Chapter 4: Planning

Ans: The budget plan is a one-time use plan. Budge is a numerically expressed statement of expected results. It is a projection intended to define the anticipated cost and results of a single project in numerical terms.

Ans: This is a pre-existing strategy known as method. Method specifies the prescribed ways or manner in which a task must be completed while keeping the objectives in mind. It deals with a task, which could be a step in a procedure, and specifies how that step should be carried out.

Ans: Organisations establish plans in order to achieve their goals. Planning is a necessary activity for any organisation since it serves as the foundation for its operation. However, occasionally things do not go as planned. Unexpected changes in the corporate environment can impair the organisation's plans. Furthermore, the planning process has its own constraints that impede the achievement of all of an organisation's objectives.

The following are some of the planning limits that may lead to the abandonment of organisational goals.

• Rigidity: A well-defined strategy is drawn up in an organisation with clear goals to be fulfilled within a specific time frame. These plans then determine the future course of action, which managers may not be able to change. This type of rigidity in plans may cause problems. Managers must be given certain leeway in order to adapt to changing situations. Following a predetermined plan, and practising rigidity when conditions change may not be in the best interests of the organisation.

• Unable to Deal with a Dynamic Environment: The business environment is dynamic and, as a result, quite uncertain. The environment has several dimensions, including economic, political, physical, legal, and social factors. The organisation must constantly adjust to changes. However, planning cannot always accurately anticipate such changes and hence fails in times of change and uncertainty. This may result in the failure to meet objectives. An organisation's operations must adapt to a changing environment.

• Extremely Expensive: Creating plans necessitates an exorbitant investment of both time and money. Because planning is dependent on future projections, it necessitates a great deal of thought and analysis. It entails scientific calculations as well as figures and facts that will be used to formulate a plan of action. This comes at a heavy cost. Furthermore, it is possible that the advantages of planning will fall short of the costs paid.

• Does Not Ensure Success: Good preparation does not ensure success. Managers frequently rely on tried-and-true ideas that have proven to be effective in the past. However, it is not always true that if a strategy has been effective in the past, it will be successful again in the future. Many unanticipated changes may occur, causing the strategy to fail. Managers frequently believe that planning can prevent problems from developing; nevertheless, they fail to recognize that planning merely serves as a foundation for forecasting the future. It does not provide immediate remedies to problems.

• Time Consuming: Making plans is a time-consuming activity because it requires anticipating unforeseen events. It necessitates extensive investigation and evaluation. This increases the time spent by managers, and actual actions may be delayed as a result. Also, many opportunities could be missed while planning.

• Reduces Creativity: Planning is a task performed by upper management. Typically, the rest of the members just carry out their plans. As a result, middle management and other decision makers are not permitted to break from plans or act independently. As a result, much of their initiative or originality is lost or curtailed. The majority of the time, employees do not even attempt to develop strategies, they merely execute commands. Thus, planning limits creativity in certain ways since people tend to think along the same lines as others. Nothing is novel or innovative.
  
  

Ans: Planning entails deciding ahead of time what will be done and how it will be done. It consists of a few logical steps.

The following are the steps that management should take when formulating plans.

• Setting up the Objectives: Setting objectives and goals is the first step in the planning process. Each company or enterprise has a certain objective to achieve. Managers must articulate these objectives clearly so that the proper path can be adopted to achieve them. Furthermore, the plan's objectives must permeate all levels of the organisation. It gives direction to separate departments/units so that they can work toward the organisation's common goals. Management functions cannot be carried out unless the goals are stated.

• Developing the Premises: Certain assumptions about the future are made under planning. These assumptions are referred to as premises. The assumptions concern future forecasts, previous plans, and current policies and facts. Managers at all levels of the organisation who are involved in planning should adhere to the Implementation of such premises. The same assumptions apply to the follow-up action. These assumptions are critical for the organisation since they determine the course of action for future initiatives. As a result, proper premises should be proposed for successful planning.

• Identification of the Alternatives: Once the objectives and assumptions have been established, it is necessary to determine the various courses of action that can be taken. There are numerous approaches that can be taken to reach a specific goal. Managers must carefully consider these many options. This requires creativity and a creative mind in order to create new solutions to achieve the goals.

• Evaluation of the Alternatives: Managers must analyse the various paths of action after recognizing them. This assessment is based on the utility and consequences of the alternatives. Managers must weigh the benefits and drawbacks of each option. Each proposal's positive and negative features must be considered in light of the goal to be attained.
  For example, which route will be less expensive or which choice would allow you to achieve your goals in less time. In light of such considerations, the appropriate evaluation of various solutions should be carried out.

• Selection of the Best: Choosing the finest choice entails going with the method that is most viable in terms of the goal. Managers should utilise their skills and knowledge to judge and select the best choice in terms of profitability, costs, and feasibility. Depending on the circumstances, a variety of multiple routes may be followed rather than simply one. Of course, the ideal strategy would be the most practical, profitable, and with the fewest bad implications.

• Implementation: Implementing the alternatives necessitates the involvement of additional management departments. It entails organising and directing work in accordance with the specified course and policies. Implementation is concerned with adhering to the chosen course of action and determining how it will be employed in order to be effective.

• Follow-up Action: A continual supervision of the actions is essential for assessing the overall operation and implementation of the plans. Keeping an eye on the activities to be completed is an important element of the planning process since it helps to guarantee that the plan works properly. As a result, rigorous follow-up activity improves the success of a plan and, as a result, the achievement of the objectives.