Planning

Definition : Planning is decoding in advance about what to do when, where, how and by whom.
Planning is the foremost function of the management.
Managerial planning seeks to achieve a consistent co-ordinate structure to operations focused
on desired ends. Without proper planning action become mere captivity producing nothing but chaos.
Koontz O Donnel : The selection from among alternatives for a future course of action for
the enterprise as a whole and each department within in.
Hart : Planning is the determination in advance of a line of action by which certain results are
to be achieved.
Fayol : The plan of action is at one and the same time the result envisaged by the line of action
to be followed, the stages to go through and methods to use. It is a kind of future picture wherein
proximate events are outlined with some distinctness, whilst repute events area progressively less
distinct.
Need & importance of Planning :
It is a blueprint of what is going to be done and it is a intellectual work. Planning plays a vital
role to cope up with the changes. Planning also provides clarity and promotes effective use of
resources. Above all it is a controlling measere by mans of evaluation. A good plan must be :1. based on clearly defined objectives
2. simple
3. establishing standards
4. flexible
5. balanced
6. uses available resources
7. practicable
Characteristics of Planning :
1. Planning is all pervasive
2. It is the basic function of Management
3. Planning is a conscious process
4. Planning is a continuous and permanent process
5. Planning based on objectives and policies
6. Planning id dynamic
7. Planning is realistic
8. Forecasting is prerequisites for planning
9. Planning must be time bounded
10. Planning is a mental activity
11. Planning based on facts
Advantages of Planning :
1.
2.
3.
4.
5.
6.

It reduces random & haphazard activity

It promotes internal co-ordination
It facilitates control
It leads to overall efficiency in the organization
It helps in taking care of the future activity
Avoids duplication

7. Minimize time
8. It swows the clear way of doing
9. Ensures orderly way of doing things
10. Reduce tension or pressure of immediacy
11. It helps to remain more competitive in industry
Limitations of Planning :
1. the effectiveness of planning depends upon the correctness of assumptions
2. planning is expensive
3. planning delays actions
4. encourages false sense of security
5. planning gives no guaranty of success
6. validity depends upon the information available
7. lack of co-ordination
8. rigidity in planning is also a constraint
9. planning is not scientific
10. mental attitude of management is also a limiting factor
11. procedural and policy rigidity of the organization
12. external factors also influence the course of action that is not controllable by the planner
Failure of Planning :
Planning is likely to fail unless some proper guidance are followed. Malcom Pennington has
suggested the following guidelines :a) involve top management only at key points in the planning process
b) involve line executives in developing the plans
c) do not look for the perfect answer
d) planning must provide realistic re-targets and alternative ways to achieve them
e) planning should starry (shiny) on small scale and can be extended only when the executives
have learned the technique and have become convinced of their usefulness.
Components of Planning
1. Objectives :
All the activities are directed towards the object or goal of the organization
2. Policies :
It has how to do aspect. It specifies the broad guideline to the executives
3. Procedures:
It is the mechanical part of policy implementation. It is different for different levels in
the organization. Procedure can exist without planning but planning cannot exist
without procedure. Procedure is a step-by-syep arrangement.
4. Rules :
It is the ultimate analysis of a plan. It is the simplest possible plan as it directs a
particular activity in a particular way. Rule has no order.
5. Budgets :
It is a plan where estimated results are shown in terms of money. It is a tool for cost
control also.
6. Programmes :
It is the composite of many small plans where each plan contributes to the objective of
the overall plan.
7. Strategies :
It means tactical planning in competitive environment. The process of selection one out
of several alternatives available is known strategy

Characteristics of planning
Planning has a number of characteristics
A. Primacy: Planning is an important managerial function that usually precedes other functions. Obviously,
without setting the goals to reached and lines of action to be followed, there is nothing to organize, to
direct, or to control in the enterprise. But this should not lead us to think that planning is isolated from
other managerial functions which have no impact on it.
B. Continuity: Planning is continuous and never-ending activity of a manger to keep the enterprise as a
going concern. One plan begets another plan to be followed by series of other plans in quick succession.
Actually, a hieracshy, of plans operates in the enterprise at any time. Planning gets used up where
tomorrow becomes today an calls for further planning day in and day out. Again, incessant changes make
replanning a continuous necessity.
C. Flexibility: Planning leads to the adoption of a specific course of action and the rejection of other
possibilities. The confinement to one course takes away flexibility. But if future assumptions upon which
planning is based prove wrong, the course of the action is to be adapted to alter situations for avoiding any
dead-lock. Accordingly, when the future can not be moulded to conform to the course of action, flexibility is
to be ingrained in planning for adapting the course of action to demands of current situations.
D. Unity: Planning is made buy different managers at different times. Maintenance of consistency or unity
of planning is one of its essential requirements. Objectives provide the common focus for unifying
managerial action in planning. Moreover, policies and procedures introduce consistency of executive
behaviour and action in matters of planning.
E. Precision: Planning must be precise as to its meaning, scope and nature. As guides for action, planning
is to be framed in intelligible and meaningful terms by way of pinpointing the expected results. According to
the capacities and facilities of the company, planning must be realistic in scope rather than dreams
indicating pious desire. As planning errors are far more serious than mistakes in other functions and cannot
be offset by effective organizing or controlling, planning precision is of utmost importance.
Important steps in planning
The techniques of planning may b outlined to indicate a step-by-step approach to the adoption of a
comprehensive plan ready for execution.

1. Determination of objectives. The first step in planning work is to determine the overall, major
objectives. These objectives set the pattern of the proposed course of action and shape the structure of
other subsidiary objectives in the organization. That is, major objectives are broken down into
departmental, sectional and individual objectives when derivative plans are developed throughout the
organization. Major objectives must be spelled out in realistic or specific terms rather than the
establishment of general philosophical or creed-type objectives. Creed-type objectives are completely
useless in managerial planning. As a guide to action, objectives must be specific, informative and clear
enough to indicate what is to be done.
2. Establishment of planning premises. Planning premises are assumptions about the further or
understanding of the expected situation. On the stage of planning, they provide the setting or back-drop
against which all planning activities are carried out. Planning premises supply pertinent facts and
information relating to the future, and as such, thy are vital to the success of planning. Forecasts and
trends analyses provides mot of the information required in planning.
3. Selection of the operating plan from alternatives. In business, there exists a number of alternative
courses of actions for achieving the desired results. All these courses of action must be found out for their
comparative and analytical evaluation. With reference to considerations like cost, risk and gain, all available
alternatives are appraise to select a satisfactory course of action. In other words, the techniques of decision
making are applied to choose the proposed course of action from several alternatives. If alternatives are not
developed, planning becomes a straight-jacket pattern of activity and loses much of its beneficial results.
The overall programme or the operating plan emerges from this steps in the planning process.
4. Preparation of derivative plans. The overall operating plan of the enterprise can not be executed
effectively unless it is supported, enlarged and clarified by the preparation of other derivative plans for each
segment of the company. Within the framework of a primary and basic operating plan, the derivative plans
are developed in each area of the business to integrate objectives with all relevant policies, procedures,
programmes and budgets. The breakdown of the primary plan of action into departmental and sectional
plans gives a realistic pictures of things to come in future.

5. Timing and sequence of operations. Timing is an essential consideration in planning, and it gives
practical shape and concrete form to the programme. The starting and finishing times are fixed for each
piece of work so as to indicate when and within what time the work is to be commenced and completed.
There are several cases on record to show that bad timing of programmes has resulted in their failure.
Further to maintain a symmetry of performance and a smooth flow of work, the sequence of operations is to
be arranged carefully by giving priorities to some work in preference to others. Sequence determination is,
of course, tied up with timing and both of them are encompassed in scheduling.
6. Securing participation. For the effective execution of the programme, the subordinate's participation
has been found to be of extreme importance. Plans must be communicated and explained in greater details
to the subordinated for increasing their understanding of the proposed action and for enlisting their cooperation in the execution of plans. This participation improves the equality of planning thorough the
knowledge of additional facts, new visions and revealing situations. Moreover, the participating mangers
owe a personal obligation to execute the plan as effectively as possible. The sky to the successful execution
of plans lies in having a fully informed group of managers and employees. Accordingly, joint participation in
planning has become the rule rather than an exception now-a-days.
Forecasting
Forecasting underpins the planning work by indicating the future setting of business conditions. To base
planning decisions on a solid foundation, forecasting provides mines of information and pertinent facts
relating to the future.
Forecasting implies the act of making a detailed analysis of the future to gain a foresight of background
situations and latent forces. Most of the important planning premises are merged in forecasting of one type
or another . Accordingly, planning without forecasting is an impossibility. Fayol has aptly observed: The
plan is the synthesis of the various forecasts: annual, long terms, short terms, special, etc.
Advantages of Forecasting
Forecasting has a number of advantages
(a) Forecasting plays a key role in managerial planning ans supplies vital facts and crucial information.
(b) forecasting improves the quality of managerial personnel by compelling them to think through the
future, to look ahead and to make provision for it.
(c) Forecasting ensures better utilization of resources by extending the frontiers of control in several
directions and by revealing the areas where control is lacking.
(d) The employees are t rained for accepting changes without any serious resistance as well as for facing
unexpected occurrences courageously.
(e) Forecasting steers the enterprise safely for reaching its fixed destination, as outlined by the objectives
of the organization.
(f) By focussing attention on the future forecasting helps the managers in adopting a definite course and a
set purpose in matters of planning.
Elements of forecasting
As an inference from known facts and given information forecasting required four well-marked steps in
analyzing the uncertain future.

In the first stage, the ground work is made for building the future estimates thereon. The known
results of past decades are scanned to ascertain the growth of the entire industry in which the
company is engaged, the growth of the company itself as well as the growth of its product lines.
In the second stage, the future business is estimated. Projecting the prospects of the company is
over the known setting of past6 activities, and estimate of future business is made by managers
from a number of probable trends studied by them.
In the third stage, actual results are compared with the estimated results. As a safeguard against
wrong, anticipation the actuals are always compared with the anticipated results.

In the final stage, the forecasting process is refined. In the light of experience and proficiency
acquired, the forecasting technique is refined, sharpened and adjusted suitably to meet the needs of
the situation.

Organization
Definition : Organization is the backbone of management. Good organization takes attention of all
activities, encourages specialization and paved the way for efficient and economical usage of human
and non human resources.
An organization is a system with inputs, and processes through which these are converted into
outputs. The word organization is often used only in two contents (i) a particular company or group
of persons working together (ii) an organization as a structure or as a network of specific relationships
among individuals or peoples.
Koontz O Donnell : It is the grouping of activities necessary to attain enterprise objectives and
the assignment of each grouping to a manager with authority necessary to supervise it.
Springel : In the broadest sense organization refers to the relationship between the various
factors present in a given endeavor.
Allen : Organization is the process of identifying and grouping work to be performed defined
and delegating responsibility and authority and establishing relationship for the purpose of enabling
people to work most effectively together in accomplishing objectives.
Steps in organizing :
Allen specified three elements of organization,
1. Division of labor :
Based on the objectives various activities are to be classified and grouped to
avoid overlapping and duplication. Works are to be divided on the basis of
function (production, sales, purchase etc.) and specialization
2. Identification of sources of authority :
The jobs are linked with superior subordinate relationship, superiors need
authority to get things from subordinates and maintain obedience.
3. Relationships :
There are different types of relationships viz. administrative or operative,
vertical or diagonal, formal or informal etc. But whatever be the relationships
the work must proceed as planned.
Characteristics of organization :
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3.
4.

Ease of flow of work

Developing ability
Co-ordination between the policy and the programme
Utilization of Means and Human labor

Importance or Organizing :
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2.
3.
4.

Facilitates Administration
It facilitates growth and diversification
Job satisfaction
It facililitates adoption of new technology