PLANNING AND MANAGEMENT PROCESS

PLANNING PROCESS:

Planning is a decision in advance, what to do, when to do, how to do and who will do a particular task. It is a process which involves thinking before doing. Koonts’ O Donnell defines planning as “the selection from among alternatives for future courses of action for the enterprise as a whole and each department with it”.

  • ESTBLISHMENT OBJECTIVES: the first step in planning process is the awareness of business opportunity and the need for taking action. Once organisational objectives are identified, objectives of lower units are identified in that context. Thus, there will be hierarchy of objectives in the organisation.
  • PLANNING PREMISES: the second step is to determine the forecasts upon which the planning shall be based. If these forecasts are accurate, the planning process will be more useful. These forecasts relate to price of a product, wage rate, materials, power, availability of personnel etc.
  • COLLECTION, ANALYSIS AND CLASSIFICATION OF INFORMATION: for effective planning, all relevant data should be collected, analysed and classified. The data so collected should be tabulated to facilitate analysis.
  • IDENTIFICATION OF ALTERNATIVES: based on the organisational objectives, various alternatives can be identified. For eg., if an organisation has set its objective to grow further, it can be achieved in several ways like expanding in the same field of business, diversifying in other areas, joining hands with other organisations and so on. All these courses should be properly evaluated to discover the most useful course of action.
  • EVALUATION OF ALTERNATIVES: each alternative is evaluated in terms of its expected results and benefits. The strong and weak points of each option should be carefully weighed. In order to make evaluation process effective., techniques like statistics and operation research are used.
  • CHOICE OF ALTERNATIVE: after the evaluation of various alternatives, the most fit one is selected. Sometimes, evaluation shows that more than one alternative is equally good. In such a case, a planner may choose more than one alternative, normally known as contingency plan, which can be implemented in changed situations.
  • FORMULATION OF SUPPORTING PLANS: after formulating the basic plan, various plans are derived so as to support the main plan. In an organisation, there can be various derivative plans like planning or buying equipments, raw materials, recruiting personnel etc. These plans are formulated out of the main plan and therefore, support it.
  • ESTABLISHING SEQUENCE OF ACTIVITIES: after formulating basic and derivative plans, the sequence of activities is determined so that plans are put into action based on plans at various levels, it can be decided who will do what and at what time.

SIX P’s OF PLANNING:

The six P’s state the fundamental requirement of planning. These are as follows:

  1. PURPOSE: the first need of planning is the purpose. An effective planning requires a clear understanding of the purpose of planning. The purpose should be clear and elaborate. The purpose of an organisation may be to increase profits or increase market share etc.
  2. PHILOSOPHY: it states the beliefs as to how the organisation’s purpose is to be achieved. The philosophy of an organisation may be based on profitability through quality or increasing turnover through consumer satisfaction etc.
  3. PROMISE: it is an assessment of the strengths and weakness of the organisation. By knowing it, management can deal with changing environment in a more effective way and some conclusions are made for the future environment trends.
  4. POICIES: These are the general statements for the guidance of the personnel. They are the guidelines and constraints which aid in management thinking for eg., an organisation may have production policies, marketing or financial policies etc.
  5. PLANS: these are the objectives and action statements. Plans guide us for reaching the goals and helping in knowing the progress at different stages.
  6. PRIORITIES: an organisation must fix goal priorities. The resources of finance, materials, personnel etc are limited and these are to be allocated as per the priorities set. The high priority goal will have preference for allocation of resources.

OBJECTIVES:

Objectives or goals are the ends towards which every activity is aimed, these are the results to be achieved. Objectives are a pre-requisite for planning. In fact, planning has no meaning unless it is related to certain well-defined objectives or goals. They provide direction to various activities of the enterprise. The management must determine: –

  1. Overall and departmental objectives
  2. Short term and long term
  3. Economic and social objective so as to make planning effective

When objectives are clear, every individual in the organisation will understand what he can contribute for the achievement of these objectives. Thus, objectives should be set very carefully.

OTHER IMPORTANT PARADIGMS:

  • POLICIES:

Policies are general statements or understandings which provide guidance in decision making to various managers. These define boundaries within which decisions can be made and are directed towards the achievement of objectives. Policies exist at various levels of the enterprise corporate, divisional and departmental. They are valuable because they allow lower levels of management to handle problems without going to top management for a decision each time. Some examples of policies at various levels are given below:

  • No employee will accept any gift from supplier.
  • Each employee will proceed on one week’s vacation each year
  • No employee will accept any outside assignment.

 

  • STRATEGIES: –

A strategy is an action plan which sets the direction that a company will be taking. It refers to the firm’s overall plan for dealing with its environment. In a business set up, a planner should see the plans and policies of his competitors and then modify or re-adjust his plans so that he may prove the superiority of his product or service. For eg,. A company may follow a strategy of charging a lower price or using more sales force than competitors or advertising more heavily than competitors. A strategy is a broad plan for brining the organisation from the present position to the desired position in future. Strategy can also be used in the sense that it helps in the determination of organisational objectives and the deployment of resources for achieving them.

  • PROCEDURE:

A procedure is a systematic way of handling regular events. It is stated in terms of steps to be followed in carrying out certain kinds of work. Chronological sequence of required actions is the essence of any procedure. For eg,. There may be different procedures in an enterprise for processing an order, shipping the goods. Handling claims, collection of payment and so on.

Procedures should be distinguished from policies. A procedure is a guide to action whereas a policy is a guide to thinking. A streamlined, simplified and sound procedure helps to expedite and accelerate work without depreciation and waste of efforts and resources. However, procedures must be periodically reviewed and updated to keep pace with changing requirements.

  • RULES:

a rule is a plan that lays down a required course of action with regard to a situation. Every organization attempts to operate in an orderly way by laying down certain rules. A rule is in the nature of a decision made by management regarding what is to be done and what is not to be done in a particular situation. It demands a specific action. It is more rigid than a policy. For eg,. ‘No smoking in the factory’ and ‘a rule to make a payment within 21 days’ are considered as rules. Their violation is generally associated with some sort of disciplinary action.

  • PROGRAMMES:

A programme is a sequence of activities designed to implement policies and accomplish goals. It is devised to meet a particular situation. Separate programmes are prepared for accomplishing different tasks. The same programme may not be used for achieving other goals. It is single use plan for new and non-repetitive activities. Thus a programme is a complex of objectives, policies, procedures, steps to be taken to carry out a given course of action.