Planning is basic of all managerial functions


It is the management function that defines and sets goals for future and then establishes the tasks and resources required to achieve the goals.

Planning is the moist basic of all management functions. With the exception of a few routine activities, every organizational and managerial activity requires planning. Every manager must have the ability to forecast for the next day and must plan to bring out new products, promote new products, distribute and price the products, hire people to produce the products and acquire the necessary finances.

Planning is largely a mental process and begins when an individual engages in thinking about a problem. Planning can be defined as selecting information and making assumptions regarding the future to formulate activities necessary to achieve organizational objectives. Thus, the challenge of planning is to deal with the future and its uncertainties.

Types of Plans:

Plans can be classified in a number of ways. Some types of plans based on the frequency of use are given below.

Standing Plans: These are plans that serve as guidelines to managerial action. Once a decision is made, it stands without the necessity of deliberation each time a similar situation arises. For example: A bank uses one standing plan that decides in advance whether to approve or not any request for loan.

Single use Plans: Single use plans are designed for a specific purpose and period. The plan ceases to exist when the goals are achieved. A typical example of a single use plan is the budget.

Long range Plans: Long range plans are the strategic plans of the organization. Under such a plan, assumptions must be made about uncontrollable factors (such as technological changes) and controllable factors (such as products of the organization). For example the long range plan of an organization might be to become a market leader in the industry.

Intermediate Plans: Once long range plans are formulated, intermediate plans are formulated. If for instance the long range plan is to be the market leader the intermediate plan would be to set up sales offices in different regions.

Short range Plans: These plans provide the guidelines for day-to-day actions in the organization. In realizing its long range goal of becoming a leader in its industry, an organization will have to recruit and train personnel as a short range plan.

Besides classifying plans based on time element, plans can also be classified based on their specific use. Let us briefly study the different types of plans.

Purpose or Mission: The purpose or mission of an organization is the purpose or reason for its existence. The mission can be defined in terms of an organization’s products, services, markets or customers. Marketing beauty care products can be the mission of a cosmetics company.

Objectives: Objectives are the estimated end result expected in the future and are established at organizational, departmental or individual level. They are usually expressed in quantifiable terms. To train two technicians in running a machine in the next six months, can be an objective of a foreman.

Strategy: A strategy is the method of shaping a company’s future and involves determining the long run direction of the organization. A company manufacturing ready made garments must have the strategy of exporting these garments within the next seven years.

Policy: A policy is a guideline for action. Policies, in general indicate what is permitted and what is not permitted. A company might follow a policy of promoting people from within for top level management jobs instead of recruiting form outside.

Procedure: Procedures are instructions as to how a particular action should be done. A company may have a prescribed procedure to be followed by employee availing of leaves.

Rules: Rules are very specific actions to be taken or not to be taken with respect to a situation. Reporting to work at 9 am sharp might be a rule in an organization.

Program: A program is the actual course of action designed to carry out the established objective. A company might institute a management development program to improve the quality of managerial functions.

Budget: Budgets are expressions of plans in terms of revenues and costs. They describe allocation of resources and to detect deviations from stated purpose and course of action. Cash budget, material budgets etc are examples.

From the above classification, we can see that objectives are not the same as policies, rules, procedures, mission, strategy and programs. Although they are not the same, some relationship exists among them.