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Strategy:

• A plan of action designed to achieve a pre-decided long-term or overall aim is called a strategy.
• Strategy formation helps the business unit to be capable enough to face the competition or to survive against the other factors.
• Strategy should be kept confidential from the competitors.
• A well-defined strategy can surely lead to success.

Programme is procedures, rule and budget within the broad framework of policy.

It is policy plan.

Tactical plan:

• Tactical plan is a short-term plan that emphasizes the current operations of various parts of the organization.
• These plans span for maximum period of 1 year.
• Since these are short term plans, they clarify short term objectives that the business aims at. Hence business activities remain goal oriented and take place in a systematic manner.
• The tactical plans or say short term plans are prepared by middle level management.
• These plans guide the departmental heads and employees about the roles that they must play to achieve tactical plans.
• It requires specialized knowledge and skills to formulate these plans.

Difference between strategic planning and tactical planning.

Importance or advantages of planning: 

1. Planning provides direction: It provides direction for action by stating in advance how a work is to be done. It ensures that the goals and objectives are clearly stated so that the workers are aware of what they must do to achieve the goals. 

2. Planning reduces the risk of uncertainty: A business organization has to work in an environment which is uncertain and ever changing. Planning helps to assess the future uncertainties and helps the organizations to face it.

3. Planning reduces wastages: Planning serves as the basis for coordinating the activities . and the efforts of the different individuals and departments of the organization. It helps to detect the inefficiency and to take corrective measures to minimize the wasteful activities. 4. Planning provides innovative ideas: Planning is basically the thinking function of management. It encourages the managers for innovative creative thinking. Many ideas come to the minds of the managers when they are planning. 

5. Planning facilitates decision making: Decision making is a process of selecting the best course of action from various available alternatives after evaluating each one of them. Planning provides guidelines for evaluation of the alternatives in taking rational decisions. 

6. Planning establishes standards for controlling: Planning helps in controlling. It determines goals and standards for every individuals and departments of the organization and makes it easy to compare the actual performance of the individuals and departments with the standards fixed.

Planning is concerned with determination of the objectives of the organization and formulating strategies, policies, rules and programmes to accomplish the objectives.

Repeated use plans or standing plans: It is a type of plan which is used in the organization again and again. It is long term in nature. They act as a ready guide for actions.

Standing plans are of different types as follows: 

1. Objectives- Objectives are the end towards which the activities of an organization are directed. They are set up by the top management. They lay down guidelines for the activities and serves as a bench mark for measuring the performance of the organization. Usually the objectives are put in the form of written statement.

2. Strategies- Strategies are the specific programmes of action for achieving the objectives of the organization by employing the resources efficiently and economically. It is formulated by the top management for successful accomplishment of the objectives in the organization. 

Formulation of strategy involves three aspects:

1. Determination of the long term objectives 

2. Adopting a course of action to achieve the objectives 

3. Allocating resources necessary to achieve the objectives. 

Examples of strategies: Strike iron while it is hot Divide and rule Time is a great healer.

Policies provides a basis for interpreting the strategy

Policy is the type of plan which provides a basis for interpreting the strategy.

Correct option is (B) Middle level management

Correct option is (C) Single use plan

Following are the limitations of planning:

i. Planning Creates Rigidity: Although the quality of flexibility is inherent in planning, but it must be admitted that only small changes are possible. Big changes are neither possible nor in the interest of the organisation. Since it is not possible to introduce desired changes according to the changed situations, the organisation loses many chances of earning profits.

ii. Planning does not work in a Dynamic Environment: Planning is based on the anticipation of future happenings. Since future is uncertain and dynamic, therefore, the future anticipations are not always true. Therefore, it can be said that planning does not work in dynamic environment.

iii. Planning Reduces Creativity: Under planning all the activities connected with the attainment of objectives of the organisation are pre-determined. Consequently, everybody works as they have been directed to do and as it has been made clear in the plans. Therefore, it checks their incisiveness. It means that they do not think about appropriate ways of discovering new alternatives.

iv. Planning Involves Huge Costs: Planning is a small work but its process is really big. Planning becomes meaningful only after traversing a long path. It takes a lot of time to cover this path. During this entire period the managers remain busy in collecting a lot of information and analysing it. In this way, when so many people remain busy in the same activity, the organisation is bound to face huge costs.

v. Planning is a Time Consuming Process: Planning is a blessing in facing a definite situation but because of its long process it cannot face sudden emergencies. In such a situation, if the manager thinks of completing the planning process before taking some decision, it may be possible that the situations may worsen or the chance of earning profit may slip away. Thus, planning is time consuming and it delays action.

Limitations of Planning:

(i) Planning leads to rigidity: In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This kind of rigidity in plans may create difficulty. Managers need to be given some flexibility to be able to cope with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest.

(ii) Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity.

(iii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.

(iv) Planning involves huge costs: When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money. For example, Checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan.

(v) Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.

(vi) Planning does not guarantee success: The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.

Limitations of Planning:

(i) Planning leads to rigidity: In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This kind of rigidity in plans may create difficulty. Managers need to be given some flexibility to be able to cope with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest.

(ii) Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity.

(iii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.

(iv) Planning involves huge costs: When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money. For example, Checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan.

(v) Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.

(vi) Planning does not guarantee success: The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.

Limitations of Planning:

(i) Planning leads to rigidity: In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This kind of rigidity in plans may create difficulty. Managers need to be given some flexibility to be able to cope with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest.

(ii) Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity.

(iii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.

(iv) Planning involves huge costs: When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money. For example, Checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan.

(v) Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.

(vi) Planning does not guarantee success: The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.

Limitations of planning are: 

1. Rigidity: In organizations a well-defined plan is drawn up with specific goals to be achieved with a time limit. This leads to rigidity in the activities of the managers which restricts the individual freedom, creativity and initiative. 

2. Environmental constraints: The business environment is dynamic in nature, nothing is constant. Planning do not take into consideration the possible changes in economic, political, legal and social dimensions. 

3. Lack of creativity: Planning is done by top management and the subordinates just implement the pl Answer: As a result the middle management are not allowed to deviate the plans and also not permitted to act on their own. Thus, their creativity is reduced.

4. Expensive: It is a costly process. Collection and analysis of information, evaluation of best course of action involves huge expenses. 

5. Time consuming: Planning process is time consuming. Collection of facts and figures, selection courses of action involves much time.

The principle of‘look and leap’is adopted when the entire plan is to be evaluated. Step by step proceedings are done after which, appropriate decisions are taken.

Correct option is (C) Contingency plan

Limitations of planning:

1. Uncertain future:

• Planning is based on assumptions and forecasting i.e. it talks about future. But, no one knows future and so it is uncertain.
• So, one may make assumptions and frame plans based on these assumptions. But it should be well noted, that assumptions can be wrong. Hence, uncertainties prevail in planning.

2. Expensive process:

• In a large unit, experts are engaged in the planning function.
• Since these experts are highly experienced and knowledgeable they charge high consultation fees for assisting in framing the plans.
• While planning several resources are also to be gathered like holding meetings, conducting surveys, gathering data and performing analysis, etc. All these activities require .time, effort and money. Hence, planning incurs huge expenses to the unit.

3. Time-consuming: Planning involves collection of necessary information, its classification, analysis and interpretation to decide alternatives for the business. Thus it is a lengthy and time-consuming process.

4. Planning is irrelevant:

• Although planning is extremely important but future is uncertain. There are chances of changes in government policies, tax slabs, price, demand, supply, etc.
• Any major change can fail even a solid plan and hence planning becomes irrelevant in such a situation.

5. Tends to be rigid:

• Planning is done keeping future in mind. Now, if an adverse situation occurs in the future, managers or employees avoid taking risk,of deviating from the plan and making changes as per the new market situation.
• They stick to the plan i.e. remain rigid for making changes.

6. Uncertainty of external factors: Business units are affected by external factors which keep on changing. This hinders the success of planning.

7. Incomplete information:

• Collecting necessary information is the pre-condition of the planning process.
• If a plan is formulated and implemented on the basis of incomplete and unclear information then it may not give the desired result.

8. Restricts creativity of employees:

• A plan is formed by manager but implemented by the employees (or say workers) of the business unit.
• Although employees have creativity and experience about the processes of the business unit they do not have the authority to make changes in the plan. Thus planning restricts the creativity of employees.

9. Use of faulty methods: While deciding assumptions and estimates for a plan, the planners make use of different mathematical and statistical methods. If these methods or information are faulty or say inappropriate, there are chances that the unit may take a wrong decision. This may fail the plan.

10. Other limitations: Over and above these limitations, many other factors that affect planning are changes in technology, prejudice of planner, ignorance of facts, problem of leadership, etc.

Limitations of Planning:

• Uncertain Future,
• Expensive Process,
• Time Consuming Process
• Planning is Irrelevant
• Promote Rigidity
• Uncertainity of External Factors,
• Incomplete Information,
• Restriction on Employees’ Creativity and
• Use of Faulty Methods.

Correct option is (C) Preparation of alternative plan

Correct option is (D) Code of conduct

Correct option is (D) Standing plan

Correct option is (A) Look and leap principle

Importance of Planning:

• All activities are done systematically.
• Wastage of resources can be avoided.
• Planning reduces future uncertainties.
• Planning leads to precision.
• Useful for achievement of objectives.
• Planning brings smoothness in other managerial functions.
• Planning increases employees’ co-operation.
• Effective control becomes possible.
• Planning co-ordinates various activities’

1. Uncertain future,
2. Expensive process,
3. Time consuming,
4. Planning is irrelevant,
5. Tends towards rigidity,
6. Uncertainty of external factors,
7. Incomplete information,
8. Restrictions on employees creativity, and
9. Use of faulty method.

Importance of planning:

• Planning is the foundation of any business and an outline for its future. It is necessary in each and every field.
• Hence, government, private sector and all other sectors make plans for their activities.
• Considering the importance of planning, the Central Government of India has formed the planning commission which plans the various activities for India.

Following are some of the importance planning:

1. Planning helps to perform all activities systematically.
2. Wastage of resources can be avoided.
3. Planning reduces future uncertainties.
4. Planning leads to precision.
5. It is useful for accomplishing objectives.
6. Planning also brings smoothness in other managerial functions.
7. Planning increases co-operation among employees.
8. It enables effective control over the activities and unit.
9. Planning co-ordinates various activities.

Planning has to be precise – because planning is a process for the future. Since, future is uncertain, the planning is to be done precisely and minutely.

1. Wastage of resource can be avoided,
2. Planning leads to precision,
3. Smoothness in other managerial functions, and
4. Effective control becomes possible.

Correct option is 

(1) B. Growth & development

(2) A. It fails to cope with sudden changes

Correct option is 

(1) 3. 1 and 2

(2) 1. Planning may not work in a dynamic environment:

Planning Premises

Correct option is (c) Setting planning premises