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According to Koontz and O’ Donnell, “Planning is an intellectual process, the conscious determination of courses of action, the basing of decisions on purpose, facts and considered estimates.” 4. According to Haynes and Massey, “Planning is that function of a manager in which, he decides in advance what he will do. It is a decision making process of a special kind. It is an intellectual process in which, creative thinking and imagination are essential.”

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Nature of Planning:The nature of planning is as follows:

1. Based on Objectives:

Planning starts only after the objectives of the firm have been defined and clearly understood. There can be no planning without an objective or a set of objectives.

After the objectives have been defined, the planning starts. It continues for ever. But, its primacy is supreme.

2. Modus Operandi:

Planning defines how the organisation would achieve its objective. It clearly stipulates the basic managerial and physical processes that would be needed to attain the goals set forth by the top brass of the organisation. Thus, it is a modus operandi and not a neatly printed document having a hullabaloo of words, figures and charts.

If a plan is unable to contribute towards the attainment of the goals of an organisation, it must be scrapped.

3. Managerial Task:

Planning is the most important task to be performed by a manager. Management experts opine that, if a plan is made in a best manner, it can be executed with perfection. A managerial task, which is properly planned, would achieve the coveted results. All other tasks of a manager can be given low properties, but planning must remain his top priority.

4. Pervasive Function:

Planning is a pervasive function.

This means that it is done at all the levels of management. When a worker sets that lathe machine to produce a component, he also plans the schedule of operation on that lathe machine. Similarly, the President of a large company carefully plans how we would execute a take-over bid in the market.

Both these gentlemen are planning. However, their planning levels differ; that is because visions differ. Planning at higher levels is a very complex task. Planning at lower levels in a much easier phenomenon. But nevertheless, every individual in a firm plans his operations so that he may be able to execute them. This feature of planning is typical. A lower-level manager may tell his boss to involve him in more tedious planning exercise.

He may ask for a better assignment to plan and execute. But, he should commit to his memory that as he moves up in the organisational hierarchy, he would find planning to be a blood-burning assignment. These moments and even cardiac problems cannot be ruled out.

That is because, when plans go haywire, he would be given the sack. The power to plan would also bring responsibilities along with it. He must have the conceptual and analytical skills, besides a clear vision of the future. So, uncles an executive is competent enough to plan with immaculate dexterity, he should not put his he? In the mouth of the tiger.

5. Experience Basic Planning:

Processes and technique is learned with experience. Most of the Presidents, directors and CEOs of large firms are good planners.

The ability of a person to visualise or “see the future” enables him to become an efficient businessman or executive. Many large firms make long term plans, some of these having duration of 20 years or more! But the manager had better rely on his own experience because, every managerial tasks is unique. Several management consultants do help managers and the top brass in such crusial planning processes.

6. Efficient and Result Oriented:

Every planned activity must not only look good, but also, it must be efficient and result oriented. Planning is related to the most powerful imaginative capabilities of man. Vision is the key to success in this dicey game.

The executive may only have seen the site of a large petrochemical plant. But has to define the specifications of the equipment, boiler, pipelines, electrical installations and flow of chemicals in the plant. He has to visualise each and every part of the plant from the scratch stage to the finish stage. His knowledge about the subject (chemical engineering), analytical abilities (calculation work to be done) and vision about the task (how would that particular fluid would move in the pipeline of a diameter of 4 inches at a pressure of 128 pounds?) would decide how he can become an efficient planner. The plant would certainly come up even if he does not plant.

But, it may prove to be disaster for this firm! Efficient planning skills would help him find the negative points of the task to be performed.

7. Different Schedules:

Execution schedules of different plans could be different. Further, work schedules which may be a part of a plan, may differ at different levels of the organisational hierarchy.



Planning and control cannot be separated; these are the Siamese twins of management. The nature of planning is different from the control function. But, we cannot view either of them in isolation. Planning without control is of no use: the vice versa is also true. Plans furnish the standards for control. 2.

Purpose of Planning:(i) The planning process anticipates and estimates unpredictable contingencies of the future. (ii) It helps in achieving such goals as are set by the top brass. (iii) It helps in meeting the demands of competition; as such, it overcomes competition in local, national and global markets. (iv) It reduces the element of uncertainty in the entire managerial process. (v) It helps the management bring co-ordination among the various departments of an organisation. (vi) It leads to efficient and optimal use of resources for the purpose of achieving the goals of the organisation. (vii) It involves forecasting of the future. The manager forecasts those events that would occur in the future (and affect the goals).

So, he uses forecasting techniques and statistical methods to anticipate facts the working of the organisation. These methods of techniques would have to be defined clearly so that when the plan is executed, those very elements of the plant must deliver results, which were defines with the help of such methods and techniques. Henry Fayol has stated, “The plan is the synthesis of various forecasts-annual, long-term special etc.” The objective is to eliminate the element of uncertainty.

If it cannot be eliminated altogether, we must minimise it. Forecasts are the assumptions or premises of planning. It determines requirements of resources, materials and equipment at all the levels. 3. Types of Planning:If degree of flexibility is the chief guiding criterion, then there are two types of plans-flexible and rigid. A flexible plan can be changed when it is being executed.

A rigid plan cannot be changed when it is being executed. Our experience, in the large and small firms of the modern era, confirms that most plants are flexible. Rigid plans may not be effective in the dynamic business environments of today. The three types of plans based on time factors are as follows

(a) Short-term Plans:

These are the plans for a period of up to 1 year. Resources committed to these are minimal. Lower-level managers and supervisors define these plans and let workers execute them. These managers also control the execution processes.

(b) Medium-term Plans:

These are the plans for a period of more than 1 year but, do not go beyond a period of 5 years.

Resources committed to such plans are moderate; but, these resources are large enough to motivate the manager to take up serious scrutiny exercises in the context of the plan; they also get advice from the top brass in this context. Lower-level managers and supervisors execute these plans. Senior managers (and heads of various departments) control the execution processes of such plans.

(c) Long-term Plans:

These are the plans for a period of 5 years or even more. Resources committed to these plans are large.

The top brass and owners of the firm ensure that such resources are utilised properly when a long-term plan is underway. The CVPs, VPs, CEOs owners and directors of the firm define such plans. Senior managers, GMs, heads of various departments and advisors to the top brass execute them. The top brass (or its equivalent) would also control the execution of these plans. Their juniors would report to them while, they execute such plans. 4. Planning Process:The planning process starts with the perception of opportunities and threats (SWOT) and is completed in establishing sequence of activities. It is a continuous process.

It is done at all the levels of management. It is important for the manager at a particular level to achieve objectives defined for him so, he has to plan to achieve his objectives must be achieved so that the firm, as a whole, achieves its major objectives and remains a commercially viable entity. While doing so, it must also remain a responsible citizen of the society (and the environment, which is a vital phenomenon nowadays managerial system that integrates many key managerial activities in a systematic manner; consciously directed towards the effective and efficient achievement of organisational objectives.” Uses various techniques of management and also, integrates these techniques to evolve a set of guidelines. These guidelines are used by subordinates to work and deliver results. Thus, it is a blend of many popular and renowned concepts of management. It is more objective-oriented than other management techniques of the yore.

Other techniques concentrate on measurement of results in terms of resources. But, MBO defines what these results and resources ought to be. It matches objectives with resources. Objectives are defined for all the levels of the organisation. Corporate objectives provide the means for integrating the organisation with its environment. Departmental objectives integrate the organisation with its parts. Finally, the objectives of individual levels integrate the managerial contributions with the needs of the organisation. MBO is a philosophy and approach and not just a technique.

It affects every management practice of an organisation. It is an attitude, a method of looking at performances under a positive ray of light. The manager sets objectives for himself; he also evaluates his performance. In this process, he is assisted by his superior. Thus, objectives are jointly set by superior and subordinates. These objectives are rational because, if these were not the superior or the subordinate would tend to modify these. The objectives are achievable as well as subject to scrutiny.

The actual performances are also evaluated by both the superior and subordinate. This is peculiar feature of MBO. Periodic review of the performance is mandatory.

This review is done once a year and could be done earlier as well. It provides a basis for corrective actions. Objectives setting leads to resources allocation, time schedules of performances, rewards, punishments, delegation of authority, flows of communication and other such tasks as are related to the achievement of objectives. The subordinate willingly defines objectives for himself in consultation with his superior. Hence, the element of coercion is missing in the MBO process.

In the process of management by objectives following steps are involved:

1. The goals and objectives of the organisation are set by the top brass or the owners of the | organisation. These objectives may be of three kinds-long-term, medium-term and short- term.

The objectives of the departments or divisions of the firm. Which have to be in tune with those of the firm, are also define similarly, individuals objectives are which naturally emanate from the departmental objectives, are defined. 2.

The Key Result Areas are considered after the preliminary stage of objective setting. These key research areas could be-profitability, innovation, market standing, worker’s performance, j public responsibility, productivity etc. This list is not exhaustive and could include different factors depending upon the operational gamut of the organisation in question. 3. The objectives of juniors are set.

The superior gives recommendations are broad guidelines to his junior. The junior raises some objections or he has some queries that must be answered by superior. Finally, both sit down and define the objectives of the junior. With passage of time, the gap between the recommended objectives of the superior and the stated objectives of the junior decreases. The final stage is not of reconciliation but of willful and pleasant understanding between the two persons. Objectives are neither very difficult to achieve nor synonymous with peeling peas.

These are achievable but efforts are needed to achieve them both the persons agree that the final outcome of the negotiations has yielded positive results (i.e., a set of rational and achievable objectives). Resources are matched with objectives. If the junior has to achieve objectives, he must be given resources to do so. 4. Finally, action starts in the real sense of the word. The subordinate tries to achieve the objectives; which is scrutinized by the seniors, this appraisal is done within one year from the date of starting the task.

It is an on-going process. The performer can be rewarded or punished. The idea is to put him on the right track and rectify his mistakes, if he commits them at any point of time. The outcome of the appraisal of one level is recycled to judge whether the objectives have been set properly at that level.

Then, the manager tries to find out whether objectives have been set in a correct manner as the next higher level.


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