PLANNING Hemant B.
Planning is a detailed programme regarding future courses of action According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur”. According to Urwick, “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses”.
Nature Of PLANNING • Rational Approach • Process • Continuous process • Future oriented • Pervasive –size of firm, function, sector • At all levels
Nature of Planning :-1. Planning is an intellectual process :- Planning as an intellectual process, the conscious determination of course of action. Thus, it becomes an important mental exercise. 2. Planning contributes to the objective :- A plan starts with the setting of objectives 3. Planning is a selecting process :- Planning is a selective process. It involves the study and a careful analysis of various alternatives and then selecting the best one. 4. Planning forms the premises for the decision of the future :- Plans become premises, for the decisions of the future. It provides series or sets of decision that can be made under various possible circumstances.
5. Planning pervades all managerial activities :- Planning is a pervasive activity converging the entire enterprise with all its segments and its every level of management. It is not the exclusive responsibility of top management but it extends to middle and lower management as well. 6. Planning is directed towards efficiency :- Planning is to increase the efficiency of the enterprise. 7. Planning is a continuous and flexible process :- Because of uncertainties of the future the planner must be ever alert and should form his plans in such a way as to adopt them to changing circumstances without inconvenience and undue costs.
Essentials of planning • Clearly define the target/goal in writing. • It should be set by a person having authority. • The goal should be realistic. • It should be specific. • Acceptability • Easily measurable • Identify all the main issues which need to be addressed. • Review past performance. • Decide budgetary requirement. • Focus on matters of strategic importance. • Review periodically. • Define strategies and activities
Purpose Of PLANNING Foundation stone for other functions 2. Reducing Uncertainty……Reducing/ Avoiding Risk Planning increases the likelihood of job success by providing insights into the job’s risks. Some jobs are so risky that we may choose not to start once we’ve learned about the risks. Other jobs may contain features whose risks can be contained by early attention. Sound forecasting Reduced uncertainty Reduced risk
3. Supporting Better Decision Making Premise and plans help us make decisions effectively. What Why When Who How? Managers constantly making tradeoff decisions between Quality, Cost and Time.
4. Developing Control Mechanism Planning sets objectives to be achieved and standards to be followed. Thus for future it provides feed-forward control. 5. Objective orientation 6. Organizational effectiveness
Planning process • Forecasting • Economic forecasting • Sales “ “ • Technological “ “
Objective setting • Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts. • Moreover objectives focus the attention of managers on the end results to be achieved. • As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective. • As far as possible, objectives should be stated in quantitative terms. • SMART
Deciding means to achieve objectives (ends) • Strategies • Policies • Procedures • Schedules • Budgets • Projects
Determining resource requirements • Financial Planning • Equipment Planning • Material & Supply Planning • HR Planning
Follow up/Appraisal of plans enables the management to correct deviations or modify the plan.
Planning principles Principle of………. Contribution to objectives Sound Premising Limiting factors Commitment Coordination Timing Efficiency Flexibility Periodic review Acceptance
Types of Planning • Time span • Long Range Planning • Short Range Planning
Types of Planning • Levels • Strategic planning: determining how to pursue long-term goals with available resources. • Intermediate / Tactical planning: determining subunits’ contribution with allocated resources. • Operational planning: determining how to accomplish specific tasks with available resources.
Types of Planning • Coverage • Corporate Planning • Functional/ Departmental planning
Types of Planning • Frequency of use • Single use planning • Standing / ongoing planning
ADVANTAGES • 1. Planning facilitates management by objectives. • Planning begins with determination of objectives. • It highlights the purposes for which various activities are to be undertaken. • In fact, it makes objectives more clear and specific. • Planning helps in focusing the attention of employees on the objectives or goals of enterprise. • Without planning an organization has no guide. • Planning compels manager to prepare a Blue-print of the courses of action to be followed for accomplishment of objectives. • Therefore, planning brings order and rationality into the organization.
2. Planning minimizes uncertainties. • Business is full of uncertainties. • There are risks of various types due to uncertainties. • Planning helps in reducing uncertainties of future as it involves anticipation of future events. • Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks by necessary provisions to meet unexpected turn of events. • Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.
3. Planning facilitates co-ordination. • Planning revolves around organizational goals. • All activities are directed towards common goals. • There is an integrated effort throughout the enterprise in various departments and groups. • It avoids duplication of efforts. In other words, it leads to better co-ordination. • It helps in finding out problems of work performance and aims at rectifying the same.
4. Planning improves employee’s moral. • Planning creates an atmosphere of order and discipline in organization. • Employees know in advance what is expected of them and therefore conformity can be achieved easily. • This encourages employees to show their best and also earn reward for the same. • Planning creates a healthy attitude towards work environment which helps in boosting employees moral and efficiency.
5. Planning helps in achieving economies of scale. • Effective planning secures economy since it leads to orderly allocation of resources to various operations. • It also facilitates optimum utilization of resources which brings economy in operations. • It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise.
6. Planning facilitates controlling. • Planning facilitates existence of certain planned goals and standard of performance. • Planning provides pre-determined goals against which actual performance is compared. • In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.
7. Planning provides competitive edge. • Planning provides competitive edge to the enterprise over the others which do not have effective planning. This is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc. • With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate the future motives of it’s competitor which helps in facing future challenges. • Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the competitive strength of the enterprise is improved.
8. Planning encourages innovations. • In the process of planning, managers have the opportunities of suggesting ways and means of improving performance. • Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.
LIMITATIONS Lack of accuracy: planning relates to future and future is always uncertain and so prediction about future is so much difficult. Moreover planning are based on data/information relating to past and as such planning based on any wrong information may not be useful to the organisation. Costs: formulation of plans involves too much cost which are in the form of time spend, money spent etc. but some times there is little benefit from in plan and than it becomes a burden for the institution. If the plan is not useful than the amount or time spent on its formulation is a waste.
Advance effect on decisions: some plans are rigid and a manager faces difficulty while making any changes where as there may be continuous change in environment where as the quick decision is required as per the changed environment. Delay in actions: planning requires some time for thinking, analyzing the situation and designing the final plan and so in case emergency decision is required it will take time and business will lose its opportunity. Moreover delay in decision will further delay the action. Psychological barrier: people in organisationhave to work strictly according to plan where as they may be able to give better performance in a way decided by themselves. Secondly they do not think beside the plan and performs their activities like a machine without using their psychology.
Limited flexibility: there may be some changes in planning only up to some extent because changes in plan will further attract the changes in supporting plans also and as such the whole system is disturbed moreover changes in plans time and again will prove a wastage of time and money spent on previous plan. Human elements: planning are the results of thinking of human being. Information on the basis of which plan is formulated may not be free form bias. Being human, may cause over or under objective setting. Limited practical value: planning is too much theoretical and have a less practical use planning is more suitable when environment is suitable but due to unsuitability of environment business has to take various quick steps/decision time and again .
Resistance to change: It is commonly experienced phenomenon in many organisations. Sometimes, planners themselves do like change and on other occasion, they do not think it desirable to bring change, as it will create resistance on the part of the workers. This attitude makes the planning process ineffective. May kill creativity: if every bit is planned, then leaving no space for spontaneousness & imagination .