Planning, Its Feature, Importance

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• Planning can be defined as “thinking in advance what is to be done,
when it is to be done, how it is to be done and by whom it should be
done”. In simple words we can say, planning bridges the gap between
where we are standing today and where we want to reach.
• Planning involves setting objectives and deciding in advance the
appropriate course of action to achieve these objectives so we can
also define planning as setting up of objectives and targets and
formulating an action plan to achieve them.

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Features/Nature/Characteristic of Planning:
1. Planning contributes to Objectives:
Planning starts with the determination of objectives. We cannot think
of planning in absence of objective. After setting up of the objectives,
planning decides the methods, procedures and steps to be taken for
achievement of set objectives.
2. Planning is Primary function of management:
Planning is the primary or first function to be performed by every
manager. No other function can be executed by the manager without
performing planning function because objectives are set up in planning
and other functions depend on the objectives only.

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 3. Pervasive:
Planning is required at all levels of the management. It is not a
function restricted to top level managers only but planning is
done by managers at every level. Formation of major plan and
framing of overall policies is the task of top level managers
whereas departmental managers form plan for their
respective departments.
4. Planning is futuristic/Forward looking:
Planning always means looking ahead or planning is a
futuristic function. Planning is never done for the past.
5. Planning is continuous:
Planning is a never ending or continuous process because
after making plans also one has to be in touch with the
changes in changing environment and in the selection of one
best way.
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6. Planning involves decision making:
The planning function is needed only when different alternatives are
available and we have to select most suitable alternative.
7. Planning is a mental exercise:
It is mental exercise. Planning is a mental process which requires higher
thinking that is why it is kept separate from operational activities by
Taylor.

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Advantage
1. Planning provides Direction:
Planning is concerned with predetermined course of
action. It provides the directions to the efforts of
employees. Planning makes clear what employees have to
do, how to do, etc.
2. Planning Reduces the risk of uncertainties:
Organisations have to face many uncertainties and
unexpected situations every day. Planning helps the
manager to face the uncertainty because planners try to
foresee the future by making some assumptions
regarding future keeping in mind their past experiences
and scanning of business environments.
3. Planning reduces over lapping and wasteful activities:
The organisational plans are made keeping in mind the
requirements of all the departments. The departmental
plans are derived from main organisational plan.
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4. Planning Promotes innovative ideas:
Planning requires high thinking and it is an intellectual process. So,
there is a great scope of finding better ideas, better methods and
procedures to perform a particular job.
5. Planning Facilitates Decision Making:
Planning helps the managers to take various decisions. As in planning
goals are set in advance and predictions are made for future.
6. Planning establishes standard for controlling:
Controlling means comparison between planned and actual output and
if there is variation between both then find out the reasons for such
deviations and taking measures to match the actual output with the
planned.

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7. Focuses attention on objectives of the company:
Planning function begins with the setting up of the objectives, policies,
procedures, methods and rules, etc. which are made in planning to
achieve these objectives only.

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 Planning Process & Step
1. Setting up of the objectives:
In planning function manager begins with setting up of objectives because all the
policies, procedures and methods are framed for achieving objectives only. The
managers set up very clearly the objectives of the company keeping in mind the goals
of the company and the physical and financial resources of the company.
2. Developing premises:
Premises refer to making assumptions regarding future. Premises are the base on
which plans are made. It is a kind of forecast made keeping in view existing plans and
any past information about various policies.
3. Listing the various alternatives for achieving the objectives:
After setting up of objectives the managers make a list of alternatives through which
the organisation can achieve its objectives as there can be many ways to achieve the
objective and managers must know all the ways to reach the objectives.

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For example, if the objective is to increase in sale by 10% then the sale can be
increased:
(a) By adding more line of products;
(b) By offering discount;
(c) By increasing expenditure on advertisements;
(d) By increasing the share in the market;
(e) By appointing salesmen for door-to-door sale etc.
So, managers list out all the alternatives.
4. Evaluation of different alternatives:
After making the list of various alternatives along with the assumptions
supporting them, the manager starts evaluating each and every alternative
and notes down the positive and negative aspects of every alternative. After
this the manager starts eliminating the alternatives
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with more of negative aspect and the one with the maximum positive
aspect and with most feasible assumption is selected as best alternative.
Alternatives are evaluated in the light of their feasibility.
5. Selecting an alternative:
The best alternative is selected but as such there is no mathematical
formula to select the best alternative. Sometimes instead of selecting one
alternative, a combination of different alternatives can also be selected.
The most ideal plan is most feasible, profitable and with least negative
consequences.
6. Implement the plan:
The managers prepare or draft the main and supportive plans on paper but
there is no use of these plans unless and until these are put in action.

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7. Follow-up:
Planning is a continuous process so the manager’s job does not get
over simply by putting the plan into action. The managers monitor the
plan carefully while it is implemented.

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 Types of Plan
On the basis of Nature
1. Operational Plan: Operational plans are the plans which are formulated
by the lower level management for a short term period of up to one year.
It is concerned with the day to day operations of the organization. It is
detailed and specific. It is usually based on past experiences. It usually
covers functional aspects such as production, finance, human resources,
etc.
2. Tactical Plan: The tactical plan is the plan which is concerned with the
integration of various organizational units and ensures implementation of
strategic plans on day to day basis. It involves how the resources of an
organization should be used in order to achieve strategic goals. The tactical
plan is also known as a coordinative or functional plan.
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• 3. Strategic Plan: A strategic plan is a plan which is formulated by top-
level management for a long period of time of five years or more.
They decide the major goals and policies to achieve their goals. It
takes in a note of all the external factors and risks involved and makes
a long-term policy of the organization. It involves the determination
of strengths and weaknesses, external risks, missions, and control
systems to implement plans

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 On the basis of the Managerial Level

1. Top-level Plans: Plans which are formulated by general managers and

directors are called top-level plans. Under these plans, the objectives, budget,
policies, etc. for the whole organization are laid down. These plans are mostly
long term plans.
2. Middle-level Plans: The managerial hierarchy at the middle level includes
the departmental managers. A corporation has many departments like the
purchasing department, sales department, finance department, personnel
department, etc. The plans formulated by the departmental managers are
called middle-level plans.
3. Lower level Plans: These plans are prepared by the foreman or the
supervisors. They take the existence of the actual work and the problems
connected with it. They are formulated for a short period of time and called
short term plans.

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On the basis of Time

1. Long Term Plan: The long-term plan is the long-term process that business
owners use to reach their business mission and vision. It determines the path
for business owners to reach their goals. It also reinforces and makes
corrections to the goals as the plan progresses.
2. Intermediate Plan: Intermediate planning covers 6 months to 2 years. It
outlines how the strategic plan will be pursued. In business, intermediate
plans are most often used for campaigns.
3. Short-term Plan: The short-term plan involves pans for a few weeks or at
most a year. It allocates resources for day-to-day business development and
management within the strategic plan. Short-term plans outline objectives
necessary to meet intermediate plans and the strategic planning process

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• Principles of Planning
• 1. Principle of Contribution to Objectives: All types of plans are
prepared to achieve the objectives of the organisation. Both major and
derivative plans are prepared to contribute to the objectives of the
enterprise. Planning is used as a means to reach the goals.
• 2. Principles of Primacy of Planning: This principle states that
planning is the first or primary function of every manager. He has to
plan first and then proceed to carry out other functions. Other
managerial functions are organized to reach the objectives set in
planning.

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• 3undertaken. Plans are, generally not properly structured. The reason
being that planning premises are not properly developed. This
principle lays emphasis on properly analysing the situation which is
going to occur in future.
• 4. Principle of Alternatives: Planning process involves developing of
many alternatives and then selecting one which will help in achieving
desired business goals. In the absence of various alternatives proper
planning will be difficult. . Principle of Planning Premises: In order to
make planning effective, some premises or presumptions have to be
made on the basis of which planning has to be done.
• 5. Principle of Timing: Plans can contribute effectively to the
attainment of business goals if they are properly timed. Planning
premises and policies are useless without proper timing.

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• 6. Principle of Flexibility: This principle suggests flexibility in plans if
some contingencies arise. The plans should be adjusted to incorporate
new situations. The dangers of flexibility should be kept in mind. The
changes may upset the earlier commitments. So the cost of changes
should be compared to the benefits of flexibility.
• 7. Principle of Commitment: There should be a time frame for
meeting the commitments made. This will ensure the achieving of
targets in time.
• 8. Principle of Competitive Strategies: While formulating own plans a
manager should keep in mind the plans of competitors. The plans
should be framed by thinking of what the competitors will do in
similar situations

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Planning Process & Step:
• 1. Setting up of the objectives:
• In planning function manager begins with setting up of objectives
because all the policies, procedures and methods are framed for
achieving objectives only. The managers set up very clearly the
objectives of the company keeping in mind the goals of the company
and the physical and financial resources of the company.
• 2. Developing premises:
• Premises refer to making assumptions regarding future. Premises are
the base on which plans are made. It is a kind of forecast made
keeping in view existing plans and any past information about various
policies.

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• 3. Listing the various alternatives for achieving the objectives:
After setting up of objectives the managers make a list of alternatives
through which the organisation can achieve its objectives as there can
be many ways to achieve the objective and managers must know all
the ways to reach the objectives.
For example, if the objective is to increase in sale by 10% then the sale
can be increased:
(a) By adding more line of products;
(b) By offering discount;
(c) By increasing expenditure on advertisements;
(d) By increasing the share in the market;
(e) By appointing salesmen for door-to-door sale etc.
So, managers list out all the alternatives
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4. Evaluation of different alternatives:
After making the list of various alternatives along with the
assumptions supporting them, the manager starts evaluating each and every
alternative and notes down the positive and negative aspects of every
alternative. After this the manager starts eliminating the alternatives with
more of negative aspect and the one with the maximum positive aspect and
with most feasible assumption is selected as best alternative. Alternatives are
evaluated in the light of their feasibility.
5. Selecting an alternative:
The best alternative is selected but as such there is no mathematical
formula to select the best alternative. Sometimes instead of selecting one
alternative, a combination of different alternatives can also be selected. The
most ideal plan is most feasible, profitable and with least negative
consequences.
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6. Implement the plan:
The managers prepare or draft the main and supportive plans on paper
but there is no use of these plans unless and until these are put in
action.
7. Follow-up:
Planning is a continuous process so the manager’s job does not get
over simply by putting the plan into action. The managers monitor the
plan carefully while it is implemented

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