Planning

 Chapter – 2

Planning

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Concept of Planning

Planning is a strategic process that includes goal-setting, figuring out what has to be done to get there, and wisely allocating resources. It acts as a roadmap, guiding people and organizations toward intended results by foreseeing obstacles and opportunities. A vision for the future, a methodical approach to decision-making, and a thorough awareness of the current situation are all necessary for effective planning. Planning helps to increase productivity, lower uncertainty, and better align efforts with long-term goals by dissecting difficult activities into manageable pieces. In the end, it encourages a proactive mentality that makes it possible to better prepare for and adjust to changing circumstances.

According to M.E Harley,” Planning is deciding in advance what is to be done. It involves the selection of objectives, Policies, Procedures and Programmes from among alternatives.”

According to Koontz and O’ Donnell,” Planning is deciding in advance what to do, how to do it, when to do it and who is to do it.” Planning bridges the gap between where we are and where we want to go. It makes possible things to occur which would not otherwise occur”.

 

Nature/ Characteristics of Planning

The nature of planning encompasses several key characteristics that define its role and importance in achieving objectives:

• Goal-Oriented: Planning is by its very nature geared toward reaching particular objectives or results. It entails defining specific, doable goals and the activities required to achieve them.
• Systematic: Planning employs an organized methodology that includes methodical task organization and analysis. It necessitates a methodical procedure that involves evaluating the situation as it is, projecting potential outcomes, and creating a roadmap for success.
• Future-Focused: Planning is essentially about being ready for the future, even though it begins with the present. It entails anticipating possible obstacles and openings and formulating plans to successfully negotiate them.
• Dynamic: The process of planning is fluid and adaptive; it is not static. Plans may need to be modified when circumstances shift and new information becomes available in order to stay applicable and efficient.
• Resource Allocation: Time, money, and personnel are just a few of the resources that must be strategically allocated in order for planning to be effective. It guarantees that resources are allocated effectively to assist in achieving objectives.
• Making decisions: Planning aids in making decisions by offering a structure for weighing possibilities and selecting the best course of action. Setting priorities for work and making wise decisions are aided by it.
• Coordination: By coordinating efforts and making sure that every action advances the shared goals, it promotes coordination across various organizational components or between people.
• Risk Management: Planning entails recognizing possible hazards and creating countermeasures. It equips interested parties to deal with ambiguities and unanticipated circumstances.
• Multidisciplinary - Planning is inherently multidisciplinary, involving the integration of various fields to address complex issues and achieve holistic solutions.

 

Scope of Planning

The scope of planning is broad and encompasses various dimensions depending on the context in which it is applied. Generally, the scope of planning can be categorized into several key areas:

1. Strategic Scope

·         Vision and Mission Setting: Choosing an organization's overarching objectives and long-term course.

·         Goal formulation: Choosing overarching goals that complement the mission of the company.

·         Resource Allocation: Selecting the most effective way to use human, financial, and technology resources in order to accomplish strategic objectives.

·         Risk management: Recognizing and preparing for possible hazards and unforeseen circumstances that can affect long-term success.

2. Operational Scope

·         Task and Activity Planning: Defining the precise tasks and activities needed to meet immediate goals.

·         Process Optimization: Streamlining processes to improve efficiency and effectiveness.

·         Scheduling: Establishing deadlines for finishing assignments and projects.

·         Resource management: Making certain that the required resources such as staff and equipment—are accessible and used effectively.

3. Financial Scope

• Budgeting: Developing financial plans to manage income and expenditures effectively.
• Financial Forecasting: Predicting future financial conditions and performance.
• Cost Control: Monitoring and controlling costs to stay within budgetary limits.

4. Human Resource Scope

• Workforce Planning: Identifying staffing needs and planning for recruitment, training, and development.
• Performance Management: Setting performance goals and evaluating employee performance.

5. Project Scope

• Project Planning: Defining the scope, objectives, and deliverables of individual projects.
• Resource Allocation: Assigning resources and responsibilities for project tasks.
• Timeline Development: Creating detailed schedules and milestones for project completion.

6. Contingency Planning

• Emergency Response: Developing plans to respond to unforeseen events or crises.
• Backup Plans: Creating alternative strategies to address potential disruptions.

7. Compliance and Regulatory Scope

• Regulatory Adherence: Ensuring that planning activities comply with relevant laws and regulations.
• Standards and Guidelines: Following industry standards and best practices.

8. Strategic Alignment

• Coordination: Ensuring that all planning activities are aligned with the overall strategic goals of the organization.
• Integration: Integrating various planning efforts across different departments or functions to achieve cohesive outcomes.

 

Importance of Planning

Because it establishes the foundation for accomplishing both short- and long-term objectives, planning is essential. Planning gives direction and concentration by methodically laying out goals and the processes required to achieve them. This helps people and organizations use resources effectively and steer clear of unneeded pitfalls. It facilitates lowering uncertainty and enhancing decision-making by foreseeing possible obstacles and coming up with proactive plans to deal with them. In addition to guaranteeing that efforts are coordinated, efficient planning also increases team member collaboration and productivity. Furthermore, it facilitates better-informed risk management, giving stakeholders more flexibility to adjust to changes and unforeseen events. Planning is essentially the process of turning abstract goals into concrete plans, which is why it is essential to both effective execution and long-term development. Following are some points justifying the same

• Direction and Focus: It provides a clear roadmap for achieving goals, ensuring that efforts are directed toward specific objectives. This focus helps individuals and organizations prioritize activities and make strategic decisions.
• Resource Optimization: By outlining what is needed and how it will be used, planning ensures that resources—such as time, money, and personnel—are allocated effectively and efficiently, minimizing waste and maximizing productivity.
• Risk Management: Planning allows for the identification of potential risks and challenges. By anticipating these issues, it enables the development of contingency strategies to mitigate adverse impacts and respond to unforeseen events.
• Improved Coordination: It fosters better coordination among team members and departments by aligning their activities and objectives. This alignment enhances teamwork and ensures that everyone is working toward common goals.
• Enhanced Decision-Making: With a clear plan in place, decision-making becomes more informed and strategic. Planning provides a framework for evaluating options and making choices that align with long-term objectives.
• Progress Measurement: Planning includes setting benchmarks and milestones, which allows for the monitoring and evaluation of progress. This measurement helps in tracking achievements and making necessary adjustments to stay on course.
• Future Preparedness: It helps in preparing for future scenarios by forecasting trends and potential changes. This foresight enables proactive adaptation to evolving conditions and market dynamics.

Principles of Planning

According to Merriam-Webster dictionary, principles are “general or basic truth on which other truths or theories can be base”. A number of fundamental principles have been devised over the year for guiding managers/ teams undertaking planning. These principles serve as guidelines following which planning becomes effective and efficient. Some of these principles are discussed as under,

a)      Principle of Contribution to Goals: An organization is having a set of predefined goals to achieve. These goals/ objectives are time bound and interlinked towards the vision and mission of the organization. All types of plans are prepared to achieve the goals/objectives of the organization. Primary/ basic and derivative/ supportive plans are prepared to contribute towards the goal achievement of the organization. Planning is used as a primary tool to achieve the organizational goal.

b)      The Primacy Principle: Planning is the basic to all managerial function. It formulates a base on which other managerial function could be exercise. It provided basic support to all other managerial function and tasks. Before pondering upon other managerial functions a manager have to plan keeping in mind the vision, mission and objectives of the organization. An optimal planning leads to efficient result.

c)      The Planning Premise Principle: Planning premises involves the assumption of future events. The behaviour of certain variables is forecasted for constituting planning premises. This principle advocates for deciding the applicability of plan through lay down the boundary or limitations within which the plan has to be implemented. One of the basic reasons behind failure of plan may be related to the poorly developed planning premise.

d)     The Alternatives Principle: There could be many alternative ways to achieve goals/ objectives of the organization. The alternative that ensures timely goal completion at comparative less cost and risk should be chosen. In planning many alternatives are developed and out of them an alternative is selected one which will help in achieving desired business goals. In the absence of various alternatives proper planning will be difficult.

e)      The Timing Principle: Plans can contribute effectively to the attainment of business goals if they are property timed. The effectiveness and efficiency of plans are directly proportional to its timing. Planning should be formed and exercised within a specific time frame, without it the premise, policies and result will not be effective.

f)       The Flexibility Principle: The plans should be having ability to adjust according to the changing environmental conditions. Flexibility of a plan addresses unforeseen urgencies and contingencies. As a sudden change may upset the earlier commitments, cost and requirements, therefore the plans should be adjusted to incorporate new situations. However, the dangers of flexibility should also be kept in mind while deciding the intensity of flexibility.

g)      Principle of Commitment: To fulfill the requirements of objectives, goals or decision the planning must be exercised within a requisite frame. It also requires the commitment of the team of managers involved in formulation and implementation of plan. Without commitment of team, time and resources the plan can never deliver right kind of result.

h)      Principle of Competitive Strategies: To enjoy distinctive competitive advantage managers have to take into account the steps, strategies and planning undertaken by core competitors. This will help the organization to remain at par or ahead with the competitors. The planning should be formed by taking into consideration the probable steps taken by competitors in the similar situation.

i)        The Policy Framework Principle – The task of planning should be exercised following the basic policies of the organization. The policy guides the decision making process of the managers who are responsible to formulate plans, hence they should be understood properly before initiating the task of planning.

j)        The principle of Periodic Change- According to this principle the planning should be properly reviewed at periodic interval to find out  whether they are intending desired result or not. If not, then plans should be adjusted according to the new requirements or even replaced by a new one. There should be a built in flexibility in plan to adjust itself according to the new changes and requirements.  

 

Limitations of Planning

Planning is crucial, but it has a few built-in drawbacks that may reduce its efficacy. One major drawback is the possibility of rigidity; in situations where things change quickly, it is easy for comprehensive plans to become out of date if they are not routinely examined and revised. An organization's capacity to adjust to unanticipated opportunities or dangers may be hampered by this rigidity. Furthermore, planning frequently makes assumptions about the future, which aren't necessarily reliable or realistic. In the event that the expected situations come to pass, this could result in misaligned strategy. In addition, planning can need a lot of time and resources, which could take focus away from urgent operational requirements. Another risk is placing too much emphasis on planning at the expense of execution, which can cause action and decision-making to be delayed. Last but not least, human elements that can impact the execution and effectiveness of planned initiatives, including company culture or employee resistance, may not be properly taken into consideration in planning. In summary, although planning is essential, it needs to be flexible and adaptable in order to properly handle these constraints.

 

 

 

 

 

 

 

 

Lack of Accurate & Reliable Data: Planning is assumed to be a futuristic activity. It is based on various forecasted figures. No planning team/ managers can predict the future events or data accurately therefore the accuracy and reliability of forecasted data is a question mark. If the data on which planning is based are not reliable then the resultant plan will also become unreliable and hence their practical utility is sometimes reduced.

Time Consuming and Expensive Process: Planning is a time consuming process. Determination of planning premise, collection of data, discovery of alternatives and their respective evaluation is costly and time consuming. Under certain circumstances an urgent action is needed then one cannot wait for the planning process to complete also actions on various operations may be delayed because of this. Sometimes expenses are so prohibitive that small concerns cannot afford it. More the time involved greater is the amount of expenditure.

External Factors may Reduce Utility of Plan: Besides internal factors, the uncontrollable external factors too adversely affect the plan and planning process. Such factors may be related to economic, social, political, technological, environmental & legal aspects. These factors may impact the nature of demand in market, consumption pattern of consumer and the nature of supplies and operations. Hence, the plans formulated to solve a distinct problem may not yield desired results.

Sudden Emergencies: Sometimes organization faces emergencies and to address them quick planning / response is required. However, planning results in rigidity in internal structure and operations as a result of that managerial workflow becomes inflexible resulting in a poor work performance. It may cast a restrictive impact on work freedom and initiative taking attitude of employees.

False senses of Security – Generally organization make strategic, tactical and operational plans to face challenges and uncertainties that may arise in future. Once the plans are formulated organization feel that it will automatically be implemented and result into effective and efficient goal completion. However environmental factors cause variation in the goals as well as result and such happenings may cause planning to be ineffective.

Resistance to Change: Resistance to change is commonly experienced phenomenon in the business world. Fear of failure, less confidence, lack of ability to plan & uncertainties are some common reasons to it. Generally people do not like any change, hence their passive outlook to new ideas becomes a limitation to planning. Sometimes the personal interest also becomes predominant factor offering resistance to change. Lack of ability to plan

 

Planning Premises

The fundamental presumptions that guide the planning process are known as planning premises. Planning entails selecting a course of action based on wildly speculative assumptions about what is likely to occur in the future. The postulates are these presumptions or premises. A manager tries to base his current decisions on projections about what is likely to happen in the future. If the premises or assumptions turn out to be true as previously assumed, judgments will be appropriate; if not, plans will need to be adjusted. These kinds of presumptions provide the foundation for planning.

1. Internal Premises

·         Weaknesses and Strengths of the Organization: Presumptions on the assets, competencies, and internal workings of the company. The presence of technology infrastructure or the availability of skilled staff are two examples.

·         Corporate Culture and Structure: Presumptions about management styles, hierarchies, and organizational cultures that may have an impact on planning.

2. External Premises

·         Economic Conditions: Presumptions on variables that can impact business operations, such as interest rates, inflation rates, and economic growth.

·         Market Trends: Presumptions about consumer preferences, competitive dynamics, and industry trends.

·         Regulatory Environment: Presumptions on current and prospective laws, rules, and policies that could have an effect on the operations of the company.

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3. Technological Premises

·         Technological Advancements: Presumptions about upcoming breakthroughs and advancements that may have an impact on operations or open up new opportunities.

·         Technology Adoption: Predictions on the rate at which new technologies will be incorporated into the company or sector.

4. Social and Demographic Premises

·         Population Trends: Presumptions on demographic shifts that may have an impact on labor supply and market demand, such as population growth, age distribution, and urbanization.

·         Social Attitudes: Presumptions about changing cultural trends and social attitudes that may have an effect on how customers behave or how businesses operate

5. Political Premises

• Government Stability: Assumptions about the stability of the political environment and its impact on business operations.
• Policy Changes: Assumptions regarding potential changes in government policies, taxation, and trade regulations.

6. Environmental Premises

·         Environmental Conditions: Presumptions on aspects of the environment that may have an impact on operations, such as resource availability, climate change, and environmental regulations.

·         Sustainability Trends: Presumptions about how sustainability and environmental responsibility are becoming more and more important in corporate operations.

7. Competitive Premises

·         Competitor Actions: Presumptions on competitors' tactics, advantages, disadvantages, and potential effects on market dynamics.

·         Market positioning: Presumptions regarding how an organization's strategy will be impacted by its position in relation to rivals.

 

 

8. Financial Premises

·         Funding Availability: Presumptions regarding the cost of capital, the state of the economy, and the availability of financial resources.

·         Revenue Projections: Presumptions about anticipated sources of income and financial outcomes.

 

Planning Process

 

Planning process involves the setting up of objectives/ need and subsequent allocation of resources to achieve the stated objectives or to arrive at a solution. Planning determines the future course of action and paves way for utilizing various resources in a best possible way. It is a combination of information handling, decision making and control systems based on information inputs, outputs and a feedback loop.

 

 

 

 

 

 

 

 

 

 

 

 

 

Steps in Planning Process

Following are the important steps in the process of planning

• Recognizing Need for Planning: The first step in planning process is the awareness of business opportunity/ identification of problem and the need for taking action. Present and future opportunities must be identified and recorded so that planning may be undertaken for them. The environmental trend should also be visualized and matched properly before recognizing the need for planning. Problem or goals must be stated in measurable terms along with the key areas that are being impacted by the problem identified..
• Gathering Relevant Information: Before actual planning is initiated relevant information, facts and figures with respect to the problem identified (in step no 1) are collected. All information relating to key stakeholders, environment, operations, resources and the affected areas in the business should be collected in detail. The collected facts and figures should be clear and has to be expressed in measurable terms keeping in mind the urgency of problem and its impact.
• Laying Down Objectives: In this step the basic objectives behind the planning is chalked out. These are the time bound goals which the management tries to achieve, they serves as a guidelines for effective and efficient planning at different levels. Objectives should always be clear and measurable and the organizational resources and energies are used judiciously to achieve these objectives
• Determining Planning Premises: Planning is an exercised conducted within an uncertain future framework. Though nothing may be certain but still certain assumptions will have to be made to lay down the boundary or limitations within which the plan has to be implemented. Forecasts are essential for planning even if all may not prove correct. Planning premises involves the assumption of future events. The behaviour of certain variables is forecasted for constituting planning premises.
• Discovering Alternative Courses of Action/ Action Plans: The next step in planning is discovering various ways or alternatives with the help of which the problem identified in (step no 1) could be solved. The discovery of alternative solutions depends on foresight, ingenuity, common sense and imagination of the team involved in planning process. While discovering the alternatives the limiting factors (that comes in the way of goal accomplishment) and the planning premises must be taken in to considerations. The most common problem in this step is attributed to the multiplicity of alternative courses of action and inability of the planning team to limit the number of alternative solutions. However, the team can go for a pilot study or preliminary examination to limit the possible alternatives.
• Selection and Evaluation of Action/ Action Plans: After discovery of different courses of action, the next step will be to evaluation of those courses of actions to select best option out of several good options. There are a number of ways of doing a thing correctly, the planer should study all the alternatives and then a final selection should be made. Best results will be achieved only when best way of doing a work is selected. Corresponding to each discovered alternative various parameters will be weighed against each other like cost, risk involved, benefits, applicability, feasibility, genuinity, attainability, practicality etc. A course of action may seems to be suitable but it may involve huge investments and other resources, therefore the selection of the alternative solution/ course of action should be made as per requirements and objectives keeping in mind the organizational resources.
• Development of Secondary/ Derivative Plans: Once a main plan is chosen and formulated then a number of supportive plans are required from each segment. Such supportive plans are required for coordination of different phase in the implementation process. While formulating the supportive plan the subordination of objectives of the plans should be kept in mind. For example, once production plan is decided then a number of plans for procurement of raw materials, purchase of plant and equipment, recruitment of personnel will be required. All secondary plans will be a part of the main plan.
• Implementation of Plans: The last step in planning process is the implementation of the paln. The planning should be put into action so that overall objective of business objectives may be achieved. Before implementation proper communication should be made to all the stakeholders, this will help in operationalization and institutionalization of the plan. The implementation of plan will require establishment of policies, procedures, standards and budgets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plans on the Basis of Time

On the basis of time plans can be classified into following types

·         Long term plans – Long terms are also known as strategic plans, these plans are generally made by top level management. It is prepared generally for a period of 5 years or more. The length of the period varies from one concern to another depending upon the nature of the business, the risks and uncertainties, government control; etc. they care concerned with the formulation of long-term goals of enterprise and the determination of the ways and means of achieving those goals. Such plans define the direction of movement of the organization and include long term commitment of manpower and resources. Long term planning defines competitive strengths of the company to a larger extent.

·         Medium term plans- The span of medium term plans ranges from 1year to 5 years. Such plans are department as well as organization oriented. Mostly these plans are being prepared by middle level management under the guidance of top level management keeping in mind the vision, mission and goals of organization. Short term problems are addressed more pertinently by the medium term plans. They are tactical in nature and are more concerned with distribution of resources as per requirements.

·         Short term plans – These plans are known as functional or operational plans. The span of these plans ranges from 1 day to 1 year. Such plans are concerned with day to day problems and operations and try to fix it to improve the functional/ operational efficiency. These plans are mostly formulated by lower level management under the guidance of middle and top level

 

Plans on the Basis of Managerial Levels

On the basis of managerial levels can be classified into following types

·         Strategic plans – Strategic planning is long term planning with the help of which the managers define mission and vision of the organization to achieve long term goals and objectives of organization. It is formed by top level management having applicability equal to or more than 5 years. It serves as a collective roadmap for the organization. Strategic plans focus on combination of the efforts of the entire stakeholder working towards attainment of common goals. It defines where organization is along with the plan of progress.

·         Tactical plans- Tactical plans are mostly related to middle level management. It involves the fragmentation of strategic plan into medium term plans having applicability up to 5 years. These plans used clearly defined SMART goals to achieve predefined targets. A tactical plan defines the way an organization achieves “Strategic Plan”. In general the scope of tactical plan is limited to departments. Tactical plans are intended to meet any changes in internal organization and external environment. For instance, difficulty in procuring raw materials, changes in prices of products, unexpected moves by the competitors and other unforeseen situations are met with the help of tactical plans.

·         Operational plans – Operational plans are formulated by lower level management under the policy guidelines. These plans are sometimes referred as functional or short term plans. They are generally concerned with daily problem and day to day operations. The applicability of these planes ranges from 1 day to 1 year. These plans are routine in nature. Operational plans create a detailed roadmap to achieve tactical and strategic plans. These are network of team based activities to achieve effectiveness and efficiency of the activities.

Plans on the Basis of Use

1. Multi Use Plans:

Multi use plans are also known as standing or repeated-use plans. These plans are generally strategic in nature and are to be used repeatedly (over and over again) over a long period of time for tackling frequently recurring problems and issues. They give ready-made answers to issues which occur again and again. Standing plans serve as guideline for managerial decision-making and actions to reoccurring problems. Multi use plans facilitate control, coordination and culmination of efforts through uniformity of actions. They make managerial decisions and actions easy and increase managerial efficiency, as they offer standard procedures for tackling similar and frequently recurring problems and issues.

Multi Use Plans Include:

(a)   Objectives – In the words of Koontz and O' Donnell, "Management terminology, objectives are the end-points of a management programme whether stated in general or specific terms". Objectives can be defined as the measurable actions and specific steps taken by organization to achieve its objectives. Objectives are prerequisite to planning and it influences the philosophy of management and managerial actions.

·      Objectives have a hierarchy

·      Objectives form a network

·      Objectives are both long range and short range

·      Business objectives are verifiable

·      Business objectives may be specific or general

·      Objectives may be tangible or intangible

·      Objectives have priority

·      Objectives may clash with one other

(b)   Policies – Policies are the written guidelines that guide decision making inside the organization. In the words of George R, Terry, "Policy is a verbal, written or implied overall guide setting up boundaries that supply the general limits and directions in which the managerial action will take place". These are clear guidelines that influence all major decisions inside the organization within the planning premise or organizational boundaries.

(c)    Procedure- According to Koontz and O’Donnell “Policies are general statements or undertakings which guide or channel thinking in decision-making of subordinates.” It could be treated as an approved, established and unique method to carry out a task. Every time a particular task is repeated the procedure is repeated. Once formulated they stay consistent and serves as a single point reference.

(d)   Rules – Rules defines what to do and what to not in a specific situations. They are always official in nature and serves as principles that guide or control actions of employees. Rules are a plan that lay down a required course of action with respect to a given situation. In other words, rules are established principles for carrying out the activities in a systematic manner.

(e)    Strategies – In the words of A.D. Chandler, "Strategy is the determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources to carry out these goals". Strategies are action plans adopted by organization to achieve long term objectives of organization. It could also be treated as attaching resources to the plans to achieve specific goals. They redefine the move of organization and prepare management to respond any change in environment effectively and efficiently.

 

 

Single Use Plans

These plans are also known as ad hoc plans, non-recurring, specific or one time plan. These are very specific in nature and vary according to the nature of the situations. The utility of single use plan is over once the objective (for which plan has been made) is achieved. One cannot use these plans repeatedly as they are project oriented as well as result oriented.

Single use plans include

(a)    Methods - A method is a specified or prescribed process, or manner or the way in which a particular task or operation is performed. It can also be treated as regular manner of doing anything. It is scientific tool following with daily as well as complex tasks are carried out. These are systematic way of doing a task leading to the standardization and efficiency. The methods of performing a task vary from one work to another also it avoids confusion.

(b)   Schedules – It is a plan highlighting the time table of tasks. It takes into consideration the starting point, end date, sequence and resource allocated to the specific task. The schedule has to be simple, clear, realistic and achievable. The programmes are expressed into a meaningful sequence with the help of a schedule. It prioritizes the work, processing time and delivery part. Schedules are the dates and timings fixed for completing the programmed activities.

(c)    Budget – According to The Chartered Institute of Management Accountants (CIMA), London budget is “A plan expressed in money. It is prepared and approved prior to the budget period and may show income, expenditure and the capital employed. May be drawn up showing incremental effects on former budgeted and actual figures, or be compiled by zero-based budgeting”. Budgets are predetermined expenditure schedule for a fixed future period of time. It is an anticipated cost schedule including probable cost requirement and outflow of cash. A budget acts as a planning and controlling aid.

(d)   Project – A project is a non-reoccurring, time bound plan of interrelated and interdependent tasks required to achieve a specific goals. A project is having clearly identified initiation and termination points. It determines how a single task or programme functions. In simple words a project is an individual part of a general programme. In other words, it is part of the job that is required to be done in connection with a general programme.

(e)    Programmes – Programmes are the concrete scheme of actions to realize the organizational objectives through implementations of policies. They are the specific set of project arranged in a coordinated and networked manner to achieve organizational objectives. In another words it is summary of who, what and how of organizational objectives. Different departmental programmes integrates together to achieve organizational objectives

 

Plans on the Basis of Functions

On the basis of important functional area present inside organization plans are classified into

a)      Financial Plan – Financial plan are also known as cash plan. These are related to finance. These plans are related to arrangement, use and disbursement of finance. These plans are mostly predefined and could be expressed in terms of credit policy, dividend policy, capital structure, expenditure plan etc.

b)      Non-Financial Plan - Non-financial plan are also known as non-cash plan. These plans are mostly related to the physical resources etc. It may be noted that non-financial plans are equally important as compared to the financial plans and are related to quality improvement. Taxes planning, plans related to consumers, TQM, BPR etc. are some examples of non-financial plans.

c)      HR Plan – These plans are related to employees (Human Resource). Attraction, retention, nurturing, training and development, career planning, succession planning, compensation management, grievance redressal of employees etc. are some important dimensions of HR plans. The main objectives of HR plans are to ensure right candidate at right time and at right place to ensure organizational productivity and efficiency.

d)     Marketing Plan – Marketing plan are related to product, price, place and promotions etc., they facilitate effective and efficient transfer of goods, services and information from producer to consumer. It is sum total of a lot of sub plans that are required to implement the marketing strategy to fulfill the marketing goals of an organization.

e)      IT Plan – IT plan are related to the information system inside the organization. They rely heavily on hardware, software and approach of management. Information collection, cleaning, feeding, analysis are some key areas related to IT Plan. They are inclined toward the informational need of the organization.

 

Plans on the Basis of Approach

On the basis of managerial approach plans are categorized into following category

a)      Proactive Plan – These plans are related to future i.e. management take an initiative to explore the conditions that may hamper the organizational prospects in future and plan to handle them well in advance. These plans are also known as future oriented plans, carried out in present. The success of proactive plans depends on how accurate the future happenings are predicted. These plans not only help in creation of a future state but simultaneously help in their control also.

b)     Reactive Plan – Reactive plans are also known as past oriented plans based on feedback. These plans attempt to study the past happening and conditions along with the process used for tackling them effectively and then attempts to make plans with respect to an objective or event. These plans are always triggered on account of an event that has already happened. In this case management is having a data set of past happening that may help them in their future plans.   

 

Other Classifications of Plans

a)      Formal Plans & Informal Plans: Formal plans are plans which are expressed in black and white (i.e., put on paper). In other words formal plans are plans which are specified in writing having specific objectives to be achieved. The steps to be taken to achieve those objectives are systematic and rational. These plans are based on systematic analysis of information and other related environmental conditions and are mostly adopted by medium and large organization.

An informal plan does not follow a specific sequence or pattern. They are the output of thinking/ analysis by some individuals of a concern. These plans are mostly adopted by small and unstructured organizations. These plans are based on memory, intuition, and gut feeling of an individual rather than a careful and systematic analysis of information and other related environmental conditions.

b)      Administrative plans & Operative plans: Administrative plans are plans which determine the basis of action for the whole organization. They define mission, vision and long term objectives of the organization. They also define the functional frame and role of departments in achievement of organizational objectives. They are formulated by top level/ middle level management and serves as guidelines to operative plans.

Operative plans are plans which are concerned with actual execution of day-to-day operations. These are short term in nature. They are prepared by the lower level of management and extend support to long term plans. Preparation of sales programme, planning of production activities, etc. are some common examples of operative plans.

 

Strategic Planning

A thorough process known as "strategic planning" establishes the long-term course of an organization and provides the structure necessary to accomplish its main objectives. To guide the organization toward its intended future state, it entails creating a vision and mission statement, selecting strategic goals, and creating workable strategies. Analyzing the internal and external environments to identify opportunities, threats, strengths, and weaknesses is a common step in this approach. Organizations can attain sustained growth and traverse intricate market dynamics by coordinating their resources, talents, and efforts with their strategic aims. Maintaining a competitive edge, making well-informed judgments, and establishing clear priorities all depend on strategic planning. Additionally, it guarantees that all organizational activities are cogently focused on common objectives, promoting long-term success and adaptability in a corporate environment that is changing quickly.

Features of Strategic Planning

 

Strategic planning is a vital process for guiding an organization toward long-term success and sustainability. Its salient features include

1. Vision and Mission Statements

• Vision: Defines the aspirational long-term goal of the organization, outlining what it aims to achieve in the future.
• Mission: Articulates the organization’s purpose and primary objectives, providing a framework for decision-making and goal-setting.

2. Environmental Analysis

• SWOT Analysis: Involves assessing internal strengths and weaknesses, and external opportunities and threats.
• PESTEL Analysis: Examines external factors such as Political, Economic, Social, Technological, Environmental, and Legal influences that could impact the organization.

3. Strategic Objectives

• Goal Setting: Establishes specific, measurable, achievable, relevant, and time-bound (SMART) objectives that guide the organization’s strategic efforts.
• Prioritization: Focuses on key areas that will drive the organization’s success and competitive advantage.

4. Action Plans and Implementation

• Tactical Plans: Develops detailed action plans and initiatives to achieve strategic objectives.
• Resource Allocation: Determines how resources such as finance, personnel, and technology will be distributed to support strategic goals.

5. Alignment and Integration

• Consistency: Ensures that all levels of the organization’s activities and plans are aligned with the strategic vision and objectives.
• Coordination: Integrates various departments and functions to work towards common goals.