an introduction to planning- business studies

1. By
ABHISHIKTH SANDEEP ABRAHAM
M.Phil, M.Com, MA(Pub.Rel & Journl), MBA (HR),B.Ed, BCJ,
ICWAI(I), PGDT, PGDCMP, Dip.Tax, CDT, UGC-NET,APSLET,
(PhD),UGC-MAN Research Fellow Awardee in Devp. Studies

2. INTRODUCTION TO PLANNING
A PLAN may be defined as –
A detailed statement of a future COURSE OF ACTION (COA)
set about to achieve a pre determined objective/goal &
expressed in quantitative terms ( in Qty/Amt/etc)
CHARACTERISTICS:
A. It provides a rational approach to achieve predetermined objectives
B. It is a commitment to accomplish required actions to achieve a goal
PLANNING: It is the process of preparing a plan
DEFINATIONS OF PLANNING
1. Deciding in advance WHAT,HOW,WHEN a task is to be done & by WHOM it
is to be done.-It refers to THINKING IN ADVANCE – (BY KOONTZ)
2. Deciding in advance WHAT is to be done, and involves selection of
objectives, policies, procedures, programmes, from amongst several
alternatives. – (BY HARLEY)
Abhishikth Sandeep .A.

3. FEATURES OF PLANNING
1. PRIMARY FUNCTION OF MANAGEMENT: It is the first function
performed by a manager. (Function of Primacy)
2. HELPS ACHIEVE OBJECTIVES: Once an objective is set, planning
helps achieve it.
3. PERVASIVE: It is performed @ all levels of Mgt. & in all types of Org.
4. CONTINOUS: It is to be performed continuously
(revised/reformulated) as the environment is dynamic & the Org.
Has to keep pace with the changing business environment to
sustain & face challenges
5. FUTURISTIC: It is related to actions to be taken in the future
6. INVOLVES DECISION MAKING: To accomplish a task, a number
of alternative COA’s may be available, Planning helps evaluate &
identify the best alternative ,enabling decision making
7. MENTAL EXERCISE: It is related to preparing a blue print for
action in advance , which calls for mental work (thinking)
Abhishikth Sandeep .A.

4. IMPORTANCE FOR A BUSINESS
Planning is needed to solve a problem or take advantage of a profitable
situation. All activities are focussed towards the this end.
 PROVIDES DIRECTION: Business objectives are clearly defined-
Planning helps focus all activities towards achieving it
 REDUCES RISK &UNCERTAINITY: Future is uncertain. In such a
situation business actions are taken-Which is risky. Planning helps
anticipate the future to a certain extent, thus helping the manager
look ahead, anticipate change &decide in advance which tasks are
to be performed.
 AVOIDS WASTEFUL EXPENDITURE: Planning puts an end to
disorder & chaos (duplication & wasteful activities). It helps us
perform only needed activities (eliminating redundant ones)
 PROMOTES INNOVATIVE IDEAS: During the process of planning,
several alternative COA’s are identified & their outcomes
forecasted. This calls for the planner to think innovatively
&discover alternatives
Abhishikth Sandeep .A.

5. IMPORTANCE FOR A BUSINESS......Contd
 FACILITATES DECISION MAKING: It helps evaluate, choose
& implement the best alternative to achieve a futuristic goal.
Thus, facilitating effective decision making.
 ESTABLISHES STANDARDS FOR CONTROLLING: It helps
lay down standards of doing a work (wrt.time ,cost,resources)
When the actual work is performed, the work in progress at
each stage is compared with the standards, thus enabling the
manager get an idea weather he is on the right path to
achieve the goal, else, initiate rectificationary action at an
early stage.
Planning sets the goals against which actual performance is compared.
Planning is the pre-requisite for Controlling
Abhishikth Sandeep .A.

6. LIMITATIONS OF PLANNING.....
1. CREATES RIGIDITY: As seen earlier, once standards are set ,managers
tend to stick to them& adopt inflexible (rigid )approach. It becomes
difficult to introduce changes /innovate on the approach.
FACTORS CAUSING RIGIDITY:
A. INTERNAL: These are organizational related.
Eg: Org. Str, Org.Policies/ procedures etc.
B. EXTERNAL: These are beyond the control of the Org.
Eg: Political, Social, Economic, Technological environments,
Competitor Policy etc.
2. NOT SUITED IN DYNAMIC ENVIRONMENT: Planning is based on
futuristic assumptions which may /may not occur. Hence planning
does not guarantee success in a dynamic environment.
3. REDUCES CREATIVITY: As work is directed towards achieving pre -
determined standards, it discourages a manager from thinking of more
innovative ways (Planning strangulates the initiative of a manager&
compels him to work in an inflexible manner.)
Abhishikth Sandeep .A.

7. LIMITATIONS OF PLANNING….contd
 4. COSTLY &TIME CONSUMING: It is a lengthy, gigantic &
cumbersome process- hence costly & time consuming.
 5. NOT USEFUL TO DEAL WITH EMERGENCIES: Planning , being
lengthy & time consuming delays action. Hence not useful to face
sudden emergency situations.
 6. MAKES A MANAGER CARELESS: Setting of standards (planned
action) gives the manager a false sense of security ,making him
careless & negligent, as he prefers to stick to the given plan.
 7. PLANNING IS NOT A ONE STOP SOLUTION TO ALL
PROBLEMS
Abhishikth Sandeep .A.

8. 1. Name the function to be performed by a manager before all other functions.
2. “Planning is undertaken to achieve organizational goals.” –True/ False.Give reasons in
support of your answer.
3. Explain how planning reduces risk & uncertainity
4. Explain how “rigidity” is a limitation of planning.
5. How does Costs create a hurdle in the planning process?
6. Is planning worth the huge costs involved? Explain.
7. How does planning provide direction to the organization?
8. “Though planning is an important tool in the hands of a manager,yet, it is not a remedy
for all types of problems”- Elaborate.
9. Why does planning fail sometimes despite the best efforts of the management?
10. State the main aspects in the concept of planning.
Abhishikth Sandeep .A.