what is planning in management

Meaning of Planning

Planning is thinking in advance about what to do and how to do it. It is one of the primary managerial duties. Before doing something, the manager must form an opinion on how to work on a specific job. Hence, planning is firmly correlated with discovery and creativity. But the manager would first have to set goals. Planning is an essential step what managers at all levels take. It requires making decisions since it includes selecting a choice from alternative ways of performance.

Importance of Planning

Planning is definitely significant as it directs us where to go, it furnishes direction, and decreases the danger of risk by making predictions. The significant advantages of planning are provided below:

Planning provides directions: Planning assures that the objectives are certainly asserted so that they serve as a model for determining what action should be taken and in which direction. If objects are well established, employees are informed of what the company has to do and what they need to do to accomplish those purposes.
Planning decreases the chances of risk: Planning is an activity that permits a manager to look forward and predict changes. By determining in prior the tasks to be completed, planning notes the way to deal with changes and unpredictable effects.
Planning decreases overlapping and wasteful activities: Planning works as the foundation of organizing the activities and purposes of distinct branches, departments, and people. It assists in avoiding chaos and confusion. Since planning guarantees precision in understanding and action, work is conducted easily without delays.
Planning encourages innovative ideas: Since it is the primary function of management, new approaches can take the form of actual plans. It is the most challenging project for the management as it leads all planned actions pointing to growth and of the business.
Planning aids decision making: It encourages the manager to look into the future and make a decision from amongst several alternative plans of action. The manager has to assess each option and pick the most viable plan.

What are the steps involved in the planning process?

The steps involved in the planning process are as follows:

Developing of objectives
Developing tasks that are required to meet those objectives
Determining resources needed to implement those tasks
Creating a timeline
Determining tracking and assessment method
Finalizing the plan
Distributing the plan to everyone involved in the process of planning

What is the classification of plans?

Plans can be classified into three types:

Operational planning
Strategic planning
Tactical planning

What are the features of Planning?

Planning is a primary function
Planning is goal-oriented
Planning is continuous
Planning is futuristic or future-oriented
Planning focuses on achieving the objectives

Planning is firmly correlated with discovery and creativity. However, the manager would first have to set goals. Planning is an essential step what managers at all levels take. It needs to hold on to the decisions since it includes selecting a choice from alternative ways of performance.

Scope and nature of Planning

The planning function of management has some special features. These features cast enlightenment on its scope and nature.

Planning focuses on achieving objectives: Companies are set up with a common goal in view. Explicit purposes are placed out in the projects along with the ventures to be initiated to accomplish the goals. Therefore, planning is helpful.
Planning is a primary function of management: Planning puts down the foundation for other operations of management. All other managerial duties are conducted within the structure of the ideas outlined. Consequently, planning leads to other operations. This is also mentioned as the supremacy of planning.
Planning is continuous: Plans are outlined for a particular period of time, perhaps for a period, a quarter, or a year. At the completion of that period, there is a requirement for a new policy to be formed in support of new conditions and future circumstances.
Planning is futuristic: Planning typically includes looking forward and outlining for the future. The idea of planning is to coincide future results efficiently to the valid advantage of an association. It means glancing into the future, investigating it, and foretelling it. Planning is, therefore, perceived as a forward-looking capacity based on predicting.

Limitations of Planning

The limitations of Planning are furnished below:

(1) Planning Leads to Rigidity

The plans are rigid in nature and have to be complied with throughout the organization.
Such rigidity of plans may be internal as well as external.
Internal rigidity relates to plans, policies, programs, rules, and methods, etc.
External rigidity relates to political, industrial, technological, legal and economic changes, etc.
Example: A super specialty hospital has fine branches in a city. Whatever the top management of the hospital decides the head of the branch of the hospital and their subordinates have to follow. Though on occasions they know they could have done better on their own but the plan laid out provides rigidity to their approach.

(2) Planning May Not Work in Dynamic Environment

The environment in which a business survives is dynamic as it keeps on changing.
It is difficult for an organization to access future trends, the taste of customers, natural calamity, competitors’ policies, and the effects of changes in the different components of the environment.
The organization has to constantly adapt itself to changes because it is difficult to forecast the future changes with absolute accuracy.
The dynamic environment may sometimes lead to the failure of plans.
Example: Nestle, a very successful producer was very proactive in deciding strategies for Maggi noodles. Maggi noodles were in a lot of demand but they were off the shelf due to political and legal dimensions. This was due to the high content of lead in Maggi noodles.

(3) Planning Reduces Creativity

Planning is mostly done by the top management and other members
like middle and lower levels of management have to follow these plans.
They can’t deviate or change the plans made by their seniors.
Under such circumstances, employees become orders following machines and don’t involve creative thinking from their side.
Such rigidity to comply with the laid plans kills the creativity of some talented persons.
Example: The need for a branch of a renowned shoe manufacturing company sees a lot of scope in customized shoes. The top management is not interested in this idea as the company manufactures standardized shoes.

(4) Planning Involves Huge Cost

Formulation of plans can be too much costly because there is a lot of time and money is involved.
Some costs are incidental in nature like- expenses on boardroom meetings, discussions with professional experts, and preliminary investigations to find out the feasibility of the plan.
Checking the accuracy of facts and scientific calculations may involve lots of time.
Sometimes, the cost incurred may not justify the benefits derived from the plans; it may leave a harmful effect on the enterprise.
Example: Companies like IBM spend a lot of research. Many world-class levels give their advice to this company and change their fee. However, without so much painstaking such a huge company won’t be able to sustain itself. So planning in the case of IBM becomes necessary.

(5) Planning is a Time-consuming Process

Planning is a very lengthy process as it consumes a lot of time for the collection, analysis, and interpretation of data.
Due to such a lengthy process, sometimes decisions get delayed, opportunities are lost and there is not much time left for the implementation of plans.
Example: Health is wealth Ltd. plans to organize 25 health checkup camps on World Health Day and send a requisition to the top management but management could send its approval just a day before and the sales manager could organize only 5 camps and thus huge opportunity is lost. Here the implementation was delayed.

(6) Planning Does Not Guarantee Success

The success of an enterprise is possible only when plans are properly drawn up and implemented.
Plans become meaningless if it is not translated into action.
Managers have a tendency to rely on previously tried and tested successful plans.
It is not necessary that a successful plan in the past will bring success in the future also as every business organization survives in a dynamic and uncertain environment.
Plans must be implemented in the light of changing environments otherwise it may lead to failure of the business.
Example: In a paint manufacturing company, the top management very meticulously chalked out a great plan. The whole company worked out the plan in a much-focused manner. However, with the entrance of a competitor with better paint quality the whole plan failed. The reason for the failure was the dynamic conditions that were not in control of the organization.

Features of Planning

(1) Primary Function

Planning precedes other functions because it lays down the base for all other functions of management.
All other management functions like organising, staffing, directing, and controlling are performed within the framework of the plans drawn.
Without planning other functions of management is not possible.
Planning is the basic function of management and it is also referred to as the “Primacy of Planning”.
Example: After having set the objective of 2400 refrigerators the company organizes the work, then staffing is done in which the required types of employees are recruited and selected, then they are motivated and supervised through directing, and ultimately their performance is controlled leading towards the achievement of the objective. However, we can see that without setting the objective of selling 2400 refrigerators, other functions were not possible.

(2) Achieving Objectives

When we make plans, we focus on two things, specific goals to be achieved and activities involved to achieve these specific goals.
These specific activities become objectives to achieve goals and objectives are quantifiable.
Planning cannot be done in the absence of objectives.
In the absence of planning, employees would be working in different directions and the organization would not be able to achieve its desired goals.
Example:
If a firm decides to sell 2400 refrigerators in six months. If sales don’t materialize, the enterprise may think of better ways like sales discounts to achieve the final objective. We can see that without the objective of selling 2400 refrigerators no planning is possible or applicable.

(3) Futuristic/ Forward-Looking

Planning means looking ahead and meeting future events effectively.
Planning is regarded as a forward-looking function based on forecasting.
On the basis of forecasting, future conditions and events are anticipated and plans are prepared.
Example: Ø On the basis of sales forecast, plans are drawn how much to produce, how to market the product, how to make it available in the market, how to make the customer aware of the product, etc.Ø All these steps are directed towards a future that is why they are futuristic. Sales forecast helps a company to look forward.

(4) All Pervasive

- Planning is required in all types of organizations and at all levels of management. However, the scope of planning differs.
- Top-level management plans for the organization as a whole. They think from the perspective of the whole organization.
- Middle-level management thinks from the perspective of their departments and is involved in departmental planning.
- Lower-level management plans for the day-to-day operations of the concern.

Example: A student may plan for his monthly test, a husband may plan to give a surprise gift to his wife on the occasion of the anniversary, the CEO of a company may plan to launch a new product in the market, a sales manager may plan to achieve his sales target, a worker may plan for his production schedule, etc.

(5) Continuous Process

- Planning is an ongoing process and plans are prepared for a specific period of time.
- These may be prepared for a day, week, a month, a quarter, or a year.
- At the end of a specific period, new plans are drawn and revised regularly on the basis of feedback on previous plans, new requirements, and future conditions.

Examples: If plans are prepared during a recession period and during its execution, the market plunges into a boom, then planners need have to make several changes for the period or to work on a different strategy to achieve the desired goals. A company plans to sell 5000 cars but due to floods, the original plan cannot be implemented. The company will require to change its plans to achieve its sales target. So we can see that in both the above examples planning is not discontinued even for a while.

(6) Decision Making

- Decision-making means choosing the best alternative among the alternatives available.
- Planning cannot be imagined in the absence of alternatives.
- If there is no alternative available then there is no need for planning.
- A thorough analysis of all the alternatives helps us choose the best one

and hence the need for planning arises.

Example:

Where there is no alternative – if a firm has to import raw materials and if there is only one agency like State Trading Corporation (STC) to get it, then the firm has no choice but to import the material through STC.
Where there are alternatives – if an import is free and there is more than one import agency included in this task then the importer has the choice to purchase from any agency at competitive prices.

(7) Planning is Mental Exercise

Planning is the outcome of a mental process rather than wishful thinking and guesswork.
Planning is a thinking process and it is separate from organizational activities.
It is based on logical reasoning, facts, foresight, vision, intelligent imagination, and sound judgment.
Example: All the great CEOs like Tim Cook of Apple, Mark Zuckerberg of Facebook have an immense capability to imagine. Then these people make sound judgments and help their companies attain phenomenal success

As planning is an activity, there are certain reasonable measures for every manager to follow: Planning Process

(1) Setting Objectives

This is the primary step in the process of planning which specifies the objective of an organisation, i.e. what an organisation wants to achieve.
The planning process begins with the setting of objectives.
Objectives are end results which the management wants to achieve by its operations.
Objectives are specific and are measurable in terms of units.
Objectives are set for the organization as a whole for all departments, and then departments set their own objectives within the framework of organizational objectives.

Example:

A mobile phone company sets the objective to sell 2,00,000 units next year, which is double the current sales.

(2) Developing Planning Premises

Planning is essentially focused on the future, and there are certain events that are expected to affect policy formation.
Such events are external in nature and affect the planning adversely if ignored.
Their understanding and fair assessment are necessary for effective planning.
Such events are the assumptions on the basis of which plans are drawn and are known as planning premises.

Example:

The mobile phone company has set the objective of 2,00,000 units sale on the basis of forecast done on the premises of favorable Government policies towards digitization of transactions.

(3) Identifying Alternative Courses of Action

Once objectives are set, assumptions are made.
Then the next step is to act upon them.
There may be many ways to act and achieve objectives.
All the alternative courses of action should be identified.

Example:

The mobile company has many alternatives like reducing price, increasing advertising and promotion, after-sales service etc.

(4) Evaluating Alternative Course of Action

In this step, the positive and negative aspects of each alternative need to be evaluated in light of objectives to be achieved.
Every alternative is evaluated in terms of lower cost, lower risks, and higher returns, within the planning premises and within the availability of capital.

Example:

The mobile phone company will evaluate all the alternatives and check their pros and cons.

(5) Selecting One Best Alternative

The best plan, which is the most profitable plan and with minimum negative effects, is adopted and implemented.
In such cases, the manager’s experience and judgment play an important role in selecting the best alternative.

Example:

Mobile phone company selects more T.V advertisements and online marketing with great after-sales service.

(6) Implementing the Plan

This is the step where other managerial functions come into the picture.
This step is concerned with “DOING WHAT IS REQUIRED”.
In this step, managers communicate the plan to the employees clearly to help convert the plans into action.
This step involves allocating the resources, organizing for labor, and purchase of machinery.

Example:

Mobile phone company hires salesmen on a large scale, create T.V advertisement, starts online marketing activities and sets up service workshops.

(7) Follow Up Action

Monitoring the plan constantly and taking feedback at regular intervals is called follow-up.
Monitoring of plans is very important to ensure that the plans are being implemented according to the schedule.
Regular checks and comparisons of the results with set standards are done to ensure that objectives are achieved.

Example:

A proper feedback mechanism was developed by the mobile phone company throughout its branches so that the actual customer response, revenue collection, employee response, etc. could be known.

Barriers to Planning

#1. Incompetent Leadership Skills

The team of planners is led by the leader in the first place, and it is the main onus and responsibility of the leader to make every planning and strategy of the firm successful.

The leader should be innovative, should come with a wealth of experience and knowledge, provide strategic inputs, and should be able to lead his team amidst stringent work schedules and environment.

#2. Excess levels of Distractions

When the distractions at the workplace become quite excessive, it results in the Barriers to Planning. For instance, if the leader is delegating too many tasks at one given point or is discussing two or more topics that are not related to each other at all, it results in complete chaos doing the planning taking a backseat

#3. No Systems in Place

Even if the team has done a thorough amount of research and study on the subject manner and the work-related tasks along with the prim and proper attention to the aspects of planning, but if the systems are not in place, there will be various Barriers to Planning, specifically to its implementation

#4. Limited Manpower Resources

Some of the features and strategies of planning require the huge support of manpower to attain the aims and objectives of planning.

#5. Limited Resources and Funding

To accomplish the aims and objectives of the firm, having required resources such as finances, manpower, office space, machinery, and others are a mandate. Of all, having stable and ongoing finances is a must as then all of the other resources can be taken care of.

#6. Opposition to Change

Some of the outcomes of strategic planning and management result in changes in the structure of the organization, the hierarchy of the management, changes, and development in of job responsibilities, and the transfer of employees to other branches or offices of the firm.

#7. Lack of Motivation

When there is a lack of motivation within the team, it results in Barriers to Planning. Motivation can arise out of various reasons such as low pay packages, office politics, and lack of relevant and challenging tasks to the employees.

what is planning in management

what is planning in management

Meaning of Planning

Importance of Planning