,

• Management labour relations,

• Philosophy of management, etc.

• Whereas external includes

• Socio- economic, political and

• Economical changes.

Choice of alternative course of action • When forecast are available and premises are

established, a number of alternative course of actions have to be considered.

• For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization.

• After objective and scientific evaluation, the best alternative is chosen.

• The planners should take help of various quantitative techniques to judge the stability of an alternative.

Formulation of Derivative Plans

• Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.

• These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. • For example, if profit maximization is the main

aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.

Securing Co-operation

After the plans have been determined,

• It is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.

• The purposes behind taking them into confidence are :- • Subordinates may feel motivated since they are

involved in decision making process. • The organization may be able to get valuable

suggestions and improvement in formulation as well as implementation of plans.

Follow up/Appraisal of plans

• After choosing a particular course of action, it is put into action.

• After the selected plan is implemented, it is important to appraise its effectiveness.

• This enables the management to correct deviations or modify the plan.

Types of Plans

Three major types of plans can help managers achieve their organization's goals:

• Operational

• Tactical, and

• Strategic

• Operational plans lead to the achievement of tactical plans, which in turn lead to the attainment of strategic plans.

• In addition to these three types of plans, managers should also develop a contingency plan in case their original plans fail.

Operational Plans

• The specific results expected from departments, work groups, and individuals are the operational goals.

• These goals are precise and measurable.

• For example- • “Process 150 sales applications each week” or

“Publish 20 books this quarter” are examples of operational goals.

Operational Plans

• An operational plan is one that a manager uses to accomplish his or her job responsibilities.

• Supervisors, team leaders, and facilitators develop operational plans to support tactical plans.

• Operational plans can be a single-use plan or an ongoing plan.

Tactical Plans

• A tactical plan is concerned with what the lower level units within each division must do, how they must do it, and who is in charge at each level.

• Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans.

• These plans usually span one year or less because they are considered short-term goals.

• Long-term goals, on the other hand, can take several years or more to accomplish.

Strategic Plans

• A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind.

• Strategic plans look ahead over the next two, three, five, or even more years to move the organization from where it currently is to where it wants to be.

• Requiring multilevel involvement, these plans demand harmony among all levels of management within the organization.

• Top-level management develops the directional objectives for the entire organization, while

• Lower levels of management develop compatible objectives and plans to achieve them.

• Top management's strategic plan for the entire organization becomes the framework and sets dimensions for the lower level planning.

Strategic Plans cont……..

Contingency Plans

• Contingency planning involves identifying alternative courses of action that can be implemented if and when

• The original plan proves inadequate because of changing circumstances.

• Unexpected problems and events frequently occur.

• When they do, managers may need to change their plans.

Contingency Plans cont……

• Anticipating change during the planning process is best in case things don't go as expected.

• Management can then develop alternatives to the existing plan and ready them for use when and if circumstances make these alternatives appropriate.

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