UNIT - 3

PLANNING
DR DEEPA SAKTHI
 PLANNING

• A plan is a forecast for accomplishment. It is a predetermined course

of action.

• It is today’s projection for tomorrow’s activity.

• In other words, to plan is to produce a scheme for future action, to
bring about specified results at a specified cost, in a specified period
of time.
 LEVELS OF PLANNING
• Effectively designed organizational goals fit into a hierarchy so that
the achievement of goals at low levels permits the attainment of high-
level goals.
• This process is called a means-ends chain because low-level goals
lead to accomplishment of high-level goals.
 TYPES OF PLANNING
• Operational plans: The specific results expected from departments,
work groups, and individuals are the operational goals.
• Single-use plans: These plans apply to activities that do not recur or
repeat.
• Continuing or ongoing plans: These are usually made once and retain
their value over a period of years while undergoing periodic revisions
and updates.
• Tactical plans: A tactical plan is concerned with what the lower level
units within each division must do.

• Strategic plans: A strategic plan is an outline of steps designed with

the goals of the entire organisation as a whole in mind, rather than
with the goals of specific divisions or departments.

• Strategic planning begins with an organisation’s mission.

PRINCIPLES OF SOUND PLANNING

• 1Principle of contribution to objectives

• 2. Principle of primacy of planning
• 3. Principle of pervasiveness of planning
• 4. Principle of flexibility
• 5. Principle of periodicity
• 6. Principle of planning premises
• 7. Principle of limiting factor
CHARACTERISTICS OF PLANNING
• Planning has a number of characteristics:
• 1. Planning is goal-oriented.
• 2. Planning is a primary function
• 3. Planning is all-pervasive.
• 4. Planning is a mental exercise
• 5. Planning is a continuous process.
• 6.Planning involves choice
• 7. Planning is forward looking
• 8. Planning is flexible
• 9. Planning is an integrated process
FORECASTING
FORECASTING

• Forecasting is the process of estimation in unknown situations.

• Business forecasting is a systematic attempt to probe into the future,

so as to identify the threats and opportunities and achieve goals
successfully by making and implementing well designed plans of
action.
DETERMINANTS OF FORECASTING
• 1.Political stability
• 2. Population trends
• 3. Price levels
• 4. Government controls and fiscal policy
• 5. Employment, productivity and national income
• 6. Technical environment – some areas have shown great changes,
e.g. computers, and the impact of the speed of developments must
be especially noted.
ADVANTAGES OF FORECASTING
• 1. Acts as premises manager's planning and decision-making.
• 2. It helps in bringing a singleness of purpose to planning.
• 3. It improves the quality of managerial planning.
• 4.Helps in achieving better coordination by focusing attention on the
future.
• 5. Forecasting helps in minimizing the costly planning errors.
• 6. Helps in identifying the environmental forces and assists in facing
challenges with ease.
Limitations of Forecasting
• 1. Reliability of past data.
• 2. Accurate judgment is needed
• 3. Single figure forecasts may be unsatisfactory.
• 4. In highly volatile and turbulent environments, forecasting is
meaningless.
• 5. Cannot eliminate the margin of error, the possibility of mistakes.
Techniques of Forecasting
• Genius forecasting: This method is based on a combination of
intuition, insight, and luck.
• Trend extrapolation: These methods examine trends and cycles in
historical data.
• Consensus methods: Forecasting complex systems often involves
seeking expert opinions from more than one person.
• Cross-impact matrix method: The cross-impact matrix method
recognizes that the occurrence of an event can, in turn, affect the
likelihoods of other.
• Decision trees: Decision trees
originally evolved as graphical
devices to help illustrate the
structural relationships between
alternative choices.
• Economic Forecasting: Economic
forecasting is one of the
common types of external
forecasting. The basic aim of
economic forecasting is to
predict business fluctuations
 DECISION MAKING
• Decision-making is almost universally defined as choosing between
alternatives.
• Decision-making is a critical activity in the lives of managers. The
decisions a manager faces can range from very simple, routine
matters for which the manager has an established decision rule
(programmed decisions) to new and complex decisions that require
creative solutions (non-programmed decisions).
• The word "decision" is derived from the Latin words "de ciso" which
means, "cutting away" or to come to a conclusion. A decision is the
selection of a course of action.
DEFINITIONS

• According to Felex M Lopez, "a decision represents a judgement; a

final resolution of a conflict of needs, means or goals; and a
commitment to action made in the face of uncertainty, complexity or
even irrationality."

• According to Philip Marvin, "decision-making may be viewed as the

process by which individuals select a course of action from among
alternatives to produce a desired result. It is a process made up of
four continuous interrelated phases: explorative, speculative,
evaluative and selective."
TECHNIQUES IN DECISION MAKING
PROCESS
• 1. Attribute Listing: This technique was developed by Robert
Crawford. It involves listing of all attributes of an object or problem.
Then an attempt is made to modify each attribute or group of
attributes in as many ways as possible.
• 2. Brain Storming: This is a technique developed by Alex F. Osborn, an
advertising agency executive. Under this technique, a group of
persons is given a problem and they are encouraged to suggest
whatever solutions come to their mind. The discussion is free and
uninhibited.
• 3. Garden Technique (Synectics): William J. Gordon developed this
technique. In order to encourage wider and a more innovative
outlook, the participants are kept in dark about the exact nature of
the problem. Gordon technique is more unconstrained than
brainstorming.

• 4.Delphi Technique: This technique is used to collect information

from physically dispersed persons by means of a written
questionnaire. This technique permits collection of ideas from experts
placed in different locations. The members are not influenced by one
another, as there is no face-to-face interaction.
• 5.Nominal Group Technique:

• This technique consists of the following steps:

• (a) the leader explains the problem to the members of the target
group
• (b) each member writes down his ideas silently and independently
• (c) each member presents his one best idea to the group which is
written on a blackboard for all to see
• (d) a discussion is held to explain and evaluate the idea.