Planning, Features,Process and types of planning

PLANNING

• Management functions include planning, organizing, staffing, directing and controlling. All these functions are required to achieve the objectives of organizations.
• Planning and plan, there is a little difference between them, planning is an activity or a process while plan is a commitment to a particular course of action believed necessary to achieve specific results. Plan are prepared through planning process.
• Planning as a process involves the determination of future course of action, that is why an action, what action, how to take action and when to take action. It is a futuristic.

Features of planning- 

It is a process,
it is a futuristic,
it involves selecting of suitable course of action,
it is taken at all levels of management,
planning is flexible as it change according to situations,
planning is pervasive (continuous management functions)

• Planning activity goes in hierarchy- corporate or organizational level>divisional plan>departmental plan>sectional plan.

Importance of planning- 

it precedes all other managerial functions such as organizing, staffing, directing & controlling,
to offset uncertainty & changes,
to focus attention on objectives,
to help in co- ordination,
to help in control,
to increase organizational effectiveness.
Co -ordination is the essence of management and planning is the base for it.

Process of planning- 

perception of opportunities
establishing objectives
planning premises
identification of alternatives
evaluation of alternatives
choice of alternatives
formulation of supporting plans
establishing sequence of activities.

Types of planning-

• On the basis of coverage of activities –

1)Corporate planning- 

planning at the top level also known as corporate level which cover the entire organizational activities. Long term objectives it is also used as synonymous to long term planning or strategic planning. It is integrative ( holistic approach)

2)Functional planning-

It is segmental and is undertaken for each major function of organizations.

• On the basis of direction of actions –

1)Strategic planning- 

It sets long term direction of organizations in which it wants to proceed is external to the environment, time period 3-5 years and formulated at the top level of management.

2)Operational planning- 

It is also known as tactical planning or short term planning usually covers 1 year. It basically includes day to day operations. It focus on the internal organizations and formulated at middle and lower level of management.

• On the basis of time period-

1)long term planning- 

It is of strategic nature and involves more than 1 year period extending to 20 years, more common is 3-5 years. It is external to the environment also known as strategic planning.

2)Short term planning- 

It is also known as operational or tactical planning usually covers 1 year.
On the basis of approach adopted –

1)Proactive planning- 

In this, organizations do not wait for environment to change but take actions in advance of environmental change.

2)Reactive planning – 

In this organizations responses come after the environmental changes have taken place.

• On the basis of degree of formalizations-

1)Formal planning- 

It is the form of well structural process involving different steps. Large organizations undertake planning in formal way. Monitor external environment on continuous basis. The planning process that is adopted is rational, systematic, well documented & regular.

2)Informal planning- 

It is taken by smaller organizations based on memory, intuitions, gut feelings.
Plan- It is a commitment of resources to a particular course of action believed necessary to achieve specific results.
Standing plan or strategic plan or long term plan- It provide guidelines for further course of action and are used over a longer period of time.
Single use or operational or tactical or short term plan- This plan are relevant for a specified time and after the lapse of that time these plans are formulated again for the next period.
Standing plan/strategic plan/long term 1) Mission or purpose 2) Objectives 3) Strategies 4) Policies 5) Procedures
Single use/operational plan/short term 1) Rules 2) Programme & projects 3) Budgets 4) Quotas 5) Target
Major plan- projects & budget
Minor plan- quotas & target

Hierarchy of organizational plans- mission or purpose>objectives>strategies>policies>procedures& rules> programmes & projects>budgets> quotas & target.

Planning premises- Anticipated (aware of future) environment in which plans are expected to operate so basically it is conditions under which planning activities are undertaken.
Types of planning premises-
1)External premises (opportunities, threat)

2)Internal premises (strength, weakness)
3)Tangible premises (quantitative)

4)Intangible premises (qualitative)
5)Controllable premises (internal such as organization policies, structures, systems, procedures)
6)Uncontrollable premises (external such as economic, social, cultural, political-legal, technological, competitive).
ETOP- Environmental threat opportunity profile
SAP- Strategic advantages profile

Limitations of planning-

1)Based on assumptions i.e. if an event has happened this way in the past, it will happen this way in the future.
2)Not absolute truth

3)Time & cost factor.

There are many barriers to effective planning-

1)Difficulty of accurate premising
2)Problems of rapid change

3)Internal inflexibilities such as psychological inflexibility, policy and procedural flexibility, capital investment.
4)External flexibility such as political climate, trade unions, technological changes

5)Time and cost factor
6)Failure of people in planning

Features of a good plan

1)Linked to long term objectives

2)Direction for action
3)Consistent

4)Feasible
5)Simplicity

6)Flexible

Measures for making planning effective: -

1)Establishing climate for planning
2)Initiative at top level

3)Participation in planning process
4)Communication of planning elements

5)Integration of long term & short term plans

6)An open system approach
Mission –Mission has external orientation and relates the organization to the society in which it operates. A mission statement helps the organization to link its activities to the needs of the society and legitimize its existence. It offers guidance to managers in developing sharply focused result oriented objectives, strategies and policies.
Formulation of mission – key decisions makers philosophy & vision>organizational philosophy & vision>organizational mission.

Vision- It is the mental perception of the kind of environment a person desires to create within a broad time horizon and the underlying conditions for the actualization of the perception. It represents the imagination of future events and prepares the organization for the same. Thus, vision represents the challenging portrait of what the organization would be in future.

• Explicit mission statement is desirable as it serves the purpose of communicating to the members about the corporate philosophy identity character and image which govern their behavior in the organization.

Objectives- It is used to specify the end results which an organization wants to achieve. Objectives are expressed in quantitative and absolute terms.
Hierarchy of objectives- Organizational objectives form a hierarchy ranging from the broad aim to specific individuals objectives. End means chain which suggest that what is a means for one unit may be an end for another unit.

• Hierarchy of objectives are as follows-

1)Socio economic purpose
2)Visionary long term concept of organization

3)Organizational mission
4)Organizational objectives

5)Objectives in key result areas
6)Departmental objectives
7)Sectional objectives

8)Individual objectives
From up to low of above hierarchy is known as top down approach, which is prepared by upper level manager. From bottom to up of above hierarchy is known as bottom up approach, which is prepared by lower level manager.