What is Planning Function of Management
Planning function of management involves selecting missions and objectives and the action to achieve them; it requires decision-making that is, choosing from alternative future courses of action. It bridges the gap from where to where we want to go. Thus we do planning in order:
- To decide what has to be done.
- To decide who and how is it to be done.
- To co-ordinate efforts with in the organization.
- To make managers future oriented and to help them in decision making.
Nature of Planning
Nature of planning can be better understood by examining its four major aspects:
The Contribution of Planning to Purpose and Objectives
Every plan and all its supporting plan do, and should contribute to the accomplishment of the purpose and objectives of the enterprise.
The Primacy of Planning
All the managerial functions/operations are designed to support the accomplishment of enterprise objectives, planning logically proceeds the execution of all the other managerial functions mesh as a system of action, planning is unique in that it involves establishing the objectives necessary for all group efforts.
The Pervasiveness of Planning
The planning spreads through every part of the organizational hierarchy. There is planning at each and every level of management (with varying degree).
The Efficiency of Plans
The achievement of purpose /objectives by the plan with reference to cost, time as well as employees satisfaction.
Steps in Planning
Generally, planning involves the following steps.
Awareness of Opportunities
possible future opportunities should be and are analyzed as first step in planning. For this SWOT analysis is done.
Establishment of Objectives
After analyzing opportunities, realistic objectives are to be formed. Objectives thus formulated, give directions to plans, policies, budgets etc of the organization .they are the base for organizational hierarchy.
Developing Premises or Premising
Developing assumption about the environment in which the plan is to be carried out. These include fore casts, applicable basic policies and existing company plans. Planning premises or premising provides pertinent facts and information relating to the future. And as such, they are vitally important for the success of planning. Forecasts and trend analysis provide most of the informations required in planning.
Determining Alternative Courses
In business there always exist more than one course of action for achieving given objectives. The fourth step of planning relates to identifying all the possible courses.
Evaluating Alternative Courses
After determining the alternative courses, these are examined and evaluated by weighing them through applying SWOT analysis. This gives a prioritized list of alternative courses of action for achievement of organization goals and objectives. This exercise enables us to switch over to another plan in case the actual plan fails.
Selecting a Course
As the courses of action are now very much clear, the decision regarding the plan to be executed is taken with all the other alternative plans kept in waiting for any failure.
Formulating Derivative Plans
The overall operating plan of the enterprise can not be executed effectively unless it is supported, enlarged and clarified by preparation of derivative plans for each segment of the company. Therefore, the primary plan is broken down and bifurcated into departmental and sectional plans. This gives a realistic picture of the course of things to come in future.
Numberizing Plan by Budgets
The final step in planning function of management is to numberize the plan. This is also called budgeting. If done well, budgets become a mean of co-ording various plans. They also become important standards against which planning progress can be measured.