This article is about the concept, nature,producer, type and limitation of of planning.
Concept Of Planning
Planning is the primary and the basic function of management. It is the beginning of the process of management system. Before coming in action relating to organizing, staffing, directing and controlling, a manager must make plan. Planning is the process of thinking before doing or determining the future course of action to achieve a desired result. It is concerned with deciding in advance what to do? How to do? When to do? Why to do, Where to do? and Who to do? Answering these questions depends upon intelligence. Therefore, planning is an intellectual process which requires a manager to think before coming in action or undertaking any operation.
Planning is concerned with setting goals and objectives of the firm and choosing the means to achieve those goals. It relates with mental process which includes assessing future, setting objectives, determining policies, deciding the actions and developing alternate strategies. Without planning, organization's other functions become mere activity, producing nothing but chaos.
Definitions
Many authorities have defined planning. Some of those are discussed below:
Mary Cushing Niles says that-"planning is the conscious process selecting and developing the best course of action to accomplish an objective".
Theo Haimann argued that-"planning is deciding in advance what is to be done".
M.E. Hurley regarded that- "planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programmes from among alternatives".
Thus, planning is the way of looking ahead in the future, giving ideas about selecting, setting and deciding objectives. It also relates with strategic planningg of the course of action of the organization. A survey of definitions of planning furnishes the following important understanding:
-Planning involves a predetermined course of action
-It involves both problem solving and decision making
-It's objectives are to achieve better results
-It is concerned with future and it helps the management to look ahead
-It specifies the objectives to be attained in future.
Features/Characteristic/Nature of Planning
The basic features of planning are described below:
1.Primary function of management: Planning is the primary function of management. Planning function is to be performed, before other functions are undertaken for action. It is concerned with setting the goals, determining policies and preparing action plans and programmes. So, without setting above things, there is no meaning of organizing, leading, controlling and directing the activities of the organization.
2.Planning is goal oriented: To attain certain objectives of an organization, a plan is required to be prepared. Planning is worthless and meaningless without goals, so it should be goal oriented. Planning finds the actions that would lead to the desired objectives quickly and economically.
3.Future oriented: Present plan act in future. Planning is done for the future course of action. It helps to decide at present what is to be done in the future. Forecasting is the basis of plan and prediction of future is the basis of forecasting.
4.Beginning Point: Planning is the starting point of the process of management. Firstly, a manager has to prepare plan, then only he can possibly organize, staff, directing and control the business activities.
5.Intellectual process: Planning is an intellectual process. Because in planning, manager is required to think before acting the job.It is relates with thinking in advance. A manager decides what is to be done, where it is to be done,how it is to be done and what is to do it. It clears that planning is concerned with decision making process.
6.Increase in efficiency: In all the levels and department of the organization, planning is concerned with increasing efficiency. The guiding principle of planning is to maximize output and to earn profit at minimum cost, that is why, in planning, the manager evaluates the alternatives on the basis of efficiency and selects most effective, suitable and acceptable set of alternatives which may help to increase the overall efficiency.
7.Coordination: Planning provide helps to coordinate various levels to activities. Planning provides guidelines to do work to all the managers and staffs to all levels.
8.Continuous process: Planning is a continuous process upto the existence of an organization. It is never ending process of management.Therefore, a manager is required to watch continuously, modify if needed, revise and adjust if required in the light of changed environmental situation.
Procedures Of Planning
It is very difficult to prescribe a fixed process of planning for the organization. However, the procedures of planning as a generally acceptable process or steps of planning can be followed for the purpose. The steps generally involved in planning are as follows:
1.Analysis of environment: Generally, analysis of environment is not the part of planning function. It is the pre-step of planning which is very essential to make good plan. Before doing anything and something to the actual planning, the management should carefully assess and analyze the environmental factors and entities. The external environmental factors to be analyzed are social, cultural and anthropological factors, economic factor and political factor whereas, internal environmental factors relate with size of the organization.
2.Setting objectives: Setting objectives is the first step in planning. The top level should define corporate mission and purpose while determining objectives. The management must understand the clearness and specificity of the objectives. Objectives may be decided for the long term of short term range. If the objective are clear and specific the expected results can be spell out.
3.Developing premises: Second step of planning is to develop premises. These premises are planning assumptions about the environment in which the plan is to be carried out. The premises are forecast of sales volume, production cost, product line, competition, tax rates, polices etc. So, managers have to develop the planning premises for the effective and complete plan.
4.Determining the alternative: Another important step is related to search for and examine alternative course of action. To perform any work or to do any job, there may be alternative means and ways, which management has to search and identify. It means the planners must analyze most fruitful alternatives.
5.Evaluating alternative course: After searching alternative course and examining their strong and weak points, in next step, the management of the organization should evaluate those all alternative courses by weighing them in the light of premises and goals. The evaluation of alternative is not easy. However, while evaluating each of the course, cost, risk and profit should be referred as the basis of evaluation.
6.Selecting the best alternatives: After evaluating the alternatives according to their strong and weak points and usefulness, now we are here, in the real point of decision making. To achieve the organizational goals, the managements has to select the best alternatives. Manager has to select the best set of alternatives out of several courses by using past information along with experience and knowledge.
7.Formulating derivative plans: The basic plan is formulated, when the best alternative is selected. When decision with regard to best alternative is made, planning is seldom complete. Derivate plans are almost invariably required to support the basic plans.
8.Budgeting the plans:After setting plans and formulating derivative plans, the next and the second last step of planning is relates with preparation of budgets for each derivative plans. Each department of an organization can have its own budget which ties the overall budget. If this budgeting is done well, it becomes a means of important tools for measuring standards and planning process.
9.Reviewing the planning process: This step is the last step of planning process. In this step, overall planning process are reviewed. The management should review the effectiveness and weakness of the planning process. It effects of planning after its formulation. It also give feedback to the management about the plan and its activities.
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Types Of Planning
Planning is the basic function of management. It begins with a goal targeted outcome. Planning helps a lot to achieve the goal. The form or style of planning varies as per the nature of the organization and their needs. To make the study and work easy planning can be classified into two groups: strategic planning and operational planning.
a.Strategic planning:
It is a long term perspective planning which defines the broad goals and objectives for the entire organization. It is done at higher level of management. It decides major goals and polices. Strategic planning is less detailed because this planning is not involved in day-to-day operations. Usually it is simple and generic. It is generally based on long term forecasts about technology, political and legal environment. So, it is more uncertain. It helps the manager to meet the future contingencies by providing opportunities to correct mistakes.
b.Operational planning:
Operational planning can be known as the implementing planning or tactical planning because it contains details of its future day to day action. It is done at lower levels of management. Operational planning decides the details about the use of the resources. It is generally based on the past performance. So, it is less uncertain.
Constraints or Limitation or Problems of Planning
Some of the main constraints or limitations are discussed below:
1.
Costly process: The procedures of planning is too much expensive. Both money and effort are required in the process of planning such as collecting information, preparing estimates and evaluating the alternatives. Similarly, the service of experts in the planning process are to be paid. So, planning has been accepted as a costly process by small and medium sized business organization.
2.
Time consuming: Planning is time consuming. It delays the business activities to come in action. In the procedures of planning, every steps are time consuming. It create problems to those organizations which need to have sudden or immediate action to meet unexpected contingencies. In such a situation this planning may not be suitable.
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.Problem of rapid changes: Planning is to be done in advance. It is the process of prediction. Whereas, future events cannot be predicated accurately. In future, changes may occur in technology, consumer tastes and fashion and in so many aspects. These changes may present constraints to planning. Due to rapid change in the environment planners will be compelled to revise their assumption and efforts.
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.External inflexibility: These inflexibility are related to technology, government policy, legal formalities, consumers tastes, fashion and preference and industrial unrests. Any change in above can influence much and these are uncontrollable variables. These cannot be influenced by the planning but plans are being influenced.
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