Introduction to Management

Chapter Summary

Planning is the most basic of all management functions. It involves looking ahead and relating today's events with tomorrow's possibilities. Planning is goal-oriented, and forward-looking process. It offsets uncertainty and risk, provides a sense of direction, provides guidelines for decision-making, and increases operational efficiency and organizational effectiveness. It also helps in the coordination of organizational activities and facilitates control and delegation.

Plans can be of various types, depending on the organization level, the frequency of use and the time frame. Depending on the organization level, plans can be strategic, tactical or operational. When frequency of use is taken into consideration, plans can be classified into single-use plans and standing plans. Single-use plans include budgets, programs and projects. Standing plans include policies, procedures and rules. On the basis of the time frame, plans can be short-term, intermediate-term or long-term. Apart from these, an organization can also have specific or directional plans.

Planning is an ongoing process. All planning processes consist of eight steps: analyzing opportunities, establishing objectives, determining planning premises, identifying alternatives, evaluating available alternatives, selecting the most appropriate alternative, implementing the plan and reviewing the plan.

Though planning provides several benefits, it has certain limitations too: it requires accurate information, it is a time consuming process, it is expensive and it lacks flexibility. Moreover, people tend to resist change and are unwilling to take risks. They also may be reluctant to establish goals which are essential for good planning. Even if good plans have been developed, changes in the environment may have a negative affect on them. In order to overcome these limitations, managers should establish a proper climate for planning; develop clear and specific objectives; evaluate all planning premises, ensure the support of top-level management, encourage employee participation in the planning process, communicate goals and planning premises throughout the organization, integrate short-term and long-term plans, have an open systems approach to planning, and implement an effective management information system.

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