PLANNING FUNCTION

Meaning :-

Planning refers to thinking before hand. Planning forms that part of management which lays down the objectives and various activities to be done for the attainment of those objectives.

Definition :

“Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it.”

- Koontz & O’Donnell

“Planning is deciding in advance what is to be done.”

- Haimann

Characteristics

Focuses on achieving objectives

Primary function of management

Pervasive Continuous Futuristic Involves Decision Making Mental Exercise

Steps in Planning

Setting Objectives

Developing Premises i) Internal Premises ii) External PremisesIdentifying alternative course of action

Evaluate alternative courses

Selecting an alternative

Implementing the plan

Follow up action

PLANNING PREMISES

Planning Premises

The basis of planning are those premises/ assumptions which influence the possible results of different alternatives.

Classification of Planning Premises

Internal & External Tangible & Intangible Controllable, semi controllable

and uncontrollable Constant & Variable Forseeable & Unforseeable

E.g.- Cement Industry

Internal Premises- Capital Investment, Scope for expansion in future, sales forecast

External Premises- Product Market, location, Availability of raw material

Tangible premises- production capacity, scope for expansion

Semi controllable premises- Labour policy, pricing policy, share of the firm in the market

Uncontrollable premises- Government policy- tax strucuture and plant location

Are the Premises important?

PLANNING POLICY & STRATEGY

Types of Plans

Objectives Strategy Policies Procedures Methods Rules Budgets Programmes

Strategy

It refers to those plans which are prepared in view of the move of the competitors and whose objective is to make possible the optimum utilization of resources.

Types

External Internal

Characteristics of Strategy Formulated by Top Level

Managers Flexile Nature Needed in special

circumstances Stress on proper utilization of

resources Proper implementation is

necessary

Formulation of Strategy Knowledge of objectives Analysis of External

Environment Analysis of Internal

Environment Development of Alternatives Evaluation of Alternatives Choice of Particular Strategy

Factors Governing Strategy : Internal Consistency External Consistency Consistent with available

resources Bearable degree of risk Appropriate Time Enough degree of Workability

Policies

Policies are those general statements which are decided for the guidance of employees while taking decision.

Personnel Policy Sales Policy Price Determining Policy

Characteristics of Policies Determination of Discretion

Limits Permanent solution to the

same type of problems General guidelines Flexibility Helpful in getting objectives In written form

Types of policies

On the basis of Broadness

•Organizational Policies•Functional & Departmental Policies

On the basis of origin

•Basic Policies•Appealed Policies•Imposed Policies

On the basis of freedom

•General Policies•Specific Polices

On the basis of clarity-

•Written Policies•Oral Polices•Implied Polices

Merits of Policies:-

Saving of Time & Labour Guidance to Subordinates Determination of Decision

Limits Convenience in Coordination Increase in confidence in

Subordinates.

Demerits:-

Policies are no solution of all the problems

Policies are only Guidance not final Decision

Lack of Freedom

Features of Sound Policy :

Relationship with organizational Objectives

Simple & Clear Written Balanced Wide Communication Realistic Employees participation

Strategy Vs. policy

Basis of Differentiation

Strategy Policy

1. Need Formulated for unforseen problems

To tackle repeatedly appearing problems of the same nature

2. Type of Plan

Adhoc plan and is formulated new every time

Standing plan, used time and again

3. Role of Competitors

Formulated in view of the activities of the competitors

Not necessary to be based on competitors move.

4. Guide Directs the use of human & physical resources

Guide for ideas and decision making