Chapter 4 planning.pptx including all the content

Easy notes of planning class 12

1. Chapter 4 PLANNING MEANING: Planning is deciding in advance what to do, how to do, when to do and who has to do it. Planning may be defined as- ‘Setting objectives for a given time period, formulating various courses of action to achieve them and then selecting the best possible alternative from among the different courses of action.’ It is basically a process of ‘thinking before doing’ It bridges the gap between where we are and where we want to go. .

2. FEATURES OF PLANNING DCP OF MP 1) D- PLANNING INVOLVES D ECISION MAKING . 2) C- PLANNING IS C ONTINUOUS. 3) P- PLANNING IS P ERVASIVE. 4) O- PLANNING FOCUSES ON ACHIEVING O BJECTIVES . 5) F- PLANNING IS F UTURISTIC. 6) M- PLANNING IS M ENTAL EXERCISE. 7) P- PLANNING IS A P RIMARY FUNCTION OF MANAGEMENT.

3. 1) D- PLANNING INVOLVES D ECISION MAKING Planning is essentially the process of choosing the best alternative among alternative courses of action. 2) C- PLANNING IS C ONTINUOUS. Plans are prepared for a specific time period, eg ., one year, at the end of that period, new plans have to be prepared. Moreover, due to ever changing environment, planning becomes a continuous responsibility of management. 3) P- PLANNING IS P ERVASIVE Planning is required at all levels and in all the departments of the organisation . It is not the exclusive function of top management or a particular department. Rather , it is performed by all managers at various levels.

4. 4) O- PLANNING FOCUSES ON ACHIEVING O BJECTIVES Planning function of management involves determination of objectives and the steps to be followed to achieve these objectives. 5) F- PLANNING IS F UTURISTIC . Planning is essentially forward looking. It is the process of charting out the path for future actions to achieve the objectives of business. 6) M- PLANNING IS M ENTAL EXERCISE Planning requires application of the mind involving creative thinking and imagination, foresight and sound judgement . 7) P- PLANNING IS A P RIMARY FUNCTION OF MGMT. Planning lays down the base for other functions of management. Planning precedes other functions of Mgmt .

5. IMPORTANCE OF PLANNING DR SODI 1) D- PLANNING PROVIDES D IRECTION. 2) R- PLANNING REDUCES THE R ISKS OF UNCERTAINITY 3) S- PLANNING ESTABLISHES S TANDARDS FOR CONTROLLING. 4) O- PLANNING REDUCES O VERLAPPING AND WASTEFUL ACTIVITIES. 5) D- PLANNING FACILITATES D ECISION-MAKING . 6) I- PLANNING PROMOTES I NNOVATIVE IDEAS.

6. 1) D- PLANNING PROVIDES D IRECTION As it acts as a guide for deciding what course of action should be taken to attain the organisational goals. 2) R- PLANNING REDUCES THE R ISKS OF UNCERTAINITY With the help of planning , managers can identify potential dangers and take steps to overcome them. 3) S- PLANNING ESTABLISHES S TANDARDS FOR CONTROLLING. Planning provides standards against which the actual performance is measured and timely corrective actions can be taken.

7. 4) O- PLANNING REDUCES O VERLAPPING AND WASTEFUL ACTIVITIES . Since planning ensures clarity of action, it helps in avoiding confusion and misunderstanding. Useless and redundant activities are minimized or eliminated. 5) D- PLANNING FACILITATES D ECISION-MAKING Plans lay down in advance what is to be done and when. Therefore, decisions can be taken with greater confidence. 6) I- PLANNING PROMOTES I NNOVATIVE IDEAS. Planning is thinking in advance and therefore, there is a scope of finding better ideas and better methods and procedures to reach the objectives/goals of the enterprise.

8. LIMITATIONS OF PLANNING NCR DTC 1) N- PLANNING DOES N OT GUARANTEE SUCCESS. 2) C- PLANNING REDUCES C REATIVITY 3) R- PLANNING CREATES R IGIDITY 4) D- PLANNING DOES NOT WORK IN A D YNAMIC ENVIRONMENT 5) T- PLANNING IS A T IME CONSUMING PROCESS 6) C- PLANNING INVOLVES HUGE C OSTS

9. 1) N- PLANNING DOES N OT GUARANTEE SUCCESS Managers have a tendency to rely on previously tried and tested successful plan. But it is not always true that a plan which has worked before will work effectively again. 2) C- PLANNING REDUCES C REATIVITY Planning is done by top management. Middle management and other decision makers are not allowed to deviate from plans . They only carry out orders. Thus, planning reduces creativity. There is nothing new or innovative. 3) R- PLANNING CREATES R IGIDITY P lanning leads to rigid mode of functioning for managers. This has adverse effect on the initiative to be taken by them.

10. 4) D- PLANNING DOES NOT WORK IN A D YNAMIC ENVIRONMENT It is not always possible to accurately access future trends in the dynamic business environment. 5) T- PLANNING IS A T IME CONSUMING PROCESS Planning requires collection of information, its analysis and interpretation. These activities may take considerable time. 6) C- PLANNING INVOLVES HUGE C OSTS When plans are drawn up, huge costs are involved in the formulation of plans. If the costs are not justified by the benefits derived from the plan, it may have adverse effect on the enterprise.

11. Steps in planning process S DIES IF SELECTING AN ALTERNATIVE IMPLEMENT THE PLAN SETTING OBJECTIVES DEVELOPING PREMISES IDENTIFYING ALTERNATIVE COURSES OF ACTION EVALUATING ALTERNATIVE COURSES FOLLOW- UP ACTION

12. 1-SETTING OBJECTIVES The first and foremost step is setting objectives. Objectives may be set for the entire organisation and each department or unit within the organisation . Objectives or goals specify what the organisation wants to achieve. For example, objective may be to increase sales by 20%. 2-DEVELOPING PREMISES Planning is concerned with the future which is uncertain. Therefore, the manager is required to make certain assumptions about the future. These assumptions are called ‘ PREMISES”. Plans are to be drawn on the basis of premises.

13. 3-IDENTIFYING ALTERNATIVE COURSES OF ACTION Once the objectives are set and assumptions are made, the all the alternative courses of action should be identified. 4-EVALUATING ALTERNATIVE COURSES The next step is to evaluate alternative courses in the light of their feasibility, profitability and consequences. 5-SELECTING AN ALTERNATIVE this is the real point of decision making. The best plan has to be adopted and implemented. This plan would be the most feasible, profitable and with least negative consequences.

14. 6-IMPLEMENT THE PLAN This step is concerned with putting plan into action, i.e. doing what is required. 7-FOLLOW- UP ACTION It includes monitoring the plan to see whether the activities are being performed according to schedule so that objectives are achieved.

15. TYPES OF PLANS PLAN IS A DOCUMENT SHOWING DETAILED SCHEME, PROGRAM, AND STRATEGY, WORKED OUT IN ADVANCE FOR FULFILLING AN OBJECTIVE. These plans may be grouped into two broad categories: Standing Plans and Single use Plans TYPES OF PLANS STANDING PLAN SINGLE USE PLAN

16. STANDING PLAN Vs SINGLE USE PLAN BASIS STANDING PLANS SINGLE USE PLANS MEANING These plans refer to the plans, which cab be used again and again whenever a particular situation arises. These plans refer to plans formulated to meet the requirements of a particular situation and to accompalish specific objectives. OBJECTIVES These are developed for activities, which are of recurring nature. These are developed for activities which are not likely to be repeated in future. PERIOD These plans are formulated for long period. These plans are generally formulated for a short period. STABILITY These are relatively stable as they are used over and over again. These are less stable as they discarded when the specific situation or project is over. SCOPE These have a wider scope as they involve more than one department of business function. These have a narrow scope as they are formulated to fit the specific situation. EXAMPLE Policy, Procedure, Method, Rules Budget and Programme .

17. Hierarchy of plans P ee B hai P ee, R oz P ee, M ango O range S harbat BUDGET RULES METHODS STRATEGY POLICY PROCEDURE PROGRAMME OBJECTIVES

18. OBJECTIVES: These are the ends which the management seeks to achieve within a given time period. Objectives should be expressed in specfic terms, i.e. they should be measurable in quantitative terms. Eg -the objective of the mobile company cab be to increase the mobile usera by 10% in 2 years. These are neither standing nor single use plans. STRATEGY: Strategy is a comprehensive plan make in response to change s in the business environment to achieve organisational objectives. Strategy provides the broad contours of an organisation’s business. The three dimensions of Strategy are: i ) Determining long term objectives Ii) Adopting a particular course of action Iii) Allocating resources necessary to achieve the objectives. These are neither standing nor single use plans.

19. POLICIES: Policies are general statements that guide thinking or channelise energy towards a particular direction. Policies are derived from Objectives. They define a broad parameters within which a manager may use his discretion to apply the policy. Eg - Policy of a company may be not to employ any person who is less than 18 years of age. These are standing plans. PROCEDURES: A Procedure is a chronological sequence of various steps to be taken into order to perform an activity in an efficient manner. Eg - an enterprise may have procedure to purchase of goods etc. These are standing plans.

20. METHODS: A method is a prescribed process in which a particular operation or an activity is performed. Methods specify the manner in which each segment of a task can be performed efficiently and effectively. The method may vary from task to task. Eg - There are different methods available for valuation of stocks- LIFO or FIFO etc. These are standing plans. Rules: Rules are specific statements that inform what is to be done and what is not to be done. These are the simplest type of plans . Rules are rigid and demand strict compliance. Their violation is generally associated with some sort of disciplinary action. Eg - a company may have rule of ‘no smoking’ in the factory premises. These are standing plans

21. BUDGET: Budget is a statement of expected result expressed in numerical terms over a specific period of time. They also serve as a control device and yardstick for measuring actual performance.. Eg - sales budget, cash budget, revenue and expense budget etc. These are single use plans. PROGRAMME: A programme is a combination of objectives, policies, procedures, rules, tasks and other elements which are designed to get a systematic working in the organisation . It gives a step by step approach to guide the action necessary to reach a predetermined goals. E g -training programme , sales programme etc. These are single use plans.