2. What Is Planning?
Define planning.
Types (Levels) of Planning
Strategic Planning
Intermediate Planning
Operational Planning
Planning Process/ Procedure
Barriers to Effective Planning
Planning Premises
Forecasting
Key to Planning
Advantage & Disadvantage of Planning
3. Planning
◦ Planning is the primary function of management.
◦ It focuses on the future course of action.
◦ A primary managerial activity that specifies the objectives to
be achieved in future and selects the alternative course of
action to reach defined objectives. Thus, it involves:
Defining the organization’s goals
Establishing an overall strategy for achieving those goals
Developing plans for organizational work activities.
4. “Determination of future course of actions in advance”
It is the blue print of action and operation.
Planning is intellectual process which is concerned with
deciding in advance what, when, why, how, and who shall do
the work.
5. “Generally speaking, planning is deciding in advance what is to
be done”
-W H Newman
“Planning is deciding in advance what to do, how to do, when to
do and who is to do it. Planning bridges a gap between from
where we are to where we want to go”
-Harold, Koontz and O’Donnel
“Planning is that function of manner in which he decides in
advance what he will do. It is a decision making process of a
special kind, its essence is futurity.”
-Hayness and Massie
6. Purposes of Planning
◦ Provides direction
◦ Reduces uncertainty
◦ Minimizes waste and redundancy
◦ Sets the standards for controlling
• Benefits of planningBenefits of planning
Goal Focus
Minimize Uncertainty
Improve efficiency
Facilitates to Control
Innovation and Creativity
Better Coordination
Ensures Commitment
Aid to Business Success
Brings Systematization
7. Elements of Planning
◦ Goals (also Objectives)
Desired outcomes for individuals, groups, or entire
organizations
Provide direction and evaluation performance criteria
◦ Plans
Documents that outline how goals are to be accomplished
Describe how resources are to be allocated and establish
activity schedules
10. Corporate planning :
Determines long-term objectives of an organisation as whole
Generates plans to achieve these objectives
Future orientated
Integrated
FunCtional planning :
Undertaken for sub functions witin each major functions
Derived from corporate planning.
Segmental
11. Depends on the type of the business and structure of
the organisation.
long terM :
Strategic in nature.
Involves generally 3-5 years.
It relates to matters like new product ,product
diversification .
12. SHort terM :
•Short term planning typically covers time frames
of less than one year in order to assist
their company in moving gradually toward its
longer term.
• Examples are the skills of the employees and
their attitudes. The condition of production
equipment or product quality problems are also
short-term concerns.
13. PROACTIVE PLANNING :
Designing suitable course of action in anticipation of likely
changes in relevant environment.
To take decision in advance.
Eg : Emergency organisations
REACTIVE PLANNING :
Reactive planning is the process whereby future action is
dictated as a response to whatever has already, or is now
occurring.
Eg. Hotel Manager.
14. FORMAL PLANNING :
It is a structured plan.
It has some procedure to follow.
Written record is followed in formal plan.
Eg. Five year plan of a country.
INFORMAL PLANNING
It is unstructured plan.
It does not have any procedure to follow.
No record is maintained for future purpose.
16. Operational plans are developed to determine
the steps necessary for achieving tactical
goals..
They are used as a guide for day to day
operation by department managers.
These plans may cover a time frame of few
months, weeks or even a few days.
17. Strategic Plans
◦ Apply to the entire organization.
◦ Establish the organization’s overall goals.
◦ Seek to position the organization in terms of its environment.
◦ Cover extended periods of time.
Operational Plans
◦ Specify the details of how the overall goals are to be achieved.
◦ Cover short time period.
18. Long-Term Plans
◦ Plans with time frames extending beyond three years
Short-Term Plans
◦ Plans with time frames on one year or less
Specific Plans
◦ Plans that are clearly defined and leave no room for
interpretation
Directional Plans
◦ Flexible plans that set out general guidelines, provide
focus, yet allow discretion in implementation.
19. Single-Use Plan
◦ A one-time plan specifically designed to meet the need of
a unique situation.
Standing Plans
◦ Ongoing plans that provide guidance for activities
performed repeatedly.
20. Traditional Goal Setting
◦ Broad goals are set at the top of the organization.
◦ Goals are then broken into sub-goals for each
organizational level.
◦ Assumes that top management knows best because they
can see the “big picture.”
◦ Goals are intended to direct, guide, and constrain from
above.
◦ Goals lose clarity and focus as lower-level managers
attempt to interpret and define the goals for their areas of
responsibility.
21.
22. Criticisms of Planning
◦ Planning may create rigidity.
◦ Plans cannot be developed for dynamic environments.
◦ Formal plans cannot replace intuition and creativity.
◦ Planning focuses managers’ attention on today’s
competition not tomorrow’s survival.
◦ Formal planning reinforces today’s success, which may
lead to tomorrow’s failure.
23. Establish objectives
Develop Strategies
Determination of
premises
Determination of
alternatives
Evaluation of
alternatives
Selecting a course
of action
Formulation of
derivative plans
Implantation of
plans
Reviewing the
planning process
How does a manager Plan?
Planning Process:
24. Not a step of Planning, It is pre-step of planning.
Essential to make a successful plan.
SWOT analysis
Setting objectivesSetting objectives
• First and real starting point of planning.First and real starting point of planning.
• Management has to define objectives in clear manner byManagement has to define objectives in clear manner by
considering organizational resources and opportunities because aconsidering organizational resources and opportunities because a
minor mistake in setting objectives might affect in implementation ofminor mistake in setting objectives might affect in implementation of
plan.plan.
• Objectives must be specific, clear and practical.Objectives must be specific, clear and practical.
• They should be time bound and expressed in numerical terms.They should be time bound and expressed in numerical terms.
25. Premises are the assumptions about the future in which the
planning is implemented.
They provide environment and boundaries for the
implementation of plan in practical operation.
These premises may be tangible and intangible and
external.
(a) Tangible and intangible: Tangible premises involve
capital investment, unit of production, units sold, cost per
unit, time available etc. Similarly, intangible premises involve
employees moral, goodwill, motivation, managerial attitude,
etc.
(b) Internal and external: Internal premises involve
money, materials, machines and managements. In the
similar manner, external factors involve competitors
strategy, technological change, government policy, social
and cultural beliefs etc.
26. It is essential to identify all the possible hidden
alternatives. The information about alternative
courses of action may be obtained from primary
and secondary sources. There must be search for
the best alternative. The management must
develop alternatives through the support of
experienced and intellectual experts in
management sectors.
27. Evaluate the alternatives from their expected cost
and benefits. This is the logical step to evaluate
each alternative from its plus and minus points.
Each alternative is studied and evaluated in terms
of some common factors such as risk,
responsibility, planning premises, resources,
technology etc.
Selecting a course of actionSelecting a course of action
28. It is essential to formulate action or derivative
plans for each step of work and to all departments
of the organization. These action plans involve
formulation of policies, rules, schedule and budget
to complete defined objectives. Thus, formulation
of derivative plans is an essential step in planning
process. It is difficult to implement main plan
without formulation of derivative plan.
29. Without this step, other this procedure of plan will remain as
paper work.
This step brings all the procedure of plan into action.
For implementation plan, management has to take some
steps such as to communicate with subordinates who initiate
to plan into action; provide necessary instruction and
guidance; make arrangement of all resources like materials,
machines, money, equipments etc; make timely supervision
and control over subordinates.
Reviewing the planning processReviewing the planning process
31. 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.
32. 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.
33. 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.
34. 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
35. 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. For example,
raw materials can be purchased in bulk and transportation cost can
be minimized. At the same time it ensures regular supply for the
production department, that is, overall efficiency
36. Planning facilitates existence of certain planned
goals and standard of performance.
It provides basis of controlling.
We cannot think of an effective system of controlling
without existence of well thought out plans.
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.
37. 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
38. 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
40. Planning involves too much expenditure.
Money and effort both are required in planning.
Planning includes collecting information, data
forecasting and evaluation of alternatives. It
requires salary and allowances to the experts
in the process of providing services.
So, planning has been accepted as costly
process by small and medium size organization
41. Planning is the time consuming process. It delays the
business activity to come in action.
In the process of planning following the procedures
of planning takes a lot of time which may create
problem to the organization where immediate action
has to be made. So in such situation planning is not
suitable.
42. Planning encourages false sense of
security against future risk and
uncertainty. As future is uncertain, it is
unpredictable. Therefore, planning cannot
give accurate and reliable results.
43. Rapid changes in technology ,consumer tastes
and prefernces are further limitations to
planning.
Eg.: Planning in aircraft ,chemical,electronic and
information industries is specially complicated
due to acceptionally complex and rapidly
changing production technology.
44. Present is always more real than the future ,
and present problems seem to be more urgent
than the future problems.
Many of us are inclined to take care of today and
hope that tommorow will take care of itself .
This is normal human tendency but infact we
have to take take care of today as well as
tommorow.
