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Features of Planning:

(i) Planning focuses on achieving objectives: Organisations are set up with a general purpose in view. Specific goals are set out in the plans along with the activities to be undertaken to achieve the goals. Thus Planning is Purposeful. Planning has no meaning unless it contributes to the achievement of predetermined organisational goals.

(ii) Planning is a primary function of management: Planning lays down the base for other functions of management. All other managerial functions are performed within the framer work of the plans drawn. Thus, planning precedes other functions. This is also referred to as the primacy of planning. The various functions of management are interrelated and equally important. However, planning provides the basis of all other functions.

(iii) Planning is pervasive: Planning is required at all levels of the management as well as in all departments of the organisation. It is not an exclusive function of top management or of any particular department. But the scope of planning differs at different levels and among different departments. For example, the top management undertakes planning for tire organisation as a whole. Middle management does the departmental planning. At the lowest Ievel, day-to-day operational planning is done by the supervisors.

(iv) Planning is continuous: Plans are prepared for a specific period of time, may be for a month, a quarter, or a year At the end of that period there is need for a new plan to be drawn on the basis of new requirements and future conditions. Hence, planning is a continuous process. Continuity of planning is related with the planning cycle. It means that a plan is framed, it is implemented, and is followed by another plan, and so on.

(v) Planning is futuristic: Planning essentially involves looking ahead and preparing for the future. The purpose of planning is to meet future events effectively to the best advantage of an organisation. It implies peeping into the future, analysing it and predicting it. Planning is, therefore, regarded as a forward looking function based on forecasting. Through forecasting, future events and conditions are anticipated and plans are drawn accordingly. Thus, for example, sales forecasting is the basis on which a business firm prepares its annual plan for production and sales.

(vi) Planning involves decision making: planning essentially involves choice from among various alternatives and activities. If there is only one possible goal or a possible course of action, there is no need for planning because there is no choice. The need for planning arises only when alternatives are available. In actual practice, planning pre-supposes the existence of alternatives. Planning, thus, involves thorough examination and evaluation of each alternative and choosing the most appropriate one.

(vii) Planning is a mental exercise: Planning requires application of the mind involving foresight, intelligent imagination and sound judgment. It is basically an intellectual activity of thinking rather than doing. Because, planning determines the action to be taken. However, planning requires logical and systematic thinking rather than guess work or wishful thinking. In other words, thinking for planning must be orderly and based on the analysis of facts and forecasts.

Organisations are not always able to accomplish all their objectives due to the following reasons 

(i) Planning Leads to Rigidity: In an organisation a well defined plan is drawn up with specific goals to be achieved, with in a specific time frame. These plans then decide how the work will progress in the future and managers may not be in a position to change it. This creates a problem as flexibility is very important. Always adhering to the plan may not give us the desired results always. 

(ii)Planning May not Work in a Dynamic Environment: The business environment is dynamic, nothing is constant. The business environment is a totality of external forces, where in some changes or the other keep on taking place. Plans decide in advance what has to be done in future. Planning cannot foresee everything and thus there may be obstacles to effective planning. 

(iii) Planning Reduces Creativity: Planning is generally done by the top management. Usually the rest of the members just implements these plans. As a consequence, middle management and other decisions makers are neither allowed to deviate from plans nor are they permitted to act on their own, 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 Cost: Planning involves huge cost in their formulation. These may be in terms of time and money. The costs incurred sometimes may not justify the benefits derived from the plans. 

(v) Planning is a Time Consuming Process: Sometimes plans to be drawn take up so much of time that there is not much time left for their implementation and the objectives to be achieved. 

(iv) Planning does not Guarantee Success: Any plans 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.

(a) Rule – No smoking

The type of plan in Programmes 

Elements/components of planning:

The subsidiary plans and programmes on which a planning is based are called elements of planning.

The elements of planning are discussed below:

1. Objectives:

• All the plans of a business unit are based on the objectives they wish to achieve.
• So, it is important that the managers consider all the factors affecting business while drafting the plans.
• Such objectives should be set which are realistic and achievable.

2. 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.

3. Policy:

• The decisions and strategies that the management decides for accomplishments of objectives are known as policies.
• The type of policy framed by the business unit reflects the idea of efficiency and working style of the business unit.
• Just like an objective, the policy should also be pragmatic and real.

4. Method/Procedure:

• The business units develop various methods or procedures to conduct business activities.
• Method guides the best way for accomplishing pre-determined objectives as well as doing tasks.

5. Rules:

• Framing rules is extremely important to accomplish the functions of planning.
• Rules decide the procedure and give the clear understanding.
• They also ensure that discipline will be followed in the unit among the employees.
• Through proper observance of rules it becomes easy for the unit to accomplish the objectives. For example the rule of prohibiting the use of mobile during working hours helps to increase efficiency of employees.

6. Budget:

• Budget is a tool that controls the outcomes and helps accomplishing business objectives.
• A unit prepares different types of budget such as capital expenditure budget, sales budget, production budget, production cost budget, cash budget, etc.
• Budget helps to control the business activities and also to increase the efficiency of management. s

7. Programme:

• The sequence of activities undertaken by a business unit to accomplish a task is called programme.
• If the work is done according to programme then the objectives can be fulfilled without any confusions or hindrances.
• The management sees to it that the work is done as per the programme as well as per the standards set. Corrective measures are taken in case if there are deviations.

The above limitations can be overcome by these actions. 

1. Arranging funds in advance. 

2. Effective methods of recruitment should be adopted to ensure availability of effective staff in all manageent. 

3. Middle level should be encouraged to propose plans in the form of suggestions. After considering all these, a strategy should be planned. 

4. The company should be able to assess the moves of the competitors.

The above limitations can be overcome by 

(i) Arranging funds in advance. 

(ii) Effective methods of recruitment should be adopted to ensure availability of effective staff in all departments. 

(iii) Middle level should be encouraged to propose plans in the form of suggestions. After considering all these, a strategy should be planned. 

(iv) The company should be able to assess the moves of the competitors.

Limitations of the above strategy can be the following : 

1. Shortage of funds. 

2. Shortage of technical professionals. 

3. Top level may not be competent enough to develop a suitable strategy. 

4. The company may not be successful in assessing the future plans of the competitors as compared to its own strategy.

Planning involves huge cost, when plans are drawn up huge costs are involved in their formulation. These are in terms of time, money, effort etc. 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 (which are indirect) like expenditures on organising a meeting, consultation fees given to professional experts, market survey etc. But despite the high cost no firm can work without proper planning if used properly.

Limitations of the above strategy can be 

(i) Shortage of funds. 

(ii) Shortage of technical professionals. 

(iii) Top level may not be competent enough to develop a suitable strategy. 

(iv) The company may not be successful in assessing the future plans of the competitors as compared to its own strategy.

In such a situation, formulating a strategy would be advisable. 

A strategy is a single use plan. It is normally made to fight competition in the market. 

The model business plan, i.e., strategy will be 

(i) It is objective and its purpose is that how much sales it wants to increase over a specified time. 

(ii) The company should then list down its strengths and weakness. This brings in light as to what will be easy and what will be difficult. 

(iii) Aggressive, advertising and sales promotion techniques to be adopted.

Rule is the type of plan which tells what is to be done and what is not to be done.

Under procedure.

Follow up action.

Rule is the type of plan which determines the parameters in which a manager can function.

The planning process consists of following steps:

1. Determination of objectives
2. Clarifying planning premises
3. Collection and analysis of information
4. Preparation of alternative plan
5. Evaluation of alternatives
6. Selection of the best alternative
7. Formulation and evaluation of subsidiary plan
8. Evaluation of plan

Policies are the general statements which guide thinking and action of the members of the organisation. A policy serves as a guide to decision makers to channelizes the energy in a propel direction. It provides direction to deal with a ‘particular situation. Such a policy is the general response to a particular problem or situation.' Policies guide the managerial action and decisions in the implementation of strategy. For example, sales policy recruitment policy etc.

 The step is Follow up.

Programme are detailed statements about a project which outlines entire gamut of activities, the objectives, policies, procedures, rules, strategies tasks and the budget to implement any courses of action. Programme is a concrete scheme of action designed to accomplish a given task. Programme is a single use plan in which minutest details are worked out i.e., procedures, rules, within the broad policy framework.

Planning is the process of setting objective for a given time period, formulating various course of action to achieve them and then selecting the best possible alternative from among the various courses of action available.

First two steps in the process of planning are:

(i) Setting objective

(ii) Developing premises

Detailed Answer:

(i) Setting Objectives: The first step in planning is to identify certain objectives. The objectives set must clearly indicate what is to be achieved, where action should take place, who should perform it and when it is to be accomplished. The objectives should be established for the entire organisation and for each and every department. Planning has no utility if it is not related to certain objectives.

(ii) Developing Premises: The next step is the establishment of planning premises. Planning premises are the assumptions and predictions about the future. The assumptions are the basis of planning. Forecasting is important in premising. It helps in making realistic assumptions about sales, costs, prices, products etc., in future. This requires a collection of data on present trends and future possibilities.

Programme are detailed statements about a project which outlines entire gamut of activities, the objectives, policies, procedures, rules, strategies tasks and the budget to implement any courses of action. Programme is a concrete scheme of action designed to accomplish a given task. Programme is a single use plan in which minutest details are worked out i.e., procedures, rules, within the broad policy framework.

Objectives are the desired end results towards which organisational activites are aimed. Objective are statements of results to be achieved in particular areas of business during a specified period of time. They provide a sense of direction, the rationale or justification for the existence of organisation, for example, to raise market share of our product by organisation for 5% over a period of 2 years.

Objectives are the desired end results towards which organisational activites are aimed. Objective are statements of results to be achieved in particular areas of business during a specified period of time. They provide a sense of direction, the rationale or justification for the existence of organisation, for example, to raise market share of our product by organisation for 5% over a period of 2 years.

Policy is general statement that guides thinking or channelizes energy towards a particular direction.

Strategy is type of plan which provides the broad contours of an organisation’s business.

Programme provides the broad contours of an organization’s business. 

The manager is required to make certain assumptions about the future, which are the base material upon which plans are to be drawn. These assumptions are called Planning Premises.

Strategy/Objective.

A strategy is a comprehensive plan for accomplishing, an organisation's objectives taking business environment into consideration.

(a) Function of Management Planning:

Characteristics of planning

(i) Planning focuses on achieving objectives.

(ii) Planning is a primary function of management

(iii) Planning is pervasive

(iv) Planning is continuous

(v) Planning is futuristic

(vi) Planning involves decision making.

(vii) Planning is a mental exercise.

(b) Any three limitations of planning:

(i) Planning leads to rigidity

(ii) Planning may not work in a dynamic environment

(iii) Planning reduces creativity

(iv) Planning involves huge cost

(v) Planning is a time consuming process

(vi) Planning does not guarantee success

Detailed Answer:

Characteristics of planning :

(i) Planning focuses on achieving objectives: Organisations are set up with a general purpose in view. Specific goals are set out in the plans along with the activities to be undertaken to achieve the goals. Thus Planning is Purposeful. Planning has no meaning unless it contributes to the achievement of predetermined organisational goals.

(ii) Planning is a primary function of management: Planning lays down the base for other functions of management. All other managerial functions are performed within the framer work of the plans drawn. Thus, planning precedes other functions. This is also referred to as the primacy of planning. The various functions of management are interrelated and equally important. However, planning provides the basis of all other functions.

(iii) Planning is pervasive: Planning is required at all levels of the management as well as in all departments of the organisation. It is not an exclusive function of top management or of any particular department. But the scope of planning differs at different levels and among different departments. For example, the top management undertakes planning for tire organisation as a whole. Middle management does the departmental planning. At the lowest Ievel, day-to-day operational planning is done by the supervisors.

(iv) Planning is continuous: Plans are prepared for a specific period of time, may be for a month, a quarter, or a year At the end of that period there is need for a new plan to be drawn on the basis of new requirements and future conditions. Hence, planning is a continuous process. Continuity of planning is related with the planning cycle. It means that a plan is framed, it is implemented, and is followed by another plan, and so on.

(v) Planning is futuristic: Planning essentially involves looking ahead and preparing for the future. The purpose of planning is to meet future events effectively to the best advantage of an organisation. It implies peeping into the future, analysing it and predicting it. Planning is, therefore, regarded as a forward looking function based on forecasting. Through forecasting, future events and conditions are anticipated and plans are drawn accordingly. Thus, for example, sales forecasting is the basis on which a business firm prepares its annual plan for production and sales.

(vi) Planning involves decision making: planning essentially involves choice from among various alternatives and activities. If there is only one possible goal or a possible course of action, there is no need for planning because there is no choice. The need for planning arises only when alternatives are available. In actual practice, planning pre-supposes the existence of alternatives. Planning, thus, involves thorough examination and evaluation of each alternative and choosing the most appropriate one.

(vii) Planning is a mental exercise: Planning requires application of the mind involving foresight, intelligent imagination and sound judgment. It is basically an intellectual activity of thinking rather than doing. Because, planning determines the action to be taken. However, planning requires logical and systematic thinking rather than guess work or wishful thinking. In other words, thinking for planning must be orderly and based on the analysis of facts and forecasts.

For 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.

It is a Programme.

Policy is the type of plan which is in the form of general statements, that guides thinking towards a particular direction and helps in solving routine problems.

Different type of plans discussed in the above part are:

i. Objective: “one of his objective was to earn 50% profit on the amount invested in the first year.”

• Objective refers to those end points for the attainment of which all the activities are undertaken.

ii. Policy: “It was decided that raw materials like flour, sugar, salt etc. will be purchased on two months credit.”

• Policy refers to those general statements which are decided for the guidance of the employees while taking decisions.

iii. Procedure: “He also decided to follow the steps required for marketing the products through his own outlets.”

OR

“He appointed Harsh as a Production Manager who decided the exact manner in which the production activities are to be carried out.”

• Procedure refers to the plan that determine the sequence of activities to be conducted to perform a work.

iv. Budget: “Harsh also prepared a statement showing the requirement of workers in the factory throughout the year.”

OR

“Mayank informed Harsh about his sales target for different products, areawise for the forth coming quarter.”

• Budget refers to the quantitative expression of the plan of action.

v. Rule: “While working on the production table a penalty of ₹ 150 per day was announced for not wearing the helmet, gloves and apron by the workers.”

• Rule refers to the plan that tells us what is to be done and what is not to be done in a particular situation.

Different types of plans discussed in the above para are:

i. Objective: “One of her objective is to earn 10% profit on the amount invested in the first year.”

• Objectives refer to those end points for the attainment of which all the activities are undertaken.

ii. Policy: “It was decided that raw material like fruits, vegetables, spices etc. will be purchased on three months credit from farmers cultivating organic crops only.”

• Policy refers to those general statements which are decided for the guidance of the employees while taking decisions.

iii. Procedure: “She also decided to follow the steps required for marketing of the products through her own outlets.”

OR

“She appointed Mohan as a production Manager who decides the exact manner in which the production activities are to be carried out.

• Procedure refers to the plan that determine the sequence of activities to be conducted to perform a work.

iv. Budget: “Mohan also prepared a statement showing the number of workers that will be required in the factory throughout the year.”

OR

v. “Madhu informed Mohan about the sales target for different products, areawise for the forthcoming quarter.”

• Budget refers to the quantitative expression of the plan of action.

vi. Rule: “While working on the production table a penalty of ™100 per day for not wearing the caps, gloves and aprons was announced.”

• Rule refers to the plan that tells us what is to be done and what is not to be done in a particular situation.

Organisations are not always able to accomplish all their objectives due to the following reasons.

1. 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 how the work will progress in the future and managers may not be in a position to change it. This creates a problem as flexibility is very important. Adhering to the plan may not always give us the desired results.

2. Planning may not work in a Dynamic Environment: The business environment is dynamic, nothing is constant. The business environment is a totality of external forces, wherein some changes or the other keep on taking place. Plans decide in advance, what has to be done in future. Planning cannot foresee everything and thus there may be obstacles to effective planning.

3. Planning reduces creativity: Planning is generally done by 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 permitted to act on their own. Thus, planning in a way reduces creativity since people tend to think along the same lines as others, there is nothing new or innovative.

4. Planning involves huge cost: Planning involves huge cost in their formulation. These may be in terms of time and money. The costs incurred sometimes may not justify the benefits derived from plans.

5. Planning is a time consuming process: Sometimes plans so drawn take up so much of time, that there is not much time left for their implementation and the objectives to be achieved.

6. Planning does not guarantee success: Any plan needs to translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It not always true just because a plan has worked before, it will work again.

Planning may be defined as the process of determining in advance what is to be done and defining a procedure, method and time table to do it to achieve the set objectives.

Importance of Planning:

(i) Planning provides directions: By stating in advance how work is to be done planning provides direction for action. Planning ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals.

(ii) Planning reduces the risks of uncertainty: Planning is an activity which enables a manager to look ahead and anticipate changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed.

(iii) Planning reduces overlapping and wasteful activities: Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions.

(iv) Planning promotes innovative ideas: Since planning is the first function of management, new ideas can take the shape of concrete plans. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business.

(v) Planning facilitates decision making: Planning helps the manager to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternative and select the most viable proposition. Planning involves setting targets and predicting future conditions, thus helping in taking rational decisions.

(vi) Planning establishes standards for controlling: Planning involves setting of goals. The entire managerial process is concerned with accomplishing predetermined goals through planning, organising, staffing, directing and controlling. Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals.

Planning may be defined as the process of determining in advance what is to be done and defining a procedure, method and time table to do it to achieve the set objectives.

Importance of Planning:

(i) Planning provides directions: By stating in advance how work is to be done planning provides direction for action. Planning ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals.

(ii) Planning reduces the risks of uncertainty: Planning is an activity which enables a manager to look ahead and anticipate changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed.

(iii) Planning reduces overlapping and wasteful activities: Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions.

(iv) Planning promotes innovative ideas: Since planning is the first function of management, new ideas can take the shape of concrete plans. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business.

(v) Planning facilitates decision making: Planning helps the manager to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternative and select the most viable proposition. Planning involves setting targets and predicting future conditions, thus helping in taking rational decisions.

(vi) Planning establishes standards for controlling: Planning involves setting of goals. The entire managerial process is concerned with accomplishing predetermined goals through planning, organising, staffing, directing and controlling. Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals.

Correct option is (A) Calculative assumptions

Planning is always done for future and future is uncertain. With the help of planning, possible changes in future are anticipated and various activities are planned in the best possible way. In this way, the risk of future uncertainties can be minimised.

(a) Function of Management Planning:

Characteristics of planning

(i) Planning focuses on achieving objectives.

(ii) Planning is a primary function of management

(iii) Planning is pervasive

(iv) Planning is continuous

(v) Planning is futuristic

(vi) Planning involves decision making.

(vii) Planning is a mental exercise.

(b) Any three limitations of planning:

(i) Planning leads to rigidity

(ii) Planning may not work in a dynamic environment

(iii) Planning reduces creativity

(iv) Planning involves huge cost

(v) Planning is a time consuming process

(vi) Planning does not guarantee success