Planning is firmly correlated with discovery and creativity. However, the manager would first have to set goals. Planning is an essential step what managers at all levels take. It needs holding on to the decisions since it includes selecting a choice from alternative ways of performance.
Scope and nature of Planning
The planning function of management has some special features. These features cast enlightenment on its scope and nature.
- Planning focuses on achieving objectives: Companies are set up with a common goal in view. Explicit purposes are placed out in the projects along with the ventures to be initiated to accomplish the goals. Therefore, planning is helpful.
- Planning is a primary function of management: Planning puts down the foundation for other operations of management. All other managerial duties are conducted within the structure of the ideas outlined. Consequently, planning leads to other operations. This is also mentioned as the supremacy of planning.
- Planning is continuous: Plans are outlined for a particular period of time, perhaps for a period, a quarter or a year. At the completion of that period, there is a requirement for a new policy to be formed on the support of new conditions and future circumstances.
- Planning is futuristic: Planning typically includes looking forward and outlining for the future. The idea of planning is to coincide future results efficiently to the valid advantage of an association. It means glancing into the future, investigating it and foretelling it. Planning is, therefore, perceived as a forward-looking capacity based on predicting.
Also Check: What is the Planning Process?
Limitations of Planning
The limitations of Planning are furnished below:
(1) Planning Leads to Rigidity
- The plans are rigid in nature and have to be complied with throughout the organisation.
- Such rigidity of plans may be internal as well as external.
- Internal rigidity relates to plans, policies, programs, rules, and methods, etc.
- External rigidity relates to political, industrial, technological, legal and economic changes, etc.
- Example: A super speciality hospital has fine branches in a city. Whatever the top management of the hospital decides the head of the branch of the hospital and their subordinates have to follow. Though on occasions they know they could have done better on their own but the plan laid out provides rigidity to their approach.
(2) Planning May Not Work in Dynamic Environment
- The environment in which a business survives is dynamic as it keeps on changing.
- It is difficult for an organisation to access future trends, the taste of customers, natural calamity, competitors’ policies and effects of changes in the different components of the environment.
- The organisation has to constantly adapt itself to changes because it is difficult to forecast the future changes with absolute accuracy.
- The dynamic environment may sometimes lead to failure of plans.
- Example: Nestle, a very successful producer was very proactive in deciding strategies for Maggi noodles. Maggi noodles were in a lot of demand but they were off the shelf due to political and legal dimensions. This was due to the high content of lead in Maggi noodles.
(3) Planning Reduces Creativity
- Planning is mostly done by the top management and other members
- like middle and lower levels of management have to follow these plans.
- They can’t deviate or change the plans made by their seniors.
- Under such circumstances, employees become orders following machines and don’t involve creative thinking from their side.
- Such rigidity to comply with the laid plans kills the creativity of some talented persons.
- Example: The need for a branch of a renowned shoe manufacturing company sees a lot of scope in customized shoes. The top management is not interested in this idea as the company manufactures standardised shoes.
(4) Planning Involves Huge Cost
- Formulation of plans can be too much costly because there is a lot of time and money is involved.
- Some costs are incidental in nature like- expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the feasibility of the plan.
- Checking the accuracy of facts and scientific calculations may involve lots of time.
- Sometimes, cost incurred may not justify the benefits derived from the plans; it may leave a harmful effect on the enterprise.
- Example: Companies like IBM spend a lot of research. Many world-class levels give their advice to this company and change their fee. However, without so much of painstaking such a huge company won’t be able to sustain itself. So planning in case of IBM becomes necessary.
(5) Planning is a Time-consuming Process
- Planning is a very lengthy process as it consumes a lot of time for collection, analysis, and interpretation of data.
- Due to such a lengthy process, sometimes decisions get delayed, opportunities are lost and there is not much time left for the implementation of plans.
- Example: Health is wealth Ltd. plans to organise 25 health checkup camps on the World Health Day and send a requisition to the top management but management could send its approval just a day before and the sales manager could organise only 5 camps and thus huge opportunity is lost. Here the implementation was delayed.
(6) Planning Does Not Guarantee Success
- The success of an enterprise is possible only when plans are properly drawn up and implemented.
- Plans become meaningless if it is not translated into action.
- Managers have a tendency to rely on previously tried and tested successful plans.
- It is not necessary that a successful plan in the past will bring success in the future also as every business organisation survives in a dynamic and uncertain environment.
- Plans must be implemented in the light of changing environment otherwise it may lead to failure of the business.
- Example: In a paint manufacturing company, the top management very meticulously chalked out a great plan. The whole company worked out on the plan in a much focused manner. However, with the entrance of a competitor with better paint quality the whole plan failed. The reason for the failure was the dynamic conditions which were not in control of the organisation.
Features of Planning
(1) Primary Function
- Planning precedes other function because it lays down the base for all other functions of management.
- All other management functions like organising, staffing, directing and controlling are performed within the framework of the plans drawn.
- Without planning other functions of management is not possible.
- Planning is the basic function of management and it is also referred to as the “Primacy of Planning”.
- Example: After having set the objective of 2400 refrigerators the company organizes the work, then staffing is done in which the required types of employees are recruited and selected, then they are motivated and supervised through directing and ultimately their performance is controlled leading towards the achievement of the objective. However, we can see that without setting the objective of selling 2400 refrigerators, other functions were not possible.
(2) Achieving Objectives
- When we make plans, we focus on two things, specific goals to be achieved and activities involved to achieve these specific goals.
- These specific activities become objectives to achieve goals and objectives are quantifiable.
- Planning cannot be done in the absence of objectives.
- In the absence of planning, employees would be working in different directions and the organisation would not be able to achieve its desired goals.
If a firm decides to sell 2400 refrigerators in six months. If sales don’t materialize, the enterprise may think for better ways like sales discount to achieve the final objective. We can see that without the objective of selling 2400 refrigerators no planning is possible or applicable.
(3) Futuristic/ Forward-Looking
- Planning means looking ahead and meeting future events effectively.
- Planning is regarded as a forward-looking function based on forecasting.
- On the basis of forecasting, future conditions and events are anticipated and plans are prepared.
- Example: Ø On the basis of sales forecast, plans are drawn how much to produce, how to market the product, how to make it available in the market, how to make the customer aware about the product, etc.Ø All these steps are directed towards a future that is why they are futuristic. Sales forecast helps a company to look forward.
(4) All Pervasive
- Planning is required in all types of organisations and at all levels of management. However, the scope of planning differs.
- Top-level management plans for the organisational as a whole. They think from the perspective of the whole organisation.
- Middle-level management thinks from the perspective of their departments and are involved in departmental planning.
- Lower level management plans for the day-to-day operations of the concern.
Example: A student may plan for his monthly test, a husband may plan to give surprise gift to his wife on the occasion of the anniversary, the CEO of a company may plan to launch a new product in the market, a sales manager may plan to achieve his sales target, a worker may plan for his production schedule, etc.
(5) Continuous Process
- Planning is an ongoing process and plans are prepared for a specific period of time.
- These may be prepared for a day, week, a month, a quarter or a year.
- At the end of a specific period, new plans are drawn and revised regularly on the basis of feedback on previous plans, new requirements, and future conditions.
Examples: If plans are prepared during a recession period and during its execution, the market plunges into a boom, then planners need have to make several changes for the period or to work on a different strategy to achieve the desired goals. A company plans to sell 5000 cars but due to floods, the original plan cannot be implemented. The company will require changing its plans to achieve its sales target. So we can see that in both the above examples planning is not discontinued even for a while.
(6) Decision Making
- Decision making means choosing the best alternative among the alternatives available.
- Planning cannot be imagined in the absence of alternatives.
- If there is no alternative available then there is no need for planning.
- A thorough analysis of all the alternatives helps us choose the best one
and hence the need for planning arises.
- Where there is no alternative – if a firm has to import raw materials and if there is only one agency like State Trading Corporation (STC) to get it, then the firm has no choice but to import the material through STC.
- Where there are alternatives – if an import is free and there is more than one import agency included in this task then the importer has the choice to purchase from any agency at competitive prices.
(7) Planning is Mental Exercise
- Planning is the outcome of a mental process rather than wishful thinking and guesswork.
- Planning is a thinking process and it is separate from organisational activities.
- It is based on logical reasoning, facts, foresight, vision, intelligent imagination, and sound judgment.
- Example: All the great CEOs like Tim Cook of Apple, Mark Zuckerberg of Facebook have an immense capability to imagine. Then these people make sound judgments and help their companies attain phenomenal success.
|1 Mark Questions|
|Q.1 What Would Happen if Objectives Are Not Set in the Planning Process?|
|Answer: In the absence of objectives, employees working at different levels of management would be working in different directions and the goals of the organisations cannot be achieved.|
|Q.2 What is Primacy of Planning?|
|Answer: Planning precedes all other functions of management like Organising, staffing, directing and controlling. So, planning becomes a primary function of management.|
|Q.3 What is the Role of Lower Level Management in the Process of Planning?|
|Answer: Lower level management plans for day-to-day operations of the organisation.|
|Q.4 When Planning is Not Required? Explain.|
|Answer: Planning is not required when there is no alternative to achieve the objectives.|
|Q.5 How Does Planning Create Rigidity?|
|Answer: Planning creates rigidity by putting an adverse effect on the initiative taken by the managers.|
|Q.6 in Spite of Many Advantages, State How Planning Can Be Detrimental?|
|Answer: Planning can be detrimental if it is not dealt with flexibility or is dealt with rigidity.|
The above mentioned is the concept, that is elucidated in detail about the ‘Features and Limitations of Planning’ for the class 12 Commerce students. To know more, stay tuned to BYJU’S.