Chapter 4: Planning

Ans: Planning provides guidance for action by defining in advance how work is to be done. Planning ensures that the goals or objectives are clearly articulated so that they may be used as a guide to decide what action to take and in which direction.

When goals are clearly defined, employees understand what the organisation as well as they must do to attain those goals. Departments and people inside the organisation can collaborate for the successful accomplishment of objectives. Employees would be working in separate directions, with no coordination if there was no planning, and the organisation would not be able to attain its planned goals.

Ans: The step of the planning process Ms. Rajni performed ‘Identification of various alternatives’. In the report, she mentioned and identified the options such as entering new markets, expanding the product range offered to customers, using sales promotion techniques such as giving rebates, discounts or increasing the budget for advertising activities. After this step, proper evaluation of each alternative will be done, and one or a mixture of alternatives will be chosen by the company.

Ans: Rules are considered as plans because:

• Rules are standard or specific statements that describe what should be done, whereas planning also specifies the what aspect of any action. 

• Because their natures are so similar, 'Rules' are regarded to be 'Plans.' 

• Rules are thought to be the most basic of designs. The goal of planning is to deliberate and decide on a future course of action. 

• Similarly, rules are statements that aid in determining whether or not an action should be conducted. 

• However, rules are rigorous in nature and must be followed exactly as written until a change is requested. 

• Noncompliance with the rules results in disciplinary actions taken by the organisation. It indicates a managerial judgement about whether or not to pursue a specific action. 

• For example, an organisation may have regulations governing employee punch-in and punch-out times, and all employees must abide by these standards. Rules serve as a guide for the general behaviour of employees in an organisation.
  
  

Ans: The type of plan used is a policy. Rama Stationery Mart has adopted a payment policy that requires all payments to be made via e-transfers only.

Policy is a broad statement that defines the boundaries within which decisions are made and directs decisions toward the achievement of goals.

Ans: No, planning does not work in a dynamic environment because the business environment is constantly changing and the organisation must adapt to these changes. In a dynamic environment, planning fails when it is unable to accurately predict future trends.

Ans: Planning is a psychological process that involves "thinking and determining ahead of time" on "what is to be done" and "how it is to be done." Thus, planning is inextricably linked to creativity and innovation. 

It is a mental activity in which the management decides on the goals to be attained and the activities to be undertaken to achieve them. It is futuristic in nature since it entails anticipating, analysing, and predicting the future. 

Planning is defined as the process of establishing goals and objectives for a specific time period, developing alternatives for the course of action to be pursued, and eventually selecting an appropriate action from the numerous choices.

The main points in the definition of planning are as follows:

a. Time Period 

• The planning strategy must be devised for a specific time period.

• If planning is not done in a timely manner, it may be ineffective. This is due to the fact that the business environment evolves throughout time, necessitating new strategy and activity as and when changes are encountered.

b. Setting Objectives 

• Planning must be directed toward a certain goal.

• There must be a specific goal for which planning is being undertaken.

c. Alternative Course of Action 

• An alternative course of action must be developed to determine which action will provide the best results in minimum costs, and successful accomplishment of objectives.

d. Deciding a Course of Action 

• The best alternative course of action must be chosen based on criterias like cost, time, availability, feasibility etc..

Ans: True, planning is a forward-thinking function that is based on analysing and forecasting future aspects. However, the future is unpredictable and cannot be foretold. External forces have a variety of effects on how an organisation operates. These natural forces are complicated and ever-changing. Social trends, political situations, technology, and government rules and regulations, for example, all change on a regular basis. 

Due to such uncertainties, it is impossible to predict the success rate of the plans; instead, the plans must be constantly adjusted to adapt to the changing environment. 

Assume, for example, that a competitor's arrival diminishes demand for a company's products. The company had not anticipated such a change when planning production. As a result, the company's earlier strategies fail, and it must devise new ones in light of the change in demand. 

Similarly, imagine the government announces a loosening of the rules for foreign investment, resulting in increased market competitiveness. Domestic enterprises' sales and manufacturing plans may collapse in the face of growing competition. Thus, despite the fact that planning entails working out details for the future, it does not guarantee success.

Ans: A strategy is a broad plan for an organisation's business.

It has three basic objectives: 

• to establish the objectives, 

• to decide on a course of action, and 

• to allocate objectives appropriately in order to achieve the objectives. 

The business environment must be considered whenever a strategy is developed. The economic, political, social, legal, and technological environments all have an impact on an organisation's strategy. Typically, strategies take the form of defining the organisation's identity in the business environment.

A business organisation may make the following strategic decisions:

• Choosing which line of business to pursue.

• Whether or not a new line of production should be implemented.

• What position should the organisation seek in the current market?

• What pricing policy should be used?

• Decisions on advertising policy and expenditures.

• Whether to expand the business or not?

• If it expands, then within the country or globally?

• Which aspect should be more focussed upon, cost leadership or differentiation?

• Strategies in respect to raising finance, deciding the outsourcing strategy.

• If growth is to be done, should it be horizontal growth or vertical growth?

Hence, the strategies take place at various business and functional levels.

Ans: Planning is a critical and difficult function because it provides direction and reduces the risk of uncertainty through forecasting. It is an intellectual process that entails coming up with better ideas and methods to accomplish a specific task. And the top management level is in charge of the planning process, with the rest of the members simply carrying it out.

They are not permitted to participate in the planning process or to act on their own. As a result, creativity and innovation suffer.

Ans: The type of plan highlighted in the preceding example is known as a strategy. A strategy is a comprehensive plan for achieving organisational goals that includes three dimensions:

• Establishing long-term goals.

• Choosing a specific course of action.

• Allocating resources required to achieve goals.