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GOOD MORNING

FUNDAMENTALS

OFPLANNING

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INTRODUCTION

All organizations operate in an environment of uncertainty. To be successful, an organization must

anticipate changes and make plans to adaptitself to the environment.

Without Planning, an Organization is like aboat without a rudder.

By setting goals and deciding how to achievethem, planning provides a steeringmechanism for an organization.

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MEANING Planning is the process of bridging the gap

between where we are and where we wantto be in the future.

In other words, Planning is looking ahead,relating todays events with tomorrowspossibilities.

It is the process of deciding in advance whatto do, how to do, when to do and who doeswhat.

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DEFINITIONS

Planning is a continuous process of makingpresent entrepreneurial decisionssystematically and with best possible

knowledge of their futurity, organizingsystematically the efforts needed to carry outthese decisions and measuring the results of those decisions against the expectationsthrough an organized systematic feedback.

PETER DRUCKER

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Planning is a concept of executive function thatembodies the skills of anticipating,influencing, and controlling the nature anddirection of change.

DALTON E.MCFARLANDPlanning involves selecting mission and

objectives and the actions to achieve them; itrequires decision-making that is choosingfrom alternative future course of action.

H.KOONTZ

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NATURE OR FEATURES OFPLANNING

Planning is goal oriented. Planning is an intellectual process. Planning is a primary function. Planning is all-pervasive.

Planning is forward-looking. Planning is a perpetual (continuous) process. Planning is an integrated process.

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ESSENTIALS OF A GOOD PLAN It should be based on a clearly-defined

objectives. It must be simple. It should be rational and appropriate. It should be comprehensive. It should provide for a proper analysis and

classification of actions. It must be flexible. It must be balanced.

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It must use all available resources andopportunities.

It should be free from social and psychologicalbiases.

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STEPS IN PLANNING

Analysis of External EnvironmentAnalysis of Internal Environment

Determination of Objectives

Determining Planning PremisesExamination of alternative course of action

Selection of the best alternative course of actionDetermining secondary/supporting plans

Providing for follow-up and evaluation.

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Perception of opportunities

Establishing objectives Planning premises

Identification of alternatives Evaluation of alternatives

Choice of alternative plans Formulation of supporting plans

Establishing sequence of activities.

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PRINCIPLES OF PLANNING

Principle of contribution to objectives. Principle of primacy of planning.

Principle of pervasiveness of planning. Principles of flexibility. Principle of periodicity. Principle of planning premises. Principle of limiting factor.

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TYPES OF PLANS

Types of plan

Single- use planProgrammes

SchedulesProjectsBudgets

Standing planMission

ObjectivesPolicies

ProceduresMethods

Rules

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Standing plans: Standing plans are put touse again and again, over a long period of time.

Single use plans: Single use plans developed tocarry out a course of action that is not likely tobe repeated in the future.

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Standing plans :

The mission , or purpose, identifies the basicpurpose or function or tasks of an enterprise

or agency or any part of it. Objectives , or goals, are the ends toward

which activity is aimed.

Policies are general statements orunderstandings that guide or channel thinkingin decision making.

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Rules spell out specific required actions ornonactions, allowing no discretion

Methods : indicate the simplified andstandardized technique to be employed to

carry out a task. Procedures Involves a selection and

establishment of a logical series of tasks

within the framework of predeterminedpolicies and objectives.

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Single use plans:

Schedule : It is a kind of time table of work,specifying the date when a task is to begin andthe time needed to complete each task.

Programs are a complex of goals, policies,procedures, rules, task assignments, steps to

be taken, resources to be employed, andother elements necessary to carry out a givencourse of action.

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A budget is a statement of expected resultsexpressed in numerical terms.

Project : It is a small program.

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TYPES OF PLANNINGBasis of types of planning :-

Coverage of Activities --

Corporate PlanningFunctional Planning.

Importance of Contents Strategic PlanningTactical/Operational Planning

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Time Period Long-term PlanningShort-term Planning.

Approach Adopted Proactive PlanningReactive planning.

Degree of Formalization Formal Planning

Informal Planning.

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Corporate PlanningIt denotes planning activities at the top level,

also known as corporate level, which coverthe entire organizational activities.

Normally, corporate planning is divided intostrategic planning or long-range planning andoperational, tactical or short-range planning.

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Functional PlanningFunctional planning is segmental, and it is

undertaken for each major function of theorganization like production, marketing,finance, HR/personnel etc.

At the second level, functional planning isundertaken for sub-functions within eachmajor function.

Functional planning is derived out of corporateplanning.

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Tactical/Operational PlanningIt is also known as short-term planning, usually

covers one year or so. It is aimed at sustainingthe organization in its production anddistribution of current products or services tothe existing markets.

It is the process of deciding the most effectiveuse of the resources already allocated and todevelop a control mechanism to assureeffective implementation of the actions sothat organization objectives are achieved.

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Long-term Planning

It is of strategic nature and involves more thanyear and the more common long-term periodis 3-5 years.

It encompass all the functional areas of thebusiness and are affected by economic, social,and technological factors.

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Short-term PlanningIt is also known as operational or tactical

planning.

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Proactive PlanningIt involves designing suitable course of action in

anticipation of likely changes in the relevantenvironment.

It uses broad planning approaches, broad

environmental scanning, decentralized controland reserve some resources to be utilize fortheir future use.

Organizations do not wait for environment tochange but take actions in advance of environmental change.

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Formal PlanningIt is in the form of well-structured process

involving different steps.Large organizations undertake planning in

formal way in which they create separatecorporate planning cell.

The planning process that is adopted is rational,systematic, well-documented and regular.

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Informal PlanningIt is undertaken, generally , by smaller

companies. The planning process is based onmanagers memory of events, intuitions ratherthan based on systematic evaluation of environmental happennings.

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PLANNING PREMISES

Planning Premises: The term Premises refers to a propositions

stated or assumed at the beginning of a deed. In the context of planning, it involves various

assumptions on which plans are formulated.Since, there are many factors which affect theimplementation of a plan, assumptions aremade in respect of these factors.

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Planning Premises are the anticipated

environment in which plans are expected tooperate. They include assumptions orforecasts of the future and known conditionsthat will affect the operation of plans.

KOONTZThus, Planning premises include both

anticipated and known conditions underwhich plans are formulated.

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TYPES OF P P :

1. External Premises.2. Internal Premises.

3. Tangible Premises.4. Intangible premises.5. Controllable Premises and6. Uncontrollable premises.

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FORECASTINGIntroduction: It is a systematic attempt to probe the future

so as to recognize problems and opportunities

and turn them into plans of action. It helps in analysing the economic, political

and market information to reduce the risksinvolved in making business decisions andlong-range plans.

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It involves a look ahead approach in business.A systematic attempt is made to look into allthe factors [past and present] affecting theworking of the organization.

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Meaning and Definitions:Forecasting is a systematic guessing of the

future course of events with the help of analysis of past and present events.

Forecasting provides a basis for a planning.

A forecast is a prediction and its purpose is tocalculate and predict some future event orcondition. WEBSTER DICTIONARY

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Features:

It is concerned with future events. Necessary for planning. [planning process].

Guessing of future events and their impact. Considers all the factors [past and present]

which affect organization.

It uses scientific, mathematical and statisticaltechnique.

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