CBSE CLASS 12TH BUSINESS STUDIES REVISION NOTES CHAPTER-4
PLANNING
Introduction
All organisation whether it is government, a private business or small businessman require planning. To turn their dreams of increase in sale, earning high profit and getting success in business all businessman have to think about future, make predictions and achieve target. To decide what to do, how to do and when to do they planning.
Meaning of planning
Planning can be defined as "thinking in advance what is to be done, when it's to be done, how it's to be done and by whom it should be done." In simple words we can say planning bridge the gap between where we are standing today and where we want to reach.Definition of planning by different authors:
"Planning is the thinking process, the organised foresight, the vision based on facts and experience that is required for intelligent action." -Alfred and beatty.
"Planning is chalking out plan of action, i.e., the result in envisaged in the line of action to be followed, the stage to go through the method to use." -Henry Fayol.
Features/ Nature/ characteristics of planning
1. Planning contributes to objectives
2. Planning is the primary function of management
3. Pervasive.
4. Planning is futuristic / forward-looking.
5. Planning is continuous.
6. Planning involves decision making.
7. Planning is a mental exercise.
Importance/ significance of planning
1. Planning provides direction.
2. Planning reduces the risk of uncertainty.
3. Planning reduces overlapping and wasteful activities.
4. Planning promotes innovative ideas.
5. Planning establishes standard for controlling.
6. Planning facilitates decision making.
7. Focuses attentions on objectives of the company.
Limitations of planning
1. Planning leads to rigidity.
2. Planning may not work in dynamic environment.
3. It reduces creativity.
4. It is the time consuming process.
5. Planning does not guarantee success.
6. Lack of accuracy.
External limitation of planning
1. Natural calamity.
2. Change in competitor's policies.
3. Change in taste/ fashion and trend in the market.
4. Change in Technologies.
5. Change in government/ economic policy.
Planning process
1. Setting of objective:
In Planning function manager begins with starting up of objective because all the policies, procedures and methods are framed for achieving objective only. The manager set up very clearly the objective of the company keeping in mind the goals of the company and the physical and financial resources of the company. Manager prefer to set up goals which can be achieved quickly and in specific limit of time. After setting up the goal, the clearly defined goals are communicated to all the employees.
2. Developing premises:
Premises refer to making assumptions regarding future. Premises are the base on which plans are made. It is a kind of forecast made keeping in view existing plans and any past information about various policies. There should be total agreement for all the assumptions. The assumptions are made on the basis of forecasting. Forecast is the technique of gathering information. Common forecast are made to find out the demand for a product, change in government or competitor policy, tax rate etc.
3. Listing the various alternative for achieving the objective:
After setting up of objective the manager make an list of alternative through which the organisation can achieve its objective as there can be many ways to achieve the objective and manager must know all the ways to reach the objectives.
4. Evaluation of different alternatives:
After making the list of various alternatives along with their functions supporting them, the manager start evaluating each and every alternative and notes down the positive and negative aspects of every alternative.
After this manager start eliminating the alternative with more of negative expect and the one with the maximum positive expect and with most feasible assumption is selected as best alternative. Alternative are evaluated in the light of their feasibility.
5. Selecting an alternative:
The best alternative is selected but as such there is no mathematical formula to select the best alternative. Sometimes instead of selecting one alternative, a combination of different alternative can also be selected. The most ideal plan is most feasible, profitable and with least negative consequences.
After preparing the main plan, organisation has to make number of some plan to support the main plan. These plan are related to performance of routine job in the organisation. These are derived from the major plan. So they are also known as derivative plans. the plans are are must accomplishing the objective of main plan. The common supportive plans are plan to buy equipment, plan for recruitment and selection of employees, plan to buy raw material, etc.
6. Implement the plan:-
The Managers prepare or draft the main and supportive plan on paper but there is no use of this plans unless and until these are put in action. For implementing the plan or putting the plans into action, the managers start communicating the plans to all the employees very clearly because the employees actually have to carry on the activities according to specification of plans. After communicating the plans to employees and taking their support the managers start allocating the resources according to specification of the plans. For example, if the plan is to increase in sale by increasing the expenditure on advertisement, then to put it into action, the manager must allot more funds to advertisement department, select better media, hire advertising agency, etc.
The Managers prepare or draft the main and supportive plan on paper but there is no use of this plans unless and until these are put in action. For implementing the plan or putting the plans into action, the managers start communicating the plans to all the employees very clearly because the employees actually have to carry on the activities according to specification of plans. After communicating the plans to employees and taking their support the managers start allocating the resources according to specification of the plans. For example, if the plan is to increase in sale by increasing the expenditure on advertisement, then to put it into action, the manager must allot more funds to advertisement department, select better media, hire advertising agency, etc.
7. Follow up:
Planning is a continuous process so the manager's job does not get over simply by putting the plan into action. The manager monitor the plan carefully while it is implemented. The monitoring of plan is very important because it help to verify whether the conditions and predictions assumed in a plan are holding true in present situation or not. If these are not coming true then immediately changes are made in the plan. During follow up many adjustment are made in the plan. For example, if the expenditure planning is done keeping in mind 5% inflation rate but in present situation if the inflation rate rise to 10% then during follow up the managers make changes in the plan according to 10% inflation rate.
Plan
Plan is a document that outlines how goals are going to be met.
Single use plans
Single use plan are one time use plan. These are designed to achieve a particular goal that once achieved will not reoccur in future.
Standing plans
Standing plans are also known as Repeat use plans. These plans focus on situation which occur repeatedly.
Types of plans
1. Objectives
Objective should be SMART as
S – SpecificM – Measurable
A – Achievable
R – Relevant
T – Time bound.
2. Strategy
Strategy is a comprehensive plan to achieve organisation objectives. The dimensions of strategy are:
1. Determining long term objectives.
2. Adopting a particular course of action.
3. Allocating resources for achieving the objectives.
3. Policies
Policy can be defined as organisation's general response to a particular problem or situation. In simple words, it is the organisation's own way of handling the problems.
4. Procedures
Procedures are required step established in advance to handle future condition. The sequence of steps to be followed by employees in different situation must be predetermined so that everyone follows same steps. The procedure can be defined as the exact manner in which an activity has to be accomplished.
5. Methods
Methods can be defined as formula used for systematic way of doing routine a repetitive jobs. The manager decide in advance the common way of doing a jobs.
6.Rules
Rules spell out special action on non-action of the employees. There is no discretion allowed in the rule, therefore they must be followed strictly and if rules, are not followed then strict action can be taken against employees who are disobeying the rules.
Get more to click here:
https://schools.aglasem.com/cbse/cbse-notes-class-12-business-studies-planning/
7. Programmes
Programs are the combination of objective, policies, procedures,and rules. All these plans together form a program. The programmes are made to get a systematic working in the organisation. The program create relation between policies, procedures, and goals. The programmes are also prepared at different levels. A primary programme is prepared by the top level and then to support the primary program supportive programs of different levels are prepared for smooth function of the company.8. Budgets
Budget is the statement of expected result expressed in numerical terms.Get more to click here:
https://schools.aglasem.com/cbse/cbse-notes-class-12-business-studies-planning/
Comments
Post a Comment