THE NALANDA CLASSES
BUSINESS STUIDES
CLASS XII
PLANNING (Notes)
Meaning of Planning:
• Deciding in advance what to do and how to do it. It is one of the
basic managerial functions.
• It involves 2 aspects:
Setting of aims and objectives of the organization + Selecting and
developing an appropriate course of action to achieve these
objectives.
According to Koontz and O‘Donnell ― Planning is deciding in advance
what to do, how to do, when to do, and who to do it. Planning bridges
the gap from where we are to where we want to go. It makes it
possible for things to occur which would not otherwise happen.
• Involves setting of objectives & developing an appropriate course of
action to achieve these objectives
Importance of Planning
1. Planning provides directions: By stating in advance how the work is
to be done planning provides direction for action. If there was no
planning, employees would be working in different directions and the
organization would not be able to achieve its goals efficiently.
2. Planning reduces the risk of uncertainty: Planning is an activity
which enables a manager to look ahead, anticipate change, consider
the impact of change and develop appropriate responses.
3. Planning reduces wasteful activities: Planning serves as the basis
of coordinating the activities and efforts of different departments and
individuals whereby useless and redundant activities are mentioned.
4. Planning promotes innovative ideas: Planning is the first function
of management. Managers get the opportunity to develop new ideas
and new ideas can take the shape of concrete plans.
, 5. Planning facilities decision making: Under planning targets are laid
down. The manager has to evaluate each alternative and select the
most viable option.
6. Planning establishes standards for controlling: Planning provides
the standards against which the actual performance can be measured
and evaluated. Control is blind without planning. Thus planning
provides the basis for control.
Limitations of Planning
(A) Internal Limitations
1. Planning leads to rigidity: Planning discourages individual’s
initiative &creativity. The managers do not make changes according to
changing business environment. They stop taking or giving suggestions
and new ideas. Thus detailed planning may create a rigid framework in
the organization.
2. Planning may not work in dynamic environment: Planning is based
on anticipation of future happenings and since future is uncertain and
dynamic therefore, the future anticipations are not always true.
3. Planning involves huge costs: When plans are drawn up, huge cost
is involved in their formulation.
4. Planning is time consuming: Sometimes plans to be drawn up take
so much of time that there is not much time left for their
implementation.
5. Planning does not guarantee success: The success of an enterprise
is possible only when plans are properly drawn and implement.
Sometimes managers depend on previously tried successful plans, but
it is not always true that a plan which has worked before will work
effectively again.
6. Planning reduces creativity: In planning, work is to be done as per
pre-determined plans. It is decided in advance what is to be done, how
it is to be done and who is going to do it. Moreover, planning is done
by top management which leads to reduction of creativity of other
levels of management.
(B) External Limitations
BUSINESS STUIDES
CLASS XII
PLANNING (Notes)
Meaning of Planning:
• Deciding in advance what to do and how to do it. It is one of the
basic managerial functions.
• It involves 2 aspects:
Setting of aims and objectives of the organization + Selecting and
developing an appropriate course of action to achieve these
objectives.
According to Koontz and O‘Donnell ― Planning is deciding in advance
what to do, how to do, when to do, and who to do it. Planning bridges
the gap from where we are to where we want to go. It makes it
possible for things to occur which would not otherwise happen.
• Involves setting of objectives & developing an appropriate course of
action to achieve these objectives
Importance of Planning
1. Planning provides directions: By stating in advance how the work is
to be done planning provides direction for action. If there was no
planning, employees would be working in different directions and the
organization would not be able to achieve its goals efficiently.
2. Planning reduces the risk of uncertainty: Planning is an activity
which enables a manager to look ahead, anticipate change, consider
the impact of change and develop appropriate responses.
3. Planning reduces wasteful activities: Planning serves as the basis
of coordinating the activities and efforts of different departments and
individuals whereby useless and redundant activities are mentioned.
4. Planning promotes innovative ideas: Planning is the first function
of management. Managers get the opportunity to develop new ideas
and new ideas can take the shape of concrete plans.
, 5. Planning facilities decision making: Under planning targets are laid
down. The manager has to evaluate each alternative and select the
most viable option.
6. Planning establishes standards for controlling: Planning provides
the standards against which the actual performance can be measured
and evaluated. Control is blind without planning. Thus planning
provides the basis for control.
Limitations of Planning
(A) Internal Limitations
1. Planning leads to rigidity: Planning discourages individual’s
initiative &creativity. The managers do not make changes according to
changing business environment. They stop taking or giving suggestions
and new ideas. Thus detailed planning may create a rigid framework in
the organization.
2. Planning may not work in dynamic environment: Planning is based
on anticipation of future happenings and since future is uncertain and
dynamic therefore, the future anticipations are not always true.
3. Planning involves huge costs: When plans are drawn up, huge cost
is involved in their formulation.
4. Planning is time consuming: Sometimes plans to be drawn up take
so much of time that there is not much time left for their
implementation.
5. Planning does not guarantee success: The success of an enterprise
is possible only when plans are properly drawn and implement.
Sometimes managers depend on previously tried successful plans, but
it is not always true that a plan which has worked before will work
effectively again.
6. Planning reduces creativity: In planning, work is to be done as per
pre-determined plans. It is decided in advance what is to be done, how
it is to be done and who is going to do it. Moreover, planning is done
by top management which leads to reduction of creativity of other
levels of management.
(B) External Limitations
