Prestige Institute Of Management
Type Of Planning,
Dr. Rajeev Bhatnagar
What is PLANNING?
TYPES OF PLANNING
Planning is deciding in advance what is to be
done, when where, how and by whom it is to
Planning bridges the gap from where we are to
where we want to go.
It includes the selection of
objectives, policies, procedures and
programmes from among alternatives
Corporate Planning :
Determines long-term objectives of an organisation as
Generates plans to achieve these objectives
Functional planning :
Undertaken for sub functions witin each major functions
Derived from corporate planning.
Depends on the type of the buisness and structure of
LONG TERM :
Strategic in nature.
Involves generally 3-5 years.
It relates to matters like new product ,product
SHORT TERM :
• Short term planning typically covers time
frames of less than one year in order to assist
their company in moving gradually toward its
• Examples are the skills of the employees and
their attitudes. The condition of production
equipment or product quality problems are also
PROACTIVE PLANNING :
Designing suitable course of action in anticipation of likely
changes in relevant environment.
To take decision in advance.
Eg : Emergency organisations
REACTIVE PLANNING :
Reactive planning is the process whereby future action is
dictated as a response to whatever has already, or is now
Eg. Hotel Manager.
DEGREE OF FORMALISATION
FORMAL PLANNING :
It is a structured plan.
It has some procedure to follow.
Written record is followed in formal plan.
Eg. Five year plan of a country.
It is unstructured plan.
It does not have any procedure to follow.
No record is maintained for future purpose.
IMPORTANCE OF CONTENTS
It sets future directions of the
organization in which it wants to proceed in future.
It involves a time horizon of more than one year and for most
of the organization it ranges between 3 and 5 years.
Strategic plans are generally developed by top level
Eg. diversification of business into new lines, planned
grown rate in sales.
Operational plans are developed to determine
the steps necessary for achieving tactical goals..
They are used as a guide for day to day
operation by department managers.
These plans may cover a time frame of few
months, weeks or even a few days.
Planning facilitates management by
Planning begins with determination of objectives.
It highlights the purposes for which various activities are
to be undertaken.
In fact, it makes objectives more clear and specific.
Planning helps in focusing the attention of employees on
the objectives or goals of enterprise.
Without planning an organization has no guide.
Planning compels manager to prepare a Blue-print of
the courses of action to be followed for accomplishment
Therefore, planning brings order and rationality into the
Planning minimize uncertainties
Business is full of uncertainties.
There are risks of various types due to uncertainties.
Planning helps in reducing uncertainties of future as it
involves anticipation of future events.
Although future cannot be predicted with cent percent
accuracy but planning helps management to anticipate
future and prepare for risks by necessary provisions to
meet unexpected turn of events.
Therefore with the help of planning, uncertainties can
be forecasted which helps in preparing standbys as a
result, uncertainties are minimized to a great extent.
Planning facilitates coordination
Planning revolves around organizational goals.
All activities are directed towards common goals.
There is an integrated effort throughout the
enterprise in various departments and groups.
It avoids duplication of efforts. In other words, it
leads to better co-ordination.
It helps in finding out problems of work
performance and aims at rectifying the same.
Planning improves employee’s
Planning creates an atmosphere of order
and discipline in organization.
Employees know in advance what is
expected of them and therefore conformity
can be achieved easily.
This encourages employees to show their
best and also earn reward for the same.
Planning creates a healthy attitude towards
work environment which helps in boosting
employees moral and efficiency
Planning helps in achieving
Effective planning secures economy since it leads to
orderly allocation ofresources to various operations.
It also facilitates optimum utilization of resources which
brings economy in operations.
It also avoids wastage of resources by selecting most
appropriate use that will contribute to the objective of
enterprise. For example, raw materials can be purchased
in bulk and transportation cost can be minimized. At the
same time it ensures regular supply for the production
department, that is, overall efficiency
Planning facilitates controlling
Planning facilitates existence of certain planned
goals and standard of performance.
It provides basis of controlling.
We cannot think of an effective system of controlling
without existence of well thought out plans.
Planning provides pre-determined goals against
which actual performance is compared.
In fact, planning and controlling are the two sides of
a same coin. If planning is root, controlling is the fruit
Planning provides competitive
Planning provides competitive edge to the enterprise over
the others which do not have effective planning. This is
because of the fact that planning may involve changing in
work methods, quality, quantity designs, extension of
work, redefining of goals, etc.
With the help of forecasting not only the enterprise
secures its future but at the same time it is able to
estimate the future motives of it’s competitor which helps
in facing future challenges.
Therefore, planning leads to best utilization of possible
resources, improves quality of production and thus the
competitive strength of the enterprise is improved
In the process of planning, managers have the
opportunities of suggesting ways and means of
Planning is basically a decision making function
which involves creative thinking and imagination
that ultimately leads to innovation of methods
and operations for growth and prosperity of the
Planning involves too much expenditure. Money
and effort both are required in planning.
Planning includes collecting information, data
forecasting and evaluation of alternatives. It
requires salary and allowances to the experts in
the process of providing services.
So, planning has been accepted as costly
process by small and medium size organization
Planning is the time consuming process. It delays the
business activity to come in action.
In the process of planning following the procedures of
planning takes a lot of time which may create problem
to the organization where immediate action has to be
made. So in such situation planning is not suitable.
False sense of security
Planning encourages false sense of
security against future risk and uncertainty.
As future is uncertain, it is unpredictable.
Therefore, planning cannot give accurate
and reliable results.
Rapid changes in technology ,consumer
tastes and prefernces are further limitations
Eg.: Planning in aircraft
,chemical,electronic and information
industries is specially complicated due to
acceptionally complex and rapidly changing
PREMIUM ON PRESENT
Present is always more real than the future , and
present problems seem to be more urgent than
the future problems.
Many of us are inclined to take care of today and
hope that tommorow will take care of itself .
This is normal human tendency but infact we
have to take take care of today as well as