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 Premises
Identifying 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 On the basis of origin

•Organizational Policies •Basic Policies
•Functional & •Appealed Policies
Departmental Policies •Imposed Policies

On the basis of clarity-

On the basis of freedom
•Written Policies
•General Policies
•Oral Polices
•Specific 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 Strategy Policy
Differentiation

1. Need Formulated for unforseen To tackle repeatedly

problems appearing problems of
the same nature
2. Type of Plan Adhoc plan and is formulated Standing plan, used
new every time time and again

3. Role of Formulated in view of the Not necessary to be

Competitors activities of the competitors based on competitors
move.
4. Guide Directs the use of human & Guide for ideas and
physical resources decision making