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II Year_Business Studies_Chapter 4, , Chapter 4, , PLANNING, Meaning: Planning is deciding in advance what to do and how to do. Planning in related with, creativity and innovation. Planning seeks to bridge the gap between where we are and where we, want to go. Planning means setting objectives and targets and formulating an action plan to achieve, them. Planning is defined as setting objectives for a given time period, formulating various courses, of action to achieve the objectives and selecting the best alternative from the available course of, action., Features of Planning:, (i) Planning focuses on achieving objectives: Planning is purposeful because specific goals are, set out in the plans. Planning has no meaning unless it helps to achieve the predetermined goals., (ii) Planning is a primary function of management: Planning is the base for other functions of, management. All other functions of management are performed within the framework of planning., This is also referred to as the primacy of planning., (iii) Planning is pervasive: Planning is required at all levels of management as well as in all, departments of the organisation. Top management develops plans for the organisation as a whole., Middle management prepares departmental plans. Lower level management prepare plans for the, day to day operations of the organisation., (iv) Planning is continuous: Plans are prepared for a specific period of time. At the end of each, period a new plan is prepared with new requirements and future conditions. Therefore planning is a, continuous process. A plan is prepared,it is implemented and followed by another plan., (v) Planning is futuristic: The purpose of planning is to meet future events effectively to the best, advantage of an organisation. Planning is a forward looking function based on forecasting the, future. Eg. Sales forecasting helps to prepare plans for future production and sales., (vi) Planning involves decision making: Planning involves the selection of the best one form the, available alternatives. Planning is the process of evaluation and analysis of various alternatives and, choosing the best one. It involves decision making about the best suitable alternative., (vii) Planning is a mental exercise: Planning is an intellectual activity of thinking rather than, doing. It determines actions to be taken. Planning requires logical and systematic thinking about, different alternatives and selecting the best one., Planning Process (Steps in Planning): Steps involved in the process of planning are (i) Setting Objectives: Every organisation have certain objectives. Objectives or goals specify, what the organisation wants to achieve. Objectives may be set for the entire organisation and each, department or unit within the organisation. Organisational objective give directions to each, department to frame their own objectives. On the basis of department objective, each employee can, frame their own goals. The plans for the organisation and departments are developed on the basis of, these objectives and goals., (ii) Developing Premises: Management prepare plans for the future, which is uncertain. Therefore, they develop the plans on the basis of some assumptions about the future. These assumptions are, called premises. Assumptions are the base material upon which plans are to be drawn. The base, material may be past plans, forecast or any information relating to the policies., (iii) Identifying alternative courses of action: After setting the objectives and assumptions, the, next stage in the process of planning is to identify all the available ways to achieve the objectives., The courses of action may be innovative routine. An innovative course of action may be adopted by, sharing the ideas of different persons., , Prepared by Dr.K.R.Rajesh Babu, GHSS, Thottada, Kannur (9447793940, 8848951808)

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II Year_Business Studies_Chapter 4, (iv) Evaluating alternative courses: In the next stage, the management analyses pros and cons of, each alternatives. The positive and negative aspects of each proposal need to be evaluated in the, light of the objective to be achieved. Alternatives are evaluated on the basis of their feasibility and, consequences., (v) Selecting an alternative:, This is the stage of decision making about the best plan. It is the, stage of adoption and implementation of plan. A plan is an ideal one with most feasible, profitable, and with least negative consequences. The manager can apply permutation and combination while, the best course of action. Sometimes a combination of plans may be selected instead of the best one., (vi) Implementing the plan: This is the stage at which the plans are put into action. This step, involve the process of organising the labour, materials, machinery and other resources required for, putting the action into practice., (vii) Follow-up action: In this stage it is monitored that the activities are undertaken as per the, plan. Here the management analyses that whether the objectives of the business are achieved as per, the schedule in the plans., Types of Plans: Plans prepared for short tern period or operational goals are classified into Sinlge, use plans and Standing plans., • Single Use Plans: A plan prepared for one time event or project is called single use plan, and not repeated in future. Duration depends on type of project, like one week, one month or, one day. It includes budgets, programmes and projects. Eg. Organising a seminar,, conference, etc., • Standing Plans: A standing plan is prepared for activities that occur regularly over a, period of time. It is designed for the smooth functioning of internal operations of the, business. It is developed once but is modified from time to time to meet the changing needs, of the business. Standing plans include policies, procedures, methods and rules., Based on what the plans seek to achieve, plans can be classified as Objectives, Strategy, Policy,, Procedure, Method, Rule, Programme, Budget.,  Objectives: First step in planning is the setting objective. It is the position desired by the, management to be reached in the future. Objective is the end result of business activities. All, other managerial activities are directed towards the achievement of these objectives. It serve, as a general guide for overall business operations. Objectives should be expressed in specific, terms and measurable in quantified terms, which can be achieved within stipulated period., Eg. Increase in sales by 10% every year.,  Strategy: Strategy is a comprehensive plan for accomplishing organisational objectives. It, includes:, i) determining long term objectives,, (ii) adopting a particular course of action, and, (iii) allocating resources necessary to achieve the objective., The changes in the economic, political, social, legal and technological environment will, affect an organisation’s strategy. It forms the organisational identity in the business environment., Strategy decisions includes continue in the same line of business or combine new line of, business with the existing one, etc.,  Policy: Policies are general statements that guide thinking activities towards a particular, direction. Policies provide a basis for interpreting strategy which is usually stated in general, terms. It gives general guidelines for the managers in decision making. It is the general, response to a particular problem or situation. There are policies for all levels and, departments in the organisation ranging from major policies to minor policies. Major, , Prepared by Dr.K.R.Rajesh Babu, GHSS, Thottada, Kannur (9447793940, 8848951808)

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II Year_Business Studies_Chapter 4, , , , , , , , , , , , policies are applicable to all like customers, suppliers, etc., but minor policies are applicable, to insiders like employees of the organisation. Policies define the parameters within which a, manager or employee can work. Eg. Recruitment policy, pricing policy, purchase policy, etc., Procedure:, Procedures are routine steps to carry out day to day activities of the, organisation. It specify the steps to be followed in a chronological order in a particular, situation. It is the steps to be followed by the insiders for attaining a particular objective. Eg., Procedure for the selection of employees., Method: Methods specify the prescribed ways or manner in which a task has to be, performed considering the objective. It specifies the steps to be followed and how it is to be, performed. The method may vary from task to task. Selection of proper method saves time,, money and effort and increases efficiency. Eg. Training methods for employees like, seminars, on the job training, etc., Rules: Rules are specified statements that inform what is to be done. It does not allow for, any flexibility or discretion. It is the simplest type of plans because there is no change is, allowed unless a policy decision is taken. Eg. Employees should reach the factory at 8am., Programme: Programmes are detailed statements about a project which gives an outlines, about the objectives, policies, procedures, rules, tasks, human and physical resources, required and the budget to implement any course of action. It explains the entire activities to, be performed to implement a project and how it will contribute to the overall objectives of, the business., Budget: A budget is a statement of expected results expressed in numerical terms. Budget, represents all items in numbers, so it becomes easy to compare actual figures with estimated, figures and take corrective actions. Budget is used as a control device for the operations of, business. It is considered as a fundamental planning instrument. Eg. Cash budget, Purchase, budget, Sales budget, etc., , Prepared by Dr.K.R.Rajesh Babu, GHSS, Thottada, Kannur (9447793940, 8848951808)