MODULE 3

PLANNING
 IMPORTANCE OF PLANNING
 Plan is a determined course of action to achieve a
desired objective
 Decision making is a most important element in

planning
 Planning deals with short term objectives of

individual departments as well as long term

objectives of the entire organisation
 Planning is actually a complex, dynamic and

continuous process of an organisation.

 Brings order in the organisation, activities are

well coordinated
PLANNING PROCESS
CHARACTERISTICS OF PLANNING
 Planning is Goal oriented.
 Sequence of Planning
 Continuous & Cyclical Activity
 Choice based decission based activity.
 Occurrence of Planning.
 Co-ordination
 Limiting Factors.
 Flexibilty
 Planning is Goal Oriented:
Every plan should contribute some positive way
towards the accomplishment of goal.
 Sequence of Planning :

Planning leads to all other Managerial functions.

 Continuous & Cyclical Activity:

Continuous process and cyclical activity as future

plans are updated in the light of existing plans.
 Choice based Decision making activity :

Several alternative course of actions are developed

,analysed & the best alternative method is selected.
 Occurrence of Planning:
 Planning occurs at all levels.
 Top Management: Strategic Planning
 Middle Management: Administrative Planning.
 Lower Management: Opeational Planning
 Co-ordination:
 Essential element after Planning
 Limiting Factors:
 A planner should understand the limiting

factors(money,man power) & formulate the plans.

 Flexibilty: Plans should be flexible to change in

environmental conditions .
 IMPORTANCE OF PLANNIG IN BUSSINESS

 (a) Planning facilitates Management by Objectives

 Planning helps management in focussing towards a goal

 (b) Planning gives a sense of direction:

Helps manager to prepare o Blue-Print of the course
of actions for accomplishing objectives.
© Improved Performance:
Good planning improves success rate of an
organisation by concentrating on end results
 Dealing Uncertainity: Planning is needed to face
new problems in bussiness/market competition,
consumer requirement etc.
 Economy in Operation:
 Involves the selection of most profitable course of
action which gives maximum results.
 Helps in optimum utilisation of resources
 Better Co-ordination
 Basis for Controlling: Controlling deals with
comparing planned performance with the actual one.
No plan,no syandarised comparison.
 Improves Employees Moral:
 Enables employees to produce their best results
 TYPES OF PLANS
 Mission or Purposes
 Objectives or Goals
 Strategies
 Policies
 Procedures
 Rules
 Programs
 Budgets
 TYPES OF PLANS
1. Mission or purposes
Identifies the basic tasks of an enterprise
2. Objectives or Goals
 Objectives : Specific & short term targets to be

achieved before goals can be reached.

 Goals: Long term targets of an organisation.

Eg: The goal of an organisation is to increase the sales

and the objective is to increase sales by 5% every
year.
 Organisational Goals are classified into:
 Financial Goals: Improves financial

Performance of an organisation
 Strategic Goals: Linked to all other aspects

of an organisation.
 TYPES OF PLANS
 3.
Strategies :Business plan based on
scope or situations.

 Business plans may be

 (a) Strategic Plan
 (b) Tactical Plan
 © Operational Plan.
COMPARISON
 4. Policies:
Standing Plans:
 Continuing Plan or ongoing plan or standing plan

usually made once ,retains their value over a

period of years and undergoes periodic revisions.
 Standing plans always make sure that the internal

operations are performed correctly.

 TYPES OF STANDING PLANS
 1. Policy
 Policy is a standing plan that provides

broad guidelines for taking actions

consistent with reaching organisational
objectives.
 Policies also explain how exceptional

situations are to be handled by managers.

CLASSIFICATION OF POLICIES
Originated Policies: Formulated by top
management for guiding employee actions.
Appealed Policies: Policies formulated as per
special request of stakeholders
Implied Policies: Policies which exist but not
explicitly approved by any authorities.
Externally Imposed Policies: Generated by
external agencies like union,govt etc.
 Procedures
 Standing plan which consist of a series of related

actions that is to be followed to accomplish a task.

 Rules & Regulations
 Rules assign a specific required action
 Indicates what an organisation member do and

should not do
 Regulations
 Controlling the behaviour of an organisation in a

programmed manner
 Programs
 Based on the frequency of use,plans are classified as
 (a) Single use Plan: Used only once and never

repeat .
 Another example of Single use Plan: Budget.
 Programs: Single use plan prepared to handle a

specific situation.
 (b) Standing Plan
 Budget
 Single use Plans
 Expressed in Financial Terms.
 Refers to fund allocated to operate a unit

for a fixed period of time.

 Deals with how to spent funds on labour,

raw materials etc

 Steps in Planning

 Being aware of opportunities.

 Establishing Objectives
 Developing Premises
 Determining Alternative Courses
 Evaluating Alternative Courses
 Selecting a Course
 Formulating Derievative Plans
 Quantifying Plans by Budgetting
 LEVELS OF PLANNING
 TOP LEVEL(STRATEGIC)
 MIDDLE LEVEL ( ADMINISTRATIVE)
 LOWER LEVEL( OPERATIONAL

LEVEL)
MANAGEMENT BY OBJECTIVE
(MBO)
STEPS IN MBO