PLANNING

How do managers plan?

What types of plans do managers use?
What are the useful planning tools?
Meaning and Definition of Planning
Successful managers try to envisage the problems before they turn into emergencies. As
pointed out by Terry, “successful managers deal with foreseen problems and unsuccessful
manager‟s struggle with unforeseen problems. The difference lies in planning.”

Manager‟s best owed with responsibility of achieving definite targets do not waste time
waiting for future. Instead they carve the future through a creative collaboration of
thoughts by removing present difficulties, anticipating future problems, changing the goals
to suit the internal and external changes, experiment with creative ideas and take the
initiative, attempting „to shape the future and create a more desirable environment.
A plan is a forecast for accomplishment. It is a prearranged course of
action for tomorrow‟s activity. In other words, to plan is to prepare a blue
print for future action, to bring about specific results at a specific cost in a
specific period.

Management thinkers have defined the term in two ways:

Based on futurity:
 Planning is a trap laid down to capture the future. (Allen)
 Planning is deciding in advance what is to be done in future.(Koontz)
 Planning is informed anticipation of future. (Haimann)
 Planning is „anticipatory‟ decision-making. (R.L, Ackoff)
Based on thinking:
Planning is a thinking process, an organised foresight, a vision based on
fact and experience that is required for intelligent action. (Alford and
Beatt)
Planning is deciding in advance what to do, how to do it, when to do it and
who is to do it. (Koontz and O‟Donnell).
The process of setting objectives and determining how to best accomplish
them.

A plan is a specific, documented intention consisting of an objective and an

action statement. The objective portion is the end and the action statements
represent means to that end. Stated another way, objectives give
management targets to shoot at, whereas action statements provide the
arrows for hitting the targets.
Planning is required to make decisions on
 What should be done?
 How it should be done?
 Who will be responsible?
 Where the action is to be taken?
 Why is it done?

Planning Is:
 A promise to do something acceptable
 An exciting opportunity to form a mental model to guide future
activities.
The role of planning and controlling in the management process
 Steps of Planning Process
The important steps of the planning process in management include:
1. Analyze opportunities
2. Set goals or objectives
3. Determining premises
4. Identify alternatives
5. Evaluate alternatives
6. Select the best course of action
7. Formulate supportive plan
8. Implement the plan
9. Review the planning process
1.Analyze Opportunities:
This is the pre-step of the planning process. It is vital to create an effective
plan. The management must do a SWOT analysis of the changing business
environment.

The internal environment of the organization determines the organization’s

strengths and limitations, such as the availability of resources, machinery,
labor, organizational structure, adopted technology, and so on.

Threats and opportunities, on the other hand, are influenced by a range of

factors such as political, economic, socio-cultural, government policies,
technical advancements, and so on. As a result, conducting a comprehensive
analysis prior to formulating objectives is crucial.
2.Set Goals or Objectives
Setting goals is the first and most important phase in the planning
process. The goals should be concise, obvious, and attainable. They
should be time-bound and numerically stated. Idealistic or too-ambitious
goals should be avoided. A little mistake in goal-setting could risk a
plan’s implementation.

As a result, a manager must clearly state the goal while taking into
account organizational resources and opportunities. It should be broken
down into specific objectives of different departments, branches,
divisions, and individuals after the basic objectives have been clarified.
In short, the organizational objectives should be SMART, that is
specific, measurable, achievable, realistic, and time-bound
3.Determine Premises
Premises are future assumptions that are established due to the unknown
nature of the future environment. The plan is then created based on the
premises. Forecasting is used to estimate the future environment. It can be
both physical and intangible, as well as internal and external.

Tangible premises involve capital investment, units of production, units

sold, cost per unit, time available, etc. Intangible premises, on the other
hand, include an employee’s morale, goodwill, motivation, and so on.

External premises include competitors’ strategies, government strategy,

technological change, and social and cultural views, whereas internal
premises include money, materials, machinery, and management.
4.Identify Alternatives
For the attainment of corporate goals, a manager must identify
numerous potential courses of action. It is vital to recognize all possible
possibilities in order to do so.

With the help of competent and creative management professionals, the

manager must develop alternatives. The premise for plan formation is the
determination of the alternative course of action
5.Evaluate Alternatives
This is yet another crucial stage in the planning process. This is a logical
step in the process of weighing the costs and benefits of each option.
Each alternative is examined and weighed against a set of common
criteria, such as risk, accountability, planning grounds, resources,
technology, time, efforts, and so on.

Managers can use a variety of analytical approaches from other

disciplines, including mathematics, sociology, economics,
and psychology, depending on the situation. To choose the optimal course
of action, the evaluation technique must be scientific and practical.
6.Select The Best Course of Action (Best Alternative)
This is a decision-making process based on the available options. After
weighing all of the options, the manager chooses the best and most
viable course of action. The manager must examine prior experience,
current circumstances, and future contingencies while making such a
decision.

As a result, it is critical to analyze an organization’s diverse premises and

settings, as well as their impact on the future course of action. Aside
from that, the option with the lowest cost and highest profit margin is
chosen
7.Formulate Supportive Plans
It is critical to build support plans for each area of the company
after deciding on a course of action. The subsidiary plans to aid in
the execution of the primary plan. These supporting plans entail
the creation of laws, rules, timetables, and budgets in order to
attain specific goals.

For example, may, getting proper training, media advertising, and

sponsoring are supportive plans for a good seminar.
8.Implement The Plan
After identifying the optimal course of action and compilation of
complementary strategies, if not implemented, the plan stays on paper only.
This is the step in the planning process when the chosen plan is put into
effect.

The manager must take certain steps to put the plan into action, including
communicating with subordinates who initiate the plan, providing
necessary instruction and guidance, arranging all resources, such as
materials, money, machines, and equipment, and ensuring timely
supervision and control of subordinates.
9.Review The Whole Planning Process
Reviewing is the last step in the planning process. Planning is a continuous
process that continues until the company ceases to exist. The strategy must
be implemented, but if the performance is not reviewed, the outcome is
unknown. It is vital to know about the plan’s real performance in order to
arrive at a decision by the managers to initiate corrective action.
 Features of Planning
Planning is goal-oriented.
 Planning is the core of business.
 Goals established should be worked out to make.
 Planning locates action which leads to goals quickly and economically.
 Planning shows a sense of direction to various activities.

Planning is looking ahead.

 It is done for future.
 It requires peeping in future, analyzing it and predicting it.
 It is based on forecasting.
 It is a synthesis of forecast.
 It is a mental predisposition for things to happen in future
Planning is an intellectual process.
 It is a mental exercise which includes lucrative thinking, judgment and
imagination.
 It involves not mere guesswork but rational thinking.
 It depends on goals, facts and considered estimates.

Planning involves choice and informed decision-making.

 It basically involves selecting from various alternatives.
 It is not applicable in single course of action as it attains no choice.
 The decision-making involves an integral part of planning.
 It gives more options to managers to select the best as per needs.
 It basically involves selecting from various alternatives.
 The decision-making involves an integral part of planning.
 It gives more options to managers to select the best as per needs.
Planning is the primary function of management / Primacy of
Planning
 It lays the foundation for other functions of management.
 It serves as guide for organizing, staffing, directing and controlling.
 It carries complete functions of management inside a framework.
 It is the main function of management.

Planning is a continuous process.

 It serves as never-ending process due to dynamic business
environment.
 It is prepared for particular time and is subject to revaluation and
review.
 It remains continuous.
Planning is all-pervasive.
 It is needed at every level of management and everywhere in enterprise.
 It varies with scope of work.
 Top level involves in planning, middle level involves in departmental
plans while lower level will implement the same plan.

Planning is designed for efficiency.

 It leads to complete objectives at lowest cost.
 It avoids wastage of resources and ensures good use of resources.
 It is worth or useless till it results in value of cost which occurs.
 It results in saving time, effort and money.
 It leads to correct use of men, money, materials, methods and machines.
Planning is Flexible.
 It should give enough room to cope with changes occurs with
customer demand, competition, government policies, etc.
 The original plan should keep on updating if any circumstance for
change occurs.
 Importance of planning
Planning facilitates management by objectives.
 Planning starts with finding of an objective.
 It shows the reason for starting different activities.
 With this, the objective becomes clear and particular.
 With planning, an employee will be more focused towards objectives and goals.
 There will be no path, if there is no planning.

Planning minimizes uncertainties.

 In business, there occur lots of uncertainties.
 Because of such uncertainties, there occurs risk factor in every business.
 With planning, the uncertainties can be lowered as it anticipates any future
occurrences.
 Since future cannot be predicted 100%, so with the help of planning, the management
will come to know about future activities.
Planning facilitates co-ordination.
 It is seen that planning moves around organisational goals.
 In this, all activities are aimed at common goals.
 There is a combined effort all the way in an enterprise in departments and
groups.
 It keeps away from replication of efforts which results in good co-
ordination.

Planning improves employee’s morale.

 With planning, an atmosphere of order and discipline originates that
takes it as a serious aspect.
 Through planning employees will come to know what is required from
them which results in obtaining conformity
Planning helps in achieving economy.
Good planning results in safer economy as it leads to allocation of
resources.
It makes admissible for correct use of resources for economic
operations.
There will no wastage of resources if choosing correct use will can
add to objectives of an enterprise.

Planning facilitates controlling.

With planning it is possible to proceed with fixed planned goals and
standards of presentation.
The basic of controlling is provided.
An operative system of controlling is unmanageable without presence
of good thought plans.
Planning provides competitive edge.
 Planning uses change in work methods, quality, quantity designs,
extension of work, redefining of goals etc.
 The forecasting will secure the future of an enterprise and at the same
time calculate the future motives of competitors.

Planning encourages innovations.

 With planning process, managers will be able to suggest ways and
different means in order to improve performance.
 It is the decision making function which accommodates creative
thinking and imagination which shows innovative methods and
growth operations of an enterprise.