bcom v mgt m 3

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  • 7/27/2019 BCom V Mgt M 3





  • 7/27/2019 BCom V Mgt M 3



    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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    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.


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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.


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    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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    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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    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 plan

    Single- use planProgrammes


    Standing planMission




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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


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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: 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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    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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