The first and foremost managerial function is ‘planning’. Planning means looking ahead and chalking out future courses of action to be followed. It is a preliminary step. The functions aim at developing a comprehensive sketch for achieving an explicit organizational objective. Planning involves the identification of tasks that are required to realize the desired goals, demarcation of how such tasks should be performed, chalking out who, when, and where such tasks will be performed. A meticulous knowledge about the vision and mission of the organization forms the pre-requisite of short as well as long term success of planning.
According to 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”
Why is planning is significant?
Why planning occupies significance? This is because the planning provides the organization a better sense of what it wants to achieve and how to achieve this. In effect, planning ensures the proper utilization of the available resources and the capability to comprehend how these should be used in order to achieve the goal.
A key part of planning is also the vital role it plays in pacifying risks. When management plans for the tasks ahead, they are looking at the situation and detailing the probable difficulties ahead.
Steps in Planning Function
The Planning function involves the following sequence of steps:
1. Establishment of objectives: Planning requires a systematic approach and starts with the setting of goals and objectives. The objectives provide a rationale for carrying out a range of activities as well as indicates the direction of the efforts of the team. Besides, the objectives also focus the attention of managers on the end results to be achieved.
2. Establishment of planning premises: Planning premises are the assumptions about the events in the future and serve as a basis of planning. The establishment of planning premises is concerned with determining the possible deviations from the actual plans and reasons for such deviations. The establishment of planning premises is concerned to take such steps that avoid such obstacles to a great extent.
3. Choice of alternative courses of action: When forecasts are available and premises are established, a number of alternative courses of action have to be considered. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of available resources and the organization’s requirements. The advantages, disadvantages, as well as consequences of each alternative, must be thoroughly examined before making the final choice.
4. Formulation of derivative plans: Derivative plans are the sub plans or secondary plans which aid in the accomplishment of the master plan. Secondary plans will flow from the master plan. These are supposed to act as a support and accelerate the pace of attainment of basic plans. These detailed plans include policies, procedures, rules, programs, budgets, schedules, etc. For example, if profit maximization is the key aim of the enterprise, derivative plans will include sales maximization, production maximization, productivity, and cost minimization.
5. Securing Co-operation: After the plans have been determined, it is essential to take into confidence the subordinates or those who have to execute these plans. The rationale behind taking the team into confidence is:- Subordinates may feel motivated as they have a say in the decision-making process, Such involvement may result in invaluable suggestions and improvement in the formulation as well as the implementation of plans.
6. Follow up/Appraisal of plans: After choosing a certain plan, it needs to be put into action and appraised for its effectiveness. Such an appraisal is done on the basis of feedback or information received from those who are responsible for its execution. Feedback enables the management to take corrective actions for rectifying deviations. Follow up establishes a link between planning and controlling function. Execution and follow up must go side by side so that the planning exercise in the future may be made more realistic in the light of observations