In this video series, I am covering the Business Studies subject from the CBSE Class XII syllabus. We will be following the standard NCERT textbook for the topics that we need to discuss. This is the fourth part of the series, and we will cover the fourth chapter – Planning.
Introduction to Planning
In a previous video, when we covered the Functions of Management, we discussed the five functions of management – POSDC – Planning, Organizing, Staffing, Directing, and Controlling. Management is a continuous process, but the first step in management is Planning.
Planning is deciding what is to be done, how to do it, and when to do it. It requires setting goals or targets and deciding the strategy to achieve them.
Understanding the Concept of Planning
Let us quickly understand the concept of planning through an example.
Example: Planning a Trip
Suppose a group of friends wants to plan a holiday trip. The conversation could be something like this:
- Ritu says, “Hey all, let us go to Goa for the long weekend.”
- Pavan says, “Sure, we will hire a car and make it a road trip.”
- Aditi says, “If we take the Konkan route, we can stop at Gokarna beach for lunch.”
- Siddharth says, “We should start at 5 am and only then we can reach Goa by 11 pm.”
In this example:
- What to do: Go to Goa.
- How to do: Go by car.
- When to do: During the long weekend.
Planning seeks to bridge the gap between where we are and where we want to go. It involves making decisions and choosing from alternative courses of action.
Example: Business Expansion
Suppose you own a textile and apparel company and are already a market leader in India. You want to expand to sell your products in the European market.
- You decide to enter the European market through the casual wear and leisure wear segment.
- You plan to hire NIFT graduates to help design the apparel for your brand.
- You set a goal that the first shipment should reach Europe by April of next year.
In this example:
- What to do: Expand to the European market.
- How to do: Target casual wear & leisure wear; hire NIFT designers.
- When to do: First shipment by next April.
You are bridging the gap between being a market leader in India and expanding to Europe. You are making decisions and choosing from alternatives, such as focusing on casual wear instead of formal wear and hiring NIFT graduates for design.
Importance of Planning
The textbook lists six points highlighting the importance of planning:
- Planning provides directions.
- Reduces the risks of uncertainty.
- Reduces overlapping and wasteful activities.
- Promotes innovative ideas.
- Facilitates decision making.
- Establishes standards for controlling.
1. Planning Provides Directions
A plan provides a clear direction for action by stating in advance what is to be done, how, and when it is to be done. It helps in setting specific actions and timelines for different departments, making it easier to assign responsibilities and work in coordination.
2. Reduces the Risks of Uncertainty
Planning helps managers anticipate changes and prepare actions to deal with them. It provides a clear path for the organization to follow, clarifying responsibilities and timelines, which reduces uncertainty.
3. Reduces Overlapping and Wasteful Activities
Planning helps coordinate the activities and efforts of different divisions, departments, and individuals, avoiding confusion and misunderstanding. It ensures that responsibilities are assigned individually to prevent redundant activities.
4. Promotes Innovative Ideas
Planning can promote innovation by setting up a structured framework for creativity. It encourages employees to contribute ideas that can help the company, fostering an environment where innovative thinking is valued.
5. Facilitates Decision Making
Planning is essential for decision making as it involves predicting future conditions and deciding between different courses of action. It helps managers set realistic goals and adjust strategies based on anticipated future events.
6. Establishes Standards for Controlling
Planning provides the goals or targets against which actual performance can be measured. It helps in tracking progress, understanding deviations, and taking corrective actions when necessary.
Features of Planning
The textbook mentions seven important features of planning:
- Planning focuses on achieving objectives.
- Planning is a primary function of management.
- Planning is pervasive.
- Planning is continuous.
- Planning is futuristic.
- Planning involves decision making.
- Planning is a mental exercise.
1. Planning Focuses on Achieving Objectives
Planning is aimed at achieving specific goals or objectives. It provides direction and helps in setting measurable and achievable targets within a specific time frame.
2. Planning is a Primary Function of Management
Planning is the first step in the management process and precedes all other functions. It is essential for setting the foundation for organizing, staffing, directing, and controlling.
3. Planning is Pervasive
Planning is required at all levels of management and across all departments. While the scope and nature of planning may vary, it is an essential activity throughout the organization.
4. Planning is Continuous
Planning is an ongoing process. Organizations need to constantly plan for the future, adjust to changes, and update their strategies accordingly.
5. Planning is Futuristic
Planning involves looking ahead into the future. It requires forecasting future conditions and making decisions based on anticipated events and trends.
6. Planning Involves Decision Making
Planning requires making choices among alternative courses of action. It involves evaluating different options and selecting the most suitable one.
7. Planning is a Mental Exercise
Planning is an intellectual activity that requires systematic and logical thinking. It involves foresight, imagination, and sound judgment to anticipate future events and devise appropriate strategies.
Limitations of Planning
Despite its importance, planning has certain limitations:
1. Planning Leads to Rigidity
Once plans are made, they can create a rigid framework that may not allow flexibility. Changes in the environment may require alterations in plans, but rigidity can make adaptation difficult.
2. Planning May Not Work in a Dynamic Environment
Business environments are dynamic, and rapid changes can make existing plans ineffective. Plans may become outdated quickly, requiring constant revisions.
3. Planning Reduces Creativity
Strict adherence to plans may limit individual creativity and innovation. Employees may feel constrained by predetermined procedures and policies.
4. Planning Involves Huge Costs
Extensive planning can be costly in terms of time and resources. It may require significant investment in research, analysis, and management time.
5. Planning is a Time-Consuming Process
Developing detailed plans can take a considerable amount of time, potentially delaying actions and decisions.
6. Planning Does Not Guarantee Success
Even the most well-thought-out plans may fail due to unforeseen circumstances. Planning cannot predict all variables, and success is not guaranteed.
The Planning Process
The planning process involves the following steps:
- Setting Objectives
- Developing Premises
- Identifying Alternative Courses of Action
- Evaluating Alternative Courses
- Selecting an Alternative
- Implementing the Plan
- Follow-up Action
1. Setting Objectives
Deciding what to achieve is the first step. Objectives may be set for the entire organization, a department, or an individual.
2. Developing Premises
Making assumptions about future conditions. These premises provide the basis for planning.
3. Identifying Alternative Courses of Action
Listing all possible ways to achieve the objectives.
4. Evaluating Alternative Courses
Assessing the pros and cons of each alternative.
5. Selecting an Alternative
Choosing the most suitable option after evaluation.
6. Implementing the Plan
Putting the selected plan into action.
7. Follow-up Action
Monitoring the plan’s implementation and making necessary adjustments.
Types of Plans
Plans can be classified based on their lifespan and purpose:
Classification by Lifespan
- Single-use Plans: Designed for specific, one-time events or projects.
- Standing Plans: Used for activities that occur repeatedly over time.
Classification by Purpose
- Objectives
- Strategy
- Policy
- Procedure
- Method
- Rule
- Programme
- Budget
Objectives
Objectives are specific goals that the organization aims to achieve. They provide direction and are measurable and time-bound.
Strategy
A strategy is a high-level plan to achieve objectives. It involves setting priorities, allocating resources, and making decisions.
Policy
Policies are guidelines that govern actions and decisions. They provide a framework for consistent and fair practices.
Procedure
Procedures are step-by-step instructions for carrying out routine activities. They detail the exact manner in which tasks are to be performed.
Method
Methods are specific ways of performing individual tasks within a procedure.
Rule
Rules are specific statements that dictate what must or must not be done. They leave little room for discretion.
Programme
A programme is a set of related projects or activities designed to achieve a common goal.
Budget
A budget is a financial plan that estimates income and expenditure over a specified period.
Conclusion
With that, we have completed this chapter on Planning. If you have any questions or feedback, please post a comment under this video. We will cover the next chapter in the next video.
