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UNIT- 4: PLANNING
TOPICS AS PER CBSE SYLLABUS
I. Planning: Concept, importance and limitation
II. Planning process
III. Single use and Standing Plans. Objectives, Strategy, Policy, Procedure, Method,
Rule, Budget and Programme
I. Concept: 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.
FEATURES OF PLANNING (only points)
1. Decision making
2. Planning is continuous process
3. Planning is pervasive
4. Objective achievement
5. Planning is Futuristic
6. Planning is a mental exercise
7. Planning is Primary function of a manager.
IMPORTANCE OF PLANNING
(i) Planning provides directions: Planning ensures that the goals or objectives are
clearly stated so that they act as a guide for deciding what action should be taken and
in which direction.
(ii) Planning reduces the risks of uncertainty: By deciding in advance the tasks to be
performed, planning shows the way to deal with changes and uncertain events.
(iii) Planning reduces overlapping and wasteful activities: planning ensures clarity in
thought and action, work is carried on smoothly without interruptions.
(iv) Planning promotes innovative ideas
LIMITATIONS OF PLANNING: (3-4M)

1. No guarantee of success: For achieving success management has to properly

2. Planning involves huge cost: When plans are drawn, costs are involved in their
formation in terms of effort, time and money. The cost incurred sometimes may
not justify the benefits derived from the plans.

3. Planning leads to rigidity: The plans are well defined and decide future course
of action. Thus managers may not be in a position to change them. Hence, there
is rigidity and blind following of plans. D- Planning may not work in a dynamic
environment: Business environment is dynamic and constantly adopt itself to
these changes. It becomes difficult to make plans where policies of a country and
economic conditions are not stable.
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4. Time consuming process: planning is a blessing in facing a definite situation but

5. Planning reduces creativity: Middle level managers are not allowed to deviate
from plans or act on their own. They only carry out order which leads to reduction
of creativity and new ideas in the manager.
III. Planning Process/Steps involved in Planning: - (4-6m)
1. Setting Objectives: Objectives or goals specify what the organization wants to
achieve. Objectives may be set for the entire organization and each department or unit.
2. Developing Premises: Planning is future oriented. So the manager is required to
make certain assumptions about the future. These assumptions are called premises.
3. Identifying alternative courses of Action: All the alternative courses of action should
be identified and they should be discussed thoroughly in the light of their feasibility and
consequences.
4. Evaluating Alternative Courses: The positive and negative aspects of each proposal
need to be evaluated in the light of the objective to be achieved.
5. Selecting an Alternative: This is the real point of decision making. The best plan has
to be adopted and implemented. The ideal plan, of course, would be the most feasible,
profitable and with least negative consequences.
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.
TYPES OF PLANS
Plan is a document that outlines how goals are going to be met. It is a specific action
proposed to help the organization to achieve its objectives.
i) Single use plan:
 A single-use plan is developed for a one-time event or project. Such a course of
action is not likely to be repeated in future.
 The duration of this plan may depend upon the type of the project. It may span a
week or a month.
 They consist of details, including the names of employees who are responsible
for doing the work and contributing to the single-use plan.
 These plans include budgets, programs
A. BUDGET
 A budget is a statement of expected results expressed in numerical terms.
 A budget may also be prepared to show the number of workers required in the
factory at peak production times.
 a budget is also a control device from which deviations can be taken care of.
B. PROGRAMMES
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 Programs are detailed statements about a project which outlines the objectives,
policies, procedures, rules, tasks, human and physical resources required and
the budget to implement any course of action.
 The minutest details are worked out i.e., procedures, rules, budgets, within the
broad policy framework.
(ii) Standing plan:
 A standing plan is used for activities that occur regularly over a period of time.
 It is usually developed once but is modified from time to time to meet business
needs as required
 Standing plans include policies, procedures, methods and rules.
A. POLICIES
 Policies are general statements that guide thinking or channelize energies
towards a particular direction.
 Policies provide a basis for interpreting strategy which is usually stated in general
terms.
 They are guides to managerial action and decisions in the implementation of
strategy.
B. PROCEDURE
 Procedures are routine steps on how to carry out activities. They detail the exact
manner in which any work is to be performed.
 They are specified in a chronological order. They are generally meant for insiders
to follow.
 Policies and procedures are interlinked with each other. Procedures are steps to
be carried out within a broad policy framework.
C. METHODS
 Methods provide the prescribed ways or manner in which a task has to be
performed considering the objective.
 Selection of proper method saves time, money and effort and increases
efficiency.
D. RULES
 Rules are specific statements that inform what is to be done. They do not allow
for any flexibility or discretion.
 They are usually the simplest type of plans because there is no compromise or
change unless a policy decision is taken.
(iii) OBJECTIVES
 Objectives can be said to be the desired future position that the management
would like to reach.
 They are usually set by top management of the organization and focus on broad,
general issues.
 They define the future state of affairs which the organization strives to realize.
 Objectives need to be expressed in specific terms i.e., they should be
measurable in quantitative terms, in the form of a written statement of desired
results to be achieved within a given time period.

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(iv) STRATEGY
 a strategy is a comprehensive plan for accomplishing an organization objective.
 This comprehensive plan will include three dimensions,
(i) determining long term objectives,
(ii) adopting a particular course of action, and
(iii) allocating resources necessary to achieve the objective
 Whenever a strategy is formulated, the business environment needs to be taken
into consideration.

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