Planning refers to the management process of setting organisational objectives and targets for a given period and formulating an action plan to achieve it. Planning process involves steps:
•    setting-up of objectives,
•    developing premises,
•    identification and
•    evaluation of alternative courses of action,
•    selection of feasible alternative,
•    formulating derivative plans,
•    implementation and follow up, etc.
Features of planning:
•    achievement of objectives,
•    primary function of management,
•    pervasive,
•    continuous process, etc.
•    provides directions for action,
•    reduces the risk of uncertainty,
•    reduces overlapping, etc.
Forecasting provides logical basis for the preparation of plans after analysing present situations and likely trends in future. Advantages of planning helps in facing complexities of modern business, facing competition, provides warning signals, etc.  A good plan should have the characteristics of clear objective, proper understanding, comprehensive, etc. Limitations of planning are categorised into internal and external.
Internal limitations of planning creates rigidity, ineffective in dynamic environment, reduces creativity, involves huge costs, etc.
External limitations of planning are natural calamities, technological changes, changes in government policies, etc.
For making planning effective factors responsible are consciousness for planning, initiative at top level, proper communication, participation in planning, etc. Plans are broadly categorised into two groups namely single use plans and standing plans. Single use plans are of two types like programme and budget where as standing plans consists of objective, policy, strategy, procedure, rule and method.


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  • Q1

    ‘Planning is forward looking’. How?


    Planning means to think in advance thus it is a looking ahead activity which is never done for the past. It involves thinking in advance what and how the work is to be done in future. It anticipates opportunities and threats in the environment. Thus, planning involves forecasting.

    The purpose of planning is to meet future events effectively for the advantage of an organisation. All managers try to predict the future on the basis of past experiences & information.

    For example, a business plans its production and related operations, on basis of sales forecast.

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  • Q2

    “Planning bridges the gap between where we are and where we want to go.” Explain.


    This statement means that planning is a futuristic exercise which involves looking ahead and preparing for the future. It implies peeping into the future, analyzing and predicting it.

    Planning may be defined as setting objectives and targets for a period and formulating an action plan to achieve them in the best possible manner.

    Plans are always developed for a fixed time period.

    Planning can thus be defined as, setting objectives for a given time period, formulating various courses of action to achieve them and then selecting the best possible course of action to achieve the organizational objectives.

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  • Q3

    What are the advantages of planning?


    Advantages of Planning:

    1. Planning is helpful in achieving business objective:- Planning anticipates future demands and evaluate existing and prospective resources. It makes effective co-ordination between physical and human efforts and channlizes them towards the desired goal of the business.
    2. Planning reduces future uncertainties and enables us to fact it:- It is planning which pre-assesses the future uncertainties and also enables the organization to fact these uncertainties with minimum wastage of resources.
    3. Planning enables the best possible use of resources:- Planning evaluates the alternative uses of the available and prospective resources of the business and makes their most appropriate use.
    4. Effective co- ordination:- Planning determines the activities of different individuals, groups and departments in such a way, that maximum co-ordination between physical and human resources may emerge.
    5. Planning facilitates decision making and promotes creativity:- In order to avail the opportunities in an appropriate way concentrated efforts are made and as such new ideas, methods and techniques emerge.
    6. Helpful in development and expansion:- Planning tries to avail all the opportunities available by making the effective utilization and integration of resources, which make the expansion of business easy.

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  • Q4

    “Planning pervades all managerial activities.” Explain the statement.


    Planning is essential for every sort of business activities. Every department whether Purchase, Sales, Accounts, Auditing, Marketing etc. needs systematic planning, Co-ordination of different departmental plans and direction of their integrated energies towards the desired goal of the business depend on planning. Effective organization, staffing, direction and controlling needs planning in this way, is all – embracing.

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  • Q5

    “Failing to plan is planning to fail.” Explain.


    The statement ‘Failing to plan is planning to fail’, if an organisation doesn’t plan its operations and activities, it will not be able to achieve its organisational objectives and may consequently fail.

    This statement therefore highlights the importance of ‘Planning’ function in an organisation.

    Planning is important due to:

    i. Provides direction: Planning provides direction by predetermining the course of actions. It provides the directions to the efforts of employees by making it clear what is to be done, how it is to be done etc.

    ii. Reduces the risks of uncertainty- Planning helps the organisations to anticipate the possible future changes and prepare for the unexpected events.

    iii. Establishes standards for controlling- Planning makes control meaningful and effective. It provides the goals or standards against which the actual performance can be measured and evaluated.

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