PLANNING [PLANNING AND ITS PROCESS]

PLANNING

PLANNING AND ITS PROCESS
It is a basic managerial function. It helps in determining the course of actions to be followed to achieve the organizational goals. It bridges the gap between where we are and where we want to go. It is thinking in advance, What to do? When to do? How to do? And, Who to do?

“ Planning is the selection and relating of facts and making and using of assumptions regarding the future, in the visualization and formulation of proposed activities, believed necessary to achieve desired results.” George Terry

Process/Steps: Every organisation makes planning for their success and fame. Whether, they are economic or non-economic in nature. Planning Manager to follow the process mentioned below: -


































1. Being aware of Opportunities: Awareness is very important for planning process because it heads to formulation of plans by providing clues, whether opportunity exist for taking up particular plan.

2. Setting of Objectives: Establishment of objective is the next step of planning. Management tries to achieve objectives in the form of goal. Setting of objectives indicates that, where the company wants to go and also help the employees to understand their duties. Without objectives, an organisation can’t run successfully.

3. Considering Planning Premises: It is a condition under which planning premises undertakes. Planning premises are planning assumptions, the expected environment and internal conditions. For example, Superior’s plan affecting subordinate manager’s area of authority because premises for the latter’s planning.

4. Identification of Alternatives: Based on organisation objectives and planning premises, various alternatives can be identified. The concept of various alternatives suggests that a particular objective can be achieved through various actions.

5. Evaluation of Alternatives: It means how each alternative contributes to organisation objectives in the light of limited factor in mind.

6. Choice of Best Alternative: After evaluation, the most appropriate and best should be selected. Sometimes, evaluation shows more than one alternative is equally good. In such case, planner may choose more than one alternative.

7. Setting of Supporting Plans: After formulating the basic plans, various plans are derived, so as to support the main plan. In the organisation, there can be various derived plans like planning for buying equipment, develop new products etc.

8. Preparing Budgets: In the last step, Budgets are to be prepared, for the implementation of the plans and get them into action.

TYPES OF PLANS














Plans based on Organizational Level

Strategic Plans: SPs are long-term plans that apply to the entire organisation. They establish an organization’s overall objectives and analyze various environmental factors that affect the organisation. These are risky, involves huge investments and non-recurring (non-repeatable).

Tactical Plans: TPs are laid to achieve short-term plans or goals. They give direction to the major departments and sub-units of an organisation in the execution of strategic plans. These are less risky, involves medium investment.

Operational Plans: OPs are developed to perform day-to-day operations within a department. OPs are designed in specific and quantitative terms. This contains low investment, and least risk.

Plans based on Frequency of Use

Single-Use Plans: This is a one-time plan, specially designed to meet the needs of a unique and non-recurring situation. The types of single-use plans are: -

(i) Programs: A program is a large-scale plan that coordinates a complex set of activities to achieve important non-recurring goals.

(ii) Budgets: A budget is a statement that outlines the expected results for a given period expressed in numerical terms. This relates to the financial expectations of the organisation.

(iii) Projects: A project is smaller in scale and less complex than a program. It helps a manager in maintaining effective control and in easy plan implementation.

Standing Plans: These are, actions developed to deal with recurring situations.

(i) Policies: A policy defines the broad area within which the organizational members operate. It ensures that members confine themselves to the organization’s objectives.

(ii) Procedures: A procedure is a plan that describes the steps to be followed to accomplish certain objectives. It is more specific than a policy.

(iii) Rules: A rule is the simplest type of plan. It spells out the actions to be performed in a particular situation. It is generally rigid and can’t be deviated from.


Plans based on their Time Frame

Organisational plans have specific time frames. Based on the time frame, they can be classified as:

Short-term Plans: These provide guidelines to first (lower) level managers regarding day-to-day activities. These plans cover a time period of up to one year.

Intermediate Plans (Mid-term Plans): These define the organizational activities and also provide direction to the middle level managers. They cover time periods ranging from one to five years.

Long-term Plans: These are the strategic plans of an organisation. They are developed on the basis of broad organizational objectives. They cover time period of longer than five years.

MERITS (ADVANTAGES) OF PLANNING:

1. It helps in devising means to achieve organizational objectives (goals).

2. It aids in accumulating information that can be used to develop detailed guidelines for achieving organizational goals.

3. It provides managers with a sense of direction. It helps in developing objectives, which facilitate the smooth flow of organizational activities.

4. It provides guidelines for decision-making.

5. It facilitates the optimum utilization of available resources, which in turn, improves organizational effectiveness.

6. It provides a basis of control. Through control, a manager ensures that the activities are in conformity with the developed plans.

7. It facilitates delegation of authority and coordination of various activities within the organisation.

DEMERITS (DISADVANTAGES OR LIMITATIONS) OF PLANNING:

1. Lack of accurate information: If the information provided to the planners is inaccurate or irrelevant, the quality of planning suffers.

2. Time-consuming process: The collection of data and revision of plans make planning time-consuming, and in the process, opportunities may be lost.

3. Expensive: Activities such as collecting information and testing different courses of action to select the best among them, requires huge funds.

4. Inflexibility: As part of planning, managers draw up detailed policies and procedures. This could lead to inflexibility.

5. Resistance to change: Employees resist change and planning requires willingness on the part of employees to change and also to take risks.

6. Environmental constraints: Changes in the environment may drastically alter an already established plan, since managers can’t anticipate these changes during planning.

7. Lack of ability and commitment: On the part of employees, this can be lead to the formulation of improper plans. Failure of a plan can also be due to inadequate support from the top management and inadequate control mechanisms.

8. False sense of security: Managers may feel secure after the formulation of plan. However, a plan can be successfully implemented only through continuous review.

9. Reluctance to establish goals: Since goal setting is the first step in the planning process, managers who are unable to set meaningful goals will not be able to make effective plans. Managers hesitate to establish goals due to fear of failure and lack of knowledge of organizational procedures, policies and environment.