Planning Process

Meaning of Planning

Planning is ascertaining prior to what to do and how to do. It is one of the primary managerial duties. Before doing something, the manager must form an opinion on how to work on a specific job. Hence, planning is firmly correlated with discovery and creativity. But 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.

Planning Process

As planning is activity there are certain reasonable measures for every manager to follow:

  • Setting Objectives: The primary step is to establish objectives. Every establishment must have definite objectives. Objectives may be fixed for the complete organisation and each division or section within the company.
  • Developing Premises: Planning is involved with the future which is unpredictable and every detailer is using theory about what might occur in future. Hence, the manager is expected to make some opinions about the future. These theories are called premises. Assumptions are the foundation element upon which policies are to be formed.
  • Identifying alternative courses of action: Once objectives are introduced, presumptions are made. Then the following step would be to work upon them. There may be many steps to perform and accomplish objectives.
  • Evaluating alternative courses: The subsequent step is to estimate the pros and cons of all alternative. Each area will have multiple variables which have to be measured against each other. The positive and negative features of each program need to be assessed in the information of the goals to be obtained. In financial plans, for instance, the risk-return trade-off is very normal.
  • Selecting an alternative: This is the actual purpose of decision making. The best plan has to be selected and executed. The perfect idea, of course, would be the most likely, practical and with limited negative results.
  • Implementing the plan: This is the step where other managerial duties also come into understanding. The step is concerned with setting the plan into execution, i.e., doing what is needed.
  • Follow-up action: To mark whether plans are being executed and actions are implemented according to plan is also part of the planning method. Controlling the plans is evenly important to assure that objectives are achieved.
5-6 MARKS QUESTIONS
Q.1 SETTING OBJECTIVE IS THE FIRST STEP IN THE PROCESS OF PLANNING. WHAT OTHER STEPS ARE NECESSARY TO FOLLOW IN SUCH PROCESS. EXPLAIN.

OR

WHAT ARE THE STEPS TAKEN BY MANAGEMENT IN THE PLANNING PROCESS? {NCERT}

ANSWER:
(1) SETTING OBJECTIVES
  • This is the primary step in the process of planning which specifies the objective of organisation i.e. what an organisation wants to achieve.
  • The planning process begins with the setting of objectives.
  • Objectives are end results which the management wants to achieve by its operations.
  • Objectives are specific and are measurable in terms of units.
  • Objectives are set for the organisation as a whole for all departments and then departments set their own objectives within the framework of organisational objectives.

Example:

A mobile phone company sets the objective to sell 2,00,000 units next year, which is double the current sales.

(2) DEVELOPING PLANNING PREMISES
  • Planning is essentially focused on the future and there are certain events which are expected to affect the policy formation.
  • Such events are external in nature and affect the planning adversely if ignored.
  • Their understanding and fair assessment are necessary for effective planning.
  • Such events are the assumptions on the basis of which plans are drawn and are known as planning premises.

Example:

The mobile phone company has set the objective of 2,00,000 units sale on the basis of forecast done on the premises of favourable Government policy towards digitization of transactions.

(3) IDENTIFYING ALTERNATIVE COURSES OF ACTION

 

  • Once objectives are set, assumptions are made.
  • Then the next step is to act upon them.
  • There may be many ways to act and achieve objectives.
  • All the alternative courses of action should be identified.

Example:

The Mobile company has many alternatives like reducing price, increasing advertising and promotion, after sale service etc.,

(4) EVALUATING ALTERNATIVE COURSE OF ACTION

 

  • In this step, the positive and negative aspects of each alternative need to be evaluated in the light of objectives to be achieved.
  • Every alternative is evaluated in terms of lower cost, lower risks, and higher returns, within the planning premises and within the availability of capital.

Example:

The mobile phone company will evaluate all the alternatives and check its pros and cons.

(5) SELECTING ONE BEST ALTERNATIVE

 

  • The best plan which is the most profitable plan and with minimum negative effects is adopted and implemented.
  • In such cases, the manager’s experience and judgement play an important role in selecting the best alternative.

Example:

Mobile phone company selects more T.V advertisements and online marketing with great after sales service.

(6) IMPLEMENTING THE PLAN

 

  • This is the step where other managerial functions come into the picture.
  • This step is concerned with “DOING WHAT IS REQUIRED”
  • In this step, managers communicate the plan to the employees clearly to convert the plans into action.
  • This step involves allocating the resources, organising for labour and purchase of machinery.

Example:

Mobile phone company hires salesman on a large scale, creates T.V advertisement, and starts online marketing activities and set up service workshops.

(7) FOLLOW UP ACTION

 

  • Monitoring the plan constantly and taking feedback at regular intervals is called follow-up.
  • Monitoring of plans is very important to ensure that the plans are being implemented according to the schedule.
  • Regular checks and comparisons of the results with set standards are done to ensure that objectives are achieved.

Example:

A proper feedback mechanism was developed by the mobile phone company throughout its branches so that the actual customer response, revenue collection, employee response, etc. could be known.

1 MARK QUESTIONS
Q.1 DEFINE ‘PLANNING PREMISES’. (DELHI 2015)
ANSWER:

Planning premises refer to the assumptions on the basis of which plans are drawn.

Q.2 ‘B CYCLES’ WAS IN THE BUSINESS OF PRODUCING RACING CYCLES AND HAD A DOMINATION IN THE MARKET. THE BUSINESS WAS DOING GREAT AND THE ORGANISATION WAS CONSISTENTLY MEETING ITS GOAL OF 10% INCREASE IN SALES EVERY YEAR. ENCOURAGED BY THE GOOD TRACK RECORD, THE MANAGING DIRECTOR OF THE COMPANY KEPT AN AMBITIOUS TARGET OF 15% INCREASE IN SALES FOR THE NEXT YEAR. IN THE SAME YEAR TWO COMPETITORS ALSO ENTERED THE MARKET AND BECAUSE OF THIS THE COMPANY WAS NOT ABLE TO MEET ITS TARGET.

IDENTIFY THE LIMITATION OF ONE OF THE FUNCTIONS OF MANAGEMENT DUE TO WHICH THE COMPANY WAS NOT ABLE TO ACHIEVE ITS TARGET. (OUTSIDE DELHI 2015)

ANSWER:

Planning may not work in a dynamic environment.

Q.3 “TO SEE WHETHER PLANS ARE BEING IMPLEMENTED AND ACTIVITIES ARE BEING PERFORMED ACCORDING TO SCHEDULE,” IS A STEP OF PLANNING PROCESS. IDENTIFY THE STEP.
ANSWER:

Follow up action.

Q.4 WHICH IS THE MOST CRUCIAL STEP IN PLANNING PROCESS?
ANSWER:

Setting objectives.

Q.5 WHAT IS MEANT BY ‘FOLLOW UP’ AS INVOLVED IN THE PLANNING PROCESS?
ANSWER:

It means to ensure the actual work is taking place as per the planned work.

The above mentioned is the concept, that is elucidated in detail about the ‘Planning Process’ for the class 12 Commerce students. To know more, stay tuned to BYJU’S.