Planning

Planning ensures that goals or objectives are clearly stated. By stating in advance what is to be done, planning provides direction for action. If goals are well defined, employees are aware of what the organization has to do and what they must do to achieve those goals.

Step Performed: Identifying alternative courses of action.
(Ms. Rajni has listed the various ways the objective can be achieved, which is the step following the setting of objectives).

Rules are considered plans (specifically Standing Plans) because they are specific statements that inform people what must or must not be done. They reflect a managerial decision that a certain action must be taken, leaving no scope for discretion.

The type of plan is a Policy.
(A policy is a general guide to thinking or decision-making. “E-transfers only” defines the boundary within which the payment decisions must be made).

No, planning may not work effectively in a dynamic environment.
Reason: The business environment is uncertain and changing (economic, political, social). Planning anticipates the future based on assumptions, but if the environment changes rapidly, the original plans may fail or become irrelevant.

The definition of planning focuses on three main aspects:

1. Setting Objectives: Deciding in advance what is to be done.
2. Time Period: It involves deciding action for a specific future period.
3. Decision Making: It involves selecting the best course of action from various alternatives.

Planning provides a path, but it is not a guarantee of success because:

• Rigidity: Managers may rely blindly on pre-decided plans even when circumstances change.
• Dynamic Environment: Unforeseen changes (policies, technology, competition) can render plans useless.
• False Security: Managers may assume that since a plan worked before, it will work again, leading to complacency.

Strategic decisions are long-term, comprehensive decisions that define the direction of the organization. Examples include:

• Determining the line of business (What products to make?).
• Choosing the target market (Who are the customers?).
• Allocating resources for growth and expansion.
• Decisions regarding mergers, acquisitions, or diversification.

This statement can be viewed from two perspectives:

• Planning Promotes Innovation (Initial Stage): Planning is a mental exercise involving intellectual thinking and brainstorming. It encourages managers to think of new, better ideas to achieve goals.
• Planning Reduces Creativity (Execution Stage): Once a plan is made by top management, middle and lower-level managers are expected to follow it strictly. They are not allowed to deviate or use their own initiative, which stifles their creativity and turns them into blind followers.

Type of Plan: Strategy.

Three Dimensions of Strategy:

1. Determining long-term objectives.
2. Adopting a particular course of action (e.g., matching competitor pricing/data).
3. Allocating resources necessary to achieve the objective.

Description	Type of Plan	Category
a. A type of plan which serves as a controlling device as well.	Budget	Single Use Plan
b. A plan based on research and analysis concerned with physical and technical tasks.	Method	Standing Plan

This is due to the Limitations of Planning. Even with a good plan, execution may fail due to:

• Planning leads to rigidity: Plans discourage flexibility and initiative at lower levels.
• Dynamic Environment: Rapid changes in economic, political, or social factors can make plans obsolete.
• Huge Costs: Planning is expensive (time and money) and sometimes the cost outweighs the benefit.
• Time Consuming: Emergency decisions cannot wait for the planning process.
• External Factors: Natural calamities, government policy changes, or competitor strategies are beyond control.

[Image of planning process flowchart]
The planning process involves the following logical steps:

1. Setting Objectives: Defining what the organization wants to achieve.
2. Developing Premises: Making assumptions about the future (market trends, inflation, etc.).
3. Identifying Alternative Courses of Action: Listing all possible ways to achieve the goal.
4. Evaluating Alternative Courses: Weighing the pros and cons of each alternative (feasibility, cost, risk).
5. Selecting an Alternative: Choosing the best plan.
6. Implementing the Plan: Putting the plan into action (allocating resources, organizing).
7. Follow-up Action: Monitoring the plan to ensure it is being implemented correctly and adjusting if necessary.

The features of planning highlighted are:

1. Planning is Pervasive: The company formed a team with “representatives from all levels of management.” This shows planning is required at all levels and in all departments.
2. Planning is Futuristic: The company realized it needs to take steps to improve its market standing “in the future” by introducing new models. Planning involves looking ahead and anticipating changes.
3. Planning is a Mental Exercise: The team will “brainstorm” to determine the steps. This highlights that planning requires application of mind, foresight, and logical thinking rather than guess work.