planning - SNS Courseware

What is PLANNING?

TYPES OF PLANNING

Advantages

Limitations

Types of Planning Shanmugapriya,AP/IT 1

“PLANNING”


Planning is deciding in advance what is to bedone, when where, how and by whom it is tobe done.

Planning bridges the gap from where we are to where we want to go.

It includes the selection of objectives, policies, procedures and programmes from among alternatives

TYPES OF PLANNING


ACTITVITY

COVERED

Corporate

Functional

PERIOD

Long

term

Short

term

APPROA

CH

PROACTIVE

FORMULATI

ON

FORMAL INFORMAL

IMPORTAN

CE

REACTIVESTRATEGIC OPERATION

AL

PLANNING


ACTIVITY COVERED


Corporate Planning :

Determines long-term objectives of an organisation as

whole

Generates plans to achieve these objectives

Future orientated

Integrated

Functional planning :

Undertaken for sub functions witin each major functions

Derived from corporate planning.

Segmental

TIME-PERIOD


Depends on the type of the buisness and structure of

the organisation.

LONG TERM :

Strategic in nature.

Involves generally 3-5 years.

It relates to matters like new product ,product

diversification .

SHORT TERM :


• Short term planning typically covers time

frames of less than one year in order to assist

their company in moving gradually toward its

longer term.

• Examples are the skills of the employees and

their attitudes. The condition of production

equipment or product quality problems are also

short-term concerns.

APPROACH

PROACTIVE PLANNING :

Designing suitable course of action in anticipation of

likely

changes in relevant environment.

To take decision in advance.

Eg : Emergency organisations

REACTIVE PLANNING :

Reactive planning is the process whereby future

action is dictated as a response to whatever has

already, or is now occurring.Types of Planning Shanmugapriya,AP/IT 8

DEGREE OF FORMALISATION


FORMAL PLANNING :

It is a structured plan.

It has some procedure to follow.

Written record is followed in formal plan.

Eg. Five year plan of a country.

INFORMAL PLANNING It is unstructured plan.

It does not have any procedure to follow.

No record is maintained for future purpose.

IMPORTANCE OF CONTENTS


STRATEGIC :

It sets future directions of the

organization in which it wants to proceed in future.

It involves a time horizon of more than one year and for most

of the organization it ranges between 3 and 5 years.

Strategic plans are generally developed by top level

management.

Eg. diversification of business into new lines, planned

grown rate in sales.

OPERATIONAL


Operational plans are developed to determine

the steps necessary for achieving tactical goals..

They are used as a guide for day to day

operation by department managers.

These plans may cover a time frame of few

months, weeks or even a few days.

ADVANTAGES


Planning facilitates management by objectives

Planning minimizes uncertainties

Planning facilitates co-ordination

Planning improves employee’s moral

Planning helps in achieving economies

Planning facilitates controlling

Planning provides competitive edge

Planning encourages innovations

Planning facilitates management by

objectives


Planning begins with determination of objectives.

It highlights the purposes for which various activities are

to be undertaken.

In fact, it makes objectives more clear and specific.

Planning helps in focusing the attention of employees on

the objectives or goals of enterprise.

Without planning an organization has no guide.

Planning compels manager to prepare a Blue-print of

the courses of action to be followed for accomplishment

of objectives.

Therefore, planning brings order and rationality into the

organization.

Planning minimize uncertainties


Business is full of uncertainties.

There are risks of various types due to uncertainties.

Planning helps in reducing uncertainties of future as it

involves anticipation of future events.

Although future cannot be predicted with cent percent

accuracy but planning helps management to anticipate

future and prepare for risks by necessary provisions to

meet unexpected turn of events.

Therefore with the help of planning, uncertainties can

be forecasted which helps in preparing standbys as a

result, uncertainties are minimized to a great extent.

Planning facilitates coordination


Planning revolves around organizational goals.

All activities are directed towards common goals.

There is an integrated effort throughout the

enterprise in various departments and groups.

It avoids duplication of efforts. In other words, it

leads to better co-ordination.

It helps in finding out problems of work

performance and aims at rectifying the same.

Planning improves employee’s

moral.


Planning creates an atmosphere of order

and discipline in organization.

Employees know in advance what is

expected of them and therefore conformity

can be achieved easily.

This encourages employees to show their

best and also earn reward for the same.

Planning creates a healthy attitude towards

work environment which helps in boosting

employees moral and efficiency

Planning helps in achieving

economies


Effective planning secures economy since it leads to

orderly allocation ofresources to various operations.

It also facilitates optimum utilization of resources which

brings economy in operations.

It also avoids wastage of resources by selecting most

appropriate use that will contribute to the objective of

enterprise. For example, raw materials can be purchased

in bulk and transportation cost can be minimized. At the

same time it ensures regular supply for the production

department, that is, overall efficiency

Planning facilitates controlling


Planning facilitates existence of certain planned goals and standard of performance.

It provides basis of controlling.

We cannot think of an effective system of controlling without existence of well thought out plans.

Planning provides pre-determined goals against which actual performance is compared.

In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit .

Planning provides competitive

edge.


Planning provides competitive edge to the enterprise over

the others which do not have effective planning. This is

because of the fact that planning may involve changing in

work methods, quality, quantity designs, extension of

work, redefining of goals, etc.

With the help of forecasting not only the enterprise

secures its future but at the same time it is able to

estimate the future motives of it’s competitor which helps

in facing future challenges.

Therefore, planning leads to best utilization of possible

resources, improves quality of production and thus the

competitive strength of the enterprise is improved

Planning encourages

innovations.


In the process of planning, managers have the

opportunities of suggesting ways and means of

improving performance.

Planning is basically a decision making function

which involves creative thinking and imagination

that ultimately leads to innovation of methods

and operations for growth and prosperity of the

enterprise

Limitations of

Planning


Costly process


Planning involves too much expenditure. Money

and effort both are required in planning.

Planning includes collecting information, data

forecasting and evaluation of alternatives. It

requires salary and allowances to the experts in

the process of providing services.

So, planning has been accepted as costly

process by small and medium size organization

Time consuming


Planning is the time consuming process. It delays the

business activity to come in action.

In the process of planning following the procedures of

planning takes a lot of time which may create problem

to the organization where immediate action has to be

made. So in such situation planning is not suitable.

False sense of security


Planning encourages false sense of

security against future risk and uncertainty.

As future is uncertain, it is unpredictable.

Therefore, planning cannot give accurate

and reliable results.

RAPID CHANGE


Rapid changes in technology ,consumer

tastes and prefernces are further limitations

to planning.

Eg.: Planning in aircraft

,chemical,electronic and information

industries is specially complicated due to

acceptionally complex and rapidly changing

production technology.

PREMIUM ON PRESENT


Present is always more real than the future , and

present problems seem to be more urgent than

the future problems.

Many of us are inclined to take care of today and

hope that tommorow will take care of itself .

This is normal human tendency but infact we

have to take take care of today as well as

tommorow.

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