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Basics of Planning- Its Nature, Objectives & Components

Productivity levels directly affect the growth and success of organizations. For higher levels of productivity, proper planning is essential.

What is planning?

According to James Lundy “planning means the determination of what is to be done, how it is to be done, who is to do it, and how results are evaluated.”

Business planning is a concept that bridges the current status or position of an organisation to the future image it aspires to be/achieve. By improving the plans, organisations could help improve leadership and management as well. One can plan better by devising plans (focusing on strengths and the core morals and ideals of the organisation), defining success (the vision of where one sees the organisation in the coming years and factors driving it) and putting the plans in motion while keeping the dynamic and uncertain future in mind.

What is the nature of planning?

Planning is:

1. Flexible. Plans are made based on forecasts. Since the future is unpredictable and uncertain, plans need to be flexible enough to keep up with any kind of changes in the future.

2. Futuristic. Planning aims at meeting future events effectively and keeping the best advantages of the company in mind. The future conditions are anticipated and plans made accordingly.

3. Goal-Oriented.

Planning is purposeful and has meaning when it contributes to the achievement of predetermined goals set by the organisation.

4. Pervasive.

Planning is not exclusive to any one tier of management not to any particular department of the organisation.

5. Primary function.

Planning sets the foundation for all other functions of management which are interrelated and performed within the framework of plans that are drawn.

6. Continuous.

Plans are made for specific periods and continuously updated or changed to serve the changing needs and demands. Planning hence is a never-ending and continuous process as the new conditions and requirements keep evolving.

7. Involves choice.

Planning involves choice among various alternatives being considered or being kept in mind. The situations and environment are evaluated to choose the best-suited plan that is expected to give the most fruitful results.

Knowing the nature of planning, one might confuse it with the objectives that planning serves.

Planning aims at reducing the uncertainty of the future by anticipating the unpredictable contingencies, leading to the best economic utilisation of resources, achieving the pre-set organisational goals, bringing cooperation and coordination among various sectors of the organisation and reducing stiff competition thereby enabling growth in the organisation.

There are various components of planning (also known as planning techniques). These include:

a. Forecasting.

b. Objectives.

c. Programmes.

d. Strategies.

e. Procedures.

f. Policies.

g. Schedules.

h. Rules, and

i. Budgets.

Let us take some time to know more about what we understand by these terms.

a. Forecasting:

This refers to the prediction of future events and conditions to reduce the uncertainties surrounding management and decision making in organisations. It not only predicts and assesses the future but also provides the provisions for it that hold the organisation’s best interest at heart.

b. Objectives:

These are the end goals or the results that are aimed at by activities to be achieved. Not just the planning or activities but also the staffing, leading and controlling are aimed towards objectives. Realistic and well-defined objectives help organisations grow in a hassle-free manner.

c. Programmes:

A programme is the course of action of work that is carried out in a particular order/sequence to achieve certain objectives that are targeted.

d. Strategies:

These refer to the long term goals of the organisation and how the organisation plans on achieving them. It is a process that aims at developing an organisation’s direction while also articulating the objectives set. Konnoz and Heinz Weihrich defined strategy as “a general programme of action and deployment of resources to attain comprehensive objectives” or ” the determination of the basic long-term objectives of an enterprise “and the adoption of courses of action and allocation of resources necessary to achieve these goals.

e. Procedures:

These are plans which aim at establishing required methods of handling future anticipated/forecasted activities. They act as guides to actions by detailing the exact manner in which certain objectives or activities must be accomplished.

f. Policies:

While procedures exclude the thinking aspect and focus on the action part of planning, policies deal with the thinking part. Policies act as guides to thinking along with the actions of subordinates in organisations. The key to a good and effective policy is that it must be clearly prescribed and understandable by all.

g. Schedules:

Schedules fix a time sequence for every operation and it normally programmes a part of an action plan.

h. Rules:

Rules are the simplest component of planning which aim at spelling out specific required actions or non-actions, following no direction.

i. Budgets:

A budget may be referred to as a numbered programme which essentially is a statement of expected results expressed in a numerical term. It may be expressed in terms of labour hours, machine hours, units of products i.e any numerically measurable term or in financial terms. It compares budgetary and actual results in an organisation and helps in controlling in setting the most plausible course of action.

As we can see, even though planning sounds like a simple day-to-day task, it is intricate with many parts and aspects that we tend to not take notice of.

Stay tuned to know more about planning- the kinds of planning along with its pros and cons! Comment down below if you face any queries!


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