The management adapts the
organization to its environment and shapes the organization to make it more
suitable for the organization. Management is a purposive activity. It is
something that directs group efforts towards the attainment of certain pre-determined
goals.
Meaning
A plan is a determined course of action. And planning is a process of thinking to action. Planning is the basic or primary function of management. It is the starting point of the whole management process. Plan The planning action is performed by managers at all levels.
It acts as a tool for solving the problems faced by a business unit. Planning is the action of the manager in which he decides in advance what he will do. It is decision-making less of a special kind. It is an attempt to anticipate the future to achieve better performance.
Features Of Planning
Primary function: Planning is
the first and foremost function of management, other functions follow planning.
What is not planned cannot be organized and controlled. All the functions of
management are depended on planning. It is the foundation of the process of
management.
1. Planning Is Pervasive In
Nature: and continuously has a managerial function. It is the function of the
process of management. All the managers and departments anticipate the planning
process. Top development spends time on strategic planning while low-level -development
is involved in operational planning.
2. Intellectual Process: Planning
is an actual process of decision-making. It is a mental activity and involves
thinking and exercising foresight and vision. A plan is based on intelligent
study and creative thinking.
3. Objectives Oriented: Planning
is for achieving the objectives of a business enterprise. Plan The planning begins
with clearly lying down the objectives. It is always objective-oriented and
result oriented.
4. Continuous Function: it
is a regular and continuous function of management. Business plans need
continuous revision, modification and adjustment as business conditions are
dynamic. Thus, planning is a never-ending activity.
5. Flexibility: Planning is
flexible as the business environment is dynamic. The plans must be flexible to
adapt to changes in technology, market, finance, personal and organizational
factors.
6. Links The Past, Present And
Future: Planning is for a future period but is based on experience taking
into consideration the present business environment and problems. It considers
the past and prepares plans for the future under the present situation.
7. Involves Choice: it cannot
be done without the alternatives, and selection of the best alternative. It
involves choosing among the alternatives.
Importance Of Planning
1. Quick Achievement Of Objectives
The problems of a business
enterprise are studied and remedial measures are adopted through the technique
of planning. This facilitates the quick achievement of business objectives.
2. Brings Unity Of Purpose And Direction
Planning brings unity and purpose
before the organisation as it directs all the resources and efforts in one
direction for achieving the objectives decided.
3. Ensures Full Utilisation Of Resources
Planning ensures maximum
utilisation of available human and material resources. It eliminates wastages
of all kinds and facilitates fuller utilisation of resources.
4. Avoids Inconsistency In Efforts
Planning avoids inconsistency
in efforts and also avoids duplications. It ensures the economy in business
operations.
5. Raises Managerial Efficiency
Planning raises managerial
efficiency as it covers all managerial functions and helps management to
execute future programmes systematically.
6. Avoids Hasty Decisions
Planning avoids hasty decisions
and haphazard actions by managers. It also encourages systematic thinking by managers.
7. Insurance Against Uncertainties
Planning act as insurance against future uncertainties. Future problems and situations are studied in advance and alternative solutions are kept ready.
8. Facilitates Other Managerial Functions
It is a basic managerial function and other managerial functions move as per the prepared plans.
Steps In Planning Process
1. Classifying The
Problems:
The planning process starts with a
clear understanding and classifying of business problems faced by a business
unit.
Identification of problems or opportunities by managers justifies the need for action. Planners have to understand the problems of the organisation first and then prepare a plan to deal with the problems in light of the prevailing business environment.
Such a study
of problems and opportunities before a business enterprise creates a suitable
environment for initiating the planning process. It acts as a starting point
for initiating the planning process.
2. Determining The Objectives:
Planning is always for achieving
certain well-defined objectives and naturally, objectives must be spelt out
precisely.
Objectives act as pillars of the
entire planning process. Business objectives may be decided in terms of profit,
sales, production or market reputation.
Objectives may be defined in
quantitative or qualitative terms. Planners should be very clear in their minds
about the objectives to be achieved through the planning process. Accurate
decision on objectives to be achieved gives a clear direction to the planning
process and makes the process result-oriented/objectives-oriented.
3. Collecting Complete
Information And Data:
The planners have to collect
information relating to problems facing the business unit. Such information
is useful for analysing the
problems in depth and also for accuracy in planning. Information can be
collected from internal and external sources.
Such sources include old records
of the company, documents and reports available in different departments of the
company, government reports, census reports, publications of RBI and financial
institutions, information published by business newspapers (e.g., Economics Times),
magazines etc.
4. Analysing And
Classifying The Information:
At this stage, the information
collected is analysed and interpreted systematically for drawing specific
conclusions. This facilitates the purposeful use of information while preparing
alternative plans. Irrelevant information can be discarded through such
analysis. Planning will be defective and even dangerous if the data collected
are not reliable and also not analysed fairly and systematically.
5. Establishing Planning
Premises:
Planning premises are various
assumptions and predictions of business situations. Planning premises are
expected to supply relevant facts, information and data based on which
forecasts are prepared and future trends are indicated.
6. Controllable Premises:
These are fully under the control of
management e.g., business policies, rules, programmes, advertising budget etc.
7. Semi-Controllable
Premises:
On these premises, management can
exercise partial control e.g., industrial relations, relations between manufacturers
and consumers etc.
Uncontrollable premises: These
premises are those on which an enterprise has no control e.g., government
policies, the role of competitors, consumer behaviour, natural calamities etc.
8. Determining Alternative
Plans:
Here, the planners prepare and keep ready
alternative plans suitable for use under different situations. The best among
the available alternative plans is used for actual execution. The preparation
of alternative plans is essential as one plan is normally not adequate under
all types of situations. It is a type of stand-by arrangement useful for
meeting any emergency.
9. Selecting Operating Plan
And Preparing Derivative Plans:
After a study of the business environment and the alternative plans available, the planners select the best execution plan. This decision is a delicate one and must be made with proper care. After the selection of the operating plan, the planners have to prepare derivative plans.
Such plans are related to different departments/activities and
constitute sub-sections of the operating plan. The division of the overall plan
into derivative plans is necessary for the easy execution of the whole plan.
10. Arranging Timing And
Sequence Of Operations:
Timing involves the fixation of
starting and finishing time for each job or piece of work. The sequence of
operations ensures the proper flow of work. This step in the planning process
is important as it brings coordination in the activities of different
departments.
The timing and sequence of
operations must be communicated to concerned departments, managers and staff
for implementation of the plan.
11. Securing Participation
Of Employees:
Planning needs the willing
participation of all employees and departments. For this, information regarding
the operative plan should be given to all employees and departments well in
advance. Here, the internal communication system should be used extensively.
For such participation, employees should be associated with the planning
process.
12. Follow-Up Of The Proposed
Plan:
The purpose of follow-up is to make a periodic review of the execution process. It is useful for understanding actual progress and deficiencies in the process of execution of the plan. This also facilitates the adoption of suitable remedial measures as and when required.
Thus, a periodical review of the plan which is under execution is necessary. Planning may fail to give expected results in the absence of a periodical review and introduction of suitable remedial measures if required.
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