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Planning is deciding in advance what to do and how to do. It is
one of the basic managerial functions.
Before doing something, the manager must formulate an idea of
how to work on a particular task.
Thus, planning is closely connected with creativity and
But the manager would first have to set objectives, only then
will a manager know where he has to go.
Planning seeks to bridge the gap between where we are and
where we want to go. Planning is what managers at all levels do.
It requires taking decisions since it involves making a choice
from alternative courses of action.
• Deciding in advance what to do& how to do it. It is one
of the basic managerial functions.
• It involves 2 aspects:
Setting of aims and objectives of the organization +
Selecting and developing an appropriate course of
action to achieve these objectives.
• Koontz and O‘Donnell – ―Planning is deciding in
advance what to do, how to do, when to do, and who
to do it. Planning bridges the gap from where we are
to where we want to go. It makes it possible for things
to occur which would not otherwise happen.
IMPORTANCE OF PLANNING
1. Planning provides directions: By stating in advance how the work
is to be done planning provides direction for action. If there was
no planning, employees would be working in different directions
and the organization would not be able to achieve its goals
2. Planning reduces the risk of uncertainty: Planning is an activity
which helps the manager to look ahead, expect change and make
plans to face it.
3. Planning reduces wasteful activities: It bring together efforts of
all departments reduces wastage and duplication.
4. Planning promotes innovative ideas: Managers get the
opportunity to develop new ideas and new ideas
5. Planning facilities decision making: Under planning targets are
laid down. The manager has to evaluate/ assess each option and
select the most suitable option.
6. Planning establishes standards for controlling: Planning provides
basis for controlling. In order to control anything the manager
needs to plan first.
FEATURES OF PLANNING
1. Planning focuses on achieving objectives: Planning helps to achieve
general goals and specific goals.
2. Planning is a primary function of management: Planning lays down the
base for other functions of management.
3. Planning is pervasive: Planning is required at all levels of management as
well as in all departments of the organisation. The scope of planning is
different at different levels and for different departments.
4. Planning is continuous: Planning is not an one time activity it is
continuous. (FRAME A PLAN- IMPLEMENT IT- RE –PLAN )
5. Planning is futuristic: The purpose of planning is to meet future events and
help the organisation. Planning involves predicting future events and
conditions and making the plans accordingly.
6. Planning involves decision making: An organisation has multiple ways of
doing a job , and in that various alternatives , Planning helps to choose the
best and decide.
7. Planning is a mental exercise: Planning requires application of the mind
involving foresight. Planning is an intellectual activity, which requires logical
and systematic thinking rather than guess work.
LIMITATIONS OF PLANNING
1. Planning leads to rigidity: Planning discourages individual’s initiative
&creativity. The managers do not make changes according to changing
business environment. They stop taking or giving suggestions and new
2. Planning may not work in dynamic environment:=Environment keeps on
changing hence, plans also should be changing
3. Planning involves huge costs: When plans are drawn up, huge cost is
involved in their formulation.
4. Planning is time consuming: Planning takes a lot of time
5. Planning does not guarantee success: The success of an enterprise is
possible only when plans are implemented. Sometimes even after making a
good plan it may not be successful.
6. Planning reduces creativity: The top management delegates work to
Middle management hence the creativity of other levels of management
reduces since they only follow orders.
1. SETTING OBJECTIVES:
Objectives specify what the organization wants to achieve.
Goals can be set for the whole organisation or for each department.
After the goals has been set, it has to be communicated to all department & employees.
Objective of the company, has to be understood clearly by the employees.
For Ex- The objective of Mysore Sandal Company is to start a new Production
Department for producing of 10000 Mysore Sandal Perfumes.
2. DEVELOPING PREMISES:
The Business managers cannot predict the future, though they are uncertain of future the
business cannot stop its work, hence the managers should make some plans by assuming some
These assumptions, which provide the basis for planning, are called premises.
Managers can assume changes Internally & Externally such as -
• Internal premises: Changes in Capital, New Machinery, Increase in Sales
• External premises: Changes in technology, population growth, competition, government
Ex- Mysore Sandal has decided to start production of Perfume bottles, and the business manager has
observed that the Government has stopped the permission for Importing perfumes from foreign
Hence the Manager has assumed that there can be Increase in Demand for Perfumes so the production
department decides to produce 20000 perfume bottles.- Based on Premises
STEPS IN PLANNING/PLANNING PROCESS
STEPS IN PLANNING/PLANNING PROCESS
3. IDENTIFYING ALTERNATIVE COURSES OF ACTION:
After setting the objectives, managers should make a list of options/alternatives available to
them to achieve its objectives.
To achieve an objective there are many ways, and the manager should identify all of it.
Ex- Mysore Sandal has started to produce 20000 perfume bottles, in order to achieve its
objectives it has multiple options such as –
Buying New Machinery
Hiring New Employees
Making the existing employees work for Extra Time - OT
4. EVALUATING ALTERNATIVE COURSES OF ACTION
After making a list of options available to achieve the objectives, the Manager should asses or
calculate the positive & negative points of each option and its feasibility.
Ex- Mysore Sandal has multiple options to increase their production such as -
Buying New Machinery - if this method is chosen it is costly & negative
Hiring New Employees – appointing new employees & training them is time consuming &
Making the existing employees work for Extra Time – OT – Making current employees work
over time is a positive option because it is less costly.
STEPS IN PLANNING/PLANNING PROCESS
5. SELECTING THE BEST ALTERNATIVE
It is a point of decision-making, in this stage the Best plan has to be adopted and
implemented. The plan that is most profitable should be selected.
Ex- Mysore Sandal has decided that in order to produce 20000 perfumes it has
chosen the option of making existing employees work for Extra Time
6. IMPLEMENTING THE PLAN- Is a process of putting the plan into action. For
implementing the plans, managers start organizing & assembling resources for it
Ex- Mysore Sandal Company has started the production then then additional
labour & machinery will be required. Hence it has to make necessary
arrangements for it.
7. Follow Up Action
– This involves monitoring the plans and ensuring that activities are performed
according to the schedule.
– Whenever there are deviations from plans, immediate action has to be taken to
bring implementation according to the plan or make changes in the plan
Ex- The production manager of Mysore Sandal has to monitor if the production is
carried out as per planned, and he has observed that instead of 20000 perfumes it
has produced only 18,000 due to Machinery breakdown. Hence he has to arrange
for the Machinery repair and immediately produce the 2000 perfumes.
TYPES OF PLAN
SINGLE USE PLAN
Is developed for a
one-time event, these
plans are not
It refers to plan
developed for a one-
time project or event
that has one specific
Are used over and
over again because
they focus on
situations that occur
They are also called
repeated use plans.
TYPES OF PLAN
SINGLE USE PLAN
1. PROGRAMME •A programme is a single use plan
•It contains detailed statements about a project
• The project details such as objectives, policies,
procedures, rules, physical and human resources.
For example- Parle-G has started a new
advertisement programme for promoting Wheat
Breads. This is a short tem activity and not
2. BUDGET A budget is an estimated or approximate
statement of expected result expressed in
numerical terms for a definite period of time in the
For Example- Parle –G production team prepares a
Budget to estimate the cost of production for
producing 10,000 kgs of biscuits. It includes cost
such as – Raw Materials, Power Supply, Labor
Wages, Rent etc.
1. Objective – is a plan, that is
repeated, once an objective is
achieved – a new objective is set.
• Objectives are the goals of the
• Ex- Parle-G wants to increase the
sales of the company by 20%
2. STRATEGY- Is a tactic or an idea of an
organisation used by it to achieve its
For Ex- If Parle-G wants to increase its sales
by 20% then the strategy to increase sales is
to market the products in Social Media – Face
book, Instagram etc
3. POLICY- are guidelines &
•They guide, assist & direct the
managers to carry out the task.
•Ex- The policy of Parle is to make
Cash sales only no Cards or digital
4. PROCEDURE- They indicate how a work
has to be done in a systematic manner and
step by step.
Ex- If Parle G has to produce Bread it has to
first arrange for Wheat Flour, Baking Powder,
Machinery, Labour, Oven, & Packing
5. RULE: specific statement that tells
what is to be done and what not to be
done in a specified situation.
Ex- Parle-G production department
employees should wear gloves, head
cap & mask during the time of
6. METHOD: Methods are standardized ways
or manner in which a particular task has to be
Ex- Parle can produce the Breads by manual
method or by using Machine.