How does planning provide direction?
Planning provides direction by stating in advance how the work is supposed to be done. It ensures that the objectives of the organisation or clearly stated to the act as a guide to decide what action must be taken. If the goals are well defined, the employees would know what they must do to achieve those goals. It would also help to bring about coordination among the different employees. In the absence of planning, the organisation would be witnessing a chaotic situation.
A company wants to increase its market share from the present 10% to 25% to have a dominant position in the market by the end of the next financial year. Ms. Rajni, the sales manager has been asked to prepare a proposal that will outline the options available for achieving this objective. Her report included the following options - entering new markets, expanding the product range offered to customers, using sales promotion techniques such as giving rebates, discounts or increasing the budget for advertising activities. Which step of the planning process has been performed by Ms. Rajni?
The step of the planning process has been performed by Ms. Rajni is identifying the various courses of action. She did a detailed study of the various fields and now the company will choose the best alternative which is profitable, feasible and with the least negative consequences.
Why are rules considered to be plans?
Rules are specific in statements that inform what is to be done. They lay down the specific sequence of actions in the organisation. They promote discipline in the organisation. Rules are considered to be a plan because both of them are similar in nature. Rules are considered to be the simplest of plans. Planning helps to decide the future course of action. Similarly, rules help in deciding whether an action should be taken or not.
Rama Stationery Mart has made a decision to make all the payments by e-transfers only. Identify the type of plan adopted by Rama Stationery Mart.
The type of plan adopted by Rama stationary mart is a policy. Policies are general statements that guide thinking or channelize energies towards a particular direction.
Can planning work in a changing environment? Give a reason to justify your answer.
Plans may not work in a changing environment. The business environment consists of various dimensions of the economic, legal, technological, political and social environment. The organisation has to constantly change itself to the needs of the environment. It is difficult to forecast accurately the future Trends of the environment. Planning may not be able to go see everything.
What are the main aspects of the definition of planning?
The main aspects of the definition of planning are mentioned below:
a. Planning is deciding in advance what to do and how to do.
b. It involves the setting up of objectives and choosing the best alternative from the various alternative.
c. It reduces the gap between where are we and where we want to reach.
d. It is a basic managerial function.
e. Plans are devised by the top management.
f. Plans are formulated for a fixed duration of time
If planning involves working out details for the future, why does it not ensure success?
Planning involves working out details for the future but it does not always ensure success. This is because of the following reasons:
a. An enterprise can only be successful if the plans are properly formulated.
b. The plan has to be turned into action or basic would be meaningless.
c. Sometimes a manager may just choose a previously successful plan in the current scenario. It is not proved that if a plan has worked well in the past it will work again.
d. The business environment is dynamic in nature and is constantly changing. The plans have to be formulated accordingly.
e. Planning is a way to analyze the future but it does not guarantee success.
What kind of strategic decisions are taken by business organizations?
Strategy refers to a broad outline of the business of an organisation. It has three major objectives:
a. To determine the objective.
b. To decide the future course of action.
c. Appropriate allocation of objective for the achievement of the objectives.
A business organisation is most likely to undertake the following strategic decisions:
a. Deciding about the line of business it should take.
b. Deciding about the position that the company aims for in the existing market.
c. Deciding on whether or not to expand the products.
d. Deciding about the prices of the products.
e. Deciding about the advertisement policy.
Planning reduces creativity. Critically comment.(Hint: both the points - Planning promotes innovative ideas and planning reduces creativity – will be given).
Planning is the most challenging function. It encourages the managers to think creatively and out of the box to generate innovative ideas. They have to think about new methods to improve their work. However, The planning function is usually performed by top-level management. Middle-Level management has the responsibility of implementing it. The lower level management has to carry out the day to day operations. The middle level and lower level management is not allowed to participate in the planning process. They are also not allowed to deviate from the given course of action and act on their own. This leads to A reduction in creativity and innovation.
In an attempt to cope with Reliance Jio’s onslaught in 2018, market leader Bharti Airtel has refreshed its Rs 149 prepaid plan to offer 2 GB of 3G/4G data per day, twice the amount it offered earlier. Name the type of plan is highlighted in the given example. ? State its three dimensions also.
The type of plan highlighted here is called a strategy. A strategy is a comprehensive plan for accomplishing organisation objectives.
It has three dimensions:
(i) determining long term objectives
(ii) adopting a particular course of action
(iii) allocating resources necessary to achieve the objective
State the type of plan and state whether they are Single-use or Standing plan:
a. A type of plan which serves as a controlling device as well. (budget)
b. A plan based on research and analysis and is concerned with physical and technical tasks. (Method)
a)This is a single-use plan called budget A budget is a statement of expected results expressed in numerical terms. It is a plan which quantifies future facts and figures.
b) This is a standing plan called method. Methods provide the prescribed manner in which a task has to be performed considering the objective. It may vary from task to task.
Why is it that organizations are not always able to accomplish all their objectives?
It is extremely important for an organisation to invest enough time and money to formulate plans for the success of the organisation. Planning is the most important activity and sets the foundation for its working. But at times due to certain unpredictable changes in the business environment both internal and external the plans of the organisation may not turn out as they had hoped to be. This is because of the various limitations of planning due to which the organizations would not be able to accomplish all of their objectives. These limitations are explained below:
a. Once the plans are made to decide the future course of action of the form it is not easy for the manager to change them. It is not feasible to alter a pre-decided plan. This type of rigidity may hamper the progress of the organisation.
b. The business environment is dynamic in nature and uncertain. It is not easy to predict the changes which may happen even in a short duration of time. Planning cannot oversee everything and may prove to be a hindrance.
c. Formulation of the plan requires a lot of money and time. It involves a lot of scientific calculation, analyzing and detail study of subjects. The cost incurred may not be justified with the benefit of the plans.
d. Planning is usually done by the top management level in a firm. The middle management and lower management is not allowed to take part in this planning process. This leads to a reduction in creativity and innovation.
e. A lot of time is consumed by the managers to formulate plans. This is because of the time involved in research and evaluation.
f. The planning process depends on various assumptions. These assumptions may not be accurate and me not guarantee success.
What are the steps taken by management in the planning process?
The steps taken by the management in the process of planning are:
a. The management must firstly decide its objectives- what is to be achieved and how is it to be achieved. Both the specific and general objective must be kept in mind while formulating the plans. The plans must be purposeful and the objectives must be clear cut.
b. Planning is based upon the assumption of the future cold premix. The exemptions are based upon future predictions, previous plans, and the current policies. All managers should have the same assumptions.
c. The manager has to make a list of alternative by which the organisation can achieve its objective.
d. After identifying the different alternative the manager has to evaluate them. This evaluation is based upon on the utility and the consequence of its action. The advantages and disadvantages of all of them must be understood clearly.
e. The next step is to choose the best alternative. The manager may also choose a combination of different alternatives. The most ideal plan is the one which is feasible and profitable along with the least negative consequences.
f. The other functions of the management including organizing, directing, staffing and controlling come into action now. The manager now has to work on the implementation of this plan.
g. Merely choosing the best alternative is not enough. Continuous supervision of the policies and the actions of the company is required. Follow up is an important part of Planning. It is important for the success of the plan and achievement of the objectives
An auto company C Ltd. is facing a problem of declining market share due to increased competition from other new and existing players in the market. Its competitors are introducing lower-priced models for mass consumers who are price sensitive. C Ltd. realized that it needs to take steps immediately to improve its market standing in the future. For quality-conscious consumers, C Limited plans to introduce new models with added features and new technological advancements. The company has formed a team with representatives from all the levels of management. This team will brainstorm and will determine the steps that will be adopted by the organisation for implementing the above strategy. Explain the features of Planning highlighted in the situation given below.(Hint: Planning is pervasive, Planning is futuristic and Planning is a mental exercise)
The features of Planning highlighted in the situation are given below:
a. Planning is pervasive: Planning is required at all levels of Management. It is not only limited to the top-level management, in fact, all the levels equally participate. The top-level management has the responsibility of formulation of the plan and framing the policies for the company. Middle-Level management is responsible for its implementation. The lower level management has to carry the day to day operational planning as done by the supervisor.
b. Planning is futuristic: Planning must be futuristic in nature. The main objective of planning is to be able to meet future events according to the best advantage of the organisation. The plant must be able to foresee and analyze the future. It must be able to help the organisation to deal with future events. The manager must be able to anticipate the problems and cope up with them.
c. Planning is a mental exercise: Planning is an intellectual activity and mental exercise. It focuses on thinking rather than doing. It decides the future course of action. It requires a systematic method of thinking rather than guesswork.