PLANNING

PLANNING
 The primary and most
fundamental function of
management.
 The act or process of making or
carrying out plans; specifically the
establishment of goals, policies,
and procedures for a social or
economic unit. (Merriam Webster
Dictionary)
 It is selecting the best course of
action so that the desired result
may be achieved.
 PLANNING
Nickels
 It refers to the management function that involves
anticipating future trends and determining the best
strategies and tactics to achieve organizational
objectives.
Aldag & Steams
 It is also the selection and sequential ordering of
task required to achieve an organization goal.
Koontz & O'Donnell
 Planning is deciding what will be done, who will do
it, where, when and how it will be done, and the
standards to which it will be done.
Alford & Beatt
Planning is the thinking process,the
organized foresight,the vision based on
fact and experience that is required for
intelligent action.
 PURPOSE OF PLANNING

 Provides direction.
 Minimize waste and redundancy.
 Reduces uncertainty.
 Sets the standards for controlling. .
 Promotes coordination.
 IMPORTANCE OF
PLANNING

According to G.R. Terry, “Planning is the foundation of

most successful actions of all enterprises.” An enterprise
can achieve its objectives only through systematic
planning on account of the increasing complexities of
modern business. The importance and usefulness of
planning can be understood with reference to the
following benefits.
 BENEFITS AND LIMITATIONS
OF PLANNING
BENEFITS LIMITS
 Minimize uncertainty  Influence of external
factors
 Emphasis on objectives
 Non-availability of Data
 Promotes better
coordination  People's resistance
 Facilitates to control  Time and Cost
 Improved efficiency and  Inflexible
competitive strength
 Uncertain future
 Economical operation
 Time investment
 Encourages innovation
 Corporate inertia
and creativity
 Centrally focused
 Ensure commitment
 Implementation
 Aid to business success
 Brings systematization.
 PLANNING AT VARIOUS
MANAGEMENT LEVEL

Since engineer managers could be occupying

positions in any of the various management levels, it
will be useful of them to know some aspects of
planning undertaken at different management
levels. Planning activities undertaken at various
level are as follows:

1. Top management level –Strategic Planning

2. Middle management level –intermediate planning
3. Lower management level –operational planning
 ELEMENTS OF PLANNING
1. GOAL (OBJECTIVES)
-desired outcomes for individuals,
groups or entire organizations.

2. PLANS
-documents that outline how goals
are to be accomplished.
- It describes how resources are to
be allocated and established activity
schedules.
 STRATEGIC PLANNING
The term strategic planning refers to the process
of determining the major goals of the organization
and the policies and strategies for obtaining and
using resources to achieve those goals. In strategic
planning, the whole company is considered,
specifically its objectives and current resources. The
output of strategic planning is the strategic plan
which spells out “the decision about long range goals
and the course of action to achieve these goals.”

INTERMEDIATE PLANNING (TACTICAL)

Intermediate planning refers to the process of determining the
contributions that subunits can make with allocated resources. The
intermediate plan is designed to support the strategic plan.

OPERATIONAL PLANNING
refers to the process of determining how specific task
can be best accomplished on time with available resources.
The organization and types
of planning undertaken

1. Strategic Planning –president,

general manager
2. Intermediate planning –marketing
manager, production manager, finance
manager, personnel manager
3. Operational Planning –industrial
engineering manager, factory manager,
quality control manager
 FEATURES OF PLANNING

 Planning is Goal-Oriented
 Planning is a Forward Looking Process

 Planning is a Choice Making Activity

 Planning involves decision-making

 Planning is a mental exercise

 Planning is a primary function

 Planning is Continuous Process

 Planning is all-pervasive (pervasive function)

 Planning is a dynamic process

 Goal-oriented Approach

 The features of planning can put to be a goal

oriented approach because it is directly
related with goals of organization. In the
absence of goals or targets we can not
assume about planning because within the
organization all the various activities are
done with a view to attain the primary goals
of organization. In fact in the lack of goals
there is no need to do plan towards any
activity. On the whole we can say; planning is
a goal oriented approach.
 Goal-oriented Approach

 The features of planning can put to be a goal

oriented approach because it is directly
related with goals of organization. In the
absence of goals or targets we can not
assume about planning because within the
organization all the various activities are
done with a view to attain the primary goals
of organization. In fact in the lack of goals
there is no need to do plan towards any
activity. On the whole we can say; planning is
a goal oriented approach.
 Forward Looking Process

• It is a salient feature of planning.

Planning is forward looking process
because it is directly concerned with
forecasting of future events. The purpose
of every plan is to determine the future
events with a view to bring certainty in the
present activities of the organization. Thus
we can say that planning is forward looking
process.
 Choice Making Activity

 Planning can set to be a choice making activity

because planning provides a large number of
alternative courses to an organization to do a
various activities in the most appropriate
manner. It is matter of fact that an action may
be performed by many ways but there is
particular way to perform an action which is
most appropriate to organization. Planning
provides these alternatives to organization to
perform its various actions in the most proper
way. Thus, planning is a choice making
activity.
 Involves decision
making

Planning is essentially decision making. Planning is a

choice activity as the planning process involves finding the
alternatives and the selection of the best. Thus decision
making is the cardinal part of planning.
 Mental Exercise

Planning is a mental activity. Planning is

not a simple process. It is an intellectual
exercise and involves thinking and
forethought on the part of the manager.
 Primary Function

• The feature of planning refers to primary function

because planning is the first task of management.
All other functions of management such as
organizing, staffing, directing & controlling are done
after completing the planning. Infact, whenever we
are going to do any event or activity at first we make
plan & accordingly we will perform to attain result
oriented work. Thus we can say to plan as primary
function.
 Planning as a
Continuous Process

• Planning can put to be a continuous process

because it is not an event which is concerned with
the point of time. It is needed every walk of life of
an organization. Infact, in the absence of planning
any organization cannot able to take even one
step properly. Thus, it is clear that planning is a
continuous process.
 Pervasive Function

 It is a unique feature of planning. Planning is a

pervasive function because it can universally
applicable at all the levels of management
either it may be like top level of management,
middle level of management or lower level of
management. In fact planning is the function of
all managers. So that, planning is a pervasive
function.
 Dynamic Process
Planning is flexible. Planning is a dynamic
process capable of adjustments in accordance
with the needs and requirements of the situations.
Thus planning has to be flexible and cannot be
rigid.
 Planning can be treated as a dynamic process

because it is affected if any changes are made in

the internal & external environment of organization.
Such as if the goals of organization will change
then it also affects the plans of organization.
Similarly in external environment if any changes
are made in the government policy, regarding
business then it also affects the plans of
organization. Therefore, it is clear that planning
can put to be as a dynamic process.
 REQUIREMENTS OF A
GOOD PLAN
An effective plan should have the following features:

(a) Clear objective

The purpose of plans and their components is to
develop and facilitate the realization of organizational
objectives. The statement on objectives should be clear,
concise, definite and accurate. It should not be colored by
bias resulting from emphasis on personal objectives.

(b) Proper understanding

A good plan is one which is well understood by those
who have to execute it. It must be based on sound
assumptions and sound reasoning.
 (c) Flexible
The principle of flexibility states that
management should be able to change an existing
plan because of change in environment without\
undue extra cost or delay so that activities keep moving
towards the established goals. Thus, a good plan should be flexible
to accommodate future uncertainties.

(d) Stable
The principle of stability states that the basic feature of the plan
should not be discarded or modified because of changes in external
factors such as population trends, technological developments, or
unemployment.

(e) Comprehensive
A plan is said to be comprehensive when it covers each and every
aspect of business. It should integrate the various administrative plans
so that the whole organization operates at peak efficiency

. (f) Economical
A plan is said to be good, if it is as economical as
possible,depending upon the resources available with the
organization.
PLANNING PROCESS
 The process of planning consists of
various steps depending on the management
level that performs the planning task.There are
seven essential steps in operating planning process.

Generally, planning involves the following:

1- Setting Goals
Establish the targets for the short and long range future.
For example:
- 25 percent growth over last year sales in present financial year.
- To increase market share by 5 percent in next five years.

2- Analyzing and evaluating the environment

Analyze the present position and resources available to
achieve objectives.
- Where are we now?
- What are the limitations in the environment?
- What resources do we have?
- Are there any external factors that can influence the
objectives and there accomplishment?
 3- Determining Alternatives
Construct a list of possible courses
of action that will lead you to your goal.

4- Evaluating the alternative

Listing and considering the various advantages and
disadvantages of each of your possible course of action

5- Selecting the Best solution

Selecting the course of action that has the most
advantages and the fewest serious disadvantages.

6- Implementing the Plan

Determine who will be involved, what resources will be
assigned how the plan will be evaluated, and reporting
procedures.

7- Controlling and evaluating the Results

Making certain that the plan is going according to
expectations and making necessary adjustments.
 Setting Organizational,Divisional
or Unit Goals

The first task of engineer manager is to

provide a sense of direction to his firm, to his
division, or to his unit. The setting of goals
provide an answer to the said concern. If
everybody in the firm is aware of the goals, there
is a big chance that everybody will contribute his
share in the realization of such goals.
 Developing Strategies or
Tactics to reach Goals.
After determining the goals, the
next task is to devise some
measures to realize them. The ways
to realize the goals are called
strategies and these will be concern
of top management. A strategy may
be defined as a course of action
aimed to ensuring that the
organization will achieve its
objectives. A tactic is a short term
action taken by management to
adjust to negative internal or external
influences.
 Determining the Sources
Needed

When particular sets of strategies or

tactics have been devised, the engineer
manager will, then, determine the
human and non human resources
required by such strategies or tactics.
The quality and quantity of resources
needed must be correctly determined.
Too much resources in terms of either
quality or quantity will be wasteful.
 Setting Standard

When actual performance,

corrections may be made
or reinforcements given. A
standard may be defined
as a quantitative or
qualitative measuring
device designed to help
monitor the performance of
people, capital goods, or
processes.
TYPES OF PLANNING
 ACTIVITY COVERED
Corporate Planning

 Determines long-term objectives of an organization

as whole
 Generates plans to achieve these objectives
 Future orientated
 Integrated

Functional planning

 Undertaken for sub functions within each major

functions
 Derived from corporate planning.
 Segmental
 TIME (PERIOD)
Depends on the type of the business and structure
of the organization.

Long Term
 Strategic in nature.

 Involves generally 3-5 years.

 It relates to matters like new product ,product

diversification .

Short Term
• Short term planning typically covers time frames of
less than one year in order to assist their company in
moving gradually toward its longer term.
Examples are the skills of the employees and their attitudes. The
condition of production equipment or product quality problems are
also short-term concerns.
 APPROACH

PROACTIVE PLANNING
 Designing suitable course of action in anticipation

of likely changes in relevant environment.

 To take decision in advance.

Eg : Emergency organizations

REACTIVE PLANNING
 Reactive planning is the process whereby future

action is dictated as a response to whatever has

already, or is now occurring.
Eg. Hotel Manager.
 DEGREE OF
FORMALIZATION

FORMAL PLANNING
 It is a structured plan.
 It has some procedure to follow.

 Written record is followed in formal plan.

Eg. Five year plan of a country.

INFORMAL PLANNING
 It is unstructured plan.
 It does not have any procedure to follow.
 No record is maintained for future purpose.
 IMPORTANCE OF
CONTENTS
STRATEGIC PLANNING
 It sets future directions of the organization in which it wants to
proceed in future.
 It involves a time horizon of more than one year and for most of

the organization it ranges between 3 and 5 years.

 Strategic plans are generally developed by top level management.

Eg. diversification of business into new lines, planned grown rate

in sales.

OPERATIONAL
 Operational plans are developed to determine the steps necessary
for achieving tactical goals..
 They are used as a guide for day to day operation by department
managers.
 These plans may cover a time frame of few months, weeks or
even a few days.
 MAKING PLANNING
EFFECTIVE

Planning is done so that some desired results

may be achieved. At times, however, failure in
planning occurs.

Planning may be made successful if the following are

observed:

1. Recognize the planning barriers

2. Use of aids to planning
The planning Barriers are:

1. Manager’s inability to plan

2. Improper planning process
3. Lack of commitment to the planning process
4. Improper information
5. Focusing on the present at the expense of the future
6. Too much reliance on the planning department
7. Concentrating only on the controllable variable