Unit 4

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Planning

UNIT 4 PLANNING

Objectives
After reading this unit, you should be able to:

• Understand the meaning of planning as a management function


• Characteristics of planning function
• How planning process takes place
• Merits and demerits of planning function and various types of planning

Structure
4.1 Introduction
4.2 Meaning of Planning
4.3 Nature of planning
4.4 Steps of planning function
4.5 Why planning is necessary
4.6 Types of planning
4.7 Summary
4.8 Self- Assessment Questions
4.9 References/ Further Readings

4.1 INTRODUCTION
The basic and primary aim of management is to solve the problem
effectively, efficiently and creatively owing to a highly competitive and
dynamic working environment. Principles of management have long been
discussed to help the managers to solve their short-term as well as long term
business problems. Due to this principles of management have been
categorized into four basic functions namely, Planning, organising, leading
and controlling (POLC framework). These integrated and highly essential
functions of an organization ensures the smooth functioning of business
enterprises on day to day basis and developing a strong foundation for long
term survival and growth. Other academics and business gurus have ramified
these management functions like planning, organizing, staffing, directing and
controlling. No matter what the bifurcation is, planning is the first and most
crucial function that needs to be performed for the effective functioning of
other management functions. This unit explains in detail about Planning as a
management function.
Planning is done by managers at all levels of organisation. You will see that
all managers plan though the character and breadth of planning may differ at
different levels of organisation. For example, while an Assistant Engineer at a
work-site plans for the accomplishment of work at his site from day to day or
for two or three days in advance, the Chief Project Manager must plan for the 53
Managerial whole project over a larger period of time. Similarly, a multinational
Processes-I
company's top management must plan over a longer time frame for a world-
wide market.

Planning is a means to some end as such involves choices among


alternatives-alternative goals, alternative programmes and alternative means
of achievement. What alternative to choose gives rise to decision-making
which every manager will be required to do.

Question: Do you plan your day? How?


Do you plan for your holidays/vacations? How? Why?

Have you actively participated in the planning of some big event like the
Annual Function of your college or the marriage of a female relative of
yours? Recapitulate how the event was planned.

If you have given thought to the above questions, you must have sensed the
need for planning any activity whatsoever. Planning is considered important
because it-
i) attempts to offset uncertainty by foreseeing the future and bringing about
preparedness for the happenings in future. In this way, it minimises the
chances of mistakes,
ii) focuses attention on the objectives or goals of the organisation and their
attainment,
iii) leads to economy in operation through the selection of the best possible
course of action,
iv) helps in controlling the activities by providing measures against which
performance can be evaluated,
v) helps in coordinating the operations of an enterprise since a well-
considered plan embraces and unifies all the divisions of an enterprise.

Activity 1
As a manager, identify various planning activities that you are involved in.

1. ……………………………………………………………………………
2. ……………………………………………………………………………
3. ……………………………………………………………………………
4. ……………………………………………………………………………
5. ……………………………………………………………………………
6. ……………………………………………………………………………
7. ……………………………………………………………………………
8. ……………………………………………………………………………

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Planning
4.2 MEANING OF PLANNING
Nothing can affect the success and failure of a business more than the
planning function of an enterprise. The globalised and highly dynamic work
environment strives for effective planning and its management. This crucial
dictum in highly recognized and its fuller assimilation can only be possible
with the understanding of what is meant by planning.

Planning is the management function initiates with setting business objective


and determining various courses of actions to achieve stated objectives. A
successful and efficient business manager scans the environmental conditions
of the business organization and forecasting future business conditions.
Scanning and predicting future business environment requires a manager to
be far-sighted and a good decision-maker.

Planning is a two-way process of looking back to derive future course of


action. This preparatory step is systematic and scientific as it follows an order
of what, when, how and whom a specific job would be carried out. It is a
detailed and comprehensive blueprint of organizational functioning in future.
Planning involves a thorough examination of an organization’s available
physical as well as human resources to coordinate and contribute towards
organizational activities. This basic management function involves
developing a detailed organizational plan to balance between needs and
demands of organizational resources and achieving organizational results
thereof.

Urwick stated that “Planning is a mental predisposition to do things in an


orderly way, to think before acting and to act in the light of facts rather than
guesses”. It is a mental process of selecting the best of alternative resources
to achieve organizational goals following predetermined standards.
In words of Koontz & O'Donnell, “Planning is deciding in advance what to
do, how to do and who is to do it. Planning bridges the gap between where
we are to, where we want to go. It makes possible things to occur which
would not otherwise occur”.

A. Features of Planning
• Planning focuses on achieving objectives by deciding upon the
activities to be undertaken.
• Planning is a primary functionas it precedes all functions of
management i.e. organising, staffing, directing& controlling.
• Planning is pervasive as it is required at all the levels of
management but its scope may vary.
• Planning is continuous as plans need to be made on a continuous
basis till an organisation exists.
• Planning is futuristic as it seeks to meet future events effectively to
the best advantage of an organisation. Planning is, therefore, called a
forward looking function.
55
Managerial • Planning involves decision-making as it involves rational thinking
Processes-I
to choose the best alternative among the various available
alternatives in order to achieve the desired goals efficiently and
effectively.
• Planning is a mental exercise as it is based on intellectual thinking
involving foresight, visualisation and judgement rather than guess
work.

4.3 NATURE OF PLANNING PROCESS


The complex and comprehensive nature of planning makes it a function with
several characteristics. Planning may have the following characteristics:

1. A cognitive Process: The planning process is highly intellectual and thus


is cognitive. This managerial function is about thinking with creativity to
utilize existing available resources for available opportunity. An
organization that lacks in studying today’s opportunity and do not reap
its benefit profitability in time, may take the opportunity into problem
tomorrow. Planning for managers involves functions such as what, how,
when and by whom is to be done. An organization that makes a timely
decision today with careful thinking need not worry for the future. Such
an organization can effectively establish equilibrium between the
external environment and internal environment. Planning with critical
thinking and a high level of cognition ensures effective decision making.
2. Planning Vs Forecasting: Many times planning and forecasting seem to
be similar to each other. Though they are common to each other to some
extent. Yet they hold a greater degree of differences. Forecasting refers
to what is expected to happen if they are no way out to escape. Whereas,
planning is about what one wants to happen. Forecasting leads to
planning. For example, a threat to natural resources may encourage
people and nation to plan for the conservation of natural resources.
Though planning involves, evaluation, assessments, estimates and
calculations, yet these are made in the presence of available resources,
time and goals and objectives of natural resources. Apart from these,
planning is a continuous process of assessment and evaluation of find the
deviations and making corrections thereafter. In the modern decade,
planning is highly complex and data-driven and involves various data
mining and analytics.
3. Planning is the accomplishment of group objectives: An organization
operates with the joint efforts of a various individual with varied
personality, skills, attitudes, learning and motivation. These varied
individuals with varied beliefs and personality make a cohesive group
that operates harmoniously to achieve organizational goals. Thus
planning involves achieving the objective of individual keeping group
and organizational objective in mind.
4. The choice between Alternatives: Modern business environment is
highly dynamic and changes at a rapid pace. The plan and procedure that
56 used to be effective in past tend to be obsolete and redundant in the
present scenario with a completely new and different business Planning

environment. Similarly, the presently available resources may not be


available tomorrow or may not fulfil the future new demands. Thus
Planning involves judicious adjustments and adaptation in resources to
grab the emerging business opportunities. The top management generally
follows three steps of decision making. The decision about the objective
of business i.e., profitability, growth, consumer satisfaction etc. the next
it focuses on selecting the strategy to achieve these objectives followed
by operation goals.
5. Planning is all-pervasive: Planning as a management function is so
imperative that is pervades in all managerial functions for a goal-oriented
organization. It would be wrong to state that planning is just a first step,
rather it is the step that influences each managerial function be it
organizing or controlling. Moreover, It is wrong to quote that planning is
a task performed by top-level management only. Though they devote
considerable time and discussion in the planning process, yet the role of
the middle and lower level of management at their respective activities
cannot be neglected to draw a successful effective plan. Several of
planning requires managers at a different level. The first step in
determining the objective involves top management. But other following
steps like operationalization of plan make require the involvement of
middle and lower level as well. Involvement of people in planning
process belonging to different levels in the organization can significantly
boost their motivation level.
6. Planning is flexible: for an organization to be successful, it is crucial to
establish synergies between opportunity and available resources.
Forecasting the growth opportunity and adapting the resources
accordingly does provide a competitive advantage to an organization.
This requires careful identification of KSAs of people, man, material and
money to the take advantage of the available opportunity. Since the
business environment is prone to suffer from uncertainty and dynamism,
alteration in a mix of materials and plans is very essential to survive and
suit the change.
7. Planning is the integrated process: with the establishment of various
policies, programs and procedures, and organization established
organization objectives that it aims to achieve under the planning
process. When the organization establish such objective and implement
the interventions, it may encounter a difference of opinion among
personnel of organization particularly from those who are involved in the
planning process. For example, where a sales manager may look for
various products to satisfy the needs of the consumer and to grab more
market share, production managers may look for keeping the production
simple with least standardization. Effective planning takes care of these
conflicting interests and tries to maximize the organization interest with
the least cost of an individual’s interest.

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Managerial
Processes-I
4.4 STEPS INVOLVED IN PLANNING PROCESS
The complex and systematic process of planning involves certain basic
logical steps to be followed. These are:
1. Setting up of organizational objectives: The first and foremost
objective of an organization establishes various objectives and goals that
an organization strives to achieve. Objectives determine the various
activities and direction of efforts. For an effective planning function,
objectives need to be stated clearly and must be precise and
unambiguous. Unclear and ambiguous objectives lead to chaos and
wastages. Objectives set under the planning process can be for the entire
organization, for each department, units and employees. It can be short-
term as well as long-term based on the organization’s desire to achieve.
Apart from objectives being clear, precise and ambiguous, they must be
practical, feasible, and achievable and realistic. For example, for a
manufacturing company, reducing production hour can be an objective
that can be achieved to reduce processing timing at every step. For an
objective to be clear and realistic it should be stated in quantitative terms,
for example, the number of working hours, the percentage increase in
sales or production, the wage is given to labours etc. Objectives stated in
qualitative terms can be optimistic but not precise. And hence leads to
confusion.
2. Developing planning premises: Planning is about predicting the
uncertain future to carry out the business activities. To forecast the
future, certain assumptions about the future need to be made by the
planning managers. These assumptions serve as the base to create a
premise for developing a plan of action. This is called planning premises.
These assumptions are made in the form of forecasts. Forecasting is a
technique of gathering information for developing planning premises. In
general business parlance, enterprises forecast the demand for a product,
inflation prediction, tax regime, interest rates, government interventions
etc. Thus to develop an effective plan, accurate forecasting is essential.
Where external forecasting is necessary and complex to be made,
internal forecasting also plays a crucial role in the planning process.
Internal forecasting such as trade relations, capital investment policy, and
management philosophy significantly influences forecasting and thus
planning process.
3. Identification of alternative course of action: as objectives setting and
making of assumptions is done, various alternative courses of actions are
identified to achieve those objectives. This step involves the
identification of a maximum number of alternatives based on the type of
project. An important project requires detailed and comprehensive
identification of alternatives than the general one. A detailed statement of
alternatives is presented amongst the members of the organization to be
discussed about the selection of alternatives.
4. Evaluating alternative course of action:after identification of various
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alternative courses of actions, each action is examined in terms of their
pros and cons. The positive and negative aspect of each course of actions Planning

is evaluated concerning the objectives of an organization. For the


selection of course of action, the cost and benefits, feasibility,
practicability is examined. For a financial plan of an organization, the
risk-return of the project is taken into consideration. The plan with
higher risk tends to have higher profit earning and is evaluated in terms
of EPS, earnings, taxes, dividends and interests.
5. Selection of alternative: At this point,the final decision is taken. The
best plan in terms of maximum benefits and the minimum cost is adopted
for implementation. The plan chosen would be feasible, profitable, and
tend to yield higher profits and the least cost. Various plans are selected
after careful investigation and statistical calculation, but many a time
subjectivity in terms of manager’s experience, knowledge and judgment
are considered in selecting the best alternative. When an organization
look for long-term benefits and number of objectives, a combination of
various plans may be selected.
6. Implementation of the plan: at this stage, various other managerial
functions come into the picture as the best-selected plan is implemented.
In this stage, the implementation of the action takes place i.e. doing what
is required. For a production department, an objective is to increase
production more than labour, then organization may implement a plan
that involves more investments in machinery.
7. Follow-up of action: this is the crucial stage as it involves seeing
whether selected and implemented plan is working as per plans or not.
This stage is essential and requires close monitoring to assess deviation
in selection and implementation and to achieve desired objectives.

Activity 2
Request your senior manager to procure a copy of the corporate plan of your
company. Read it carefully and summarise some of the important
programmes of your company.
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………

4.5 WHY PLANNING IS NECESSARY:


IMPORTANCE
The fast-changing business environment creates the need for development
and planning. An organization that adopts a lackadaisical approach in the
identification of environmental change would surely struggle to survive and
grow. The following point shows how planning is an important management
function:
59
Managerial 1. Ensures selection of optimum goals: planning is the cognitive and
Processes-I
intellectual process of selecting the best course of action from various
available alternatives. It is also about selecting one course of action that
has sound chances of being profitable, feasible, achievable and
economical and reject the other courses of actions that are not so feasible
and profitable. The selected course of action ensures the overall growth
of an organization keeping in mind the organizational limitations in
terms of resources, time limit, objectives and strategies. In overall
development of the organization, it is necessary to optimize the overall
operation of the organization and sub-optimization of other departments.
2. Manages complexities: a single organization is a function of the
heterogeneous group of human resource who possess different KSA,
values, belief, culture and motivation level. In such heterogeneous
working environment, it is obvious to have a disharmony in terms of
organizational and individual interest. An effective plan of organization
is a way to create a common interest among individual of an organization
who works together towards the accomplishment of organizational goals
in which they have shared common goals too. Thus planning is a way
towards goal directing activity.
3. Survive environmental change: the business environment witness
tremendous change now and then. From a conservative business model
to democratic, global business scenario has left the business houses to
keep itself updated to meet changing demands with changing
environment. Change in demand, change in technologies, fashion,
preferences, social values significantly affect the organizational normal
course of operation. Management must strive to grab the opportunity to
take advantage of the changed situation by adapting and adjusting its
inputs to meet new demand and preferences of customers. Proper,
scientific and systematic planning helps to survive in the turbulent
situation created out of environmental change.
4. Protection from failure: unpredictable change in consumer’s taste and
preferences, cut-throat competition, rapid technological change,
economic slowdown, political disturbances significantly affect the nation
and so business houses. Sometimes these changes are so adverse that
leads to complete business failure. However, many organizations could
not survive these radical changes due to ineffective planning and faulty
decision making. It cannot be denied that planning cannot eliminate all
business failures, but it can surely help in identification and evaluation of
business opportunities and threats and examining the various course of
action thereafter.
5. Unity of action: since the organization works with joint efforts of an
individual with different KSAs, thus their harmonious working is
necessary towards accomplishment of organizational goals. This is
possible with efficient planning that provides stake to employees to work
jointly for organizational success.
6. Supports control and coordination: Planning function supports other
management function such as control and coordination. What, when,
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how and by whom a function is to be performed, all these are planned Planning

and worked out well in advance. This helps in easy and timely
performance appraisal and finding the deviation thereof. In the absence
of planning neither the performance would be of quality nor can the
standard of performance be established effectively. This will lead to poor
performance, delay in completion of tasks, wastages, chaos and
ultimately control and coordination would suffer. Proper planning can
ensure establishment performance standards scientifically and
systematically, timely and effective performance measurement, timely
identification and elimination of deviations and thus harmonious
function at the workplace.
7. Planning Promotes Innovative Ideas:It is clear that planning selects the
best alternative out of the many available. All these alternatives do not
come to the manager on their own, but they have to be discovered. While
making such an effort of discovery, many new ideas emerge and they are
studied intensively in order to determine the best out of them. In this
way, planning imparts a real power of thinking in the managers. It leads
to the birth of innovative and creative ideas. For example, a company
wants to expand its business. This idea leads to the beginning of the
planning activity in the mind of the manager.
8. Planning Facilitates Decision Making: Decision making means the
process of taking decisions. Under it, a variety of alternatives are
discovered and the best alternative is chosen. The planning sets the target
for decision making. It also lays down the criteria for evaluating courses
of action. In this way, planning facilitates decision making.

Limitations:
Though planning is the first and foremost managerial function, still it is indulged
in various negative connotation and limitations. These limitations are:
1. Uncertainty: Planning function prepares policies and procedures for
future and set goals to be achieved in future. Owing to the uncertain
nature of the future, planning function tends to be ineffective as nothing
can be assessed about future with surety. So planning is prone to failure
many times. As planning is about the future, the future course of action
can only be based on anticipation, assumptions, speculations, and
probabilities. The management sets the goals to achieve, prepares a plan
to achieve those runs with the risk of failure. Though data analysis and
statistics have made the planning accurate and effective, yet its cent
percent success can never be ensured.
2. Planning is cognitive function: planning being the cognitive and
intellectual function requires serious attention, time and expertise to plan
and make decisions. These require maximum mental involvement and
time. Managers who are always grappling with day-to-day operational
problems could not devote much attention and time on planning. Many
organizations keep planning function at a back seat as it is required only
when any adverse change is observed. Thus the effect of planning will be
observed in a long time. Therefore focus on the present problem is
necessary than the problem of the future. 61
Managerial 3. Abstraction: as discussed, planning is about predicting future, it
Processes-I
involves dealing with vague alternatives. It addresses a question like
“what if”. Since it is a function of assumptions, estimation, guesswork
and speculation, planning works in abstraction with nothing hard and fast
and concrete.
4. Rigidity: setting up of objectives, choosing a course of action to be
implemented to achieve those objectives makes the planning rigid
enough to deviate from the stated path. Work for an uncertain future,
with abstraction and speculation through predetermined goals and course
of action makes planning function inefficient and ineffective many times.
Plan, procedures and practices with predetermined goals and objectives
and already stated course of action is deterrent to creativity and
innovation. It leaves no room for freedom at work and makes an
organization bureaucratic many times. Thus planning function is
criticized due to its rigidity.
5. Costly affair: planning is an expensive function both in terms of time
and money. It requires a huge outlay to assess and estimate information
from within and outside the organization. These require an investment of
time with serious mental and cognitive devotion. Since it is an
intellectual function, it requires experts to assess, evaluate a problem and
suggesting a solution thereafter. Many times business organization resort
to expert houses offering planning functions from data extraction to data
analysis to policy formation. These outside experts cause huge costs to
an organization.

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BENEFITS FROM ORGANISATIONAL PERSPECTIVE: Planning

• Gives an organization a sense of direction Without plans and


goals, organizations merely react to daily occurrences without
considering what will happen in the long run. For example, the
solution that makes sense in the short term doesn't always make
sense in the long term. Plans avoid this drift situation and ensure
that short range efforts will support and harmonize with future
goals.
• Focuses attention on objectives and results Plans keep the people
who carry them out focused on the anticipated results. In addition,
keeping sight of the goal also motivates employees.
• Establishes a basis for teamwork Diverse groups cannot
effectively cooperate in joint projects without an integrated plan.
Examples are numerous: Plumbers, carpenters, and electricians
cannot build a house without blueprints. In addition, military
activities require the coordination of Army, Navy, and Air Force
units.
• Helps anticipate problems and cope with change When
management plans, it can help forecast future problems and make
any necessary changes up front to avoid them. Of course, surprises
— such as the 1973 quadrupling of oil prices — can always catch
an organization short, but many changes are easier to forecast.
Planning for these potential problems helps to minimize mistakes
and reduce the “surprises” that inevitably occur.
• Provides guidelines for decision making Decisions are future
oriented. If management doesn't have any plans for the future, they
will have few guidelines for making current decisions. If a
company knows that it wants to introduce a new product three years
in the future, its management must be mindful of the decisions they
make now. Plans help both managers and employees keep their
eyes on the big picture.
• Serves as a prerequisite to employing all other management
functions Planning is primary, because without knowing what an
organization wants to accomplish, management can't intelligently
undertake any of the other basic managerial activities: organizing,
staffing, leading, and/or controlling.

4.6 TYPES OF PLANNING


Based on the organizational objectives and goals the planning can broadly be
classified into three main categories. These are Strategic Planning, Tactical
Planning and Operational planning. The organization works in an uncertain
business environment. Thus it is susceptible to various threats as well as
opportunities from the environment. When an organization analyzes possible
63
Managerial threats and competitive opportunities within the environment and evaluates
Processes-I
its strength and weaknesses to position itself to take the advantage of the
environment or survive the adverse the organization plans strategically.
Strategic planning involves long term commitment often five or more years.
This planning is complex as it includes the entire organization and
formulation of objectives. Generally, strategically planning is done in the
view of organizational vision and mission. Since it is long term and highly
technical therefore top management is involved in it. On the other hand,
tactical planning of less long term in nature usually for one to three years
and it is about developing means and mechanism to be adopted for the
implementation of strategic plans. In simple words, tactical planning is “how
to implement” strategic plans. This planning is about implementation
therefore middle-level managers are involved in such planning process. The
third type of planning i.e. operational planning seems to functional planning
where organization-wide or goals and objective for each unit or sub-unit is
established ways to achieve them is looked for. Operational planning is short-
term planning for less than one year as it aims to eliminate current
operational problems. Planning at this level supports at the higher-level
planning of tactical and strategic.

The above discussion classified the planning into three broad categories,
however, planning can also be classified based on the time frame involved in
it. Broadly plans under planning are divided into three parts i.e. Long-term
plans, medium-term plans and short-term plans. Plans those are highly
technical and deals with the competitive aspect of the organization are termed
as long term plans as they involve allocation of resources for a long period
usually between five and fifteen years. However they may vary concerning
their nature, scope, complexity, and size and are usually somewhat vague.
These plans are more susceptible to uncertain events that may leave a
significant impact on the organization. Such as technological changes, change
in consumer behaviour, government policies can significantly affect the
organization and involves serious attention of top management to make a
long-term plan. Plans that are relatively detailed and specific and usually
range between two and five years are medium-term plans. These plans are
operational as decisions like raw material purchase; overhead expenses,
labour wages, production etc are taken. Though these decisions are also
crucial to an organization, yet any flaw in planning would not result in
serious failure, as it can be altered in two-three years. Similarly in short-
term plans for about a year or so are more specific and deals with day to day
operation such as inventory management, employees training etc.

Plans can be classified based on the nature and scope of plans. Based on their
nature and scope of plans, plans can be standing and of repeated nature that is
used repeatedly. In such plans, objectives, policies, procedures, rules and
strategies are developed. These plans serve as guidelines to carry out business
activities. When an organization has a single-use plan, it usually establishes
programmes and budgets.

Types of Plans:

64 As the plans are all pervasive, they are made at every level of organization
with different purposes and perspectives. Accordingly they may take various Planning

shapes and stand differently in the hierarchy of importance.

The most popular ways to describe organizational plans are by their:


1. Coverage – Strategic, tactical, and operational,
2. Time frame – Short and long term,
3. Specificity – Specific versus directional,
4. Frequency of use – Single use and standing.

Note that these planning classifications aren’t independent. For instance,


short-and long- term plans are closely related to strategic and operational
ones. And single-use plans typically are strategic, long term, and directional.

1. Strategic, Tactical and Operational Plans:


a. Strategic Plans:
Strategic plans are designed to meet the broad objectives of the
organization – to implement the mission that provides the unique
reason for organization’s existence. They are set at the top
managerial level, and are meant to guide the whole organization.
An organization’s strategic plan is the starting point for planning.
The aim of strategic planning is to help a company select and
organize its businesses in a way that would keep the company
healthy in spite of unexpected upsets occurring in any of its specific
businesses or product lines.
For example- in order to deal with uncertainties of raw material
availability, a company’s strategic plan may purport to acquire its
own facilities for generating raw material. Strategic plan serves as a
guide to the development of sound sub plans to accomplish the
organizational objectives.
b. Tactical Plans:
Top level managers set the strategies that an organization should
focus to achieve organizational goals. Examples of strategies include
set-up a plant to generate raw material for the organization’s
manufacturing activities, explore North-East market, and likewise.
Middle managers interpret these strategies and develop tactical plans
for their departments that follow strategies in order to contribute to
the organizational goals.
In order to develop tactical plans, middle management needs detail
reports (financial, operational, market, external environment).
Tactical plans have shorter time frames and narrower scopes than
strategic plans. Tactical planning provides the specific ideas for
implementing the strategic plan. It is the process of making detailed
decisions about what to do, who will do it, and how to do it.
65
Managerial In short, tactical plans may be understood in following terms:
Processes-I
1. Tactical planning deals primarily with the implementation phase
of the planning process
2. Tactical planning turns strategy into reality
3. Tactical planning usually has a 1-2 year time horizon
4. Tactical planning is usually tightly integrated with the annual
budget process
c. Operational Plans:
The supervisor interprets the strategic and tactical management
plans as they apply to his unit. This way, he makes operational plans
to support tactical plans. These plans provide the details of how the
strategic plans will be accomplished. Examples of planning by
supervisors include scheduling the work of employees and
identifying needs for staff and resources to meet future changes.
Operating plans tend to be repetitive and inflexible over the short
run. Change comes only when it is obvious that plans and specific
action steps are not working.
There are two main type of operational plans – Single use plans
which are developed to achieve specific purposes and dissolved
when these have been accomplished; standing plans are standardized
approaches for handling recurring and predictable situations.
Note that Tactical plans are based on the organization’s strategic
plan. In turn, operational plans are based on the organization’s
tactical plans. These are specific plans that are needed for each task
or supportive Activity comprising the whole. Strategic, tactical, and
operational planning must be accompanied by controls.
Monitoring progress or providing for follow-up is intended to ensure
that plans are carried out properly and on time. Adjustments may
need to be made to accommodate changes in the external and/ or
internal environment of the organization.
2. Short-Range and Long-Range Plans:
Time is an important factor in planning. George Terry says, “The time
period covered by planning should preferably include sufficient time to
fulfil the managerial commitments involved.”
Generally a short range planning (SRP) means a plan for one or two
years and long range planning (LRP) means a plan for three to five years
or more. Though this division may be considered as arbitrary, but it may
have a general acceptability. This period of course, may vary according
to the nature and size of business.
When a concern requires long gestation period, it is natural that the long
range planning may cover a longer period than five years. For example-
organizations, such as oil or mining companies, or airlines must make
long range planning because of their particular purposes and objectives.
66 A home video-rental store or a book store might concentrate on seasonal
or annual goals. Planning

However, whatever the period of planning, it should not be too rigid. It


should rather be flexible to meet the unknown factors of the future. If a
concern adopts both short-term and long-term planning, the short-term
planning should fit in with long-term planning. It is important, for
managers, to understand the roles of both long range and short range
planning in overall planning scheme.
3. Specific and Directional Plans:
Specific plans are established to achieve a specific purpose and dissolves
when the purpose is accomplished. For example- a manager who seeks to
increase his firm’s sales by 20 per cent over a given twelve-month period
might establish specific procedures, budget allocations, and schedules of
activities to reach that objective. These represent specific plans.
Directional plans identify general guidelines. They provide focus but do
not lock managers into specific objectives or courses of action. Instead of
following a specific plan to cut costs by 4 per cent and increase revenues
by 6 per cent in the next six months, a directional plan might shoot for
improving corporate profits by 5 to 10 per cent every year.
Intuitively it seems right that specific plans would be preferable to
directional or loosely guided plans, because they have clearly defined
objectives. There is no ambiguity, no problem with misunderstandings.
However, in certain circumstances, like in case of fast changing
environment, directional plans provide the flexibility required to cope
with the changing situations.
4. Single Use and Standing Plans:
A single-use plan is a one-time plan specifically designed to meet the
needs of a unique situation and created in response to non-programmed
decisions that managers make.
In contrast, standing plans are ongoing plans that provide guidance for
activities repeatedly performed in the organization. Standing plans are
created in response to programmed decisions that managers make and
include the policies, rules, and procedures.
i. Single-Use Plans:
Single-use plans are detailed courses of action that probably will not
be repeated in the same form in the future. For example- a firm
planning to set up a new warehouse because it is expanding rapidly
will need a specific single-use plan for that project, even though it
has established a number of other warehouses in the past.
It will not be able to use an existing warehouse plan, because the
projected warehouse presents unique requirements of location,
construction costs, labour availability, zoning restrictions, and so
forth. The major types of single-use plans are programs, projects,
and budgets.

67
Managerial a. Programs:
Processes-I
A program covers a relatively large set of activities. The
program shows- (1) the major steps required to reach an
objective, (2) the organization unit or member responsible for
each step, and (3) the order and timing of each step. The
program may be accompanied by a budget or a set of budgets
for the activities required.
A program may be as large in scope as placing a person on the
moon or as comparatively small as improving the reading level
of fourth-grade students in a school district. Whatever its scope,
it will specify many activities and allocations of resources
within an overall scheme that may include other single-use
plans as projects and budgets.
b. Projects:
Projects are the smaller and separate portions of programs. Each
project has limited scope and distinct directives concerning
assignments and time. In the warehouse example, typical
projects might include the preparation of layouts, a report on
labour availability, and recommendations for transferring stock
from existing facilities to the new installation. Each project will
become the responsibility of designated personnel who will be
given specific resources and deadlines.
c. Budgets:
Budgets are statements of financial resources set aside for
specific activities in a given period of time. They are primarily
devices to control an organization’s activities and so are
important components of programs and projects. Budgets
itemize income as well as expenditures and thus provide targets
for such activities as sales, departmental expenses, or new
investments.
Managers often use budget development as the process by
which decisions are made to commit resources to various
alternative courses of action. In this sense, budgets can be
considered single-use plans in their own right.
ii. Standing Plans:
a. Policies:
A policy is a general statement designed to guide employees’
actions in recurring situations. It establishes broad limits,
provides direction, but permits some initiative and discretion on
the part of the supervisor. Thus, policies are guidelines. Some
policies deal with very important matters, like those requiring
strict sanitary conditions where food or drugs are produced or
packaged. Others may be concerned with relatively minor
issues, such as the way employees dress.
68 Policies are usually established formally and deliberately by top
managers of the organization. Policies may also emerge Planning

informally and at lower levels in the organization from a


seemingly consistent set of decisions on the same subject made
over a period of time.
For example- if office space is repeatedly assigned on the basis
of seniority, that may become organization policy. In recent
years policy has also been set by factors in the external
environment—such as government agencies that issue
guidelines for the organization’s activities (such as requiring
certain safety standards).
b. Procedures:
A procedure is a sequence of steps or operations describing how
to carry out an activity. It is more specific than a policy and
establishes a customary way of handling a recurring activity.
Thus, less discretion on the part of the supervisor is permissible
in its application. For example- the refund department of a large
discount store may have a policy of “refunds made, with a
smile, on all merchandise returned within seven days of
purchase.”
The procedure for all clerks who handle merchandise returned
under that policy might then be a series of steps like these- (1)
Smile at customer. (2) Check receipt for purchase date. (3)
Check condition of merchandise … and so on. Such detailed
instructions guide the employees who perform these tasks and
help insure a consistent approach to a specific situation.
OBJECTIVES: the future goals and desired state that an organization strives
to achieve in future. Objectives are road map or direction path that keeps an
organization attentive and focused towards its goals and helps in dodging
obstacles. Peter Drucker say that an organization mostly has objectives
related to market share, innovation, productivity, profitability, physical and
financial resources, performance and development etc. Charles Perrow
classified objectives into five categories namely; Societal objectives (cultural
values, production of goods and services), output objectives, system
objectives, product objectives and Derived objectives (community
development).

Though organizational objectives are vital to an organization, yet it suffers


from the problem of quantification. Where objectives stated in quantitative
terms are easily understandable, qualitative objectives are vague and
confusing. For example, the objective of cost reduction, ROI on investment,
market share, reduction in cost by one-third, fifteen increase in profit, ten
percent return on capital etc are explicitly stated and are not subject to
vagueness and confusion. Qualitative objective such as maximizing customer
satisfaction through quality performance, maintaining an ethical relationship
with stakeholders etc are necessary but vague in terms of a clear definition of
satisfaction, quality performance and ethics. Objectives that are clear and
unambiguous are sure to be achieved.
69
Managerial Management by Objectives (MBO)
Processes-I
Management by objective is the scientific and strategic approach to enhance
the organizational objective wherein goals and objectives of organizations are
clearly stated, define and conveyed by the managers to the entire
organization. The crucial step of defining the objective under this approach
is to monitor and evaluate employees’ performance against the stated
objectives. Ideally, under this approach, employees themselves set their goals
and course of action that effectively fulfil their obligation. In other words,
MBO is a scientific strategy to establish objectives jointly by managers and
subordinates and desire to achieve them with achieving organizational
objectives simultaneously. MBO approach follows the following six steps:

1. Defining organizational objectives/goals with the help of different


managers and supervisors. Based on organization status and
performance, objectives to be achieved in specific time are established.
A broad range of objectives that are critical to the organization is
established and most top-level managers are involved in this step.
2. Defining objectives for employees: after establishing the general broad
organizational objectives, plans and procedures, managers are superiors
discuss and work with their subordinates to establish their objectives.
This step is crucial enough as the personal objectives of employees
motivate them to work towards organizational objectives. Managers and
superiors discuss the need, goals, time and resources required by the
employees to achieve their objective and organizational objective
ultimately. Employees present their thought and ideas about what
departmental objectives are necessary to be framed and achieved.
3. Regular monitoring performance and progress: since an organization is
managed by managing the objectives of an organization. Thus, apart
from increasing managerial efficiency, regular monitoring and progress
of employees are necessary. Close monitoring of performance ensures
eliminating performance deviation and flaws.
4. At this step performance of each employee concerning performance
standard and objectives are evaluated by the concerned managers of
supervisors.
5. Providing Feedback: feedback step is very crucial under management by
objective approach. Continuous feedback on performance helps the
employees to manage their performance quality and correcting their
actions. Feedback at a particular point of time should be replaced with
continuous feedback through regular formal and informal meetings of
superiors and subordinates. In this way, probable performance deviation
can be eliminated and progress can be ensured.
6. Performance Appraisal: the routine of performance of an employee by
the managers is the final step under the MBO approach.
Management by objectives offers several benefits to the organization such as
it ensures better communication between managers and subordinates while
objectives for organization and employees are set, makes job clarity amongst
70 subordinates, it leads to increase in motivation level of employees as they feel
more connected with the organization being part of the planning process, and Planning

it also ensures the close monitoring too of performance of employees.


Ultimately, MBO improves the planning process. Despite several benefits to
the organization and employees, MBO is engulfed in various demerits and
limitations. Since it involves setting clear and unambiguous objectives for
organization as well as employees, a lot of paperwork is involved in it.
Regular meetings and sessions are conducting with managers and
subordinates to set objectives and detailed records are maintained. Secondly,
many a time, lower levels of management are kept outside the objective-
setting process and thus the process becomes less democratic. Thirdly, where
poor performance is closely monitored and managed, exceptionally good
performances do not get any incentive. Moreover, MBO faces the problem of
defining the objectives with clarity, devising suitable means to achieve them,
difficulty in avoiding conflicts.

Policies: Policies refers to guides to think about the actions to be taken to


make decisions with regards to organizational objectives. It is ready reference
and answer to all the questions that may arise in due course of time in
running the organization. These are broad, comprehensive and flexible to
define the course of actions to be followed to attain objectives. In other
words, it eliminates the possible confusion of objectives and makes the
objectives more concrete and static. Though they are not about any decision
yet it sets the boundary and limits within which decision should be made.
For instance, an organization aiming at reducing the poverty level within a
particular area may hire employees from that local area only.

A good policy is the one that is broad, consistent, adequate in numbers,


practical and flexible. The policy formulated must be outlined broadly
leaving more scope for managers to decide within the limit. It need not cover
every detail as it would become more particular and less scope would be
there to make a decision. Since many policies resort to many questions, there
are chances that one policy may contradict others. Such a situation must be
avoided and hence policies formulated must be consistent and not mutually
contradictory. The policy of an organization binds itself in a single thread
with which is it known. Hence it is an image builder. A policy must be
logical and practical so that every member of an organization can rely on that
and managers can make a decision effectively. Lastly, it must be flexible
enough to incorporate any probable change and uncertainty.

Procedures: A good objective and good policy may not lead to the desired
result until a clear way and mean to achieve them are not established. An
organization that does not ponder upon the procedure to be followed for
accomplishing its objectives and policies to be implemented is certain to
flounder. Questions like what, when and by whom a task would be
performed. An effective procedure ensures easy to control, standardisation,
consistency, coordination and communication.
Rules: in a general term, rules are norms set by the organization that governs
what and what not to be done under a certain situation. It is the self-imposed
principle of action and varies with the situation. Rules set the parameters to
be followed and standards to be achieved. Hence it does not leave any scope 71
Managerial for decision making. Deviations or violations of rules usually lead to
Processes-I
punishment.

Strategies: derived from the Greek word “strategi” which means the office of
the general. Strategy refers to the organizational overall plan to attain the
objectives working under the ambit of uncontrollable environmental forces.
In an uncertain external environment, the organization is exposed to various
threats as well as opportunities. In such situations, an enterprise makes
various strategies such as; a strategy to stabilize the business in a turbulent
situation, strategy to develop a product, strategy to expand the market,
vertical integration, mergers, disinvestment, etc.

Planning Practices in Indian Organisations


Several researchers have looked into the planning practices in Indian
enterprises.

Some of these studies are reported here:

Richman and Copen (1972)


Virtually all of the medium-sized and larger companies surveyed established
at least some quantitative objectives or targets on an annual or short-term
basis. These generally include profitability, sales and production objectives.
Most of them also had some kind of growth objectives and some general
guidelines to help determine those areas in which the firm would concentrate
or expand its efforts. However few defined longer-term objectives clearly.
Only one of the Indian firms surveyed, a drug producer, did a truly thoughtful
job of developing a long-term growth and development model. It identified
explicitly a desirable position to strive for several years in the future and
designed specific strategies to reach it. This firm established specific three
and five-year goals for market share and profitability.
In general, planning processes and plans at firms studied in India focused on
the short run, and in particular on short-term projections of monthly, weekly
and daily operating data. Planning documents consisted mostly of sales
forecasts and some kind of operating budgets. However, these were prepared
more for control purposes than for future planning. The only planning
activity found in most of the major firms was the translation of a sales
forecast into requirements of imported raw materials and the ordering and
stockpiling of these items. In a few cases there were accurate forecasts of
capital requirements or productive capacities made.

Bhatia (1981)
This research study on the objectives of a sample of 65 out of the 251 giant
companies listed by Research Bureau of Economic Times, revealed that only
45 per cent of these have explicitly defined objectives and 55 per cent do not
have expressed objectives. Moreover out of those which have specified their
objectives 17 per cent feel that their objectives are confidential and not to be
divulged.
72 The above evidence indicates that the Indian business organisations, specially
the large-sized, do realise the need and urgency of planning their operations Planning

over longer periods of time. Many however, still consider planning over
longer periods a waste of effort primarily because of a larger measure of
uncertainties prevailing in the Indian environment.

4.7 SUMMARY
Planning is the crucial, first and foremost function of management. It is the
function that lays down foundation stone for other managerial functions such
as organizing, staffing, directing and controlling. With a view to meet future
uncertain event, it is also about retrospection and enhancing the planning
eliminating the flaws committed in previous plans. Planning being cognitive,
continuous and future driven process, it is engrossed with various merits and
limitations as well. Planning is not simple and easy to perform function,
rather it is cognitive and comprehensive function that requires various
chronological steps to be followed. Be it objectives, procedures, rules,
strategies and policies an organization need to define its planning function
accordingly in order to make an organization successful.

Case Studies:
I. Super Fine Rice Ltd. has the largest share of 55% in the market. The
company’s policy is to sell only for cash. In 2015, for the first time
company’s number one position in the industry has been threatened
because other companies started selling rice on credit also. But the
managers of Super Fine Rice Ltd. continued to rely on it’s previously
tried and tested successful plans which didn”t work because the
environment is not static. This led to decline in sales of Super Fine Rice
Ltd. The above situation is indicating two limitations of planning which
led to decline in it sales.
a) Identify the limitations.
Answer:
The two limitations of planning which led to decline in it sales are:
• Planning does not guarantee success.
• Planning may not work in dynamic environment.
II. Laxmi Chemicals Ltd., a soap manufacturing company, wanted to
increase its market share from 30% to 55% in the long-run. A recent
report submitted by the Research & Development Department of the
company had predicted a growing trend of herbal and organic products.
On the basis of this report, the company decided to diversify into new
variety of soaps with natural ingredients having benefits and fragrances
of Jasmine, Rose, Lavender, Mogra, Lemon Grass, Green Apple,
Strawberry etc. The Unique Selling Proposition (USP) was to promote
eco-friendly living in the contemporary life style. The company decided
to allocate 30 crores to achieve the objective.
a) Identify the type of one of the functions of management mentioned
above which will help the company to acquire dominant position in
the market 73
Managerial Answer:
Processes-I
Strategy is the type of plan which will help the company to acquire
dominant position in the market.
III. Two years ago, Mayank obtained a degree in food technology. For some
time, he worked in a company that manufactured bread and biscuits. He
was not happy in the company and decided to have his own bread and
biscuits manufacturing unit. For this, he decided the objectives and the
targets, and formulated an action plan to achieve the same.One of his
objectives was to earn 50% profits on the amount invested in the first
year. It was decided that raw materials like flour, sugar, salt, etc. will be
purchased on two months credit. He also decided to follow the steps
required for marketing the products through his own outlets. He
appointed Harsh as the Production Manager who decided the exact
manner in which the production activities were to be carried out. Harsh
also prepared a statement showing the requirement of workers in the
factory throughout the year. Mayank informed Harsh about his are a wise
sales target for different products, for the forthcoming quarter. While
working on the production table, a penalty of D150/- per day was
announced for not wearing the helmet, gloves and apron by the workers.
a. Identify and explain the different types of plans discussed.
Answer:
The different types of plans discussed above are listed below:
1. Objectives: Objectives are the end results of the activities that
an organisation seeks to achieve through its existence. All other
activities within the organisation are directed towards achieving
these objectives.
“One of the objectives was to earn 50% profit on the amount
invested in the first year.”
2. Policy:A policy is a set of general guidelines that help in
managerial decision making and action.
“decided that the raw materials like flour, wheat, sugar, etc. will
be purchased on two months credit.”
3. Method:A method refers to the prescribed ways or manner in
which a task has to be performed considering the objective.
“decided the exact manner in which production activities were
to be carried out.”
4. Procedure:A procedure contains a series of specific steps to be
performed in a chronological order to carry out the routine
activities.
“decided to follow the steps required for marketing of the
products through his own outlets.”
5. Rule:A rule is a specific statement relating to the general norms
in terms of Do’s and Dont’s that guide the behaviour of people.
It commands strict obedience and a penalty which is likely to be
imposed on its violation.
74
“While working on the production table, a penalty ofRs. 150 per Planning

day was announced for not wearing helmets, gloves and aprons
by the workers.”

4.8 SELF-ASSESSMENT QUESTIONS


I Perspective Planning in Mahindra Ugine Steel Co. Ltd.
The following passages are extracted from the statement of the chairman of
Mahindra Ugine Steel Co. Ltd. at its annual general meeting in 1971. These
extracts will provide you an idea of the importance attached to a perspective
(long-term) plan for an enterprise and also of some of the factors which
condition the planning of a business enterprise.

"I am happy to advise you that in furtherance of our plans to expand the
capacity of your Plant and to achieve maximum economies of scale your
Company has been able to submit a comprehensive plan to the Government
for enlargement of the productive capacity upto 60,000 tonnes of finished
Tool, Alloy and Special Steels per annum In planning the expanded capacity
of our plant we shall strive to achieve maximum diversification of the end-
products consistent with a favourable capital-output ratio… For this, we have
to constantly strive to expand our operations and diversify our product-mix
so that the goals are met or even exceeded.

The observations about our sales and the outlook for our Company prompts
me to discuss briefly the developments and trends in our own industry and
share some thoughts on perspective planning. Planning today is a universally
accepted exercise for one and all. It involves looking as far ahead as the data
on our hands and our vision permit. In the life of a corporation this means a
,close study of all the factors that shape its progress and influence it
decisively. There are several such factors and one such all-important factor,
external to the organisation that could provide the guidelines for future
growth is the assesssment of the potential market. I attach overriding
importance to a sincere, honest and realistic attempt to size up the
approximate if not the exact requirements of a given product for a given year
in the planning and creation of manufacturing capacity.

Your Company is vitally interested in making projections of its own growth


with the help of macro-projections of the demand for Mild, Alloy and Special
Steels released by various Government and semi-Government agencies.
During the last decade there has been several such macro-projection . The last
estimates of demand for Steel have come from NCAER. Most of the studies
work out the potential demand with thehelp of the end-use method which is a
simple but down to earth technique to assess the short-term as well as long-
term demand in developing countries. The recent estimates of NCAER also
utilise the same method.

In the latest study of the demand for Steel, the NCAER has taken full account
of (a) all the major steel consuming sectors, (b) requirements of such
consumers, (c) increase in demand due to export of Steel, (d) Steel content of
machinery and engineering goods to be exported, (e) possible reduction in
75
Managerial demand due to substitution of Steel by items such as plastics, asbestos,
Processes-I
cement, aluminium, etc. in such products as motor cars, railway rolling stock,
ship-building, pipes and tubes, (f) Price elasticity of Steel demand and (g)
Steel content of imported products and so on.

The main assumption underlying the end-use method is firstly that the targets
for various industries obtained from research organisations like the Planning
Commission or those of NCAER itself, would be achieved. Experience tells
us that this has not always been a correct assumption and plan targets for
even the major steel consuming sectors get elasticised. Also in several
industries there have been shortfalls in respect of the attainment of targets. As
you can see for yourselves, such shortfalls may result in over-estimation of
the requirements. Conversely, where targets are exceeded, which is not often
the case, the forecast of requirements for a particular industry turn out to be
under-estimates.

Secondly, the success of the end-use method is largely conditioned by the


accuracy of the norms that relate the Steel industry to the Steel consuming
industry by indicating the input co-efficient. Such norms are known to
change with technological progress and innovations and there have been
several occasions in the past when estimates have gone haywire on account
of unrealistic norms having been adopted. For instance, the norms employed
by the Perspective Planning Division in its 1965 estimate of the requirements
of Alloy and Special Steels have been replaced by the NCAER which has
employed its own norms for various industries. The end-use method thus
assumes that the impact of technological changes would be minimal, if not nil
on the norms of consumption of Steel. Naturally to obtain more accurate
figures at the end of such an exercise, the final estimates are adjusted upward
to provide for such findings of changes in various consuming sectors. In
order to make the macro-projections meaningful for the producers to plan and
expand their capacity, it is essential that norms are kept under review and at
the end of every year or so the Associations of Consumers and Producers
should get together and see that any significant changes in the norms are
reflected in the demand figures and necessary adjustments and/or corrections
are made on the overall demand projections. By such an exercise the year to
year projection of demand would be rendered more realistic and would
provide a workable basis to determine the gap between demand and
availability.

With these considerations regarding the merits and demerits of the end-use
technique in mind, let us consider the recent studies in demand estimates with
special reference to the products of our own industry viz. Alloy and Special
Steels. There have been as many estimates of demand for Alloy and Special
Steels as there are for other Steels also. As against about 300,000 tonnes for
1973-74 and 430,000 tonnes for 1978-79. estimated by the Steering Group of
the Steel Ministry in 1968 and incorporated in the Fourth Five Year Plan
document, the latest study of the Council provides for 434,000 tonnes for
1975 and 817,000 tonnes for 1980.

The estimates of the Steering Committee as revised by the Technical Wing of


76 the Steel Ministry have now become available. Accordingly the demand for
Alloy and Special Steels has been revised upwards from 300,000 tonnes to Planning

400,000 tonnes for 1973-74 and from 430,000 tonnes to 590,000 tonnes for
1978-79. What is of interest to your Company as a producer of Alloy
Constructional Steel in these varying estimates is that for 1973-74 the
estimates of both the Technical Wing and the NCAER arrive at almost the
same figure, but for a difference of only about 2,000 tonnes. The marginal
divergence, however, turns out to be sizable in the estimates for the end of
the Seventies. As against the Technical Wing's estimate of 178,700 tonnes for
1978-79, the Council Places the demand for Alloy Constructional Steel at
239,906 tonnes for 1980.

It is now accepted that the assessment of the Technical Wing has been rather
conservative and that the Council's studies despite certain limitations are
more realistic. A message that emerges loud and clear from these studies is
that even after the schemes for expansion or setting up of new units on green
sites which are now under consideration are successfully implemented by the
end of the decade, there would still be a gap, probably substantial rather than
marginal between requirements and actual production.

All said and done the numerous estimates referred to above need to be further
processed and worked upon for purposes of drawing meaningful conclusions
that guide us in deciding about future investments in the creation of new
Alloy Steel capacity and in determining the ideal product-mix for your or
other plants. The breakdown of such broad aggregates into categories, grades,
shapes, surface finish i.e. black or bright, etc. is a pre-condition for successful
corporate planning. Quite a few snap judgments, I am afraid, have already
been made based on broad aggregate demand resulting in duplication of
capacity of the same size ranges. And circumstances may force us to amend
them, if not reverse such decisions. In this context, I would emphasize that
before a final sanction is issued for creation of fresh capacity, adequate
thought is given to the point whether such fresh capacity shouldcome about
through new units on green sites or through expansion of existing units or
both. These considerations weigh very heavily in favour of the second
proposition. Expansion would firstly help creation of new capacity faster; it
would involve lower capital investment; and finally what is important, it
would help the existing units to achieve economies of scale.
It is high time that a master perspective plan for the speedy expansion of
Steel capacity in the country is drawn up and Government and industry
jointly and single-mindedly work for the crystallisation of such plans. This
exercise has to be followed by clearer thinking about the future needs.

A corporate or industry wise perspective plan considers not only the market
potential for a product but also the derivative demand for essential inputs to
be supplied by the feeder and ancillary industries. Only such an assessment of
the requirements and availability of raw materials would give meaning and
content to the perspective plan.”

Questions:
1) What factors influence the planning in MUSCO?
77
Managerial 2) How does Government policy influence planning in MUSCO?
Processes-I
3) What method of making future forecasts is referred to in these passages?
What are its elements? How accurately can be the forecasts arrived at
through this method? Find out from the books listed below what the
other methods of demand forecasting are.

4.9 REFERENCES/ FURTHER READINGS


Chabra, T. (2018).Principles & Practices of Management. Dhanpat Rai
Publications.
Donnelly, J., Gibson, J., & Ivancevich, J. (2000).Fundamentals of
management. New York: McGraw Hill Companies/Primis Custom Pub.
Mandal, S. K. (2011).Management: Principles and Practice. Jaico Publishing
House.
Robbins, S. (2003).Management. Frenchs Forest, N.S.W.: Pearson Education.
Terry, G., & Franklin, S. (1997).Principles of management. New Delhi:
AITBS Publishers.
Bateman, T., & Snell, S. (2013).M: Management (3rd ed). McGraw Hill /
Irwin: New York,NY
Bernard Taylor; Strategies for Planning: Long Range Planning (August 1975)
Quoted by Stoner, Management (Prentice Hall, New Delhi) Page 102.
Bhatia, M.L. 1981, Corporate Objectives, Indian Management, September.
Crutchfield, N., & Roughton, J. (2013). Safety Culture : An Innovative
Leadership Approach. Elsevier Science & Technology, 2013. ProQuest
Ebook Central
Mandal, S. K. (2011).Management: Principles and Practice. Jaico Publishing
House.
Richman & Coper, 1972. International Management and Economic
Development, Tata McGraw-Hill: New Delhi.
Saim, S., & Idris, M. S. (2017). Co-curriculum management practiced by
principle in secondary level.Social Science, 47734-47736.
Wren, D. A., &Bedeian, A. G. 2009. The evolution of management thought.
(6th ed.), New York: Wiley.

78

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