Planning in Management

Planning
Definition: Planning is the fundamental management function, which

involves deciding beforehand, what is to be done, when is it to be done, how it is to
be done and who is going to do it. It is an intellectual process which lays
down an organisation’s objectives and develops various courses of action, by
which the organisation can achieve those objectives. It chalks out exactly, how to
attain a specific goal.
Planning is nothing but thinking before the action takes place. It helps us to take
a peep into the future and decide in advance the way to deal with the situations,
which we are going to encounter in future. It involves logical thinking and rational
decision making.
Characteristics of Planning
1. Managerial function: Planning is a first and foremost managerial function provides
the base for other functions of the management, i.e. organising, staffing, directing and
controlling, as they are performed within the periphery of the plans made.
2. Goal oriented: It focuses on defining the goals of the organisation, identifying

alternative courses of action and deciding the appropriate action plan, which is to be
undertaken for reaching the goals.
3. Pervasive: It is pervasive in the sense that it is present in all the segments and is
required at all the levels of the organisation. Although the scope of planning varies at
different levels and departments.
4. Continuous Process: Plans are made for a specific term, say for a month, quarter,
year and so on. Once that period is over, new plans are drawn, considering the
organisation’s present and future requirements and conditions. Therefore, it is an
ongoing process, as the plans are framed, executed and followed by another plan.
5. Intellectual Process: It is a mental exercise at it involves the application of mind, to

think, forecast, imagine intelligently and innovate etc.
6. Futuristic: In the process of planning we take a sneak peek of the future. It

encompasses looking into the future, to analyse and predict it so that the organisation
can face future challenges effectively.
7. Decision making: Decisions are made regarding the choice of alternative courses of
action that can be undertaken to reach the goal. The alternative chosen should be best
among all, with the least number of the negative and highest number of positive
outcomes.
Planning is concerned with setting objectives, targets, and formulating plan to

accomplish them. The activity helps managers analyse the present condition to
identify the ways of attaining the desired position in future. It is both, the need of
the organisation and the responsibility of managers.
Importance of Planning
 It helps managers to improve future performance, by establishing objectives and

selecting a course of action, for the benefit of the organisation.
 It minimises risk and uncertainty, by looking ahead into the future.
 It facilitates the coordination of activities. Thus, reduces overlapping among

activities and eliminates unproductive work.
 It states in advance, what should be done in future, so it provides direction for action.
 It uncovers and identifies future opportunities and threats.
 It sets out standards for controlling. It compares actual performance with the
standard performance and efforts are made to correct the same.
Planning is present in all types of organisations, households, sectors, economies, etc.

We need to plan because the future is highly uncertain and no one can predict the
future with 100% accuracy, as the conditions can change anytime. Hence, planning is
the basic requirement of any organization for the survival, growth and success.
Steps involved in Planning
By planning process, an organisation not only gets the insights of the future, but it
also helps the organisation to shape its future. Effective planning involves simplicity
of the plan, i.e. the plan should be clearly stated and easy to understand because if
the plan is too much complicated it will create chaos among the members of the
organisation. Further, the plan should fulfil all the requirements of the
organisation.
Strategic Planning
Definition: Strategic Planning can be understood as a systematic long-range planning
activity, that an organization uses to fix priorities, strengthen operations, ascertain
objectives and focus on the resources required and are to be allocated in order to
pursue the strategy and attain the objectives.
It is a part of the strategic management process, which ensures that every aspect of
the organization is working towards the achievement of the organization’s goals, i.e.
in the right and intended direction.
Strategic Planning ascertains what an organization is, to whom it serves, where is it

going and what are the paths, which are to be followed to follow its vision. It includes
strategic decision making, strategic intent, strategic management model and strategy
formulation.
Characteristics of Strategic Planning
 Strategic Planning is an analytical process which formulates strategic and operational

plans for the organization. The implementation of strategic plans is possible through
projects, whereas various units or divisions of the firm implement operational plans.
 It performs SWOT Analysis, i.e. during the planning process, the firm’s strengths,
weaknesses, opportunities and threats are taken into consideration.
 It is a forward-looking activity wherein the future opportunities and threats are

ascertained while considering its profitability, market share, product and competition.
 It presupposes that a firm should always be ready to adapt itself according to the
dynamic business environment. For this purpose alternative strategies are developed
for different circumstances, i.e. from best to worst, for the future
 It can be done for the entire organization or to a specific business unit.
 It is helpful in selecting the best strategy, among the various strategies taking into
account the firm’s interest, personal values and corporate social responsibility.
 It acts as a guide to the executive to reduce the risk involved in the business and also
to take the best possible advantage of the opportunities. So, in this way, it contributes
to the success of the enterprise.
Strategic Planning is a logical effort, that envisions the desired future, by producing
various alternative actions and decisions, to formulate an effective strategy, that
brings success to the organisation. It helps in analysing and adjusting the
organisation’s efforts as a whole, according to the changing business environment.
Strategic Planning Stages
1. Generation of Strategic Alternatives: In this step, the firm seeks a number of

strategic alternatives in the light of the firm’s business, industry and competition.
These strategies may be acquisition and expansion, focusing on core competencies,
increase in the market share, etc.
2. Assessment of Strategic Alternatives: At this stage, the firm observes various

strategies, on the basis of the benefits. It questions:
1. Will it improve the firm’s position or market share?
2. Will it increase existing strengths?
3. Will it bring new opportunities?
4. Will it maximize shareholder’s wealth?
3. Selection of Strategy: The optimum strategy is selected at this stage, among various
alternative strategies.
Both internal and external analysis of the firm is performed during the exercise;
wherein internal analysis entails an evaluation of financial performance, operational
limitations, current market position/share corporate culture, strengths and weaknesses.
On the other hand, external analysis concentrates on the analysis of competition,

trends, changing business environment, opportunities and threats, latest technology
and so forth.

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Planning

Definition: Planning is the fundamental management function, which

2. Goal oriented: It focuses on defining the goals of the organisation, identifying

5. Intellectual Process: It is a mental exercise at it involves the application of mind, to

6. Futuristic: In the process of planning we take a sneak peek of the future. It

Planning is concerned with setting objectives, targets, and formulating plan to

 It helps managers to improve future performance, by establishing objectives and

 It minimises risk and uncertainty, by looking ahead into the future.

 It facilitates the coordination of activities. Thus, reduces overlapping among

 It uncovers and identifies future opportunities and threats.

Planning is present in all types of organisations, households, sectors, economies, etc.

Strategic Planning ascertains what an organization is, to whom it serves, where is it

Characteristics of Strategic Planning

 Strategic Planning is an analytical process which formulates strategic and operational

 It is a forward-looking activity wherein the future opportunities and threats are

 It can be done for the entire organization or to a specific business unit.

Strategic Planning Stages

1. Generation of Strategic Alternatives: In this step, the firm seeks a number of

2. Assessment of Strategic Alternatives: At this stage, the firm observes various

2. Will it increase existing strengths?

3. Will it bring new opportunities?

4. Will it maximize shareholder’s wealth?

On the other hand, external analysis concentrates on the analysis of competition,

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