Planning
Contents:- planning, concept, objectives, nature, limitations, process of planning, importance,
forms, techniques and process of decision making, objectives, tools
Planning is the fundamental management function, which involves deciding beforehand, what is to
be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual
process which lays down an organization’s objectives and develops various courses of action, by
which the organization can achieve those objectives. It chalks out exactly, how to attain a specific
goal.
Planning is nothing but thinking before the action takes place. It helps us to take a peep into the
future and decide in advance the way to deal with the situations, which we are going to encounter in
future. It involves logical thinking and rational decision making.
Planning is the first primary function of management that precedes all other functions. The planning
function involves the decision of what to do and how it is to be done? So managers focus a lot of
their attention on planning and the planning process.
Objectives of Planning
The objectives of planning are many and varied. These aims are not the same for all countries, not
are they same for the same country at all times.
Some major objectives of economic planning are:
(a) An improvement in the standard of living of the people through a sizable increase in national
income within a short period of time;
(b) A large expansion of employment opportunities for the removal of unemployment and for
creating jobs and incomes
(c) A reduction in all types of social, economic and regional inequalities
(d) An efficient utilisation of the country’s resources for faster growth
(e) Removal of mass poverty within a definite time limit through land reform, employment creation,
and provision of educational and medical facilities;
(f) Attainment of self-reliance by reducing dependence on foreign capital and foreign aid.
Nature of Planning
1. Planning is primary function of management
The functions of management are broadly classified as planning, organisation, direction and control.
It is thus the first function of management at all levels. Since planning is involved at all managerial
functions, it is rightly called as an essence of management.
2. Planning focuses on objectives
Planning is a process to determine the objectives or goals of an enterprise. It lays down the means to
achieve these objectives. The purpose of every plan is to contribute in the achievement of objectives
of an enterprise.
3. Planning is a function of all managers
, Every manager must plan. A manager at a higher level has to devote more time to planning as
compared to persons at the lower level. So the President or Managing director in a company devotes
more time to planning than the supervisor.
4. Planning as an intellectual process
Planning is a mental work basically concerned with thinking before doing. It is an intellectual process
and involves creative thinking and imagination. Wherever planning is done, all activities are orderly
undertaken as per plans rather than on the basis of guess work. Planning lays down a course of
action to be followed on the basis of facts and considered estimates, keeping in view the objectives,
goals and purpose of an enterprise.
5. Planning as a continuous process
Planning is a continuous and permanent process and has no end. A manager makes new plans and
also modifies the old plans in the light of information received from the persons who are concerned
with the execution of plans. It is a never ending process.
6. Planning is dynamic (flexible)
Planning is a dynamic function in the sense that the changes and modifications are continuously
done in the planned course of action on account of changes in business environment.
As factors affecting the business are not within the control of management, necessary changes are
made as and when they take place. If modifications cannot be included in plans it is said to be bad
planning.
7. Planning secures efficiency, economy and accuracy
A pre- requisite of planning is that it should lead to the attainment of objectives at the least cost. It
should also help in the optimum utilisation of available human and physical resources by securing
efficiency, economy and accuracy in the business enterprises. Planning is also economical because it
brings down the cost to the minimum.
8. Planning involves forecasting
Planning largely depends upon accurate business forecasting. The scientific techniques of forecasting
help in projecting the present trends into future. ‘It is a kind of future picture wherein proximate
events are outlined with some distinctness while remote events appear progressively less distinct.”
9. Planning and linking factors
A plan should be formulated in the light of limiting factors which may be any one of five M’s viz.,
men, money, machines, materials and management.
10. Planning is realistic
A plan always outlines the results to be attained and as such it is realistic in nature.
LIMITATIONS OF PLANNING:-
Following are the limitations of planning:
(1) Planning Creates Rigidity
Although the quality of flexibility is inherent in planning, meaning thereby that in case of need
changes can be brought in, but it must be admitted that only small changes are possible. Big changes
are neither possible nor in the interest of the organization.
Since it is not possible to introduce desired changes according to the changed situations, the
organization loses many chances of earning profits. For this limited flexibility in planning, both the
, internal as well as external factors are responsible. These facts are called internal and external
inflexibility.
They are the following:
(i) Internal Inflexibility
At the time of planning the objectives of the organization, its policies, procedures, rules,
programmes, etc. are determined. It is very difficult to bring in changes time and again. It is known
as internal inflexibility,
(ii) External Inflexibility
External inflexibility means various external factors that cause limited flexibility in planning.
These factors are beyond the control of the planners. The chief among them are: political climate,
economic changes, technical changes, natural calamities, policies of the competitors, etc.
For example, in political context, as a result of change, a new government brings up a new trade
policy, policy of taxation, import policy, etc. All these changes make every sort of planning a
meaningless waste. Similarly, a change in the policies of the competitors suddenly makes all types of
planning ineffective.
(2) Planning Does Not Work in a Dynamic Environment
Planning is based on the anticipation of future happenings. Since future is uncertain and dynamic,
therefore, the future anticipations are not always true. Therefore, to consider planning as the basis
of success is like a leap in the dark.
Generally, a longer period of planning makes it less effective. Therefore, it can be said that planning
does not work in dynamic environment.
For example, a company anticipated that the government was thinking about allowing the export of
some particular product. With this hope the same company started manufacturing that product. But
the government did not allow the export of this product. In this way, the wrong anticipation proved
all planning wrong or incorrect. It brought loss instead of profit.
(3) Planning Reduces Creativity
Under planning all the activities connected with the attainment of objectives of the organization are
pre-determined. Consequently, everybody works as they have been directed to do and as it has been
made clear in the plans.
Therefore, it checks their incisiveness. It means that they do not think about appropriate ways of
discovering new alternatives. According to Terry, “Planning strangulates the initiative of the
employees and compels them to work in an inflexible manner.”
(4) Planning Involves Huge Costs
Planning is a small work but its process is really big. Planning becomes meaningful only after
traversing a long path. It takes a lot of time to cover this path.
During this entire period the managers remain busy in collecting a lot of information and analysing
it. In this way, when so many people remain busy in the same activity, the organization is bound to
face huge costs.
(5) Planning is a Time-consuming Process
Planning is a blessing in facing a definite situation but because of its long process it cannot face
sudden emergencies. Sudden emergencies can be in the form of some unforeseen problem or some
opportunity of profits and there has been no planning for all these situations beforehand and which
now requires immediate decision.
In such a situation, if the manager thinks of completing the planning process before taking some
decision, it may be possible that the situations may worsen or the chance of earning profit may slip
away. Thus, planning is time consuming and it delays action.
(6) Planning Does Not Guarantee Success
Sometimes the managers think that planning solves all their problems. Such thinking makes them
neglect their real work and the adverse effect of such an attitude has to be faced by the
organization.
Contents:- planning, concept, objectives, nature, limitations, process of planning, importance,
forms, techniques and process of decision making, objectives, tools
Planning is the fundamental management function, which involves deciding beforehand, what is to
be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual
process which lays down an organization’s objectives and develops various courses of action, by
which the organization can achieve those objectives. It chalks out exactly, how to attain a specific
goal.
Planning is nothing but thinking before the action takes place. It helps us to take a peep into the
future and decide in advance the way to deal with the situations, which we are going to encounter in
future. It involves logical thinking and rational decision making.
Planning is the first primary function of management that precedes all other functions. The planning
function involves the decision of what to do and how it is to be done? So managers focus a lot of
their attention on planning and the planning process.
Objectives of Planning
The objectives of planning are many and varied. These aims are not the same for all countries, not
are they same for the same country at all times.
Some major objectives of economic planning are:
(a) An improvement in the standard of living of the people through a sizable increase in national
income within a short period of time;
(b) A large expansion of employment opportunities for the removal of unemployment and for
creating jobs and incomes
(c) A reduction in all types of social, economic and regional inequalities
(d) An efficient utilisation of the country’s resources for faster growth
(e) Removal of mass poverty within a definite time limit through land reform, employment creation,
and provision of educational and medical facilities;
(f) Attainment of self-reliance by reducing dependence on foreign capital and foreign aid.
Nature of Planning
1. Planning is primary function of management
The functions of management are broadly classified as planning, organisation, direction and control.
It is thus the first function of management at all levels. Since planning is involved at all managerial
functions, it is rightly called as an essence of management.
2. Planning focuses on objectives
Planning is a process to determine the objectives or goals of an enterprise. It lays down the means to
achieve these objectives. The purpose of every plan is to contribute in the achievement of objectives
of an enterprise.
3. Planning is a function of all managers
, Every manager must plan. A manager at a higher level has to devote more time to planning as
compared to persons at the lower level. So the President or Managing director in a company devotes
more time to planning than the supervisor.
4. Planning as an intellectual process
Planning is a mental work basically concerned with thinking before doing. It is an intellectual process
and involves creative thinking and imagination. Wherever planning is done, all activities are orderly
undertaken as per plans rather than on the basis of guess work. Planning lays down a course of
action to be followed on the basis of facts and considered estimates, keeping in view the objectives,
goals and purpose of an enterprise.
5. Planning as a continuous process
Planning is a continuous and permanent process and has no end. A manager makes new plans and
also modifies the old plans in the light of information received from the persons who are concerned
with the execution of plans. It is a never ending process.
6. Planning is dynamic (flexible)
Planning is a dynamic function in the sense that the changes and modifications are continuously
done in the planned course of action on account of changes in business environment.
As factors affecting the business are not within the control of management, necessary changes are
made as and when they take place. If modifications cannot be included in plans it is said to be bad
planning.
7. Planning secures efficiency, economy and accuracy
A pre- requisite of planning is that it should lead to the attainment of objectives at the least cost. It
should also help in the optimum utilisation of available human and physical resources by securing
efficiency, economy and accuracy in the business enterprises. Planning is also economical because it
brings down the cost to the minimum.
8. Planning involves forecasting
Planning largely depends upon accurate business forecasting. The scientific techniques of forecasting
help in projecting the present trends into future. ‘It is a kind of future picture wherein proximate
events are outlined with some distinctness while remote events appear progressively less distinct.”
9. Planning and linking factors
A plan should be formulated in the light of limiting factors which may be any one of five M’s viz.,
men, money, machines, materials and management.
10. Planning is realistic
A plan always outlines the results to be attained and as such it is realistic in nature.
LIMITATIONS OF PLANNING:-
Following are the limitations of planning:
(1) Planning Creates Rigidity
Although the quality of flexibility is inherent in planning, meaning thereby that in case of need
changes can be brought in, but it must be admitted that only small changes are possible. Big changes
are neither possible nor in the interest of the organization.
Since it is not possible to introduce desired changes according to the changed situations, the
organization loses many chances of earning profits. For this limited flexibility in planning, both the
, internal as well as external factors are responsible. These facts are called internal and external
inflexibility.
They are the following:
(i) Internal Inflexibility
At the time of planning the objectives of the organization, its policies, procedures, rules,
programmes, etc. are determined. It is very difficult to bring in changes time and again. It is known
as internal inflexibility,
(ii) External Inflexibility
External inflexibility means various external factors that cause limited flexibility in planning.
These factors are beyond the control of the planners. The chief among them are: political climate,
economic changes, technical changes, natural calamities, policies of the competitors, etc.
For example, in political context, as a result of change, a new government brings up a new trade
policy, policy of taxation, import policy, etc. All these changes make every sort of planning a
meaningless waste. Similarly, a change in the policies of the competitors suddenly makes all types of
planning ineffective.
(2) Planning Does Not Work in a Dynamic Environment
Planning is based on the anticipation of future happenings. Since future is uncertain and dynamic,
therefore, the future anticipations are not always true. Therefore, to consider planning as the basis
of success is like a leap in the dark.
Generally, a longer period of planning makes it less effective. Therefore, it can be said that planning
does not work in dynamic environment.
For example, a company anticipated that the government was thinking about allowing the export of
some particular product. With this hope the same company started manufacturing that product. But
the government did not allow the export of this product. In this way, the wrong anticipation proved
all planning wrong or incorrect. It brought loss instead of profit.
(3) Planning Reduces Creativity
Under planning all the activities connected with the attainment of objectives of the organization are
pre-determined. Consequently, everybody works as they have been directed to do and as it has been
made clear in the plans.
Therefore, it checks their incisiveness. It means that they do not think about appropriate ways of
discovering new alternatives. According to Terry, “Planning strangulates the initiative of the
employees and compels them to work in an inflexible manner.”
(4) Planning Involves Huge Costs
Planning is a small work but its process is really big. Planning becomes meaningful only after
traversing a long path. It takes a lot of time to cover this path.
During this entire period the managers remain busy in collecting a lot of information and analysing
it. In this way, when so many people remain busy in the same activity, the organization is bound to
face huge costs.
(5) Planning is a Time-consuming Process
Planning is a blessing in facing a definite situation but because of its long process it cannot face
sudden emergencies. Sudden emergencies can be in the form of some unforeseen problem or some
opportunity of profits and there has been no planning for all these situations beforehand and which
now requires immediate decision.
In such a situation, if the manager thinks of completing the planning process before taking some
decision, it may be possible that the situations may worsen or the chance of earning profit may slip
away. Thus, planning is time consuming and it delays action.
(6) Planning Does Not Guarantee Success
Sometimes the managers think that planning solves all their problems. Such thinking makes them
neglect their real work and the adverse effect of such an attitude has to be faced by the
organization.
