PLANNING

INTRODUCTION & concept :-

Planning is deciding about future course of action to attain
the desire objectives. Planning is basis to rest of all the
managerial function planning is important for every kind of
function it has been adopted as an essential process of
accomplishment by all business enterprises, its is the
process by which not only objective establish but also all the
recourses of the firm are effectively integrated to fulfill the
objectives. Planning is the mental activity it requires
foresight, imagination and judgment.

First Step In Planning Is To Asses The Present Status Of

The Organization By Reviewing And Analyzing A Great Deal
Of Data From Variety Of Sources Including Information
About Environment. The Resources And About Organization
Itself.
Plans Involves Selecting Objectives And Setting
Departmental Goals & Determining Ways Of Reaching
Them.

According to the M.E hurle :- planning is decide in advance

what is to be done in future it involves the selection of
objectives, policies, procedure and program for attaining the
objectives .
Most basic task of any Mgr is planning. •Mgr’s most
important essential task is to see that everyone understands
the group’s purposes & objectives its method of attaining
them. If group effort is to be effective, people must know
what they are expected to accomplish.
“Planning Is The Process Of Determination Of The
Desired Future Destination And Direction In Terms Of
Objectives And Aspirations Of Any Organization, As
Also The Ways Means Of Achieving Them Over A
Specific Period Of Time.”

NATURE OF PLANNING

1. Planning is the continuous process

Planning is continuous process because it deals
with the future by its very nature ,is uncertain. although the
planner bases his plan on an informed and intelligent
estimate of the future. the future events may not turn out to
be exactly as predicted this aspects of planning makes it’s a
continuous process .

2. Planning concern all the managers

it’s a responsibility of every manager to set his
goal and operating plans. In doing so he formulates his
goals and plans within the framework of the goals of the
superior thus planning is not responsibility of the top
management or the staff planning department only; all
those who are responsible for the achievement of the results
have an obligation to plan into the future.

3. Goal oriented
 Planning is very closely associated with the goals or
objectives of the organization. Specific goals are set in the
plan along with the activities to be undertaken to achieve
the goal. Well defined goal lead to efficiency in the
planning.

4. Basic function
Planning occupies the first place in the list of the
managerial function. This is because the decision as regards
the organization structure, staffing, motivation, leadership
will be dependent on the objectives and action plan of the
business.

5. Forward looking
Planning is the always forward looking .the aim
of planning is to think of the future is to best advantage of
an organization.

6. Based on availability of recourses

Plan are always formulated taking into account the
availability of resources and all the processes are performed
accordingly.

7. Plans are arrange in the steps

plan are the first set for the entire organization called
the corporate plan . the corporate plan provides the
framework for the formulation of divisional departmental
and sectional goals. each of these organizational component
sets its plan laying down the programmes , project, budgets,
resources requirement , etc. the plan of each lower
components are aggregates into the plan of successively
higher components until the corporate plans into a
composite whole. for Ex. in a production department ,each
shop superintendent set his plan ,which are successively
integrated into the general
Foremen’s works managers and production managers plan.
all departments plan are integrated into the corporate plan
thus there is a step .

8. Planning commits an organization into the future

Planning commits an organization into the future as

past present and future are tied in a chain. An
organizational objectives , strategies policies and orating
plan affect its future effectiveness as decision made and
activities is to be undertaken in the present continue to have
their impact in future.

9. Flexibility
it is flexible as it is based on future condition which
too are dynamic. Planning must cope with changes in future
condition. in practice , new problems arise quite often and
to meet these managers must take changes in the existing
plans.

10. Involve choice

in organization there are alternative courses of action
for pursuit of any objective. therefore picking out the best
from among a number of alternatives .
PLANNING PROCESS
Determination of objectives

Establishing planning premises or assumption

Determining alternative course of action

Selecting the best one

Establish the sequence of activities

Determining secondary plans

Securing co-operation

Reviewing the planning process

In details

Determination of objectives

The first step in planning is setting the objectives or goals.

The objectives relate to what the organization need. The
objectives must be clearly specified and measurable as far
as possible. Integrated efforts of human and physical
factors should be channelised towards the desire objectives.
Planning should always be goal oriented .objective
indicates what basically is to be done, where the primary
emphasis is to be placed and what is to be accomplished by
the network of policies, procedure, rules programme and
strategies.

1. Establishing planning premises or assumption

Under this certain assumption upon which the planning will

be predicted are made this premises point out the
background assume to exist to validate the plan. They are
the backdrops on the stag of planning and should be
carefully noted so that the plan can be thoroughly
understood. According to Henry fayol, the entire plan of an
enterprise is made of a series of separate plan called
forecast such as
1. Genral business forecast
2. Sales forecast
3. Capital fore casts
The planning premises act as environment of plan in
operation and are thus the basis of planning
 2. Determining alternative course of action

When the forecasts are available and premises are establish

a number of alternative course of action have to be
consider. often there will be more then one way to
achieve a particular objective .in fact in many
situation there mat be a an unlimited no. of
alternatives plans of action .the management
should try to find out these alternatives and
examine them carefully in the light of planning
premises .

4. Selecting the best one

After evaluating the various alternatives the best suited

alternative is selected . With the help of mathematical and
statical techniques and otherwise a decision will ultimately
be made in favour of one or the other alternative courses of
action. In this context the plans expediency adaptability and
cost are important.

5 Establish the sequence of activities

after selecting the best plan its relation to all activities

affected by it are worked out the details of where the
planed action should be done by whom and were are put in
a proper order for the indented purpose the approach and
the timing of the application are vital .
6. Determining secondary plans

Secondary plan flow from the basic plan these are meant to
support and expedite the achievement of basis plan for ex.
ones the production plan is prepared secondary plan
regarding raw material consumable store acquisition of
necessary equipments tools and training of workers etc are
drawn out .

7. Securing co-operation

the plan formulated must be implemented effectively for

this purpose co-operation of all the members of the
organization is needed . the plan should be communicated
and explained in proper forms to the workers so that they
are well inform about it their useful suggestion should be
given proper weight age better result would come when
employs take active participation plan to be adapted.

8. Reviewing the planning process

Success of the plan is measures by the result there for

provision for adequate follow-up to determine compliance
an result should be included in the planning work.
Normally of course this is including in the fundamental
functions of controlling.
 OR
PLANNING PROCESS

and when
Where we want to be and what we want to accomplish

Setting objective or goal

Considering planning premises

In what environment – internal or external –will our

plans operate?

Identify alternatives

What are the most promising alternatives to

accomplishing our objective?
Comparing alternative in light of goals sought

Which alternative will give us the best change of meeting

our goals at the lowest cost and higher profit?
Choosing an alternatives

Selecting the course of action will pursue

Formulating supportive plans
Such as plans to:
Buy equipment
Buy materials
Hire and train workers
Develop a new product

Numbering plans by making budget

Develop such budget as :

Volume &price of sales
Operating expenses necessary for plans
Expenditure for capital equipment
 Follow – up

Checking up the progress of the plan

TYPES OF PLANNING

1. SHORT –RANGE PLANING :-

The short range planning covers period

of one month to 2 years depending on the nature of the
business and the traditions prevailing in the industry
short range plan are otherwise called operational plans.
the primary concern is efficiency (doing things right )
 rather then effectiveness (doing the right things )
operating plan content and form to long range plans. In
fact, short range planning is an extension of long range
plans market plan , production plan , financial plans are
typical example of operational planning.

2. LONG –RANGE PLANING

Long range planning covers a

relatively long period of the time anything over a five
year period and affect many department \ division of
the organization. It includes the formulation of
overall broad objective and the selection of
appropriate means by which the objective are to be
achieved. long range planning is quite common in
stable industries such as steel ,automobile. in India ,
public sector companies adopt the national planning
period of five years. long range planning is the series
of the step :
1. the first step is the estimation of the
international national and local situation .the
possible future changes that might take place
in areas external to an organization are
examined
2. The second step of long range planning is
defining the goal is to be pursued by the
organization and the philosophy to be
adopted.
 3. The third step in long range planning answer
the question where are we now?
4. in the forth step an attempt is made to find
out the strong or weak spots on the
company’s program till date in the light of
additional information on sales selling
expenses ,production target capital inflows
etc . the deficiency are rectified promptly
5. now a full blown program of longer range
planning is developed and approval is sought
for its adoption
6. The last step is concern with the placing long
range planning into the work .its divided into
the action plan.

3. COORDINATIVE or
TACTICAL PLANNING

This are concern with the

implementation of strategic plan by coordinating the
work of different department in the organization.

4. FORMAL AND INFORMAL

PLANNING
 A formal plan is well documented plan.
It is written record of what organization intends to do
within a time frame. The record is made after a
careful evolution of all relevant factor that have a
bearing all organizational function .it is systematic
and rational .
In Formal planning does not offer a
written record. It is carried out without any
direction .managerial thoughts which do not find
expression on paper are informal plans UN healthy
tendencies like carelessness in planning and
implementation, loss of memory and direction might
creep in it should be followed as an exception rather
then a rule .

5. FUNCTIONAL AND CORPORATE

PLANNING

Functional planning is
“unit planning “ it deals with part such as
production, marketing ,finance, manufacturing in
an isolated manner as a result the functional
planner develop a parts mentality they often fail to
see the total big picture the impact of internal as
well external factor may not be fully taken care of
the in respect of functional planning
 Corporate planning outlines the broad objective
of the company as a whole and develops plan
design to meet those objective. it has both the
micro as well as macro focus. it takes a long term
view . it tries it strike a balance between
organizational recourses and environmental
challenges .

6. PROTECTIVE PLANNING

Is the way of thinking about

managing the future risk and challenges .it tries
to take of all future contingencies and changes
plan are often tied to a time frame Protective
planning makes manager alert and sensitive to
all such changes they are force to be a dynamic,
active and creative .

Advantages of planning
 Planning
provides ba
for all
cooperative
Planning coordinate
makes effort
activities of
employees
meaningful

Provides
future
destination

Advanta
s of
Planning plannin
provide
direction
For details of points which covered in the wheel
It provide
c R.D agarwal . basis for
control

It releases
force of
innovation
and
LIMITATION OF creativity
PLANNING

1. Limitation of information: - lack of

sufficient information and facts , and
doubts as to the accuracy and relevance
of the available data constitute this type
of limitation.
2. Time limit :- people generally are not
aware about the plan. Failure and
 success of a plan depends upon the
correct time span
3. costly and time consuming :- planning

is costly .it is expensive in terms of time

spent to formulate the plan, the man
power required to do the planning and
recourses needed to execute the plan the
collection of the information , evolution
of alternatives , selection a best one may
consume lot of executive time and
organization recourses .
employee resistance :- for any plan to
succeed , you need operating people to
understand it, embrace it , and make it
happen one of the frequent complaint made
against the planning process is that it is done
by specialist who are not in touch with
operation. as a result operating people who
are not involved in planning tend to resist
the planning process .
PLANNING
INTRODUCTION & concept :-
Planning is deciding about future course of action to attain
the desire objectives. Planning is basis to rest of all the
managerial function planning is important for every kind of
function it has been adopted as an essential process of
accomplishment by all business enterprises, its is the
process by which not only objective establish but also all the
recourses of the firm are effectively integrated to fulfill the
objectives. Planning is the mental activity it requires
foresight, imagination and judgment.

First Step In Planning Is To Asses The Present Status Of

The Organization By Reviewing And Analyzing A Great Deal
Of Data From Variety Of Sources Including Information
About Environment. The Resources And About Organization
Itself.
Plans Involves Selecting Objectives And Setting
Departmental Goals & Determining Ways Of Reaching
Them.

According to the M.E hurle :- planning is decide in advance

what is to be done in future it involves the selection of
objectives, policies, procedure and program for attaining the
objectives .
Most basic task of any Mgr is planning. •Mgr’s most
important essential task is to see that everyone understands
the group’s purposes & objectives its method of attaining
them. If group effort is to be effective, people must know
what they are expected to accomplish.

“Planning Is The Process Of Determination Of The

Desired Future Destination And Direction In Terms Of
Objectives And Aspirations Of Any Organization, As
Also The Ways Means Of Achieving Them Over A
Specific Period Of Time.”

NATURE OF PLANNING

1. Planning is the continuous process

Planning is continuous process because it deals
with the future by its very nature ,is uncertain. although the
planner bases his plan on an informed and intelligent
estimate of the future. the future events may not turn out to
be exactly as predicted this aspects of planning makes it’s a
continuous process .

2. Planning concern all the managers

it’s a responsibility of every manager to set his
goal and operating plans. In doing so he formulates his
goals and plans within the framework of the goals of the
superior thus planning is not responsibility of the top
management or the staff planning department only; all
those who are responsible for the achievement of the results
have an obligation to plan into the future.

3. Goal oriented
Planning is very closely associated with the goals or
objectives of the organization. Specific goals are set in the
plan along with the activities to be undertaken to achieve
the goal. Well defined goal lead to efficiency in the
planning.

4. Basic function
Planning occupies the first place in the list of the
managerial function. This is because the decision as regards
the organization structure, staffing, motivation, leadership
will be dependent on the objectives and action plan of the
business.

5. Forward looking
Planning is the always forward looking .the aim
of planning is to think of the future is to best advantage of
an organization.

6. Based on availability of recourses

Plan are always formulated taking into account the
availability of resources and all the processes are performed
accordingly.

7. Plans are arrange in the steps

plan are the first set for the entire organization called
the corporate plan . the corporate plan provides the
framework for the formulation of divisional departmental
and sectional goals. each of these organizational component
sets its plan laying down the programmes , project, budgets,
resources requirement , etc. the plan of each lower
components are aggregates into the plan of successively
higher components until the corporate plans into a
composite whole. for Ex. in a production department ,each
shop superintendent set his plan ,which are successively
integrated into the general
Foremen’s works managers and production managers plan.
all departments plan are integrated into the corporate plan
thus there is a step .

8. Planning commits an organization into the future

Planning commits an organization into the future as

past present and future are tied in a chain. An
organizational objectives , strategies policies and orating
plan affect its future effectiveness as decision made and
activities is to be undertaken in the present continue to have
their impact in future.

9. Flexibility
it is flexible as it is based on future condition which
too are dynamic. Planning must cope with changes in future
condition. in practice , new problems arise quite often and
to meet these managers must take changes in the existing
plans.

10. Involve choice

in organization there are alternative courses of action
for pursuit of any objective. therefore picking out the best
from among a number of alternatives .
PLANNING PROCESS
Determination of objectives

Establishing planning premises or assumption

Determining alternative course of action

Selecting the best one

Establish the sequence of activities

Determining secondary plans

Securing co-operation

Reviewing the planning process

In details

Determination of objectives

The first step in planning is setting the objectives or goals.

The objectives relate to what the organization need. The
objectives must be clearly specified and measurable as far
as possible. Integrated efforts of human and physical
factors should be channelised towards the desire objectives.
Planning should always be goal oriented .objective
indicates what basically is to be done, where the primary
emphasis is to be placed and what is to be accomplished by
the network of policies, procedure, rules programme and
strategies.

3. Establishing planning premises or assumption

Under this certain assumption upon which the planning will

be predicted are made this premises point out the
background assume to exist to validate the plan. They are
the backdrops on the stag of planning and should be
carefully noted so that the plan can be thoroughly
understood. According to Henry fayol, the entire plan of an
enterprise is made of a series of separate plan called
forecast such as
1. Genral business forecast
2. Sales forecast
3. Capital fore casts
The planning premises act as environment of plan in
operation and are thus the basis of planning
 4. Determining alternative course of action

When the forecasts are available and premises are establish

a number of alternative course of action have to be
consider. often there will be more then one way to
achieve a particular objective .in fact in many
situation there mat be a an unlimited no. of
alternatives plans of action .the management
should try to find out these alternatives and
examine them carefully in the light of planning
premises .

4. Selecting the best one

After evaluating the various alternatives the best suited

alternative is selected . With the help of mathematical and
statical techniques and otherwise a decision will ultimately
be made in favour of one or the other alternative courses of
action. In this context the plans expediency adaptability and
cost are important.

5 Establish the sequence of activities

after selecting the best plan its relation to all activities

affected by it are worked out the details of where the
planed action should be done by whom and were are put in
a proper order for the indented purpose the approach and
the timing of the application are vital .

6. Determining secondary plans

Secondary plan flow from the basic plan these are meant to
support and expedite the achievement of basis plan for ex.
ones the production plan is prepared secondary plan
regarding raw material consumable store acquisition of
necessary equipments tools and training of workers etc are
drawn out .

7. Securing co-operation

the plan formulated must be implemented effectively for

this purpose co-operation of all the members of the
organization is needed . the plan should be communicated
and explained in proper forms to the workers so that they
are well inform about it their useful suggestion should be
given proper weight age better result would come when
employs take active participation plan to be adapted.

8. Reviewing the planning process

Success of the plan is measures by the result there for

provision for adequate follow-up to determine compliance
an result should be included in the planning work.
Normally of course this is including in the fundamental
functions of controlling.

OR
PLANNING PROCESS

and when
Where we want to be and what we want to accomplish

Setting objective or goal

Considering planning premises

In what environment – internal or external –will our

plans operate?

Identify alternatives

What are the most promising alternatives to

accomplishing our objective?
Comparing alternative in light of goals sought

Which alternative will give us the best change of meeting

our goals at the lowest cost and higher profit?
Choosing an alternatives

Selecting the course of action will pursue

Formulating supportive plans
Such as plans to:
Buy equipment
Buy materials
Hire and train workers
Develop a new product

Numbering plans by making budget

Develop such budget as :

Volume &price of sales
Operating expenses necessary for plans
Expenditure for capital equipment
 Follow – up

Checking up the progress of the plan

TYPES OF PLANNING

1. SHORT –RANGE PLANING :-

The short range planning covers period

of one month to 2 years depending on the nature of the
business and the traditions prevailing in the industry
short range plan are otherwise called operational plans.
the primary concern is efficiency (doing things right )
 rather then effectiveness (doing the right things )
operating plan content and form to long range plans. In
fact, short range planning is an extension of long range
plans market plan , production plan , financial plans are
typical example of operational planning.

2. LONG –RANGE PLANING

Long range planning covers a

relatively long period of the time anything over a five
year period and affect many department \ division of
the organization. It includes the formulation of
overall broad objective and the selection of
appropriate means by which the objective are to be
achieved. long range planning is quite common in
stable industries such as steel ,automobile. in India ,
public sector companies adopt the national planning
period of five years. long range planning is the series
of the step :
1. the first step is the estimation of the
international national and local situation .the
possible future changes that might take place
in areas external to an organization are
examined
2. The second step of long range planning is
defining the goal is to be pursued by the
organization and the philosophy to be
adopted.
 3. The third step in long range planning answer
the question where are we now?
4. in the forth step an attempt is made to find
out the strong or weak spots on the
company’s program till date in the light of
additional information on sales selling
expenses ,production target capital inflows
etc . the deficiency are rectified promptly
5. now a full blown program of longer range
planning is developed and approval is sought
for its adoption
6. The last step is concern with the placing long
range planning into the work .its divided into
the action plan.

3. COORDINATIVE or
TACTICAL PLANNING

This are concern with the

implementation of strategic plan by coordinating the
work of different department in the organization.

4. FORMAL AND INFORMAL

PLANNING
 A formal plan is well documented plan.
It is written record of what organization intends to do
within a time frame. The record is made after a
careful evolution of all relevant factor that have a
bearing all organizational function .it is systematic
and rational .
In Formal planning does not offer a
written record. It is carried out without any
direction .managerial thoughts which do not find
expression on paper are informal plans UN healthy
tendencies like carelessness in planning and
implementation, loss of memory and direction might
creep in it should be followed as an exception rather
then a rule .

5. FUNCTIONAL AND CORPORATE

PLANNING

Functional planning is
“unit planning “ it deals with part such as
production, marketing ,finance, manufacturing in
an isolated manner as a result the functional
planner develop a parts mentality they often fail to
see the total big picture the impact of internal as
well external factor may not be fully taken care of
the in respect of functional planning
 Corporate planning outlines the broad objective
of the company as a whole and develops plan
design to meet those objective. it has both the
micro as well as macro focus. it takes a long term
view . it tries it strike a balance between
organizational recourses and environmental
challenges .

6. PROTECTIVE PLANNING

Is the way of thinking about

managing the future risk and challenges .it tries
to take of all future contingencies and changes
plan are often tied to a time frame Protective
planning makes manager alert and sensitive to
all such changes they are force to be a dynamic,
active and creative .

Advantages of planning
 Planning
provides ba
for all
cooperative
Planning coordinate
makes effort
activities of
employees
meaningful

Provides
future
destination

Advanta
s of
Planning plannin
provide
direction
For details of points which covered in the wheel
It provide
c R.D agarwal . basis for
control

It releases
force of
innovation
and
LIMITATION OF creativity
PLANNING

1. Limitation of information: - lack of

sufficient information and facts , and
doubts as to the accuracy and relevance
of the available data constitute this type
of limitation.
2. Time limit :- people generally are not
aware about the plan. Failure and
 success of a plan depends upon the
correct time span
3. costly and time consuming :- planning
is costly .it is expensive in terms of time
spent to formulate the plan, the man
power required to do the planning and
recourses needed to execute the plan the
collection of the information , evolution
of alternatives , selection a best one may
consume lot of executive time and
organization recourses .
4. employee resistance :- for any plan to
succeed , you need operating people to
understand it, embrace it , and make it
happen one of the frequent complaint
made against the planning process is
that it is done by specialist who are not
in touch with operation. as a result
operating people who are not involved
in planning tend to resist the planning
process .
5. Uncertainties In the future:-planning
is based on a estimate of the future
 condition in and outside the company.
Since future can not be predicted
accurately, the forecast and premises
underlying the plans are subject to
error .
6. Past decision:-past decision act as a
barrier to future planning.
7. rapid change :- rapid change in
technology and consumer test are future
limitation to planning in aircraft ,
chemical , electronics and information
industry is specially complicated due to
complex and changing production
technology but all industry specially
textile , sugar shoe are not subject to
rapid change .
8. Administrative problem;-this problem
f planning centre around the creation of
an environment conductive to planning.
Some executive seems to think that
planning is useless coz future will not
be same. Planning also require abstract
thinking and analysis.
THE PLANNING FUNCTION:-

The planning process

Forecast
Budget

Objectives Action Reso

 Performance outcome

Components of Planning

• Planning comprises of:-

 • Strategies
• Policies standing plans
• Procedures
• Methods
• Standards
• Programs
• Project Single use (for
fixed purpose/period)
• Budgets
“ These components are considered
instruments of Planning”

Classification of Planning ;-

• Purposes or Missions
• Objectives or Goals
 • Strategies
• Policies
• Procedures
• Rules
• Programs
• Budgets

Mission or
Purpose :-
• It identifies basic function of an enterprise
• Mission State The Contribution Of The
Organization To The Society.
• Every kind of organized operation should
have purpose
• In every social system enterprise is assigned
a task e.g. courts interprets laws, hosp for
Tmt
Purpose of University to educate community
business enterprise produces/distributes goods .
Objectives or Goals:-
• Ends towards which activity is aimed at.
• Objectives denote the end towards which the
organization is moving.
• They are the ends of all viz. Plg, Org,
Staffing, Leading & controlling.
• Identifiable i.e. specific & clear
• Measurable
• Time Bound (Long Term >5 Yrs/ Short
Term < 2 Yrs)
• Achievable ( Realistic)
•
Setting Objectives or Goals

• Top Level Mgrs:- Determine the

purpose, mission, & overall objectives
of the firm.
• Middle Level Mgrs:-involve in setting
KRA,s, objectives of Division & Deptt.
• Lower Level Mgrs set objectives of
Deptt/units as well as their subordinates.
• There are two approaches Top-down &
Bottom-up approach in setting of objectives.

Strategies:-
• Defined as “ Any decision or behavior
which, after taking into account the probable
or actual actions policies & strategies of
competitors suppliers, Govt, trade unions
etc. is aimed at achieving organization
goals”.
• Strategies are major thrusts or planks of an
organization for the achievements of it’s
objectives.
• Strategist looks to his rivals & other external
actors, existing strategies & behavior,
considers their probable counter strategies in
response to his various alternative strategies
 & then selects the one which is likely to be
most effective.

Types Of Strategy
• Overall cost leadership strategy:-Aims at
reduction of cost based on great experience
of the company. Watch on cost in areas viz
R&D, sales , Service. Objective is to have
lower cost than competitors. Requires large
Mkt share
• Differentiation strategy:-Offers something
unique in product/service.
• Focused Strategy:-Concentrates on special
groups of customers: a particular product
line, a specific geographic region

Features of Effective Strategic Planning

• Shift in orientation :- From producing
services/products to what is need of
consumer.
• Strategic Planning involves a process of
choosing decisions from among realistic
options based on quantitative judgments.
 • Understanding plg & managing are
concurrent. Str Plg is integrated in day to
day Mgt , unless all are involved in resource
allocation decisions, strategic Plg cannot
become integral dimension of Mgt

Concept of Corporate Strategy

In large & diversified companies strategy may

form a hierarchy:-
– Top level is called Corporate level
strategy:- Executives craft overall
strategy for a diversified company.
– Second level is business strategy:-
Developed by GM of a business unit &
approved/rejected by CEO
– Third level Functional strategies:- they
are developed for deptt/units e.g
production, finance, marketing.

Policies:-
• General statements they guide decision
making.
• Policies are area within which a decision is
to be made & ensure that decision will be
consistent & contribute to an objective.
They set limits within which a Mgr decision
is required to be taken
• Essence of policy is discretion.
• Broad guidelines given by Mgt within
which whole organization works.
• They also reflect the values held by the
Organization.
• Policies are plans and include objectives,

strategies and resources.

• Policies are framed by executives at various

levels in the Org. Policy must state how the
goals can be achieved & who will carry out
the tasks in what manner.
• Policy is a time related concept since it has
relevance to the circumstances e.g political,
social, economical & technological.
 • Scientific approach should be used for
formulation of policy.

Types of Policies
• Functional Policies:-Whichare set up in

KRAs viz produc/purchse/pers/finance

• Internal Policies:-Related to organizational

objectives for guiding sub-

ordinates,prepared by Mgrs.
(basic/Gen/Dept)
• Externally Imposed Policies:-Policies

arising due to forces outside the Org.e.g

Govt./trade union
• Appealed Policies:- Formed in response to

suggestions/complaints received from emp.

• Stated or explicit Policies:-As enterprise

Manual (rigid)
• Implied or un-stated Policies:-Not recorded

in writing but followed at every level.

Generally
Rules:-
• Spell out required actions or non action
i.e what should or should not be done.
• It does not provide any exception.
• Rules are associated with penalities for
violation.

• They do not allow any deviation unlike

the policy which are general guidelines
& permit flexibility within a framework.
• Rules are mandatory to be followed
• It requires no decisions but only
enforcement.
• They reflect Managerial decisions

Procedure:-
• Chronological sequences of required
actions”.
• Are the steps involved in the transaction of
business.
• Are plans that establishes the exact method
of handling future activities
• A hospital may have leave policy but
procedure for applying & channeling leave
& approval are different than leave policy.
• Example-Procedure for I V cannulation
specifies step by step how it is done

Methods:-
• Methods are standard ways of
performing tasks involved in
operations.
• It is prescribed manner of
performing a task. Taylor
emphasized that there is “one best
Method” for it’s performance by
minimizing the number of motions.
• The drawback in developing

standard method is it involves time

 & cost. The standard methods are
resented by trade unions/workers as

it involves speeding of work .

Standards:-
• They are units of measuring performance.
• Standards are established to measure time,
quantity, quality & cost of work.
• All works cannot be quantitatively measured
e.g work of PRO, or personnel executive
whereas Performance of a judge/production
Mgr/Doc can be measured. Standards should
be objective.

Programs:-
 • They are complex of goals, policies,
procedures, rules, tasks assignment
resources to be employed & all steps
required to be taken for a given course of
action eg Malaria control program/Pulse
Polio program, college admission program.
• They relate to those activities which have
distinctive mission & time schedule.
• Cover special activity which is part of
corporate Plg viz. plant expansion, Org.
change, promotion of new product, opening
of a new sales branch.

BUDGET:-
Definition:-
“It Is A Financial And/ Or Quantitative
Statement Prepared prior To A Definite Period
Of Time, Of The Policies To Be Pursued During
That Time For The Purpose Of Attaining A
Given Objective.”
 • Manager Has To Prepare A Budget And
Monitor Expenditure. At The End Of The
Year He Has To Asses The Financial
Performance.

• Budget Aids To Management, Both For

Formulating Policies And Keeping Check
On Their Execution.
•

• It is a statement of expected results

expressed in numerical terms.
• Budget be expressed in financial terms, in
terms of labor hours, machine hours or any
other numerically measurable term.
• Making a budget is a planning process.
• Budgets are control devices

Budget Serves The Purpose Of :

a. Financial Accountability.
b.Ensure Legality.
c. Ensures Regularity Of Expenditure.
There Is hardly any activity Of An
Organization, having Financial Bearing Which
Is Not Reflected In The Budget. Funds Need To
Be Provided In The Budget In The Various
Activities The Organization Plans To Execute.
An Organization Budget Is Very Important For
Planning Management And Control Of
Activities.

• A Proper Planning And Implementation Of

The Budget Would Enable Optimizing The
Use Of Resources And Economical
Achievement Of The Organization
Activities.

• Govt. Hospital Follow A Set Pattern For

Budget While Private Adjust As Per There
Current Requirements.

• Allocations Of Govt. And Govt. Aided Are

To Be Approved By The Legislators. Rigid
Controls And Lack Of Authority At
Operating Level In Govt. Hospital Which Is
Not So In Private Hospitals.
Types of Budget

• Sales Budget
• Production Budget
• Materials Budget
• Manpower/Personnel Budget
• Operating Budget
• Program Budget
• Revenue & Expense Budget
• Capital Expenditure Budget
• Cash Budget
• Balance Sheet Budget
• Time & Space Budget

9.
10. Uncertainties In the future:-planning
is based on a estimate of the future
condition in and outside the company.
Since future can not be predicted
accurately, the forecast and premises
underlying the plans are subject to
error .
11. Past decision:-past decision act as a
barrier to future planning.
12. rapid change :- rapid change in
technology and consumer test are future
limitation to planning in aircraft ,
chemical , electronics and information
industry is specially complicated due to
complex and changing production
technology but all industry specially
textile , sugar shoe are not subject to
rapid change .
13. Administrative problem;-this problem
f planning centre around the creation of
an environment conductive to planning.
Some executive seems to think that
planning is useless coz future will not
 be same. Planning also require abstract
thinking and analysis.

THE PLANNING FUNCTION:-

 The planning
process

Forecast
Budget

Objectives Action Reso

 Performance outcome

Components of Planning

• Planning comprises of:-

• Strategies
 • Policies standing plans
• Procedures
• Methods
• Standards
• Programs
• Project Single use (for
fixed purpose/period)
• Budgets
“ These components are considered
instruments of Planning”

Classification of Planning ;-

• Purposes or Missions
• Objectives or Goals
• Strategies
 • Policies
• Procedures
• Rules
• Programs
• Budgets

Mission or
Purpose :-
• It identifies basic function of an enterprise
• Mission State The Contribution Of The
Organization To The Society.
• Every kind of organized operation should
have purpose
• In every social system enterprise is assigned
a task e.g. courts interprets laws, hosp for
Tmt
Purpose of University to educate community
business enterprise produces/distributes goods .
Objectives or Goals:-
• Ends towards which activity is aimed at.
• Objectives denote the end towards which the
organization is moving.
• They are the ends of all viz. Plg, Org,
Staffing, Leading & controlling.
• Identifiable i.e. specific & clear
• Measurable
• Time Bound (Long Term >5 Yrs/ Short
Term < 2 Yrs)
• Achievable ( Realistic)
•
Setting Objectives or Goals

•Top Level Mgrs:- Determine the

purpose, mission, & overall objectives
of the firm.
• Middle Level Mgrs:-involve in setting
KRA,s, objectives of Division & Deptt.
• Lower Level Mgrs set objectives of
Deptt/units as well as their subordinates.
• There are two approaches Top-down &
Bottom-up approach in setting of objectives.

Strategies:-
• Defined as “ Any decision or behavior
which, after taking into account the probable
or actual actions policies & strategies of
competitors suppliers, Govt, trade unions
etc. is aimed at achieving organization
goals”.
• Strategies are major thrusts or planks of an
organization for the achievements of it’s
objectives.
• Strategist looks to his rivals & other external

actors, existing strategies & behavior,

considers their probable counter strategies in
response to his various alternative strategies
& then selects the one which is likely to be
most effective.
Types Of Strategy
• Overall cost leadership strategy:-Aims at
reduction of cost based on great experience
of the company. Watch on cost in areas viz
R&D, sales , Service. Objective is to have
lower cost than competitors. Requires large
Mkt share
• Differentiation strategy:-Offers something
unique in product/service.
• Focused Strategy:-Concentrates on special
groups of customers: a particular product
line, a specific geographic region

Features of Effective Strategic Planning

• Shift in orientation :- From producing
services/products to what is need of
consumer.
• Strategic Planning involves a process of
choosing decisions from among realistic
options based on quantitative judgments.
• Understanding plg & managing are
concurrent. Str Plg is integrated in day to
day Mgt , unless all are involved in resource
 allocation decisions, strategic Plg cannot
become integral dimension of Mgt

Concept of Corporate Strategy

In large & diversified companies strategy may

form a hierarchy:-
– Top level is called Corporate level
strategy:- Executives craft overall
strategy for a diversified company.
– Second level is business strategy:-
Developed by GM of a business unit &
approved/rejected by CEO
– Third level Functional strategies:- they
are developed for deptt/units e.g
production, finance, marketing.

Policies:-
• General statements they guide decision
making.
• Policies are area within which a decision is
to be made & ensure that decision will be
consistent & contribute to an objective.
They set limits within which a Mgr decision
is required to be taken
• Essence of policy is discretion.
• Broad guidelines given by Mgt within
which whole organization works.
• They also reflect the values held by the
Organization.
• Policies are plans and include objectives,

strategies and resources.

• Policies are framed by executives at various

levels in the Org. Policy must state how the
goals can be achieved & who will carry out
the tasks in what manner.
• Policy is a time related concept since it has
relevance to the circumstances e.g political,
social, economical & technological.
• Scientific approach should be used for
formulation of policy.
Types of Policies
• Functional Policies:-Whichare set up in

KRAs viz produc/purchse/pers/finance

• Internal Policies:-Related to organizational

objectives for guiding sub-

ordinates,prepared by Mgrs.
(basic/Gen/Dept)
• Externally Imposed Policies:-Policies

arising due to forces outside the Org.e.g

Govt./trade union
• Appealed Policies:- Formed in response to

suggestions/complaints received from emp.

• Stated or explicit Policies:-As enterprise

Manual (rigid)
• Implied or un-stated Policies:-Not recorded

in writing but followed at every level.

Generally

Rules:-
• Spell out required actions or non action
i.e what should or should not be done.
• It does not provide any exception.
• Rules are associated with penalities for
violation.

• They do not allow any deviation unlike

the policy which are general guidelines
& permit flexibility within a framework.
• Rules are mandatory to be followed
• It requires no decisions but only
enforcement.
• They reflect Managerial decisions

Procedure:-
• Chronological sequences of required
actions”.
• Are the steps involved in the transaction of
business.
• Are plans that establishes the exact method
of handling future activities
• A hospital may have leave policy but
procedure for applying & channeling leave
& approval are different than leave policy.
• Example-Procedure for I V cannulation
specifies step by step how it is done

Methods:-
• Methods are standard ways of
performing tasks involved in
operations.
• It is prescribed manner of
performing a task. Taylor
emphasized that there is “one best
Method” for it’s performance by
minimizing the number of motions.
• The drawback in developing

standard method is it involves time

& cost. The standard methods are
 resented by trade unions/workers as

it involves speeding of work .

Standards:-
• They are units of measuring performance.
• Standards are established to measure time,
quantity, quality & cost of work.
• All works cannot be quantitatively measured
e.g work of PRO, or personnel executive
whereas Performance of a judge/production
Mgr/Doc can be measured. Standards should
be objective.

Programs:-
 • They are complex of goals, policies,
procedures, rules, tasks assignment
resources to be employed & all steps
required to be taken for a given course of
action eg Malaria control program/Pulse
Polio program, college admission program.
• They relate to those activities which have
distinctive mission & time schedule.
• Cover special activity which is part of
corporate Plg viz. plant expansion, Org.
change, promotion of new product, opening
of a new sales branch.

BUDGET:-
Definition:-
“It Is A Financial And/ Or Quantitative
Statement Prepared prior To A Definite Period
Of Time, Of The Policies To Be Pursued During
That Time For The Purpose Of Attaining A
Given Objective.”
 • Manager Has To Prepare A Budget And
Monitor Expenditure. At The End Of The
Year He Has To Asses The Financial
Performance.

• Budget Aids To Management, Both For

Formulating Policies And Keeping Check
On Their Execution.
•

• It is a statement of expected results

expressed in numerical terms.
• Budget be expressed in financial terms, in
terms of labor hours, machine hours or any
other numerically measurable term.
• Making a budget is a planning process.
• Budgets are control devices

Budget Serves The Purpose Of :

d.Financial Accountability.
e. Ensure Legality.
f. Ensures Regularity Of Expenditure.
There Is hardly any activity Of An
Organization, having Financial Bearing Which
Is Not Reflected In The Budget. Funds Need To
Be Provided In The Budget In The Various
Activities The Organization Plans To Execute.
An Organization Budget Is Very Important For
Planning Management And Control Of
Activities.

• A Proper Planning And Implementation Of

The Budget Would Enable Optimizing The
Use Of Resources And Economical
Achievement Of The Organization
Activities.

• Govt. Hospital Follow A Set Pattern For

Budget While Private Adjust As Per There
Current Requirements.

• Allocations Of Govt. And Govt. Aided Are

To Be Approved By The Legislators. Rigid
Controls And Lack Of Authority At
Operating Level In Govt. Hospital Which Is
Not So In Private Hospitals.
Types of Budget

• Sales Budget
• Production Budget
• Materials Budget
• Manpower/Personnel Budget
• Operating Budget
• Program Budget
• Revenue & Expense Budget
• Capital Expenditure Budget
• Cash Budget
• Balance Sheet Budget
• Time & Space Budget