BUSINESS STUDIES – CLASS 12

CHAPTER 4: PLANNING

1. INTRODUCTION

1. Planning is the first and most important function of management.
2. It involves deciding what to do, how to do, when to do, and who will do a particular task.
3. Planning bridges the gap between where we are and where we want to reach.
4. It provides a future-oriented roadmap to achieve organisational objectives.
5. Planning reduces uncertainty by anticipating future conditions.
6. It brings rationality and orderliness into decision-making.
7. Managers prepare alternative courses of action and choose the best one.
8. Planning focuses on achieving organisational goals in a systematic manner.
9. It facilitates coordination among different departments.
10. Planning serves as the basis for all other managerial functions—organising, staffing, directing and controlling.

2. CONCEPT OF PLANNING

1. Planning is deciding in advance what is to be done.
2. It is a systematic thinking process that involves predicting the future and making provisions to deal with it.
3. It includes setting objectives and choosing the best alternative to achieve them.
4. Planning is future-oriented and anticipatory.
5. It involves selection from among various alternatives.
6. Planning is pervasive—it is required at all levels of management.
7. It is continuous because plans have to be revised according to changing conditions.
8. Planning aims at achieving organisational goals effectively and efficiently.
9. It forms the basis for action—without planning, activities become unstructured.
10. Planning is decision-making—every plan consists of a series of decisions.

3. IMPORTANCE OF PLANNING

1. Provides Direction

1. Planning provides a clear sense of direction to employees.
2. It ensures that everyone works towards the same goals.
3. Objectives guide decision-making and unify organisational efforts.

2. Reduces Risks and Uncertainty

1. Future conditions are uncertain; planning helps managers anticipate changes.
2. It minimizes the impact of risks.
3. Preparations are made for unexpected events.

3. Facilitates Coordination

1. Different departments coordinate their efforts under a common plan.
2. Activities are aligned with organisational objectives.
3. Avoids duplication and overlap of efforts.

4. Economy in Operations

1. Planning enables optimum use of resources.
2. Reduces wastage, confusion, and unnecessary delays.
3. Promotes efficient and systematic operations.

5. Encourages Innovation and Creativity

1. Planning involves generating new ideas and alternatives.
2. Managers think creatively to solve future problems.
3. Innovation becomes a key part of organisational growth.

6. Improves Decision-Making

1. Planning is based on rational thinking and evaluation of alternatives.
2. Decisions are logical, consistent and well-structured.
3. Helps managers choose the best possible course of action.

7. Establishes Standards for Controlling

1. Planning sets objectives and performance standards.
2. Actual performance can be compared with standards.
3. Deviations can be monitored and corrected.

8. Helps in Anticipating Future Opportunities

1. Planning helps identify new market opportunities.
2. Helps firms prepare for emerging trends and customer demands.
3. Gives a competitive advantage in the market.

9. Leads to Goal Achievement

1. Planning aligns resources, people and processes to achieve goals.
2. It ensures timely completion of targets.
3. Provides clarity on priorities and action sequences.

4. FEATURES OF PLANNING

1. Planning is Goal-Oriented

1. All planning efforts focus on achieving organisational objectives.
2. Proper planning ensures goals are clear and achievable.

2. Planning is Future-Oriented

1. Planning deals with future events and uncertainties.
2. It forecasts future conditions and prepares for them.

3. Planning is Continuous

1. Planning never stops; it is an ongoing process.
2. Plans are modified based on changing situations.
3. Old plans may become obsolete and need updating.

4. Planning is Pervasive

1. It exists at all levels—top, middle and lower.
2. Scope and nature of planning differ at each level but are equally important.

5. Planning is a Mental Exercise

1. It requires logical thinking, foresight and intelligence.
2. Planning is an intellectual activity, not guesswork.
3. It is based on analysis, evaluation and reasoning.

6. Planning Involves Decision-Making

1. Among various alternatives, the best one must be selected.
2. Every planning step involves choosing between options.

7. Planning Involves Choice

1. Planning is needed only when alternatives exist.
2. Managers evaluate each option before selecting the best.

8. Planning is Flexible

1. Plans must change according to environmental changes.
2. Flexibility is required to adapt to unexpected events.

9. Planning Precedes Other Functions

1. Planning is a primary function of management.
2. Organising, staffing, directing, controlling etc.—depend on planning.

5. PLANNING PROCESS

Planning is a systematic process involving several interconnected steps:

1. Setting Objectives

1. Objectives must be clear, specific, measurable and achievable.
2. They provide direction for all activities.
3. Goals may be short-term, medium-term, or long-term.

2. Developing Planning Premises

1. Planning premises are assumptions about the future.
2. They include forecasts about economy, demand, government policies etc.
3. Premises act as the basis for planning.

3. Identifying Alternative Courses of Action

1. Managers list all possible alternative ways to achieve objectives.
2. Each alternative should be feasible and relevant.
3. Creativity and brainstorming help in generating options.

4. Evaluating Alternatives

1. Alternatives are analyzed based on cost, risk, resources and outcomes.
2. Positive and negative consequences of each alternative are assessed.
3. Helps in comparing different options.

5. Choosing the Best Alternative

1. The most suitable alternative is selected.
2. The selected plan should be economical, practical and flexible.
3. It must align with organisational goals.

6. Implementing the Plan

1. Implementation requires resources, delegation and coordination.
2. Responsibilities are assigned and timelines are created.
3. Effective communication is necessary.

7. Follow-Up and Monitoring

1. Plans must be continuously monitored to check progress.
2. Deviations should be identified and corrective actions taken.
3. Feedback helps refine future plans.

6. TYPES OF PLANS

Plans can be categorised into single-use plans and standing plans.

A. SINGLE-USE PLANS

Used once for a specific purpose.

1. Objectives

1. They are the desired results an organisation aims to achieve.
2. Objectives guide planning and decision-making.
3. They should be SMART—Specific, Measurable, Achievable, Relevant, Time-bound.
4. Example: “Increase sales by 15% within 1 year.”

2. Strategy

1. A strategy is a comprehensive plan to achieve long-term objectives.
2. It involves determining:
   • Objectives
   • Course of action
   • Allocation of resources
3. Strategies consider external environment, competitors and internal strengths.
4. Example: entering a new international market, adopting new technology.

3. Programme

1. A programme is a detailed plan consisting of:
   • Objectives
   • Policies
   • Procedures
   • Rules
   • Tasks
   • Resources
   • Time schedule
2. It combines many plans to accomplish a major goal.
3. Example: launching a new product.

4. Budget

1. A budget is a financial plan expressed in numerical form.
2. It estimates income, expenditure and resource allocation.
3. Types: sales budget, production budget, cash budget etc.
4. Budgets help in controlling expenses and monitoring performance.

B. STANDING PLANS

Used repeatedly for recurring activities.

1. Policy

1. A policy is a general guideline for decision-making.
2. It sets boundaries within which decisions must be made.
3. Example: HR policy on leave, marketing policy on discounts.
4. Policies ensure consistency and clarity.

2. Rule

1. Rules are rigid statements that must be followed without exception.
2. They specify what must or must not be done.
3. Example: “Smoking prohibited in the workplace.”
4. Violation results in disciplinary action.

3. Procedure

1. Procedure is a sequence of steps to perform a task.
2. It specifies how an activity will be carried out.
3. Example: procedure for purchasing materials.
4. Helps maintain uniformity and eliminates confusion.

4. Method

1. A method is the prescribed way of doing a job.
2. It determines the best and simplest way of performing a task.
3. Methods aim at reducing time and increasing efficiency.
4. Example: best method for assembling a product.

7. CONCLUSION

1. Planning is the foundation of effective management.
2. It provides direction, reduces risks and ensures efficient use of resources.
3. Planning helps organisations anticipate opportunities and challenges.
4. Features such as goal orientation, future-focus, continuity and flexibility make planning essential.
5. The planning process—objectives, premises, alternatives, evaluation, selection, implementation and follow-up—ensures systematic managerial action.
6. Different plans like objectives, policies, strategies, rules, budgets and programmes help managers handle both routine and special tasks.
7. Successful organisations rely on good planning to achieve long-term growth and stability.
8. Though planning does not guarantee success, it greatly increases the chances of achieving desired results.
9. In modern dynamic business environments, planning is not optional but a necessity.