CBSE Class 12 Business Studies Planning Notes Set B

Concept

Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning bridges the gap from where we are to where we want to go. It is one of the basic managerial functions. Planning involves setting objectives and developing appropriate courses of action to achieve these objectives. Thus, it in closely connected with creativity and innovation. Importance of Planning: –

1. Planning provides directions: By Stating in advance how work to be done planning provides direction for action. If there was no planning, employees would be working in different direction and the organisation would not be able to achieve its goods efficiently

2. Planning reduces the risk of uncertainty: – Planning is an activity which enables a manager to look ahead, anticipate change, consider the impact of change and develop appropriate responses.

3. Planning reduces wasteful activities: – Planning serves as the basis of coordinating the activities and efforts of different departments and individuals useless and redundant activities are minimised.

4. Planning promotes innovative ideas: Planning is the first function of management: Managers get the opportunity to develop new ideas and new ideas can take the shape of concrete plans.

5. Planning facilities decision making: Under planning targets are laid down. The manager has to evaluate each alternative and select the most viable proposition.

Limitations of Planning

1. Planning leads to rigidity: A well-defined plan is drawn up with specific goals to be achieved within a specific time frame. A plan decides in advance the future course of action. This kind of rigidity in plan may create difficulty.

2. Planning may not work in a dynamic environment: – The business environment is dynamic, nothing is constant. Every organisation has to constantly adapt itself to the changes in business environment.

3. Planning reduces creativity: Planning is an activity which is done by the top management therefore it reduced other level creativity.

4. Planning involves huge costs: When plans are drawn up, huge cost involved in their formulation.

5. Planning is time consuming: Sometime plans to be drawn up take so much of time that there is not much time left for their implementation.

Planning Process: –

1. Setting Objectives: The first and foremost step is setting objective. Objective may be set for the entire organisation and each department.

2. Developing premises: Planning premises are the assumptions about the likely shape of events of future. It forecasts the obstacles, problems or limitations in the path of the effective planning because of which the plans may deviate, planning premises supply relevant facts & information relating to future.

3. Identifying alternative courses of action: – Once objective are set and premises are developed. Then the next step would be to act upon them. All the alternative courses of action should be identified.

4. Evaluating alternative Courses: The next step is to be weight pros and cons of each alternative. Each course will have many variables which have to be weighed against each other.

5. Selecting an alternative: – After comparison and evaluation the best alternative is chosen for reaching organisation objectives.

6. Implement the plan: Once the plan is developed, they are put into action.

7. Follow to action: To see whether plans are being implemented, activities are performed according to schedule.