Management Planning Process

Formulation of Policies Important Considerations which should be followed in formulating the various policies:- 1.Policies should be based on facts not on intuition. 2.Joint Participation in policy making should be encouraged 3.Policies should be broad, general, and basic, not specific because they are guide to thinking and action. 4.Policies must reflect the internal and external business environment 5.Rigidities should be avoided to make policies more realistic. 6.Policies should be in writing and the language of the policies should be intelligible to those who are supposed to implement them. 7.Different policies in an organization should support one another. 8.They must not be detrimental to the interest of society. 9.Policies should be understood by the organizational members.

Procedures Procedures are clear cut administrative specifications prescribing the chronological manner in which repetitive activity is initiated, carried forward and controlled.

Distinction b/w Policies and Procedures Policies Are guides to decision making Leave some room for interpretation and discretion. Form part of the strategies of the organization Policies are formulated by the top management Procedure Are guides to action They are more rigid and specific. Procedures are operational and tactical tools Procedures are laid down at somewhat lower level.

Forecasting Forecasting is essentially a technique of anticipation. Provide key information and pertinent facts relating to future. It refers to a systematic analysis of past and present circumstances with the aim of drawing conclusions about the future course of events.

Important Characteristics of Forecasting 1.Forecasts are the estimates for the future trends. 2.These estimates for future are based on the analysis of past and present circumstances. 3.Some systematic and scientific techniques are used for analysis of past trend and then estimating the future. 4.It forces the possible changes in order to bring accuracy and exactness in decisions.

Importance of Forecasting Importance in planning Accuracy in managerial decisions Singleness of purpose is developed Coordination is developed Control is facilitated Contributes to business sucess

Elements of forecasting Process 1.Developing the ground work 2.Estimating future trends 3.Comparing actual results with the estimated figures 4.Refining the forecasts

Limitations of forecast Forecasts are not absolute truths Forecasts are based on based on certain assumptions The business conditions are dynamic and ever-changing. They can never be forecasted accurately.