Plannning and Types of planning

Prestige Institute Of Management &Research ,Indore

Presentation On

Type Of Planning,

Its advantages

&Limitations

Submitted to: Submitted by:

Dr. Rajeev Bhatnagar Deepika Mantri

Garima Patil

Priyanka Daryani

Shalabh Sharma

Varsha Talreja

Index

What is PLANNING?TYPES OF PLANNINGAdvantagesLimitations

“PLANNING”

Planning is deciding in advance what is to be done, when where, how and by whom it is to be done.

Planning bridges the gap from where we are to where we want to go.

It includes the selection of objectives, policies, procedures and programmes from among alternatives

TYPES OF PLANNING

ACTITVITYCOVERED

Corporate

Functional

PERIOD

Longterm

Shortterm

APPROACH

PROACTIVE REACTIVE

FORMULATION

FORMAL INFORMAL

IMPORTANCE

STRATEGIC OPERATIONAL

PLANNING

ACTIVITY COVEREDCorporate Planning :

Determines long-term objectives of an organisation as whole

Generates plans to achieve these objectivesFuture orientated Integrated

Functional planning :Undertaken for sub functions witin each major functionsDerived from corporate planning.Segmental

TIME-PERIOD

Depends on the type of the buisness and structure of the organisation.

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.

APPROACHPROACTIVE PLANNING :Designing suitable course of action in anticipation of likely

changes in relevant environment.To take decision in advance. Eg : Emergency organisations

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 FORMALISATIONFORMAL 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 :

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.

ADVANTAGES

Planning facilitates management by objectives

Planning minimizes uncertaintiesPlanning facilitates co-ordinationPlanning improves employee’s moralPlanning helps in achieving economiesPlanning facilitates controllingPlanning provides competitive edgePlanning encourages innovations

Planning facilitates management by objectives

Planning begins with determination of objectives. It highlights the purposes for which various activities are

to be undertaken. In fact, it makes objectives more clear and specific.Planning helps in focusing the attention of employees on

the objectives or goals of enterprise.Without planning an organization has no guide.Planning compels manager to prepare a Blue-print of

the courses of action to be followed for accomplishment of objectives.

Therefore, planning brings order and rationality into the organization.

Planning minimize uncertainties

Business is full of uncertainties.There are risks of various types due to uncertainties.Planning helps in reducing uncertainties of future as it

involves anticipation of future events.Although future cannot be predicted with cent percent

accuracy but planning helps management to anticipate future and prepare for risks by necessary provisions to meet unexpected turn of events.

Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.

Planning facilitates coordination

Planning revolves around organizational goals.All activities are directed towards common goals.There is an integrated effort throughout the enterprise in various departments and groups.

It avoids duplication of efforts. In other words, it leads to better co-ordination.

It helps in finding out problems of work performance and aims at rectifying the same.

Planning improves employee’s moral.

Planning creates an atmosphere of order and discipline in organization.

Employees know in advance what is expected of them and therefore conformity can be achieved easily.

This encourages employees to show their best and also earn reward for the same.

Planning creates a healthy attitude towards work environment which helps in boosting employees moral and efficiency

Planning helps in achieving economies

Effective planning secures economy since it leads to orderly allocation ofresources to various operations.

It also facilitates optimum utilization of resources which brings economy in operations.

It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise. For example, raw materials can be purchased in bulk and transportation cost can be minimized. At the same time it ensures regular supply for the production department, that is, overall efficiency

Planning facilitates controlling

Planning facilitates existence of certain planned goals and standard of performance.

It provides basis of controlling.We cannot think of an effective system of controlling without existence of well thought out plans.

Planning provides pre-determined goals against which actual performance is compared.

In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.

Planning provides competitive edge.

Planning provides competitive edge to the enterprise over the others which do not have effective planning. This is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc.

With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate the future motives of it’s competitor which helps in facing future challenges.

Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the competitive strength of the enterprise is improved

Planning encourages innovations.

In the process of planning, managers have the opportunities of suggesting ways and means of improving performance.

Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise

Limitations of Planning 

Costly process

 Planning involves too much expenditure. Money and effort both are required in planning.

Planning includes collecting information, data forecasting and evaluation of alternatives. It requires salary and allowances to the experts in the process of providing services.

   So, planning has been accepted as costly process by small and medium size organization

  Time consuming

Planning is the time consuming process. It delays the business activity to come in action.

In the process of planning following the procedures of planning takes a lot of time which may create problem to the organization where immediate action has to be made. So in such situation planning is not suitable.

  False sense of security

Planning encourages false sense of security against future risk and uncertainty. As future is uncertain, it is unpredictable. Therefore, planning cannot give accurate and reliable results.

RAPID CHANGE

Rapid changes in technology ,consumer tastes and prefernces are further limitations to planning.

Eg.: Planning in aircraft ,chemical,electronic and information industries is specially complicated due to acceptionally complex and rapidly changing production technology.

PREMIUM ON PRESENTPresent is always more real than the future , and present problems seem to be more urgent than the future problems.

Many of us are inclined to take care of today and hope that tommorow will take care of itself .

This is normal human tendency but infact we have to take take care of today as well as tommorow.

THANK YOU ☺☺☺☺

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