Course: BCA 1st

Subject-POM
Unit-2: Planning

Concept of planning
Planning is the process of deciding in advance what is to be done, what is to be
done ,who is to do it and how it is to be done and when it is to be done.
The determination of a course of action to achieve the desired result and bridges
the gap from where we are to, Where we want to go. Planning is the intellectually
demanding process it requires the conscious determination of course of action
and bases of decision on purpose knowledge.

Definition of planning

W H Newman.  “Planning is deciding in advance what to do, how to do, when to

do. and who is to do it. Planning bridges a gap between from where we are.

According to Theo Haimann, “Planning is deciding in advance, what is to be done.

When manager plans, he projects a course of action for the future, attempting to
achieve a consistent, coordinated structure of operations aimed at the desired
results.”

According to 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 between
where we are and where we want to go. ft makes it possible for things to occur
which would not otherwise happen".

According to Billy E. Goetz, "Planning is fundamentally choosing and a planning

problem arises when an alternative course of action is discovered."

According to Allen, "A plan is a trap laid to capture the future."

According to Alford and Beatt, "Planning is the thinking process, the organized
foresight, the vision based on fact and experience that is required for intelligent
action."

Nature of Planning

Planning is an intellectual activity- to decide the things to be done in future. It

involves use of mental skills for the achievement of group objective
Planning involves selection among alternative. Planning is a choice activity
planning process involves mining of alternatives in selection of the best
alternative
Planning is forward-looking planning -means looking ahead it is carried out to
achieve some objectives in future. It may involve forecasting of future event such
as customer demand, competition, and government policies.
Planning related to objective- every plan that comprised the objective to be
attained in the future and these steps necessary to reach them managerial
planning seeks to achieve a consistent coordinator, structure of operation,
focused on desire ends.
Planning is the most basic of all management functions-Managerial operation
and organizing, staffing, leading and controlling are design to support the
accomplishment of organisation objective planning location of all the other
managerial function
Planning is a necessary function of management- planning is a function of all
managers all the character and planning will play very with their nature of policy
and plan outlined by the superior.
Significance of planning
Focus is on attention on objective: - All planning is directed towards achieving
the Enterprises objective and focuses attention on these objectives.
Planning ensures economic cooperation -Planning needs lots of mental exercise,
which is directed towards achieving efficient operation in the Enterprise
substitute joint directed efforts for a co-ordinate piecemeal activity this helps in
better utilization of resources and then minimizing costs
 Reduces uncertainty -planning helps in reducing uncertainty of future because it
involves anticipation of each element effective planning is a result of deliberate
thinking based on forecast and figures.
Facilitate control planning helps the manager and performing their function of
control planning and control are inseparable in the sense that unplanned action
cannot be completed the predetermined deviations from plan
Improve competitive strength effective planning gives competitive edge to the
enterprise over other income Luck now plan other ineffective Planning
Improve motivation a good planning system ensure your participation of all
managers which improve their motivation it improves the motivation of work and
because they know clear what is to be expected of them.

Types of Planning
Corporate planning – corporate planning is defined as a systematic and
comprehensive process of planning taking into account of resources and
capabilities of the organisation and the environment within which it has to be
operate it will it usually covers a long period of 5 years or even more than this.
Divisional planning (middle level) -divisional planning related a particular division
or department wise that the objectives policy and program of a particular division
or department in tune with the corporate plan of the Enterprise
Sectional planning( lower level) -sectional all over planning is Highly Effective as
it is done to achieve the Divisional objective it focus is to lay down retail plan for a
particular unit for the day to take guide of personal working there
Strategic planning- strategic planning is the process of deciding the objectives of
the organisation and decide the manner in which the resources of the enterprises
are to be deployed to realize the objective in the uncertain environment. It covers
a long period depending on the nature of Business, top-level management does
Environment .It, and it is based on organisation objective
Operational planning -operational planning confirm the efficient use of the
sources already located update the development of control mechanism for the
efficient Operation for that organisational objectives are achieved. It covers a
short run period after one year it is done by the middle level and lower level and
focus is on specific departments and functional area of this business.
Tactical planning -these plans are made for short-term moves and necessary for
the strategic plans in a given first forms objective and they are required to meet
the challenge of sudden change in the environment .For example tactical plans
are made to handle change in demand of your company product because of entry
of a competitor.
According to time span of planning
Long run planning -long range planning is the process of establishing long-term
NGOs working out strategic policy and program to achieve the in other words long
range planning sets long-term goal for the business it covers a period of ranging
from 5 years to 20 years.
Medium range planning- intermediate plans are made to support the now they
may relate to development of a new product or market and publicity increasing
return on investment from the existing product for market. Medium term
planning for the period of more than one year but less than five years.
Short range planning- short range planning relate to period of less than one year.
These plans are made to short terms goals for instance training of workforce,
product design.

ROLE, SIGNIFICANCE, & ADVANTAGES OF PLANNING

An organization without planning is like a sailboat minus its rudder. Without
planning, organization, are subject to the winds of organizational change.
Planning is one of the most important and crucial functions of management.
According to Koontz and O'Donnell, "Without planning business becomes random
in nature and decisions become meaningless and adhoc choices." According to
Geroge R. Terry, "Planning is the foundation of most successful actions of any
enterprise." Planning becomes necessary due to the following reasons:

1. Reduction of Uncertainty
Future is always full of uncertainties. A business organization has to function in
these uncertainties. It can operate successfully if it is able to predict the
uncertainties. Some of the uncertainties can be predicted by undertaking
systematic. Some of the uncertainties can be predicted by undertaking systematic
forecasting. Thus, planning helps in foreseeing uncertainties which may be caused
by changes in technology, fashion and taste of people, government rules and
regulations, etc.

2. Better Utilization of Resources

An important advantage of planning is that it makes effective and proper
utilization of enterprise resources. It identifies all such available resources and
makes optimum use of these resources.
3. Increases Organizational Effectiveness
Planning ensures organizational effectiveness. Effectiveness ensures that the
organization is in a position to achieve its objective due to increased efficiency of
the organization.
4. Reduces the Cost of Performance
Planning assists in reducing the cost of performance. It includes the selection of
only one course of action amongst the different courses of action that would yield
the best results at minimum cost. It removes hesitancy, avoids crises and chaos,
eliminates false steps and protects against improper deviations.
5. Concentration on Objectives
It is a basic characteristic of planning that it is related to the organizational
objectives. All the operations are planned to achieve the organizational
objectives. Planning facilitates the achievement of objectives by focusing
attention on them. It requires the clear definition of objectives so that most
appropriate alternative courses of action are chosen.
6. Helps in Co-ordination
Good plans unify the interdepartmental activity and clearly lay down the area of
freedom in the development of various sub-plans. Various departments work in
accordance with the overall plans of the organization. Thus, there is harmony in
the organization, and duplication of efforts and conflict of jurisdiction are
avoided.
7. Makes Control Effective
Planning and control are inseparable in the sense that unplanned action cannot
be controlled because control involves keeping activities on the predetermined
course by rectifying deviations from plans. Planning helps control by furnishing
standards of performance.
8. Encouragement to Innovation
Planning helps innovative and creative thinking among the managers because
many new ideas come to the mind of a manager when he is planning. It creates a
forward-looking attitude among the managers.
9. Increase in Competitive Strength
Effective planning gives a competitive edge to the enterprise over other
enterprises that do not have planning or have ineffective planning. This is because
planning may involve expansion of capacity, changes in work methods, changes in
quality, anticipation of tastes and fashions of people and technological changes
etc.
10. Delegation is facilitated
A good plan always facilitates delegation of authority in a better way to
subordinates.

Limitations of Planning
 Rigidity in Process

Planning leads to rigidity in the process as all the employees of the

organisation have to adhere to the plan even if they have alternatives to
perform better. This rigidity in the process may affect the overall
productivity of an organisation.
 Non-Functional in a Dynamic Process
It is difficult for organisations to keep adhering to the plan as one is
unaware of the future situations they may come across. Market
fluctuations, natural calamities, etc. are a few examples of dynamic changes
that may affect a business. In such a scenario, it becomes difficult to stick to
a plan and organisations have to form new strategies to cope with the new
situation.
 Huge Cost
Sometimes, the planning process may consume more time and money and
may not prove to be that beneficial. Acquiring expert suggestion, verifying
facts and data, and spending on boardroom meetings, etc. may cost
significant money. In such a case, planning the processes may not be a
feasible option.
 Time-Consuming
The planning process can be time-consuming and may sometimes result in
delaying other processes. Delay in other processes of organising, staffing,
directing, etc. may result negatively for the organisation as they miss
achieving the planned target on time.
 Less Creativity
The low-level management and employees follow up on the plans and steps
decided by the top-level management, and this eliminates any room for
 creativity in the process. They aren’t allowed to add or suggest any
innovation which may impact the overall performance of an organisation.

 No Guarantee for Success

Even with several beneficial features of planning in business studies, it may
not work as well as existing projections. The success of a firm hugely
depends upon the well-drafting of plans and its implementation in the real
world. But, in many cases, businesses fail to make the right plan as per the
changing business market. Managers tend to stick to a tried and tested plan
which may not work well considering the changing market scenario.
Besides, there is no guarantee if a particular plan will work out for a
company or not.
With such limitations of planning, businesses must try to form an effective
plan which caters to the changing need of enterprises and market.
Planning Leads to Rigidity
The plans cannot be flexible and it has to be followed throughout the
organization.
The rigidity of plans may be both internal and external.
Internal rigidity is related to plans, policies, programs, rules, and methods,
etc.
External rigidity is related to political, industrial, technological, legal and
economic changes, etc.
 Planning May Not Work in Dynamic Environment
The business environment keeps on changing on a daily basis.
It is difficult for an organization to predict future trends, the taste of
customers, natural calamity, competitors’ policies, and the effects of
changing components of the environment.
The organization should constantly adapt to changes and it is very difficult
to forecast the future accurately.
The dynamic environment in a specific situation may lead to the failure of
plans.
 Planning Reduces Creativity
Most of the plans are made by the top-level management and the
members from middle and lower levels of management should only follow
 the plans framed.They cannot deviate or alter the plans made by their
higher officials.
Under this situation, employees have to only follow orders which kills the
creative thinking of employees.
 Planning Involves Huge Cost Planning can be too costly because it requires
a lot of time and money. Like expenses on boardroom meetings,
discussions with professionals, and primary investigations to find out the
feasibility of the plan.
Checking the accuracy of facts and scientific calculations involves lots of
time.
 Planning Does Not Guarantee Success
The enterprise's success is only possible when the plans are properly
executed.
Plans become meaningless if they are not put into action.
Managers may rely on previously tested successful plans.
Every successful plan in the past may not be successful in the future, and
cannot be adapted in every situation.

STEPS INVOLVED IN PLANNING

Planning is a process which embraces a number of steps to be taken. Planning is
an intellectual exercise and a conscious determination of courses of action.
Therefore, it requires courses of action. The planning process is valid for one
organization and for one plan, may not be valid for other organizations or for all
types of plans, because various factors that go into planning process may differ
from organization to organization or from plan to plan. For example, planning
process for a large organization may not be the same for a small organization.
However, the major steps involved in the planning process of a major
organization or enterprise are as follows:
1. Establishing objectives
The first and primary step in planning process is the establishment of planning
objectives or goals. Definite objectives, in fact, speak categorically about what is
to be done, where to place the initial emphasis and the things to be accomplished
by the network of policies, procedures, budgets and programs, the lack of which
would invariably result in either faulty or ineffective planning.
It needs mentioning in this connection that objectives must be understandable
and rational to make planning effective. Because the major objective, in all
enterprise, needs be translated into derivative objective, accomplishment of
enterprise objective needs a concrete endeavor of all the departments.
2. Establishment of Planning Premises
Planning premises are assumptions about the future understanding of the
expected situations. These are the conditions under which planning activities are
to be undertaken. These premises may be internal or external. Internal premises
are internal variables that affect the planning. These include organizational
polices, various resources and the ability of the organization to withstand the
environmental pressure. External premises include all factors in task environment
like political, social technological, competitors' plans and actions, government
policies, market conditions. Both internal factors should be considered in
formulating plans. At the top level mainly external premises are considered. As
one moves downward, internal premises gain importance.
3. Determining Alternative Courses
The next logical step in planning is to determine and evaluate alternative courses
of action. It may be mentioned that there can hardly be any occasion when there
are no alternatives. And it is most likely that alternatives properly assessed may
prove worthy and meaningful. As a matter of fact, it is imperative that alternative
courses of action must be developed before deciding upon the exact plan.

4. Evaluation of Alternatives
Having sought out the available alternatives along with their strong and weak
points, planners are required to evaluate the alternatives giving due weight-age
to various factors involved, for one alternative may appear to be most profitable
involving heavy cash outlay whereas the other less profitable but involve least
risk. Likewise, another course of action may be found contributing significantly to
the company's long-range objectives although immediate expectations are likely
to go unfulfilled.
Evidently, evaluation of alternative is a must to arrive at a decision. Otherwise, it
would be difficult to choose the best course of action in the perspective of
company needs and resources as well as objectives laid down.
5. Selecting a Course of Action
The fifth step in planning is selecting a course of action from among alternatives.
In fact, it is the point of decision-making-deciding upon the plan to be adopted for
accomplishing the enterprise objectives.
6. Formulating Derivative Plans
To make any planning process complete the final step is to formulate derivative
plans to give effect to and support the basic plan. For example, if Indian Airlines
decide to run Jumbo Jets between Delhi an Patna, obliviously, a number of
derivative plans have to be framed to support the decision, e.g., a staffing plan,
operating plans for fuelling, maintenance, stores purchase, etc. In other words,
plans do not accomplish themselves. They require to be broken down into
supporting plans. Each manager and department of the organization is to
contribute to the accomplishment of the master plan on the basis of the
derivative plans.
7. Establishing Sequence of Activities
Timing a sequence of activities is determined after formulating basic and
derivative plans, so that plans may be put into action. Timing is an essential
consideration in planning. It gives practical shape and concrete form to the
programs. The starting and finishing times are fixed for each piece of work, so as
to indicate when the within what time that work is to be commenced and
completed. Bad timing of programs results in their failure. To maintain a
symmetry of performance and a smooth flow of work, the sequence of operation
shaped be arranged carefully by giving priorities to some work in preference to
others. Under sequence it should be decided as to who will don what and at what
time.
8. Feedback or Follow-up Action
Formulating plans and chalking out of programs are not sufficient, unless follow-
up action is provided to see that plans so prepared and programs chalked out are
being carried out in accordance with the plan and to see whether these are not
kept in cold storage. It is also required to see whether the plan is working well in
the present situation. If conditions have changed, the plan current plan has
become outdated or inoperative it should be replaced by another plan. A regular
follow-up is necessary and desirable from effective implementation and
accomplishment of tasks assigned.
The plan should be communicated to all persons concerned in the organization.
Its objectives and course of action must be clearly defined leaving no ambiguity in
the minds of those who are responsible for its execution. Planning is effective only
when the persons involved work in a team spirit and all are committed to the
objectives, policies, programs, strategies envisaged in the plan.

“Planning is the process of setting goals, developing strategies, and outlining

tasks and schedules to accomplish the goals.”

Planning Process
As planning is an activity, there are certain reasonable measures for every
manager to follow:

(1) Setting Objectives

 This is the primary step in the process of planning which specifies the
objective of an organisation, i.e. what an organisation wants to achieve.
 The planning process begins with the setting of objectives.
 Objectives are end results which the management wants to achieve by its
operations.
 Objectives are specific and are measurable in terms of units.
 Objectives are set for the organisation as a whole for all departments, and
then departments set their own objectives within the framework of
organisational objectives.
Example:

A mobile phone company sets the objective to sell 2,00,000 units next year, which
is double the current sales.

(2) Developing Planning Premises

 Planning is essentially focused on the future, and there are certain events
which are expected to affect the policy formation.
 Such events are external in nature and affect the planning adversely if
ignored.
  Their understanding and fair assessment are necessary for effective
planning.
 Such events are the assumptions on the basis of which plans are drawn and
are known as planning premises.
Example:

The mobile phone company has set the objective of 2,00,000 units sale on the
basis of forecast done on the premises of favourable Government policies towards
digitisation of transactions.

(3) Identifying Alternative Courses of Action

 Once objectives are set, assumptions are made.

 Then the next step is to act upon them.
 There may be many ways to act and achieve objectives.
 All the alternative courses of action should be identified.
Example:

The mobile company has many alternatives like reducing price, increasing
advertising and promotion, after sale service etc.

(4) Evaluating Alternative Course of Action

 In this step, the positive and negative aspects of each alternative need to
be evaluated in the light of objectives to be achieved.
 Every alternative is evaluated in terms of lower cost, lower risks, and higher
returns, within the planning premises and within the availability of capital.
Example:

The mobile phone company will evaluate all the alternatives and check its pros
and cons.

(5) Selecting One Best Alternative

 The best plan, which is the most profitable plan and with minimum
negative effects, is adopted and implemented.
  In such cases, the manager’s experience and judgement play an important
role in selecting the best alternative.
Example:

Mobile phone company selects more T.V advertisements and online marketing
with great after sales service.

(6) Implementing the Plan

 This is the step where other managerial functions come into the picture.
 This step is concerned with “DOING WHAT IS REQUIRED”.
 In this step, managers communicate the plan to the employees clearly to
help convert the plans into action.
 This step involves allocating the resources, organising for labour and
purchase of machinery.
Example:

Mobile phone company hires salesmen on a large scale, creates T.V

advertisement, starts online marketing activities and sets up service workshops.

(7) Follow Up Action

 Monitoring the plan constantly and taking feedback at regular intervals is

called follow-up.
 Monitoring of plans is very important to ensure that the plans are being
implemented according to the schedule.
 Regular checks and comparisons of the results with set standards are done
to ensure that objectives are achieved.
Example:

A proper feedback mechanism was developed by the mobile phone company

throughout its branches so that the actual customer response, revenue collection,
employee response, etc. could be known.
 Types of Planning

Planning is an essential part of every business, whether that is in the form of

laying out a strategic framework, or making contingency plans for emergencies.
Organizations that are not well-planned may be faced with serious consequences.
The four main plans are strategic, tactical, operational, and contingency.
The four main plans of business are strategic, tactical, operational and
contingency.

 Strategic planning looks at the long-term issues of the organization, and

helps develop a plan for growth or change of business function. Goals
developed at the strategic planning-level are often increased by dividing
them into tactical and operational levels.
 Operations planning focuses on day-to-day issues, such as staffing levels or
inventory quantities. Operational-level planning includes more detailed
objectives with concrete deadlines and task assignments.
 Tactical planning is used to reach the goals set out by strategic and
operational planning. Tactical planning includes short-term objectives and
tasks designed to create specific results within a limited time span. Tactical
plans often include operational level plans, and make way for the
development of contingency level plans.
 Contingency-level planning includes more detailed action items with
specified responses in case of unexpected events or emergencies, such as
natural disasters or extreme weather events that disrupt business
operations.

Types of Plans: Standing Plan and Single-use Plan

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A management plan is a global plan that provides the objective of any

organization’s project. A plan certainly defines responsibilities, roles, etc., to
ensure the achievement of the targeted goal. A plan is a resource that everyone in
the firm can use, be it the top-level manager or the low-level manager. The plan
creates an outline for the organization as to what should be the aim and
objective, the strategies that the firm will use, and what method will the firm use
to measure its performance. The plan is applicable in all types of organizations be
they big or small. There are different types of plans that can be helpful for
managers in making decisions and solving their problems.

Types of Plan
To provide guidelines to the managers for taking decisions and solving problems,
there are various kinds of plans. These plans are helpful in managing day-to-day
affairs and in regulating the work behaviour of the subordinates. These various
types of plans are grouped into two categories that are standing plans and single-
use plans.
I. Standing Plans
Standing plans are those plan which is used again and again whenever a particular
situation arises. It is designed to make sure that the internal operations of an
enterprise run smoothly. These plans are developed once but are designed to be
used over the years. It is generally developed in such a manner that it can be
modified when needed. These plans are also known as multiple-use plans or
repeated-use plans. These plans are generally prepared by top-level managers.
Standing plans include objectives and goals, strategy, policy, procedure, rules, and
methods. The following are explained below:

1. Objectives and Goals:-

Both the terms are used interchangeably, as both imply the target one desires to
accomplish. Goals are the desired set of affairs that an organization wants to
accomplish. Whereas objectives are specific targets within the general goal to
achieve a certain task. Thus objectives are specific with support in the attainment
of goals. The process of planning beings with the setting up of objectives. The
planning stage includes courses of action and identifies the results that the
company desires. These are usually set up by the top level. All organizations large
or small can identify problems and establish overall goals for their business, but
they need specific objectives to progress.
For example, the managers of a department may have the objective to increase
sales by 15%. This becomes an objective of selling more units for his employees.
Objectives refer to purposes or aims that an organization wants to achieve at
different periods. Activities of an organization are directed towards the objectives.
In other words, objectives indicate the destination of the organization.
2. Strategy:-

The term strategy is mostly used in military science and games. But in view of
growing competition and a rapidly changing environment, now it has become
equally relevant to the business organization. In business, it refers to a
comprehensive (i.e., determining long-term objectives, adopting a course of
action, and allocation of resources) and an integrated plan, which indicates the
desired future of the organization. It is very often said that a proper strategy is the
blueprint of an organization’s desired destination. It is an elaborate, systematic
and special type of plan, which is formulated to meet the challenges forwarded by
the competitors or other external factors, such as changes in the economic,
political, social, legal, and technological environment. It involves preparing itself
for meeting unforeseen factors.
For example, Pepsi and Coca-Cola are competitors in the soft drink market. If
Pepsi reduces the price, then the counter plan of Coca-Cola is to maintain its
market may be considered a strategy.
3. Policy
The policy is a general statement that guides thinking or channelizing energy
towards a particular direction. It also defines boundaries within which the
decision can be made. It is a parameter within which managers use their
discretion to apply the policy. There are policies for all levels and departments in
the organization. There are major company policies that are common for all
customers, clients, competitors, etc. Whereas minor policies are for the insiders
of an organization and mainly contain minute details of information important to
the employees.
For example, the policy of a company may be not to employ any person who is
less than 18 years of age.
4. Procedures
A procedure refers to a particular course of action in order to achieve the desired
result. Basically, it is a series of chronological steps to be taken to perform an
activity. It simplifies the work by eliminating unnecessary steps and brings
uniformity of action. Procedures may bring rigidity in the working of all
organizations by specifying the best way of doing it. It tends to become outdated
unless reviewed and revised at periodic intervals. It provides no room for creative
thinking and at times discourages initiatives.
For example, an enterprise may have the following procedure for the purchase of
goods: Identification of various suppliers, inviting quotations from them,
comparison of quotations, placing orders to the suppliers who offer the best
quotation, receipt, and inspection of goods, and making the payment to the
suppliers.
5. Rules
Rules are a set of directives or statements to do or not to do certain things, to
behave or not to behave in a particular way. Every organization aims to operate in
an orderly manner to regulate and control the working behaviour of employees.
Rules are formed by the organization and these are enforced to maintain. They
are rigid and do not allow derivations. The breach of rules usually carries a
penalty. It aims to maintain discipline and thereby helps to improve efficiency.
Any violation of the rule is generally associated with some sort of disciplinary
action.
For example, a company may have a rule of no smoking in the office premises,
‘smoking is strictly prohibited’.
6. Method
Methods are formalized techniques and standard ways of doing repetitive and
routine jobs. It prescribes the manner of doing the task. They also provide
detailed guidance for day-to-day activities and are helpful in the use of
procedures with minimum expenditure of time, effort, and money. The method
specifies the manner in which a work can be performed effectively and efficiently.
It should be stated clearly and in precise terms to improve organizational
efficiency and bring a sense of order to the workplace. It is a prescribed way in
which one step of the procedure is to be performed. Specified techniques are to
be used in a particular operation.
For example, there are different methods for the valuation of stock, like the FIFO
method, LIFO method, and HIFO method. A business can select any one method
for the valuation of the stock. Selecting a particular method avoids confusion and
helps in the smooth functioning of the organization. ( FIFO- first in first out, LIFO-
last in first out, and HIFO- highest in first out).
II. Single-use Plans
Single-use plans are made to serve a specific objective. They cease to exist once
such an objective is achieved. They are nonrecurring and the duration of this plan
generally depends upon the type of project. These plans are short-lived and they
have to be reformulated after every use. These plans include programme and
budget, following are explained below:
1. Programme
Programmes are comprehensive plans designed to implement the policies and
accomplish the objective by combining goals, task assignments, policies,
resources, etc. They are usually single-use plans indicating the steps to be taken,
resources to be used, and the period for completion of the task. It gives a step-by-
step approach to guide the action necessary to reach a pre-determined goal.
There are two types of programmes major and minor. Major programmes are
basic plans for example- the poverty eradication programme. Minor programmes
are derivative programmes designed to implement major programmes.
For example, a company may have a programme with respect to ‘Construction of
new factory premises’.
2. Budget
According to George. R. Terry,” a budget is an estimate of future needs arranged
to an orderly basis covering some or all of the activities of an enterprise for a
definite period of time”. A budget is a statement of expected results that are
expressed in numerical terms for a definite period. It is a single-use plan
expressed in quantitative terms. It is a projection of anticipated cost results and
the allocation of resources. On one hand, it is an instrument of planning, as it
helps to make the plans clear, on the other hand, it is an instrument of control, as
it serves as a standard for evaluating performance. It is prepared for one year.
For example, the sales department of an organization provides its budget,
wherein they have estimated the figures about different types of material that
will be needed for production, its quality, the time of purchase, and what amount
is to be spent on it. There as other such departments that prepare these budgets.
Qualities of a Good Plan
A good plan should consist of these basic qualities:
 Firstly, it should have a defined objective, i.e., the ultimate goal that the
organization wants to achieve.
 A plan should be simple, which can be understood by each and every member,
and does not create problems in understanding for anyone in the team.
 A plan should be comprehensive in nature. It should contain all the necessary
elements to attain the organizational goal.
 A plan should be flexible enough so that it can be adjusted according to the
changes without any delay. It should meet the various future challenges.
 A plan should be economical. This means when a plan is made, it should be
kept in mind that it should require the least operating costs.
 A good plan should set the standards to be achieved. As it is required in the
planning process to compare the actual performance with the standards that
had been set.
 A plan should maintain a balance between all the departments of the
organization.

Strategy

Strategy (from Greek στρατηγία stratēgia, "art of troop leader; office of general,
command, generalship"[1]) is a general plan to achieve one or more long-term or
overall goals under conditions of uncertainty.[2] In the sense of the "art of the
general", which included several subsets of skills including military
tactics, siegecraft, logistics etc., the term came into use in the 6th century C.E.
in Eastern Roman terminology, and was translated into Western vernacular
languages only in the 18th century. From then until the 20th century, the word
"strategy" came to denote "a comprehensive way to try to pursue political ends,
including the threat or actual use of force, in a dialectic of wills" in a military
conflict, in which both adversaries interact.

Strategy is important because the resources available to achieve goals are usually
limited. Strategy generally involves setting goals and priorities, determining
actions to achieve the goals, and mobilizing resources to execute the actions. A
strategy describes how the ends (goals) will be achieved by the means
(resources). Strategy can be intended or can emerge as a pattern of activity as the
organization adapts to its environment or competes.[4] It involves activities such
as strategic planning and strategic thinking.

Definition

Henry Mintzberg from McGill University defined strategy as a pattern in a stream

of decisions to contrast with a view of strategy as planning, [7]
 Henrik von Scheel defines the essence of strategy as the activities to deliver a
unique mix of value – choosing to perform activities differently or to perform
different activities than rivals.[8]

while Max McKeown (2011) argues that "strategy is about shaping the future"
and is the human attempt to get to "desirable ends with available means".

Vladimir Kvint defines strategy as "a system of finding, formulating, and

developing a doctrine that will ensure long-term success if followed faithfully." [9]

In simple words Strategy refers to the course of action which is required to

achieve the objectives of an organisation and implement its goals. In other words,
strategy is a means to achieve goals. In this article, we will talk about strategy, its
definition, and features.

Features of Strategy

The following are some features of business strategies:

1. Generally, strategies are long run-in nature as they help to understand the path
towards the future as well as its impact on present activities. However, in some
cases, strategies may be made for a shorter period.

2. Strategy mainly defines the course of action of a business in general, which an

organisation needs to follow in order to achieve its objectives.

3. Another important component of strategy is that it is dynamic in nature, and it

needs to be changed or modified according to changing times and conditions.

4. Strategy provides a proper combination of external and internal factors that can
affect the ability of an organisation to perform activities towards well-established
goals.

5. Strategies are formulated mainly by top-level managers and directions are

provided to the middle and lower-level managers to frame sub-strategies.
6. Strategy allows businesses to beat their competition by distributing scarce
resources efficiently across different regions, resulting in optimal utilisation.

7. Strategies are forward-looking because they are developed and implemented

with the goal of achieving the firm’s goals in the future.

Importance of Strategy

The importance of strategy in business organisations is as follows –

1. Direction and Action Plans: A strategy gives an organisation the appropriate

course to follow in order to meet its objectives. It provided a clear and detailed
action plan for achieving the targeted position in the future. The company
receives comprehensive guidance on how things will be done and goals will be
met.
2. Identification of Trends and Opportunities: Strategy helps to identify various
market trends and future opportunities available to a business organisation. It
helps in examining the different variations in the market like that of social,
political, as well as customer changes and technological changes. Once the market
changes have been identified, the firm develops certain tactics so that the
business can adjust to the future changes.
3. Defining Accountability: Strategy helps to define accountability in a business
enterprise. It also helps in setting the timelines in order to attain certain results on
the strategic initiatives.
4. Improving Communication and Commitment: With a proper well-defined
strategy, the level of communication, as well as commitment in the organisation,
get enhanced as it helps in clarifying the accountability as well as vision. With a
proper strategic plan, all the activities of businesses are aligned to safeguard the
commitment.
5. Allocation of Desired Resources: Every firm, large or small, must allocate
resources correctly. Since resources are limited, strategy determines which goods,
services, and markets will be included in the company’s future and which will not.
This guarantees that resources are efficiently utilised, resulting in maximum
output for the company.
 6. Framework for Decision-Making: A strategy helps in providing a proper
framework regarding decision-making for a particular firm. Also, a strategy
provides a reference point on the basis of which organisations can make decisions
to ensure sustained business growth.
7. Competitive Advantage: By establishing strategies, businesses can get a
competitive advantage over their competitors. Businesses can have a better
understanding of themselves and their future goals. In this manner, resources are
efficiently used, and everything runs smoothly, resulting in maximum productivity
for the company.

Types of Strategy

 Corporate Level Strategy: Corporate-level strategies are generally defined by

senior management and include the long term objectives as well as influence the
business units working under it.
 Business-Level Strategy: These are strategies which are framed at the business
unit level by a senior manager, which includes building a certain competitive
advantage for the firm.
 Functional Level Strategy: Functional strategy refers to strategies within a
business enterprise that mainly focus on certain functional areas like that of
marketing, sales as well as production.
 Operational Level Strategy: These are strategies that are formed in the operating
units of a company and are mainly developed by field-level managers. It mainly
focuses on creating implementable plans for acting on business strategies.
Conclusion
These were some details of what the concept of strategies is, as well as its
importance and types. Strategy plays an important role in helping an organisation
achieve its business goals.

The process of strategy formulation basically involves six main steps. Though
these steps do not follow a rigid chronological order, however they are very
rational and can be easily followed in this order.

1. Setting Organizations’ objectives - The key component of any strategy

statement is to set the long-term objectives of the organization. It is known
 that strategy is generally a medium for realization of organizational
objectives.

Objectives stress the state of being there whereas Strategy stresses upon
the process of reaching there.

Strategy includes both the fixation of objectives as well the medium to be

used to realize those objectives. Thus, strategy is a wider term which
believes in the manner of deployment of resources so as to achieve the
objectives.

While fixing the organizational objectives, it is essential that the factors

which influence the selection of objectives must be analyzed before the
selection of objectives. Once the objectives and the factors influencing
strategic decisions have been determined, it is easy to take strategic
decisions.

2. Evaluating the Organizational Environment - The next step is to evaluate

the general economic and industrial environment in which the organization
operates. This includes a review of the organizations competitive position.

It is essential to conduct a qualitative and quantitative review of an

organizations existing product line. The purpose of such a review is to make
sure that the factors important for competitive success in the market can
be discovered so that the management can identify their own strengths and
weaknesses as well as their competitors’ strengths and weaknesses.

After identifying its strengths and weaknesses, an organization must keep a

track of competitors’ moves and actions so as to discover probable
opportunities of threats to its market or supply sources.

3. Setting Quantitative Targets - In this step, an organization must practically

fix the quantitative target values for some of the organizational objectives.
The idea behind this is to compare with long term customers, so as to
evaluate the contribution that might be made by various product zones or
operating departments.
4. Aiming in context with the divisional plans - In this step, the contributions
made by each department or division or product category within the
 organization is identified and accordingly strategic planning is done for each
sub-unit. This requires a careful analysis of macroeconomic trends.
5. Performance Analysis - Performance analysis includes discovering and
analyzing the gap between the planned or desired performance.

A critical evaluation of the organizations past performance, present

condition and the desired future conditions must be done by the
organization.

This critical evaluation identifies the degree of gap that persists between
the actual reality and the long-term aspirations of the organization. An
attempt is made by the organization to estimate its probable future
condition if the current trends persist.

6. Choice of Strategy - This is the ultimate step in Strategy Formulation. The

best course of action is actually chosen after considering organizational
goals, organizational strengths, potential and limitations as well as the
external opportunities.

Objective:

An objective is something you plan to achieve. A military objective is the overall

plan for a mission. The objective for a bake sale is to raise money. If
your objective is to learn a new word, you have succeeded.

What Are Goals and Objectives?

Goals and objectives provide the foundation for measurement. Goals are
outcome statements that define what an organization is trying to accomplish,
both programmatically and organizationally. Goals are usually a collection of
related programs, a reflection of major actions of the organization, and provide
rallying points for managers. For example, Wal-Mart might state a financial goal
of growing its revenues 20% per year or have a goal of growing the international
parts of its empire. Try to think of each goal as a large umbrella with several
spokes coming out from the center. The umbrella itself is a goal.
In contrast to goals, objectives are very precise, time-based, measurable actions
that support the completion of a goal. Objectives typically must (1) be related
directly to the goal; (2) be clear, concise, and understandable; (3) be stated in
terms of results; (4) begin with an action verb; (5) specify a date for
accomplishment; and (6) be measurable. Apply our umbrella analogy and think of
each spoke as an objective. Going back to the Wal-Mart example, and in support
of the company’s 20% revenue growth goal, one objective might be to “open 20
new stores in the next six months.” Without specific objectives, the general goal
could not be accomplished—just as an umbrella cannot be put up or down
without the spokes. Importantly, goals and objectives become less useful when
they are unrealistic or ignored. For instance, if your university has set goals and
objectives related to class sizes but is unable to ever achieve them, then their
effectiveness as a management tool is significantly decreased.
Measures are the actual metrics used to gauge performance on objectives. For
instance, the objective of improved financial performance can be measured using
a number metrics, ranging from improvement in total sales, profitability,
efficiencies, or stock price. You have probably heard the saying, “what gets
measured, gets done.” Measurement is critical to today’s organizations. It is a
fundamental requirement and an integral part of strategic planning and of
principles of management more generally. Without measurement, you cannot tell
where you have been, where you are now, or if you are heading in the direction
you are intending to go. While such statements may sound obvious, the way that
most organizations have set and managed goals and objectives has generally not
kept up with this commonsense view.

Measurement Challenges

There are three general failings that we can see across organizations related to
measurement. First, many organizations still emphasize historic financial goals
and objectives, even though financial outcomes are pretty narrow in scope and
are purely historic; by analogy, financial measures let you know where you’ve
been, but may not be a good predictor of where you are going.
Second, financial outcomes are often short term in nature, so they omit other key
factors that might be important to the longer-term viability of the organization.
For instance, return on sales (ROS, or net profit divided by total sales) is a
commonly used measure of financial performance, and firms set goals and
objectives related to return on sales. However, an organization can increase
return on sales by cutting investments in marketing and research and
development (since they are costs that lessen the “return” dimension of ROS). It
may be a good thing to cut such costs, but that type of cost-cutting typically hurts
the organization’s longer-term prospects. Decreases in marketing may reduce
brand awareness, and decreases in research and development (R&D) will likely
stifle new product or service development.

Finally, goals and objectives, even when they cover more than short-term
financial metrics, are often not tied to strategy and ultimately to vision and
mission. Instead, you may often see a laundry list of goals and objectives that lack
any larger organizing logic. Or the organization may have adopted boilerplate
versions of nonfinancial measurement frameworks such as Kaplan and Norton’s
Balanced Scorecard, Accenture’s Performance Prism, or Skandia’s Intellectual
Capital Navigator.

Goals and Objectives in P-O-L-C

Goals and objectives are an essential part of planning. They also have cascading
implications for all the aspects of organizing, leading, and controlling. Broadly
speaking, goals and objectives serve to:

 Gauge and report performance

 Improve performance
 Align effort
 Manage accountabilities

Goals, Objectives, and Planning

Planning typically starts with a vision and a mission. Then managers develop a
strategy for realizing the vision and mission; their success and progress in
achieving vision and mission will be indicated by how well the underlying goals
and objectives are achieved. A vision statement usually describes some broad set
of goals—what the organization aspires to look like in the future. Mission
statements too have stated goals—what the organization aspires to be for its
stakeholders. For instance, Mars, Inc., the global food giant, sets out five mission
statement goals in the areas of quality, responsibility, mutuality, efficiency, and
freedom. Thus, goals are typically set for the organization as a whole and set the
stage for a hierarchy of increasingly specific and narrowly set goals and objectives.

However, unless the organization consists of only a single person, there are
typically many working parts in terms of functional areas and product or service
areas. Functional areas like accounting and marketing will need to have goals and
objectives that, if measured and tracked, help show if and how those functions
are contributing to the organization’s goals and objectives. Similarly, product and
service areas will likely have goals and objectives. Goals and objectives can also be
set for the way that functions and product or service areas interact. For instance,
are the accounting and marketing functions interacting in a way that is
productive? Similarly, is marketing delivering value to product or service
initiatives?

Goals, Objectives, and Organizing, Leading, and Controlling

Within the planning facet of P-O-L-C alone, you can think of goals and objectives
as growing in functional or product/service arena specificity as you move down
the organization. Similarly, the time horizon can be shorter as you move down the
organization as well. This relationship between hierarchy and goals and objectives
is summarized in the following figure.

Obviously, the role of goals and objectives does not stop in the planning stage. If
goals and objectives are to be achieved and actually improve the competitive
position of the firm, then the organizing, leading, and controlling stages must
address goals and objectives as well.

The way that the firm is organized can affect goals and objectives in a number of
ways. For instance, a functional organizational structure, where departments are
broken out by finance, marketing, operations, and so on, will likely want to track
the performance of each department, but exactly what constitutes performance
will probably vary from function to function.

In terms of leadership, it is usually top managers who set goals and objectives for
the entire organization. Ideally, then, lower-level managers would set or have
input into the goals and objectives relevant to their respective parts of the
business. For example, a CEO might believe that the company can achieve a sales
growth goal of 20% per year. With this organizational goal, the marketing
manager can then set specific product sales goals, as well as pricing, volume, and
other objectives, throughout the year that show how marketing is on track to
deliver its part of organizational sales growth. Goal setting is thus a primary
function of leadership, along with holding others accountable for their respective
goals and objectives.

Figure 6.4 Goals and Objectives in Planning

Finally, goals and objectives can provide a form of control since they create a
feedback opportunity regarding how well or how poorly the organization executes
its strategy. Goals and objectives also are a basis for reward systems and can align
interests and accountability within and across business units. For instance, in a
business with several divisions, you can imagine that managers and employees
may behave differently if their compensation and promotion are tied to overall
company performance, the performance of their division, or some combination of
the two.

Policies

A “policy” is any standard, statement, or procedure of general applicability

adopted by the Board of Trustees pursuant to authority delegated by law or the
Board of Governors.

POLICIES
3. Policies: General statements that guide decision-making are called 'policies'.
They define the boundaries within which decisions can be made by sub-ordinates.
They direct decisions towards the accomplishment of objectives. The basic
purpose of policies is to secure a consistency of purpose and avoid decisions
which are based on expediency. Policies may be either written statements or oral
understandings in general terms governing actions in repetitive situations. Policies
help in the realisation of business objectives.
Definitions of Policies
1. "Policies de-limit an area within which a decision is to be made and assure
that decision will be consistent with and contribute to objectives."

-Koontz and O'Donnell

2. "Policies are general statements which guide or channel the thinking of all
personnel charged with decision-making."

-Theo Haimann

3. "Policy is simply a statement of an organisation and intention to act in

certain ways, when specified types of circumstances arise."
 -Dougless

Policy is the standing direction to the management to take decisions within the
prescribed limit. Every executive has to honour policy and his decisions should not
violate it. In this way we can define policy as objective oriented continuing
decision guides to management in making his decisions in specific similar
circumstances. Characteristics of a Policy Following are the important features of
a policy:

(a) A policy is an expression of intentions of top management. It presents the

principles that will guide the organisational actions.

(b) A policy is based on objectives of the enterprise.

(c) A policy is long lasting. It is sufficiently comprehensive and is so formulated

that it covers all the conditions reasonably anticipatable.

(d) A policy is realistic. It can be translated into action in every department of

the enterprise. A policy is stated in simple and easily understandable terms.

It is definite, positive and clear.
(e) A policy is developed with the active participation of the people who are

going to use it.

(f) A policy is consistent with other policies of the enterprise. It is also in

harmony with the policies of the Government and institutions like Trade
Associations and Chambers of Commerce.

Kinds of Policies

A business enterprise may have the following kind of policies:

(i) Functional policies: Policies may be set up in the key areas of the
enterprise like production, purchase, finance, personnel and marketing. Such
policies are known as personnel policies.

(ii) Internal policies: Internal policies include those initiated by managers at

various levels to guide the sub-ordinates. Such policies are closely related to the
organisational objectives. They differ in their nature and scope depending upon
the level of management where they have been formulated.

They can be sub-classified into three categories:

(a) Basic policy: It is used primarily by the top managers and is very broad in
scope and affects the organisation as a whole.

(b) General policy: It affects the middle level managers and is more specific
than a basic policy. It is used mainly by the middle level managers.

(c) Departmental policy: It is highly specific in nature and is applicable at the

lowest level of the management to provide a guide in the day-to-day activities.

(iii) External policies: External or imposed policies include those policies arising
to meet the various pressures and request of forces outside the enterprise such
as government, trade unions and trade associations.

(iv) Appealed policies: Such policies are formulated on the basis of the
suggestions and complaints received from the employees. This happens when the
subject-matter of a suggestion or complaint is exceptional in nature and is not
covered by the existing policies. Such policies are sometimes incomplete. So, it is
better to replace them by the originated policies.
(v) Stated or explicit policies: Such policies are usually in writing and form a
part of enterprise manual. They are definite and generally rigid.

(vi) Unstated or implied policies: These policies are not recorded in writing
even though they are followed at every level. Sometimes they are not stated
orally but are inferred from the behaviour of the managers. That is why they are
known as implied policies. An implied policy is generally flexible in nature.

Benefits of Policies

Policies bring about the following benefits:

(a) Policies facilitate better administrative control. Policies provide the rational

basis, for evaluating the results.

(b) By making policy decisions on frequently recurring problems, the top

management provides the guidelines to lower-level managers.

(c) Policies secure co-ordination and integration of efforts in accomplishing the

organisational objectives.

(d) Policies save time and effort by pre-deciding problems in situations. They

save the management from the botheration frame the policy repetitive of
every repeating the expensive analysis required to time,
(e) Policies help managers at various levels to act with confidence without the

need for consulting the superiors every time. This also ensures promptness
of action.
 (f) By setting up policies, the management ensures that decisions made will be

consistent and in keeping with the objectives and interests of the

enterprise.

Limitations of Policies

Following are the limitations of the policies:

i. Policies do not cover all the problems. Sometimes unforeseen situations

arise which are not covered by the existing policies.
ii. Policies are not ever lasting.
iii. Policies are repeatedly used plans and bring about rigidity in operations.
They leave no room for initiative by the subordinates.
iv. Policies are no substitute for human judgement. Policies only the area
within which decisions are to be made.
Differences between Objectives and Policies

Environmental Analysis

What is environmental analysis?

An environmental analysis is a strategic technique used to identify all internal and

external factors that could affect a company’s success. Internal components
reveal the strengths and shortcomings of a company, while external components
represent the opportunities and risks. This exists outside of the company.

Trends and high-level factors are considered in it; another name for this is
environmental scanning.

Interest rates, for example, and how they may affect a company’s operations.
These analyses can help businesses achieve attractiveness in their market.

Importance of environmental analysis

Organizations need to do environmental analysis because it helps them:

  Find opportunities: By looking at the outside world, organizations can find
new trends and chances to enter new markets or make new products or
services.
 Identify threats: It helps businesses find threats to their business, such as
new competitors, changes in regulations, or a slowing economy.
 Create effective strategies: Organizations can create effective strategies
that are in line with their goals and objectives when they understand how
the outside world affects their business.
 Anticipate change: Environmental scanning helps organizations plan ahead
for changes in the outside world and create strategies to deal with them.
 Make informed decisions: It helps organizations learn more about the
outside factors that affect their business so that they can make better
decisions.

Organizations that want to stay competitive and successful in a business world

that is changing quickly need to do environmental analysis. It helps them take
advantage of opportunities, lower risks, and come up with good plans that lead to
growth and success.

Environmental analysis process

Environmental analysis is the process of assessing and evaluating the internal and
external factors that can have an effect on an organization’s performance and
strategy. This analysis aims to find opportunities, threats, strengths, and
weaknesses so that the organization can make a good workforce strategy that fits
its goals and objectives.

The environmental analysis process usually involves the following steps:

1. Determine the effects on the environment

To begin a business environmental analysis procedure, select environmental

factors evaluating. Your industry determines this.
For example, if you work in a medical facility, you might want to think about legal
implications. Regulations managing healthcare experience and safety, for
example. Choose factors that have the potential to influence how you make deals.

2. Obtain information

Collect information about your chosen environmental factors once you decide
which ones to evaluate. You can observe your factors and conduct research here.
There are two types of information to gather: verbal and written data. Hearing is
how people obtain verbal information.

As an example, consider listening to a radio broadcast. They obtain written

information from sources such as newspapers and magazines.

Using the preceding example, this would involve conducting research online and
in medical magazines.

It will assist you in determining whether or not there have been any changes to
health and safety regulations because this may have an impact on your healthcare
facility.

3. Consider your competitors

You may want to gather information about your competitors. To see if they pose
any threats. You can accomplish this by employing a technique known as spying.
This involves unusually gathering information.

Using the same example, you could spy on a nearby health facility to learn about
recent activity.

4. Examine your strategies

Finally, evaluate your present and prospective strategies to determine how future
environmental changes will impact your organization. This assists you in resolving
potential issues. These factors could have been to blame.
For example, the health facility may wish to develop a new strategy. It will clearly
show how they aim to deal with the decrease in clients caused by their
competitor’s new branch.

Environmental analysis tools

Environmental analysis is frequently used to assist businesses. It is used before

launching a new product or service.

For example, survey the landscape of competitors, customers, economic

conditions, market conditions, and so on. PESTEL is a popular project
management tool for performing this analysis.

It refers to the factors that are political, economic, social, and technological. The
various components of a PESTEL analysis are listed alphabetically below.

Political

Political issues refer to the level of government intrusion into an organization’s

operations. Primary concerns include taxes, tariffs, regulations, elections, and
political stability.

For example, different political parties hold divergent viewpoints on raising the
minimum wage. Small businesses may be affected by an election.

When one candidate proposes raising the minimum wage, it may impact their
product/service prices and ability to retain current employees.

Economic

Businesses in the United States first consider the overall health of the American
economic factors. Growth, employment, inflation, and interest rates are just a
few examples. Organizations operating outside of the United States will
concentrate on exchange rates.
A startup, for example, may assess the current state of the economy to determine
whether or not it will be able to survive. The long-term revenue and expenses of a
company are affected by economic conditions.

Social

Shifts in age, demographic changes, changing attitudes toward safety and health,
customer preferences, and technical improvements. All are examples of social
challenges. 86 percent of young people, for example, use social media.

As a result, of successful business strategies, millennials are more likely to run

promotional ads, especially on social media platforms.

Technology

The technology involves research and development, robotics, automation, and

any other type of technological advancement. New technologies are referred to
as “technological disruption.” It has the ability to change the cast of leading
competitors dramatically.

For example, the popularity of Facebook was a technological challenge for

Myspace. It was once the most popular social media network in the early 2000s.

Environmental

Climate change, weather, air quality, and natural disasters are examples of
environmental factors. Changes in the environment threaten some industries
more than others.

Farmers, for example, could watch the Weather Channel or read the Farmer’s
Almanac. Because pesticide treatment, irrigation schedule, planting dates, and
fungicide application are all affected by the weather.
Legal

Legal factors involve employment, health, and safety policies. Customer safety
and discrimination laws can also have an impact on a company’s capacity to
operate.

Congress, for example, passed the Dodd-Frank Act in 2009. Following the Great
Recession, banks were subjected to strict requirements to protect customers.

Environmental analysis techniques

A corporation can use environmental analysis techniques in a variety of ways. But

some are more frequent. The PESTLE study is the most widely used tool for
conducting a complete business or industry environment analysis.

PESTLE Analysis

This is essentially a bird’s eye view of corporate behavior. Because we take a

broad look at some macro issues that significantly impact the health of a
particular business or industry, this study is used by managers and strategists to
determine where their market is right now. It also assists in evaluating the
company’s future position.

The PESTLE study considers several factors that have an impact on the business
environment. It is a macroeconomic instrument that is used to understand the
external environment through more extensive environmental analysis.

Each letter in the acronym represents a different component. These factors can
directly or indirectly impact any sector or organization.

SWOT Analysis

SWOT stands for strengths, opportunities, weaknesses, and threats, in case you
didn’t know. These four factors are utilized to determine where a company stands
regarding strategy.
These four elements are divided into two groups. We must talk about them a bit
to see how they can assist us in conducting an environmental study.

 Internal Factors

Internal factors in this type of analysis are strengths and weaknesses. Because
they can be affected and even controlled by the organization, they are referred to
as internal analysis if a corporation has a firm brand name.

This is a strength because it was made possible by the organization’s efficient use
of resources. As a result, this is an internally generated element that highlights
one of the causes of the company’s success.

 External Factors

External considerations in this type of environmental assessment include threats

and opportunities. Unlike the elements listed above, the company cannot control
them in any way. In fact, these circumstances frequently occur on their own.

Competition is a concern to all businesses since it is impossible to eliminate it. As

a result, external factors function in this manner.

Now that you know how to do a SWOT analysis, you can include your findings in
your environmental study. Strengths may be enhanced, weaknesses can be
eliminated by taking advantage of opportunities when they arise, and threats can
be minimized by remaining vigilant.

Benefits of environmental analysis

Environmental evaluations help organizations in detecting potential effects. That

could pose a hazard or an opportunity. This assists them in anticipating changes in
their environment.

The internal insights from the environmental analysis are used to evaluate things
like how well employees are doing their jobs, how happy customers are, how
much maintenance costs, etc., so that corrective action can be taken where
needed.

Also, the external metrics help the organization positively respond to its
environment and ensure its strategies align with its goals.

This helps to find threats early on, which helps the organization come up with
plans for how to stay alive. On top of that, it looks for opportunities, like potential
customers, new products, segments, and technologies, so that it can take up the
most market share possible compared to its competitors.

Using environmental factors analysis has several advantages, including the

following

 Predicting the future

 Recognizing threats and allowing them to develop a response strategy
 Assisting in the achievement of business goals
 Increasing organizational effectiveness

Conclusion

The analysis examines revenue, profitability, and company success in depth

analysis. An environmental analysis can help you make the best decisions for your
company. The nature of your business determines the type of environmental
analysis you should perform.

It helps companies uncover opportunities, minimize risks, and create successful

strategies that meet their goals.

SWOT, PESTEL, and Porter’s Five Forces analyses are used to evaluate an
organization’s performance and strategy.

Environmental analysis helps organizations anticipate change, make informed

decisions, and stay competitive in today’s fast-changing business environment.
Environmental scanning has several benefits and is vital for today’s businesses.
Strategy formulation:- Advantages and business possibilies in chhatisgarh:-

Chhattisgarh offers a range of opportunities for business and strategic advantages

due to its unique resources, demographics, and economic landscape. Here are
some key areas to consider:

### 1. **Natural Resources**

- **Mining**: Chhattisgarh is rich in minerals like coal, iron ore, and bauxite.
Exploring mining operations or mineral processing can be profitable.
- **Agriculture**: The state has fertile land and a favorable climate for crops
like rice, maize, and pulses. Agro-based industries, organic farming, and food
processing can be developed.

### 2. **Infrastructure Development**

- **Transportation**: With ongoing improvements in road and rail connectivity,
investing in logistics and transport services can yield significant returns.
- **Urban Development**: Growing urban centers like Raipur and Bhilai
present opportunities in real estate, retail, and service sectors.

### 3. **Energy Sector**

- **Renewable Energy**: There’s potential for solar and biomass energy
projects, leveraging the state’s natural resources.
- **Power Supply**: Investing in power generation and distribution can meet
the growing energy demands of industries.

### 4. **Tourism**
- **Cultural and Ecotourism**: Promoting Chhattisgarh’s rich tribal culture,
wildlife sanctuaries, and historical sites can attract domestic and international
tourists.
- **Adventure Tourism**: Activities like trekking, river rafting, and wildlife
safaris can be developed.

### 5. **Education and Skill Development**

- **Educational Institutions**: Establishing schools, colleges, and vocational
training centers can address the skills gap in the workforce.
 - **IT and Tech Hubs**: Encouraging IT firms to set up in the state can promote
technological advancement and job creation.

### 6. **Health Care**

- **Healthcare Facilities**: There is a growing demand for quality healthcare
services. Investing in hospitals and clinics can be beneficial.
- **Pharmaceuticals**: Setting up manufacturing units for medicines can tap
into the increasing health awareness.

### 7. **Government Policies and Incentives**

- **Supportive Ecosystem**: Leverage government initiatives aimed at
promoting entrepreneurship, such as subsidies, tax incentives, and ease of doing
business.
- **MSME Promotion**: Small and medium enterprises are encouraged
through various schemes, providing opportunities for innovation and growth.

### 8. **Sustainable Practices**

- **Green Businesses**: Focus on sustainability by exploring eco-friendly
products, waste management solutions, and sustainable agriculture.

Implementation Strategies
- **Market Research**: Conduct thorough research to understand local needs
and gaps in the market.
- **Partnerships**: Collaborate with local businesses, government bodies, and
NGOs for support and resources.
- **Innovation**: Encourage the use of technology and innovative practices in
operations.

By capitalizing on these areas, businesses can establish a strong foothold in

Chhattisgarh, leveraging its resources and unique characteristics for growth and
sustainability.