Planning

Planning

                                   Planning is considered to be the central function of management because it sets the pattern for the other activities to follow. “Planning means defining goals for future organizational performance and deciding on the tasks and use of resources needed to attain them” (Richard Daft).

Planning encompasses four elements:

1. Evaluating environmental forces and organizational resources
2. Establishing a set of organizational goals
3. Developing strategies and plans to achieve the stated goals
4. Formulating a decision-making process

These elements are concerned with organizational success in the near future as well as success in the more distant future. Planning to the future, the manager develops a strategy for getting there. This process is referred to as strategic planning.

Planning is looking ahead. According to Henri Fayol, drawing up a good plan of action is the hardest of the five functions of management. This requires an active participation of the entire organization. With respect to time and implementation, planning must be linked to and coordinated on different levels. Planning must take the organization’s available resources and flexibility of personnel into consideration as this will guarantee continuity.

It is rightly said “Well plan is half done”. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.

According to Urwick, “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses”. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.

According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur”.

Steps in Planning Function:

Planning function of management involves following steps

 (A)  Establishment of Objectives

• Planning requires a systematic approach.
• Planning starts with the setting of goals and objectives to be achieved.
• Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.
• Moreover objectives focus the attention of managers on the end results to be achieved.
• As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.
• As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of personnel manager.
• Such goals should be specified in qualitative terms.
• Hence objectives should be practical, acceptable, workable and achievable.

   (B)Establishment of Planning Premises

• Planning premises are the assumptions about the lively shape of events in future.
• They serve as a basis of planning.
• Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations.
• It is to find out what obstacles are there in the way of business during the course of operations.
• Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.
• Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes.
• Internal premises are controllable whereas external are non- controllable.

 (C)  Choice of alternative Course of Action

• When forecast are available and premises are established, a number of alternative course of actions have to be considered.
• For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization.
• The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made.
• After objective and scientific evaluation, the best alternative is chosen.
• The planners should take help of various quantitative techniques to judge the stability of an alternative.

(D)  Formulation of Derivative Plans

• Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
• Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans.
• These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.
• Derivative plans indicate time schedule and sequence of accomplishing various tasks.

   (E)  Securing Co-operation

• After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.
• The purposes behind taking them into confidence are :-
• Subordinates may feel motivated since they are involved in decision making process.
• The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.
• Also the employees will be more interested in the execution of these plans.

 (F)  Follow up/Appraisal of plans

• After choosing a particular course of action, it is put into action.
• After the selected plan is implemented, it is important to appraise its effectiveness.
• This is done on the basis of feedback or information received from departments or persons concerned.
• This enables the management to correct deviations or modify the plan.
• This step establishes a link between planning and controlling function.
• The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic.

Six Barriers to Effective Planning

1.Fear

Fear can be a barrier to effective planning. When management focuses on the fear of change or lack of success rather than the potential for growth, it makes it difficult to plan for the future of an organization. Fear of financial insolvency or a lack of knowledge about market conditions can cause executive management to avoid planning for the future and focus solely on day-to-day operations.

2.Shortsightedness

Shortsighted behavior can cause executive managers to stop in their tracks. By focusing on current projects rather than broader, long-term goals and on day-to-day management rather than future growth and profitability, shortsightedness is a barrier to effective planning.

3.Negativity

Negativity, or a lack of positive ideas and suggestions for the future, can create an insurmountable barricade when it comes to strategic planning. A good leader must be positive and bring knowledge and expertise to the table. Negative thought, or a belief in failure, can lead to inertia, which can cause an organization to stagnate.

4.Communication Barriers

Difficulty in communicating goals and plans can stall a planning session. Whether communication barriers stem from language or cultural differences, or whether a manager simply is an ineffective communicator, poor communication can make it hard to express goals and organizational mission.

5.Poor Leadership

Leaders who are insecure or fearful in their own position within an organization are ineffective when it comes to planning. A leader must inspire those around him to work to their full capability. A leader who cannot lead, or who is unapproachable, cannot collect suggestions and ideas from employees that are essential to effective planning.

6.Lack of Creativity

An ability to think originally and grow in new directions are what often keep a company alive and vibrant. While one business model may work for many years, organizations have to think creatively and take chances by expanding and growing into new areas. A lack of creativity, tied with poor leadership, can cause employees to grow bored and disheartened, and employees who feel like that can’t do their best work.

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