PLANNING
Concept & Definition: Planning is deciding in advance what to do and how to do. It bridges the gap
between where we are and where we want to go. Planning, thus, involves setting objectives and
developing appropriate courses of action to achieve these objectives or in other words we can define
planning as setting objectives for a given time period, formulating various courses of action to achieve
them, and then selecting the best possible alternative from among the various courses of action
available.
Planning Process: The process of planning involves the following steps:
(1)Setting Objectives: The first and foremost step is setting objectives. Objectives may be set for the entire
organisation and each department or unit within the organisation. Objectives or goals specify what the
organisation wants to achieve. Objectives should be stated clearly for all departments, units and employees.
They give direction to all departments. Departments/units then need to set their own objectives within the
broad framework of the organisation’s philosophy.
(2)Developing Premises: Planning is concerned with the future which is uncertain. Therefore, the
manager is required to make certain assumptions about the future. These assumptions are called Planning
premises. Assumptions are the base material upon which plans are to be drawn.
(3)Identifying alternative courses of action: Once objectives are set, assumptions are made. Then the next
step would be to act upon them. There may be many ways to act and achieve objectives. All the
alternative courses of action should be identified. The course of action which may be taken could be
either routine or innovative.
(4)Evaluating alternative courses: The next step is to weigh the pros and cons of each alternative. The
positive and negative aspects of each proposal need to be evaluated in the light of the objective to be
achieved. Alternatives are evaluated in the light of their feasibility and consequences.
(5)Selecting an alternative: This is the real point of decision making. The best plan has to be adopted.
The ideal plan, of course, would be the most feasible, profitable and with least negative consequences.
Sometimes, a combination of plans may be selected instead of one best course.
(6)Implementing the plan: This is the step where other managerial functions also come into the picture.
The step is concerned with putting the plan into action, i.e., doing what is required.
(7)Follow-up action: To see whether plans are being implemented and activities are performed according to
schedule is also part of the planning process. Monitoring the plans is equally important to ensure that
objectives are achieved.
Features of Planning:
(1)Planning focuses on achieving objectives: Specific goals are set out in the plans along with the
activities to be undertaken to achieve the goals.
(2) Planning is a primary function of management: Planning lays down the base for other functions of
management. All other managerial functions are performed within the framework of the plans drawn.
This is also referred to as the primacy of planning.
(3)Planning is pervasive: Planning is required at all levels of management as well as in all departments
of the organisation.
(4)Planning is continuous: Plans are prepared for a specific period of time, may be for a month, a quarter,
or a year. At the end of that period there is need for a new plan to be drawn on the basis of new
requirements and future conditions. Hence, planning is a continuous process.
(5)Planning is futuristic: Planning essentially involves looking ahead and preparing for the future.
Planning is, therefore, regarded as a forward looking function based on forecasting. Through forecasting,
future events and conditions are anticipated and plans are drawn accordingly. For example, sales forecasting
is the basis on which a business firm prepares its annual plan for production and sales.
(6)Planning involves decision making: Planning essentially involves choice from among various
alternatives and activities. Planning, thus, involves thorough examination and evaluation of each
alternative and choosing the most appropriate one.
(7)Planning is a mental exercise: Planning is basically an intellectual activity of thinking rather than
doing, because planning determines the action to be taken. However, planning requires logical and
systematic thinking rather than guess work or wishful thinking.
