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PLANNING
A plan is a future course of actions.
Planning is the first and the most important function of management that involves setting objectives and determining a course of action for achieving those objectives. It deals with checking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals.
Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.
Planning involves selecting missions and objectives and the actions to achieve them, it requires decision making, i.e. choosing future courses of action from among alternatives.
Planning as a process typically involves the following steps:
- Selection of goals for the organization.
- Establishment of goals for each of the organization’s sub-units.
- Establishment of programs for achieving goals in a systematic manner.
Types of Planning
- Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization. It also involves determining how to position the organization to compete effectively in their environment.
- Tactical planning is creating the blueprint for the lager strategic plan. These plans are often short term and are carried out by middle-level managers.
- Operational planning generally covers the entire organization’s goals and objectives and put into practice the ways and action steps to achieve the strategic plans. They are very short terms usually less than a year.
Planning is a pervasive function as it is performed by all managers at all levels. It only varies with authority and nature of policies. (A manager is not a manager if he does not perform a planning function).
Plans must be efficient – where efficiency is measured by the contribution of the plan to accomplish objectives at the lowest cost. It implies the input-output ratio and cost-benefit analysis of the of the plan. The efficiency of plans is not measured only in terms of money but intangible costs such low morale, hostility by employees, layoffs, and resentment. A plan becomes inefficient if it cannot accomplish its intended objective or accomplishes it at high costs
Steps in Planning
- Identifying opportunities.
Panning requires realistic diagnosis of the opportunity situation. The ability to see clearly future opportunities, and have knowledge of own strengths and weaknesses.
2) Establishing objectives
This involves specifying expected results
3) Setting the parameters or boundaries within which realistic goals can be formulated.
It means the org. cannot set goals and make goals that are unattainable in terms of the environment and resources at the disposal of the org.
Planning premises are derived from the:
- Purpose of the Organization.
- Mission
- Business environment
- Management values which determine the organizational commitment to social responsibility
- Experience of management.
4) Determining alternative courses of action.
This step Involves searching and examining of alternative courses of action. Alternatives may be many but they have to be reduced and analyzed until only a few promising ones remain. (Plan A versus Plan B)
5) Evaluating alternative courses of action.
This step involves weighing the strengths and weaknesses of a plan against set objectives. Evaluation is in terms of risk, profitability, returns, costs, technology, image etc. Evaluation is difficult because of the many variables that can influence a plan.
6) Selecting a course of action.
This is the point at which a plan is adopted. It is the point of decision making on which alternative to follow.
7) Formulating derivative plans.
Once a decision is made and a course of action taken, derivative plans are required to support the basic plan. E.g. KQ decides to acquire a new fleet, hence derivative plans would be needed for expansion of runways, hiring and training new pilots, crew, acquisition of spare parts, scheduling and advertising, insurance etc.
8) Numbering plans by budgeting.
After decisions are made and plans set, they have to be given meaning. This is done by converting the plans into budgets representing income and expenses, profit and losses, etc. Budgets are an important of measure and control of plans.