Planning
Planning is basic to all managerial functions. It is a
process of selecting one course of action, from different alternatives, for
achieving the stated goals, objectives and targets. It is a decision making
process determining in advance what to do, how to do, when to do and who is to
do. Planning creates a frame of
activity and events which are to happen or a runway for achieving corporate
goals, objectives and targets. Planning process demands resource allocation
through decision marking. The organization may have a plan; but question is how
effective the plan is.
The efficiency of a plan is measured by the amount it
contributes towards achievement of goals. It further helps to control business
operations at all levels with common reference to goals, objectives and targets.
Planning is a process and hence it has a methodology. The
first step in planning is forecasting the environment, in which the plan is to
be made and operated. Forecasting provides information on population, growth,
price trends, market changes, new opportunities, changes in technology and the
external factors affecting the business.
The second step in planning process is to evaluate the best
among all the feasible alternatives. The analysis and evaluation is done with
reference to the objectives such as, minimization of cost, maximization of
profit, yield, and productivity, etc. The right choice of an objective is a
crucial factor in the selection process. The planning begins with the setting of
goals and objectives and end up in selecting the most rational course of action.
The organization has a network of goals, objectives and
targets. It is necessary to develop
the network of plans corresponding to this network. The process leads to the
development of corporate plans, functional plans, and departmental plans and so
on. For example, the organization may have business plans, investment plans,
marketing plans, and advertising plans.
Normally, the corporate plans are for a longer period and the derived
plans are for shorter periods. Since
the plan has a commitment to time, it is necessary to build a flexible plan
capable of undergoing a suitable change to alter the goals and objectives within
the same time.
An effective planning should begin at the top and flow down
the line. The effectiveness is brought in by taking a series of decisions,
committing resources, giving directions, and executing controls to achieve the
goals and objectives. The process of
planning, therefore, is to develop the alternatives, evaluate them by meaningful
analysis of costs and benefits, and make a rational selection based on some
choice about goals. If the situation
is that of uncertainty, then the evaluation is done thorough risk analysis and
preference theory using utility as criteria.
