principle of management

1. Planning & Decision Making
Unit - II

2. Meaning
• Planning involves determination of objectives of the business, formation
of programmes and courses of action for their attainment, development of
schedules and timings of action and assignment of responsibilities for
their implementation.
• Koontz and O’ Donnell say planning is deciding in advance what to do, how
and when to do it and who is to do it. Planning bridges the gap between
where we are and where we want to go. It makes it possible for things to
happen which would, but for planning, not happen.
• In the words of Haiman, “Planning is the function that determines in
advance what should be done. It consists of selecting the enterprise
objectives, policies, programmes, procedures and other means of
achieving these objectives”.
• In the words of M.F. Yarlay, “Planning is deciding in advance what is to be
done. It involves the selection of objectives, policies, procedures and
programmes from among alternatives.”

3. Nature
• Planning is looking into the future.
• Planning involves pre-determined line of action.
• Planning discovers the best alternative out of available many
alternatives.
• Planning requires considerable time for implementation.
• Planning is a continuous process.
• Planning’s object is to achieve pre-determined objectives in a
better way.
• Planning integrates various activities of organisation.
• Planning is done for a specific period.
• Planning not only selects the objectives but also develops
policies, programmes and procedures to achieve the
objectives.
• Planning is required at all levels of management.

4. Purpose/Objectives
• Reduces uncertainty – Future is an uncertainty. Planning may convert the uncertainty
into certainty. This is possible to some extent by, planning which is necessary to reduce
uncertainty.
• Brings co-operation and co-ordination – Planning can bring co-operation and co-
ordination among various sections of the organisation. The rivalries and conflicts
among departments could be avoided through planning. Besides, planning avoids
duplication of work.
• Economy in operation – Planning selects best alternatives among various available
alternatives. This will lead to the best utilisation of resources. The objectives of the
organisation are achieved easily.
• Anticipates unpredictable contingencies – Some events could not be predicted. These
events are termed as contingencies. These events may affect the smooth functioning of
an enterprise. The planning provides a provision to meet such contingencies and tackle
them successfully.
• Achieving the pre-determined goals – Planning activities are aimed at achieving the
objectives of the enterprise. The timely achievements of objectives are possible only
through effective planning.
• Reduce competition – The existence of competition enables the enterprise to get a
chance for growth. At the same time, stiff competition should be avoided. It is possible,
to reduce competition through planning.

5. Process of Planning
1. Setting Objectives
2. Developing the planning premises
3. Reviewing limitations
4. Deciding the planning period
5. Formulation of policies and strategies
6. Preparing operating plans
7. Integrate the plans

6. Decision Making
• The Oxford Dictionary defines the term
decision-making as "the action of carrying out
or carrying into effect".
• According to Trewatha & Newport, "Decision-
making involves the selection of a course of
action from among two or more possible
alternatives in order to arrive at a solution for
a given problem".

7. Characteristics
• Decision making implies choice
• Dynamic Process
• Continuous activity/process
• Mental/intellectual activity
• Goal oriented process
• Relates to specific problem
• Time-consuming activity
• Needs effective communication
• Pervasive process
• Responsible job

8. Decision Making Process
1. Defining / Identifying the managerial
problem,
2. Analyzing the problem,
3. Developing alternative solutions,
4. Selecting the best solution out of the
available alternatives,
5. Converting the decision into action, and
6. Ensuring feedback for follow-up