What Is Planning? Planning Planning is the primary function of management. It focuses on the future course of action. A primary managerial activity that specifies the objectives to be achieved in future and selects the alternative course of action to reach defined objectives. Thus, it involves: Defining the organization’s goals Establishing an overall strategy for achieving those goals Developing plans for organizational work activities. 6/17/2018 Dr V Ramadevi - AP / DoMS

“Determination of future course of actions in advance” What Is Planning? “Determination of future course of actions in advance” It is the blue print of action and operation. Planning is intellectual process which is concerned with deciding in advance what, when, why, how, and who shall do the work. 6/17/2018 Dr V Ramadevi - AP / DoMS

Definitions: “Generally speaking, planning is deciding in advance what is to be done” -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 to where we want to go” -Harold, Koontz and O’Donnel “Planning is that function of manner in which he decides in advance what he will do. It is a decision making process of a special kind, its essence is futurity.” -Hayness and Massie 6/17/2018 Dr V Ramadevi - AP / DoMS

Why Do Managers Plan? Purposes of Planning Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controlling Benefits of planning Goal Focus Minimize Uncertainty Improve efficiency Facilitates to Control Innovation and Creativity Better Coordination Ensures Commitment Aid to Business Success Brings Systematization 6/17/2018 Dr V Ramadevi - AP / DoMS REDUNDANCY<===> अतिरिक्तता

Nature of Planning The nature of planning can be highlighted by studying its characteristics. They are as follows (a) Planning is a mental activity. Planning is not a simple process. It is an intellectual exercise and involves thinking and forethought on the part of the manager. (b) Planning is goal-oriented. Every plan specifies the goals to be attained in the future and the steps necessary to reach them. A manager cannot do any planning, unless the goals are known. (c) Planning is forward looking. Planning is in keeping with the adage, “look before you leap”. Thus planning means looking ahead. It is futuristic in nature since it is performed to accomplish some objectives in future.

d) Planning pervades all managerial activity d) Planning pervades all managerial activity. Planning is the basic function of managers at all levels, although the nature and scope of planning will vary at each level. (e) Planning is the primary function. (f) Planning is based on facts. Planning is a conscious determination and projection of a course of action for the future. It is based on objectives, facts and considered forecasts. Thus planning is not a guess work. (g) Planning is flexible. Planning is a dynamic process capable of adjustments in accordance with the needs and requirements of the situations. Thus planning has to be flexible and cannot be rigid. (h) Planning is essentially decision making. Planning is a choice activity as the planning process involves finding the alternatives and the selection of the best. Thus decision making is the cardinal part of planning.

Importance of Planning According to G.R. Terry, “Planning is the foundation of most successful actions of all enterprises.” An enterprise can achieve its objectives only through systematic planning on account of the increasing complexities of modern business. The importance and usefulness of planning can be understood with reference to the following benefits.

(a) Minimizes uncertainty: The future is generally uncertain and things are likely to change with the passage of time. Planning helps in minimizing the uncertainties of the future as it anticipates future events. (b) Emphasis on objectives: The first step in planning is to fix the objectives. When the objectives are clearly fixed, the execution of plans will be facilitated towards these objectives. (c) Promotes coordination. Planning helps to promote the coordinated effort on account of pre-determined goals.

(d) Facilitates control (d) Facilitates control. Planning and control are inseparable in the sense that unplanned actions cannot be controlled. Control is nothing but making sure that activities conform to the plans. (e) Improves competitive strength. Planning enables an enterprise to discover new opportunities, which give it a competitive edge. (f) Economical operation. Since planning involves a lot of mental exercise, it helps in proper utilization of resources and elimination of unnecessary activities.This, in turn, leads to economy in operation.

g) Encourages innovation g) Encourages innovation. Planning is basically the deciding function of management. Many new ideas come to the mind of a manager when he is planning. This creates an innovative and foresighted attitude among the managers. (h) Tackling complexities of modern business. With modern business becoming more and more complex, planning helps in getting a clear idea about what is to be done, when it is to be done, where it is to be done and how it is tobe done.

How Do Managers Plan? Elements of Planning Goals (also Objectives) Desired outcomes for individuals, groups, or entire organizations Provide direction and evaluation performance criteria Plans Documents that outline how goals are to be accomplished Describe how resources are to be allocated and establish activity schedules 6/17/2018 Dr V Ramadevi - AP / DoMS

Types of Plans 6/17/2018 Dr V Ramadevi - AP / DoMS

Types of Plans Strategic Plans Operational Plans Apply to the entire organization. Establish the organization’s overall goals. Seek to position the organization in terms of its environment. Cover extended periods of time. Operational Plans Specify the details of how the overall goals are to be achieved. Cover short time period. 6/17/2018 Dr V Ramadevi - AP / DoMS

Types of Plans (cont’d) Long-Term Plans Plans with time frames extending beyond three years Short-Term Plans Plans with time frames on one year or less Specific Plans Plans that are clearly defined and leave no room for interpretation Directional Plans Flexible plans that set out general guidelines, provide focus, yet allow discretion in implementation. 6/17/2018 Dr V Ramadevi - AP / DoMS

Specific Versus Directional Plans 6/17/2018 Dr V Ramadevi - AP / DoMS

Types of Plans (cont’d) Single-Use Plan A one-time plan specifically designed to meet the need of a unique situation. Standing Plans Ongoing plans that provide guidance for activities performed repeatedly. 6/17/2018 Dr V Ramadevi - AP / DoMS

Establishing Goals and Developing Plans Traditional Goal Setting Broad goals are set at the top of the organization. Goals are then broken into sub-goals for each organizational level. Assumes that top management knows best because they can see the “big picture.” Goals are intended to direct, guide, and constrain from above. Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility. 6/17/2018 Dr V Ramadevi - AP / DoMS

The Downside of Traditional Goal Setting 6/17/2018 Dr V Ramadevi - AP / DoMS

Planning in the Hierarchy of Organizations 6/17/2018 Dr V Ramadevi - AP / DoMS

Contemporary Issues in Planning Criticisms of Planning Planning may create rigidity. Plans cannot be developed for dynamic environments. Formal plans cannot replace intuition and creativity. Planning focuses managers’ attention on today’s competition not tomorrow’s survival. Formal planning reinforces today’s success, which may lead to tomorrow’s failure. 6/17/2018 Dr V Ramadevi - AP / DoMS

Planning Process: How does a manager Plan? Establish objectives Develop Strategies Determination of premises Determination of alternatives Evaluation of alternatives Selecting a course of action Formulation of derivative plans Implantation of plans Reviewing the planning process 6/17/2018 Dr V Ramadevi - AP / DoMS

Analyze Opportunities Not a step of Planning, It is pre-step of planning. Essential to make a successful plan. SWOT analysis Setting objectives First and real starting point of planning. Management has to define objectives in clear manner by considering organizational resources and opportunities because a minor mistake in setting objectives might affect in implementation of plan. Objectives must be specific, clear and practical. They should be time bound and expressed in numerical terms. 6/17/2018 Dr V Ramadevi - AP / DoMS

Determination of premises Premises are the assumptions about the future in which the planning is implemented. They provide environment and boundaries for the implementation of plan in practical operation. 6/17/2018 Dr V Ramadevi - AP / DoMS

These premises may be tangible and intangible and external. (a) Tangible and intangible: Tangible premises involve capital investment, unit of production, units sold, cost per unit, time available etc. Similarly, intangible premises involve employees moral, goodwill, motivation, managerial attitude, etc. (b) Internal and external: Internal premises involve money, materials, machines and managements. In the similar manner, external factors involve competitors strategy, technological change, government policy, social and cultural beliefs etc. 6/17/2018 Dr V Ramadevi - AP / DoMS

Determination of alternatives It is essential to identify all the possible hidden alternatives. The information about alternative courses of action may be obtained from primary and secondary sources. There must be search for the best alternative. The management must develop alternatives through the support of experienced and intellectual experts in management sectors. 6/17/2018 Dr V Ramadevi - AP / DoMS

Evaluation of alternatives Evaluate the alternatives from their expected cost and benefits. This is the logical step to evaluate each alternative from its plus and minus points. Each alternative is studied and evaluated in terms of some common factors such as risk, responsibility, planning premises, resources, technology etc. Selecting a course of action 6/17/2018 Dr V Ramadevi - AP / DoMS

Formulation of derivative plans: It is essential to formulate action or derivative plans for each step of work and to all departments of the organization. These action plans involve formulation of policies, rules, schedule and budget to complete defined objectives. Thus, formulation of derivative plans is an essential step in planning process. It is difficult to implement main plan without formulation of derivative plan. 6/17/2018 Dr V Ramadevi - AP / DoMS

Reviewing the planning process Implantation of plans Without this step, other this procedure of plan will remain as paper work. This step brings all the procedure of plan into action. For implementation plan, management has to take some steps such as to communicate with subordinates who initiate to plan into action; provide necessary instruction and guidance; make arrangement of all resources like materials, machines, money, equipments etc; make timely supervision and control over subordinates. Reviewing the planning process 6/17/2018 Dr V Ramadevi - AP / DoMS