Planning Definition: Planning is the first and foremost function of management which involves deciding the vision, mission, goals, targets, etc. Planning is the primary function of management. It specifies the objectives to be achieved in the future and selects the best course of action to be taken to achieve defined objectives. It also involves many activities like analyzing and deciding about technical personnel, financial and other elements essential to implement the predetermined course of action.
Definitions of Planning
According to Ricky W. Griffin, “Planning is setting an organization’s goals and deciding how best to achieve them.”
According to Henri Fayol, “The plan of action is, at one and the same time the result envisaged, the line of action to be followed the stages to go through and the methods to use.”
Characteristics of Planning
Planning is the primary function of management. It focuses on the future of action. It specifies the objectives to be achieved in the future and selects the best course of action to be taken to achieve defined objectives. It also involves many activities like analyzing and deciding about technical personnel, financial and other elements essential to implement the predetermined course of action. The following are the characteristics of planning:
- Focus on goal
- Primary function
- Pervasive activity
- Continuous activity
- Intellectual work
- Efficiency and economy
1. Focus on Goal
Planning focuses on achieving defined objectives. It clearly defines a major course of action to achieve goals. The activities of all members of an organization must concentrate on the implementation of plans. Therefore, the plan will become worthless if it unable to contribute positive guidelines for the achievement of objectives
2. Primary Function
Planning is the initial function of management which plays a pivotal role in coordinating all other functions of management. In a real sense, the implementation of all other managerial functions like organizing, staffing, directing, and controlling depends upon planning. In other words, planning sets the framework for other functions of management. And, the manager can think of implementing other functions only after determining strategic plans.
3. Pervasive Activity
Planning is a pervasive activity of all levels of managers. It is not an exclusive function of only top-level management. The level of planning depends upon the nature and scope of work. For instance, top-level management prepares strategic plans, middle-level management prepares departmental plans and first-line management prepares day-to-day operational plans.
Planning is prepared for the future course of action. And its main motive is to meet with uncertain future events. Since it looks forward through forecasting, management anticipates future events and situations through it. Thus, to anticipate the future courses of action accurately, the scientific technique of forecasting is used. Planning provides guidelines, suggestions, and develops a framework for future operation.
5. Continuous Activity
Planning is a continuous process up to the existence of the organization. In other words, it is a never-ending process because of the ever-changing environment of business. When an organizational objective is achieved, a new plan is made to achieve the future objectives of the organization. The business environment will be changed according to the changing environment. Therefore, plans must be up-to-date to adapt to the changing environment of the business.
6. Intellectual Work
Planning is mental work. It needs creative thinking, sound judgment, and imagination, foresight, intelligence, and fair judgment. Planning requires thinking about what, how, when, by whom, etc. A manager has to think about various alternative courses of action and their impact before formulating a plan. And only an experienced and intelligent manager can formulate an effective plan.
Plans should be drafted in such a manner that they are adjustable in any circumstances. A plan of today may be difficult to implement similar in the future. It may be affected by many environmental factors. These environmental factors involve both internal and external. Therefore, there should be a provision of modification and revision of the plan based on changing the environment.
8. Efficiency and Economy
Cost-benefit is one of the important elements of changing the environment. It aims to increase the working efficiency of the organization by defining the course of action. Only sound planning can help to achieve the organizational objectives through minimum effort and cost. It clearly defines where we are and how we have to reach the destination.
Thus, if each and every function is to be done accurately in accordance with the plan, predetermined goals can be achieved efficiently and effectively with minimum cost and effort.
A plan must be actionable. It should not be limited to paper works. Its result can be obtained only after implementation. The plan should be formulated in such a manner that it can be implemented properly. Therefore, over-ambitious and impracticable plans must be avoided.
Types of Planning
Planning is a formal process and a schedule to complete the work. Every organization has to prepare a plan to achieve a predetermined objective in proper time. However, types of plan depend upon the nature and size of the organization.
Such plans may be prepared either for a short period or a long period and may be prepared by top-level management or operational level management. The following are the basis of classification of organizational plans (types of planning):
- On the basis of hierarchy
- On the basis of use
- On the basis of flexibility
1. On The Basis of Hierarchy
On the basis of hierarchy, the plan may be classified into three groups: Corporate plan, strategic plan, and operating plan. Brief discussions of these plans are as follows:
a. Corporate Plan
The corporate plan is a long term plan prepared by top-level management after environmental scanning. It also gives the reason for existence for the organization. It clearly defines the objectives of the organization and the strategy to achieve defined objectives. The strategy involves a clear explanation of how to achieve the defined objectives because there is a high degree of uncertainty in the strategic plan
b. Tactical Plan
Middle-level management prepares the tactical plan. It is consistent with the corporate plan. It is the sub-division of the corporate plans to be implemented in the practical field. The divisional managers identify the priority of the activities and prepare plans on the basis of the priority of works. They focus on allocating resources based on programs. It is prepared to perform divisional activities like production, finance, marketing, personnel, and others.
c. Operational Plan
Lower level management prepares this plan. It is consistent with the tactical plan. It is a specific action plan for each and every activity of the unit. It involves preparing a schedule for each unit of work to implement in practice. It concentrates on the best use of available resources.
2. On The Basis of Use
On the basis of use, the plan may be classified into two groups — a single-use plan, and a standing use plan. Brief discussions of these plans are as follows:
a. Single-use Plan
Such a plan is prepared for a specific purpose in a non-programmed situation. It is prepared for non-repetitive activities. After completion of the defined objective, such a plan becomes worthless. The example of such a plan is the project program and budget.
b. Standing use Plan
Such a plan is prepared for a programmed decision-making situation in an organization. This plan gives broad guidelines for repetitive activities. Such a plan once developed will be implemented in the organization to achieve organizational objectives in different situations. Examples of such a plan are objectives, rules, policies, procedures, and strategy.
3. On The Basis of Flexibility
On the basis of flexibility, the plan may be classified into two groups specific plan, and a flexible plan. Brief discussions of these plans are as follows:
a. Specific Plan
The specific plan is developed for a particular department or unit about the activities to be performed. Members of an organization are clear about the task to be performed and the resources to be used. All clearly stated plans are specific plans.
b. Flexible Plan
A flexible plan is changeable on the basis of time and situation. It is not specific in terms of procedures and allocation of resources. Such plan only provides guidelines to the members and they can modify it on the basis of their facility and requirement.