Planning:- Planning involves setting objectives and deciding in advance the appropriate course

of action to achieve these objectives so we can also define planning as setting up of objectives
and targets and formulating an action plan to achieve them.

Meaning of Planning:
Planning is very important for the success and effective performance of an organisation not only
for organizations but also for individuals. It is the most basic of all the managerial functions. It
involves selecting missions and objectives and the actions to achieve them. Therefore every
organisation gives a greater emphasis on planning.

Planning as a process involves the determination of future course of action, that is why an action,
what action, how to take action, and when to take action. These are related with different aspects
of planning process.

Terry has defined planning in terms of future course of action i.e., “planning is the selection and
relating of facts and making and using of assumptions regarding the future in the visualization
and formalization of proposed activities believed necessary to achieve desired result.”

McFarland has defined Planning as “a concept of executive action that embodies the skills of
anticipating, influencing and controlling the nature and direction of change.”
Peter Drucker defined as “planning is the continuous process of making present entrepreneurial
decisions systematically and with best possible knowledge their futurity, organizing
systematically the efforts needed to carry out these decisions and measuring the results of these
decisions against the expectation through organised systematic feedback.”

In the words of Koontz and O’Donnell, “planning is deciding in advance what to do, how to do
it, when to do it, and who is to do it. Planning bridges the gap from where we are to here we
want to go.”

Nature and Characteristics of Planning:

Planning is concerned with the establishment of objectives of an enterprise and finding out the
way of realisation of those objectives. However, without setting the objectives there are nothing
to organise, direct or control. Therefore, every organisation is required to specify what it wants to
achieve. Planning is basically related with this aspect.
The nature and characteristics of planning may be stated as follows:
1. Intellectual Process:
Planning is an intellectual and rational process. Planning is a mental exercise involving
imagination, foresight and sound judgment. It requires a mental disposition of thinking before
acting in the light of facts rather than guess. The quality of planning depends upon the abilities of
the managers who are required to collect all relevant facts, analyze and interpret them in a
correct way.

How far into the future a manager can see and with how much clarity it will depend on his
intellectual caliber, are chalked out through planning process. In thinking of objectives,
alternative courses of action and, above all, in making decision for choosing certain alternatives,
the planner goes through an intellectual process.

2. Goal-orientation:
All planning is linked up with certain goals and objectives. It follows, therefore, that every plan
must contribute in some positive way to the accomplishment of group objectives. Planning has
no meaning without being related to goals and objectives. It must bridge the gap between where
we are and where we want to go at the minimum cost.

3. Primary Function:
Planning is said to be the most basic and primary function of management. It occupies first place
and precedes all other functions of management which are designed to attain the goals set under
planning. This is so because the manager decides upon the policies, procedures, program,
projects, etc. before proceeding with the work. The other functions of management—organizing,
direction, co-ordination and control—can be performed only after the manager has formulated
the necessary planning.

4. Pervasiveness:
Planning pervades all managerial activities. It is the job of all managers in all types of
organisation. It is undertaken at all segments and levels of the organisation—from the general
manager to the foreman. Whatever be the nature of activity, management starts with planning.
The character and breadth of planning will, of course, vary from one job to another—depending
on the level of management.
5. Uniformity:
There may be separate plans prepared in different levels in the organisation, but all the sub-plans
must be united with the general plan so as to make up a comprehensive plan for operation at a
time. So, uniformity must be there in all levels of planning to match the general plan.

6. Continuity:
To keep the enterprise as a going concern without any break, it is essential that planning must be
a continuous process. So, the first plan must follow the second plan and the second plan the third
and so on in never-ending series in quick succession.

7. Flexibility:
Plans should not be made rigid. It should be as flexible as possible to accommodate all possible
changes in the enterprise with a view to coping with the changing conditions in the market. In
fact, planning is a dynamic activity.

8. Simplicity:
The language of the work schedule or programme in the planning should be simple so that each
and every part of it may easily be understood by the employees at different levels, specially at
the lower level.

9. Precision:
Precision is the soul of planning. This gives the planning exact, definite, and accurate meaning in
its scope and content. Any mistake or error in planning is sure to upset other functions of
management and, thus, precision is of utmost importance in every kind of planning.

10. Feasibility:
Planning is neither poetry nor philosophy. It is based on facts and experience, and thereby
realistic in nature. It represents a program which is possible to execute with more or less existing
resources.

11. Choice among Alternative Courses:

Planning involves selection of suitable course of action from several alternatives. If there is only
one way of doing something there is no need of planning. Planning has to find out several
alternatives, estimate the feasibility and profitability of the different alternatives, and to choose
the best one out of them.

12. Efficiency:
Planning is directed towards efficiency. A plan is a course of action that shows promise of
optimizing return at the minimum expense of inputs. In planning, the manager evaluates the
alternatives on the basis of efficiency. A good plan should not only attain optimum relationship
between output and input but should also bring the greatest satisfaction to those who are
responsible for its implementation.

13. Inter-dependence:
The different departments may formulate different plans and programs for their integration in the
overall planning. But sectional plans cannot but be inter-dependent. For example, production
planning depends upon sales planning—and vice versa.
Again, planning for purchase of raw materials, employment of labour, etc. cannot be an isolated
act apart from sales planning and production planning. Planning is a structured process and
different plans constitute a hierarchy. Different plans are inter-dependent and inter-related. Every
lower-level plan serves as a means towards the end of higher plans.

14. Forecasting:
Above all, no planning can proceed without forecasting—which means assessing the future and
making provision for it. Planning is the synthesis of various forecasts—short-term or long-term,
special or otherwise. They all merge into a single program and act as a guide for the whole
concern.

Importance of Planning:
Planning is the key to success of an organisation. In fact, most of the company’s achievements
can be attributed to careful planning. Planning is a function of every manager at every level in an
enterprise. Every manager is required to plan first for systematic and orderly performance of his
assigned duties.

It is within the planning function that goals are determined, decision-making takes place,
forecasts are made and strategies are initiated. Thus, planning has assumed great importance in
all types of organisation—business or non-business, private or public sector, small or large.

As a managerial function, planning is important for the following reasons:

1. Providing Basis of Decision:
The first and most important reason for planning lies in the fact that it provides a basis on which
decisions are made. It is an immense need for the managers of an enterprise to fix up their minds
as to what they want to accomplish and then plan the use of time, resources, and efforts towards
the achievement of their objectives.

2. Focusing Attention on Objectives:

Planning concentrates attention on the objectives of an enterprise. The first function of planning
is to spell out its objectives. The objectives are defined in more concrete, precise and meaningful
terms. As a result of such attention, it becomes possible for the planners to determine the
policies, procedures, programs and the rules for an orderly advance towards the ultimate goals
desired to be achieved.

3. Minimising Uncertainty and Risk:

The future is uncertain. Planning helps the managers in taking care of future uncertainties and
thus minimizes business risk. It anticipates future events and sets the course of action to control
these events to one’s advantage. With the help of planning, an enterprise can predict future
events and make due provision for them. This, no doubt, eliminates or reduces the possibility or
jumping into uncertainties.

4. Adapting with Changes:

Business planning has become imperative due to the fact that an enterprise operates in a
changing and dynamic environment. The aspects of this changing environment include changes
in technology, government policies, the nature of competition, social norms and attitudes etc. As
the planning proceeds step by step, it foresees the changes likely to come and accordingly
prepares its program by necessary adjustments and adaptation.

5. Securing Economy:
Planning focuses on efficiency and economy in operation. A plan is a course of action that can
take the organisation to its objectives at the minimum cost. Planning prevents wastage of
resources by choosing the best course of action from many alternatives. It aims at smooth flow of
work. All these steps in planning lead automatically to economy.

6. Helping in Co-ordination:
Planning leads to achieve a coordinated structure of operations. It provides a unifying
framework. Sound planning inter-relates all the activities and resources of an organisation. Well-
considered overall plans harmonies inter-departmental activities. Thus, various departments
work in accordance with the overall plan, and coordination is achieved.

7. Making Control Effective:

The managerial function of controlling is concerned with a comparison between the planned
performance and the actual performance of the subordinates and departments of the organisation.
Thus, control is exercised in the context of planning action as the standards against which actual
results are to be compared are set up through planning. So planning provides the basis for
control. Thus, planning and control are inseparable.

8. Increasing Organisational Effectiveness:

Planning ensures organisational effectiveness in several ways. It states the objectives of the
organization in the context of given resources; provides for proper utilisation of resources to the
best advantage, gives necessary competitive strength for continuous growth and steady progress
by foreseeing what the competitors are likely to do and evolving its strategies accordingly.

The process of planning generates the purposeful and orderly setting up of activities to be carried
on. It defines the boundaries within which the business should operate. This enables the
businessman to concentrate upon those matters which are actually relevant and vital to business
success.

Elements of Planning:

Planning as a managerial process consists of the following elements or components:

1. Objectives:
The important task of planning is to determine the objectives of the enterprise. Objectives are the
goals towards which all managerial activities are aimed at. All planning work must spell out in
clear terms the objectives to be realized from the proposed business activities. When planning
action is taken, these objectives are made more concrete and meaningful. For example, if the
organisational objective is profit earning, planning activity will specify how much profit is to be
earned looking into all facilitating and constraining factors.

2. Forecasting:
It is the analysis and interpretation of future in relation to the activities and working of an
enterprise. Business forecasting refers to analysing the statistical data and other economic,
political and market information for the purpose of reducing the risks involved in making
business decisions and long range plans. Forecasting provides a logical basis for anticipating the
shape of the future business transactions and their requirements as to man and material.

3. Policies:
Planning also requires lying down of policies for the easy realisation of the -objectives of
business. Policies are statements or principles that guide and direct different managers at various
levels in making decisions. Policies provide the necessary basis for executive operation. They set
forth overall boundaries within which the decision-makers are expected to operate while making
decisions. Policies act as guidelines for taking administrative decisions.

In a big enterprise, various policies are formulated for guiding and directing the subordinates in
different areas of management. They may be production policy, sales policy, financial policy,
personnel policy etc. But these different policies are co-ordinated and integrated in such a way
that they ensure easy realisation of the ultimate objectives of business. Policies should be
consistent and must not be changed frequently.

4. Procedures:
The manner in which each work has to be done is indicated by the procedures laid down.
Procedures outline a series of tasks for a specified course of action. There may be some
confusion between policies and procedures. Policies provide guidelines to thinking and action,
but procedures are definite and specific steps to thinking and action. For example, the policy may
be the recruitment of personnel from all parts of the country; but procedures may be to advertise
and invite applications, to take interviews and offer appointment to the selected personnel.

Thus, procedures mean definite steps in a chronological sequence within the area chalked out by
the policies. In other words, procedures are the methods by means of which policies are
enforced. Different procedures are adopted in different areas of business activities. There may be
production procedure, sales procedure, purchase procedure, personnel procedure etc.

Production procedure involves manufacturing and assembling of parts; sales procedure relates to
advertising, offering quotations, securing and execution of orders; purchase procedure indicates
inviting tenders, selecting quotations, placing orders, storing the goods in go-down and
supplying them against requisition to different departments and personnel procedure is the
recruitment, selection and placement of workers to different jobs.

5. Rules:
A rule specifies necessary course of action in a particular situation. It acts as a guide and is
essentially in the nature of a decision made by the management authority. This decision signifies
that a definite action must be taken in respect of a specific situation. The rules prescribe a
definite and rigid course of action to be followed in different business activities without any
scope for deviation or discretion.

Any deviation of rule entails penalty. Rule is related to parts of a procedure. Thus, a rule may be
incorporated in respect of purchase procedure that all purchases must be made after inviting
tenders. Similarly, in respect of sales procedure, rule may be enforced that all orders should be
confirmed the very next day.

6. Programs:
Programs are precise plans of action followed in proper sequence in accordance with the
objectives, policies and procedures. Programs, thus, lead to a concrete course of inter-related
actions for the accomplishment of a purpose. Thus, a company may have a program for the
establishment of schools, colleges and hospitals near about its premises along with its expanding
business activities.

Programs must be closely integrated with the objectives. Programming involves dividing into
steps the activities necessary to achieve the objectives, determining the sequence between
different steps, fixing up performance responsibility for each step, determining the requirements
of resources, time, finance etc. and assigning definite duties to each part.
7. Budgets:
Budget means an estimate of men, money, materials and equipment in numerical terms required
for implementation of plans and programs. Thus, planning and budgeting are inter-linked.
Budget indicates the size of the program and involves income and outgo, input and output. It also
serves as a very important control device by measuring the performance in relation to the set
goals. There may be several departmental budgets which are again integrated into the master
budget.

8. Projects:
A project is a single-use plan which is a part of a general program. It is part of the job that needs
to be done in connection with the general program. So a single step in a program is set up as a
project. Generally, in planning a project, a special task force is also envisaged.

It is a scheme for investing resources which can be analysed and appraised reasonably and
independently. A project involves basically the investment of funds, the benefits from which can
be accrued in future. Examples of such investment may be outlays on land, building, machinery,
research and development, etc. depending upon the situation.

9. Strategies:
Strategies are the devices formulated and adopted from the competitive standpoint as well as
from the point of view of the employees, customers, suppliers and government. Strategies thus
may be internal and external. Whether internal or external, the success of the plans demands that
it should be strategy-oriented.

The best strategy of planning from the competitive standpoint is to be fully informed somehow
about the planning ‘secrets’ of the competitors and to prepare its own plan accordingly.
Strategies act as reserve forces to overcome resistances and reactions according to
circumstances. They are applied as and when required.

Steps in Planning/Planning Process:-

A plan is essentially today’s design for tomorrow’s action and an outline of the steps to be taken
in future. A good plan must be simple, balanced and flexible, and make utmost use of the
existing resources. It must be based on clearly defined objectives.
For preparation of such a plan, a definite process involving the following steps has to be
followed:
1. Perception of the Opportunities:
The manager must first identify the opportunity that calls for planning and action. This is very
important for the planning process because it leads to formulation of plans by providing clue as
to whether opportunities exist for taking up particular plans.

Perception of opportunities includes a preliminary look at possible opportunities and the ability
to see them clearly and completely, an understanding of why the organisation wants to solve the
uncertainties and a vision what it expects to gain. This provides an opportunity to set the
objectives in real sense.

2. Establishment of the Objectives:

The next step in the planning process lies in the setting up of objectives to be achieved by the
enterprise in the clearest possible terms keeping in view its strength and limitation. Objectives
specify the results expected in measurable terms and indicate the end points of what is to be
done; where the primary emphasis is to be placed, and what is to be accomplished by various
types of plans. Enterprises start with a general objective.

From this are developed subordinate goals that contribute to the attainment of the general
objective. These, in turn, are supported by the specific objectives for the departments. In this
process a hierarchy of objectives is created. The plans at each level of the organisation are made
for the attainment of the appropriate objectives in the hierarchy. This hierarchy can be built up
by coordinating the plans of different departments.

3. Building the Planning Premises:

After determination of the organisational goals, it is necessary to establish planning premises,
that is, the conditions under which planning activities will be undertaken. This involves
collection of facts and figures necessary for planning the future course of the enterprise.
‘Planning Premises’ are planning assumptions relating to the expected environmental and
internal conditions.

So, planning premises are of two types—external and internal. External premises include total
factors in the environment like social, political, technological, competitors’ plans and actions,
government policies, etc. Internal factors include the organization’s policies, resources of various
types, and the ability of the organisation to withstand the environmental pressure. The plans are
formulated in the light of both external and internal factors.

4. Identifying the Alternatives:

The next step in planning process is to search for various alternative courses of action based on
the organisational objectives and planning premises. A particular objective can be achieved
through various actions. For example, if an organisation has set its objective to grow further, it
can be achieved in several ways like expanding the field of business or product line, joining with
other organisations, or taking over another organisation, and so on. Within each category, there
may be several alternatives.
Since all alternatives cannot be considered for further analysis, it is necessary for the planner to
reduce in preliminary examination the number of alternatives that do not meet the minimum
preliminary criteria. Preliminary criteria can be defined in several ways— minimum investment
required, matching with the present business of the organisation, control by the government, etc.

5. Evaluation of the Alternatives:

Various alternative courses that are considered feasible in terms of preliminary criteria have to be
taken for detailed evaluation. Alternative courses of action can be evaluated against the criteria
of cost, risks, benefit and organisational facilities. The strong and weak points of every
alternative should be analysed carefully.

Since there are so many complex variables connected with each goal and each possible plan, the
process of comparative evaluation is extremely difficult. For example, one alternative may be the
most profitable but requires heavy investment; another may be less profitable but also involves
less risk.

Moreover, there is no certainty about the outcome of any alternative course because it is related
with future which is not certain. Ultimately, the choice will depend upon what is determined as
the most critical factor from the point of view of the objectives of the enterprise.

6. Choice of the Course of Action:

After the evaluation of various alternatives, the most appropriate one is selected as the plan.
Sometimes evaluation shows that more than one alternative are equally good. In such a case, the
manager may choose more than one alternative at the same time. There is another reason for
choosing more than one alternative. Alternative course of action may be required to be
undertaken in future in changed situations. So, the planner must also be ready with alternative—
normally known as contingency plan— that can help coping up with the changed situation.

7. Formulation of Supporting or Derivative Plans:

After the best alternative is decided upon, the next step is to derive various plans for different
departments or sections of the organisation to support the main plan. In an organisation, there
can be various derivative plans like planning for buying raw materials and equipment,
developing new product, recruiting and training the personnel, etc.

These derivative plans are formulated out of the main plan and so they support it. The break-
down of the master plan into departmental and sectional plans provides a realistic picture of the
actions to be taken in future.

8. Establishing the Sequence of Activities:

After formulating the basic and derivative plans, the sequence of activities is determined so that
the plans are put into action. Based on the plans at various levels, it can be decided who will do
what and at what time. Budgets for various periods can be prepared to make plans more concrete
for implementation.

9. Securing Participation:
Plans must be communicated in greater details to the subordinates to increase their understanding
of the proposed action and for enlisting their co-operations in the execution of plans. It will, thus,
add to the quality of planning through the knowledge of additional facts, new visions and
revealing situations.

10. Providing for Future Evaluation:

For ensuring that the selected plans are proceeding with the right lines, it is of paramount
importance to devise a system of continuous evaluation and appraisal of the plan. It will help in
detecting the shortcomings and pitfalls of the plans and taking remedial actions well in time. All
the steps in the process of planning must be linked and co-ordinated with each other. For
successful implementation of a plan, it must be communicated to all levels of the organisation.

Basic Principles of Planning:

Planning requires scientific thinking and it should spell out in clear terms the definition of the
purpose, analyse the problem and make a careful and diligent search for all the facts bearing
upon it. The task of planning will be well-accomplished if some fundamental principles are
followed in the process.

The important principles may be stated as follows:

1. Principle of Commitment:
This means that certain resources must be committed or pledged for the purpose of planning.
Planning is not an easy task. So, necessary help is to be taken from experts. The enterprise must
be ready to exhaust the available resources for the achievement of a plan.

2. Principle of the Limiting Factor:

A plan involves varied factors of different importance. This principle implies that more emphasis
has to be put on that factor which is scarce or limited in supply or extremely costly. This will
help in selecting the most favourable alternative.

3. Principle of Reflective Thinking:

Planning, being an intellectual activity is based on rational considerations. These involve
reflective thinking which signifies problem-solving thought process—a process by which past
experiences are superimposed on the facts of the present situation and possible future trends.
None can be a planner whose mind is not active, who does not possess any deliberate power and
whose sense of judgement is not strong.

4. Principle of Flexibility:
Though a plan is prepared after reflective thinking, this does not mean that no departure can be
made in the course of its operation. The plan should be so prepared that there is sufficient scope
for changing it from time to time. Changes must necessarily be effected in the plan for taking
into account new developments that may take place in the course of the operation of the plan.

5. Principle of Contribution to Enterprise Objectives:

A major plan is prepared and it is supported by many derivative plans. But all plans must
contribute in a positive way towards the achievement of the enterprise objectives.

6. Principle of Efficiency:
A plan should be made efficient to attain the objectives of the enterprise at the minimum cost and
least effort. It must also achieve better results with the minimum of unexpected happenings.
Therefore, it is to be seen that what is expected is likely to be achieved.

7. Principle of Selection of Alternatives:

Planning is basically a problem of choosing. The essence of planning is the choice among
alternative courses of action. There is no need for planning if there is only one way for doing
something. In choosing from alternatives, the best alternative will be that which contributes most
efficiently and effectively to the accomplishment of a desired goal.

8. Principle of Planning Premises:

A plan is prepared against some foundations or backgrounds known as ‘Planning Premises’.
There must be complete agreement among the managers in respect of planning premises over
which the structure of plan is to be framed.

9. Principle of Timing and Sequence of Operations:

Timing and sequence of operations determine the starting and finishing time for each piece of
work according to some definite schedule and give practical and concrete shape and form to
work performance.

10. Principle of Securing Participation:

To secure participation of the employees with whole-hearted co-operation in execution of the
plan, it is necessary that the plan must be communicated and explained to them for their full
understanding. This understanding provides the basis for additional knowledge about new facts
and matters to the employees. This is needed for improvement in the quality of planning. It also
ensures an obligation of the personnel of the enterprise to execute the plan by individual and
joint participation.

11. Principle of Pervasiveness:

Though major planning function is entrusted to the top management, it is not restricted to the top
level only. It is a function of every manager at every level in the organisation.

12. Principle of Strategic Planning:

Strategic planning is essential where there is competition. It is prepared in the light of what the
competitors are intending to do. Planners must take into account the strategies of the rival
organisations, otherwise the planning projection may land them in trouble.

13. Principle of Innovation:

A good system of planning should be responsive to the opportunities for innovation. Innovation
consists in creating something new for increasing satisfaction of the consumers. This may also be
stated as an important strategy of business. Innovation is a necessity for its sustaining growth in
this dynamic world. Innovation is achieved through research and development and planning is
required to provide such scope.

14. Principle of Follow-up:

In the course of execution of a plan, certain obstacles may crop up in midway and planning may
require revision, alteration or correction. This is why there must be a follow-up system in the
planning process itself. This allows timely changes in the planning and makes it more effective.

Advantages of planning:-
1. Planning leads to more effective and faster achievements in any organization.

2. Since planning foresees the future and also makes a provision for it, it gives an added strength
to the business for its steady growth and continuous prosperity.

3. It secure unity of purpose, direction and effort by focusing attention on the objectives. Hence,
unnecessary duplication, overlapping and cross-purpose workings are eliminated.

4. It has the effect of minimizing the cost of operations.

5. It ensures an even flow of work minimizes false steps and protects against unwanted
deviations.

6. It enhances the efficiency of other managerial functions.

7. It provides an effective basis for control in all organizations whether small or big.

8. It facilitates the process of decision-making.

9. It enables the management to implement future programs in a systematic way so that

management may get the maximum benefit out of the programs framed. It enables all the
activities to be conducted in an orderly and coordinated manner in order to achieve the common
goals of the enterprise.
10. With the rapid growth of technological development, it is essential for a manager to keep
abreast of the up-to-date technology. Otherwise, the products are likely to become obsolete.
Planning helps in this process.

11. By avoiding waste of men, money, materials and machinery, planning indirectly leads to
large-scale economies.

12. Planning encourages the sense of involvement and team spirit. Planned targets provide a
basis upon which good performances can be rewarded and poor performances can be improved.

13. Planning is the essence of all management activities. Once it is done well, other activities
automatically follow.

14. It educates people. It orients people. It gives them a sense of direction and the stimulating
feeling that their efforts are being put to useful purpose, rather than being wasted. They begin to
feel that they are worthy partners in a productive enterprise.

Limitations of Planning:-

Levels of planning:-
 1) A strategic plan is an outline of steps designed with the goals of the entire organization
as a whole in mind, rather than with the goals of specific divisions or departments.
Strategic planning begins with an organization's mission.

Strategic plans look ahead over the next two, three, five, or even more years to move the
organization from where it currently is to where it wants to be. Requiring multilevel
involvement, these plans demand harmony among all levels of management within the
organization. Top‐level management develops the directional objectives for the entire
organization, while lower levels of management develop compatible objectives and plans to
achieve them. Top management's strategic plan for the entire organization becomes the
framework and sets dimensions for the lower level planning.

2) A tactical plan is concerned with what the lower level units within each division must
do, how they must do it, and who is in charge at each level. Tactics are the means needed
to activate a strategy and make it work.

Tactical plans are concerned with shorter time frames and narrower scopes than are strategic
plans. These plans usually span one year or less because they are considered short‐term goals.
Long‐term goals, on the other hand, can take several years or more to accomplish. Normally, it is
the middle manager's responsibility to take the broad strategic plan and identify specific tactical
actions.

3) An operational plan is one that a manager uses to accomplish his or her job
responsibilities. Supervisors, team leaders, and facilitators develop operational plans to
support tactical plans. Operational plans can be a single‐use plan or an ongoing plan.
  Single‐use plans apply to activities that do not recur or repeat. A one‐time occurrence,
such as a special sales program, is a single‐use plan because it deals with who, what,
where, how, and how much of an activity. A budget is also a single‐use plan because it
predicts sources and amounts of income and how much they are used for a specific
project.
 Continuing or ongoing plans are usually made once and retain their value over a period
of years while undergoing periodic revisions and updates. The following are examples of
ongoing plans:
a) A policy provides a broad guideline for managers to follow when dealing with
important areas of decision making. Policies are general statements that explain
how a manager should attempt to handle routine management responsibilities.
Typical human resources policies, for example, address such matters as employee
hiring, terminations, performance appraisals, pay increases, and discipline.
b) A procedure is a set of step‐by‐step directions that explains how activities or
tasks are to be carried out. Most organizations have procedures for purchasing
supplies and equipment, for example. This procedure usually begins with a
supervisor completing a purchasing requisition. The requisition is then sent to the
next level of management for approval. The approved requisition is forwarded to
the purchasing department. Depending on the amount of the request, the
purchasing department may place an order, or they may need to secure quotations
and/or bids for several vendors before placing the order. By defining the steps to
be taken and the order in which they are to be done, procedures provide a
standardized way of responding to a repetitive problem.
c) A rule is an explicit statement that tells an employee what he or she can and
cannot do. Rules are “do” and “don't” statements put into place to promote the
safety of employees and the uniform treatment and behavior of employees. For
example, rules about tardiness and absenteeism permit supervisors to make
discipline decisions rapidly and with a high degree of fairness.

NOTE:- Contingency Plans

As we already know, the process of planning is based on certain assumptions about
what is likely to occur in the environment of an organization.
Contingency plans are made to deal with situations that might crop up if these
assumptions turn out to be wrong.
Thus contingency planning is the development of alternative courses of action to be
taken if events disrupt a planned course of action.
A contingency plan allows management to act immediately if such unforeseen events
as strikes, boycotts, natural disasters or major economic changes render existing plans
inoperable or unsuitable.