1. Define Planning.
2. Manav Ltd. Prepares budget in its Annual General Meeting for the year 2019-2020. What kind of plan is it?
a) Single use plan
b) Standing plan
c) Rule
d) Budget
3. State and explain any three limitations of planning.
4. Explain the following types of plan:
a) Strategy
b) Rule
5. Arushii joins as a sales manager of a company dealing in nature-therapy products. Being proficient in his work, he knew that without good planning he will not be able to organize, direct, control or perform any of the other managerial functions efficiently and effectively. Only on the basis of sales forecasting, he would assist in the preparation of the annual plans for its production and sales. Besides, he will have to prepare sales plans regularly on weekly, monthly, quarterly and half yearly basis. While preparing the sales forecasts, he undertakes intellectual thinking involving foresight, visualization and issued judgement rather than wishful thinking or guess work. Most importantly, all these planning activities will be meaningful only if they will coincide with the purpose for which the business is being carried out. In context of the above case, identify the various features of planning highlighted in the above paragraph by quoting lines from it.
6. ‘Astha Ltd.’ Is a well-known automobile manufacturing company in India. The company plans to increase the sale of its sedan cars by 20% in the next quarter. In order to achieve the desired target, the marketing team of the company considers the impact of policy of the government towards diesel vehicles and the level of competition in this segment of cars. They explore the various available options like offering more discounts to dealers and customers, providing more customer friendly finance options, lucky draws on test drives, increasing advertising, offering more of free accessories on the purchase of the car, etc. A thorough analysis of the various available options is done keeping in view the relative viability of each option. The company decides to pursue the option of offering more discounts to dealers and customers in order to boost the sale of sedan cars. In order to implement the plan, they determine the various discount packages and communicate the same to their product dealers. To make the prospective consumers aware about the new available benefits, advertisements are made through various sources of print and electronic
media. The market analysts of the company keep a close watch on the revenue from the sedan cars to study the effect of new initiatives by the company to promote its sales.
In context of the above case:
1. Name the function of management described in the above paragraph.
2. Identify and explain the various steps involved in process the function of management as identified in part (a) by quoting lines from the paragraph.
VALUE POINTS
1. Planning is deciding in advance what to do, how to do, when to do and who has to do it.
2. Single Use Plan
3. Limitations of Planning
• Planning leads to rigidity as plans are drawn in advance and managers may not be in a position to change them in the light of changed conditions.
• Planning may not work ina dynamic environment as through planning, everything cannot be foreseen.
• Planning reduces creativity as the top management undertakes planning of various activities whereas the middle managers are neither allowed to deviate from plans nor are they permitted to act on their own.
• Planning involves huge costs in terms of time and money required to undertake scientific calculations and sometimes it may not justify the benefits derived from it.
• Planning is a time consuming process and sometimes there is not much time left for implementation of the plans.
4. 1. Strategy: A strategy is a comprehensive plan prepared for winning over the given challenge or problem. A strategy is based on the objectives of the organisation. A strategy may be determined by top level or middle level management.
2. Rule: A rule is a specific statement relating to the general norms in terms of Do’s and Don’ts that guide the behaviour of people. It commands strict obedience and a penalty is likely to be imposed on its violation. Rules help to maintain discipline. Rules are both specific and rigid. For example, No smoking, No Parking. It is a type of standing plan.
5. The features of planning highlighted in the above paragraph are explained below:
1. Planning is a primary function: Planning precedes all the functions of management i.e. organizing, staffing, directing and controlling. This refers to primacy of planning. Planning provides the basis of all other functions.
“… without good planning he will not be able to organise, direct, control or perform any of the other managerial functions efficiently and effectively. “
2. Planning is futuristic: Planning is called a forward looking function as it enables an organization to meet future events effectively. “Only on the basis of sales forecasting, he would assist in the preparation of the annual plans for its production and sales.”
3. Planning is continuous: Plans need to be continuously made, implemented and followed by another plan and so on till an organization exists “Besides, he will have to prepare sales plans regularly on weekly, monthly, quarterly and half yearly basis.”
4. Planning is a mental exercise: Planning is done on the basis of rational thinking involving foresight, visualization and issued judgement rather than wishful thinking or guess work.
“While preparing the sales forecasts, he undertakes intellectual thinking involving foresight, visualization and issued judgement rather than wishful thinking or guess work.”
5. Planning focuses on achieving objectives: Planning is a purposeful activity as it contributes to the achievement of predetermined goals of the organization both efficiently and effectively.
“Most importantly, all these planning activities will be meaningful only if they will coincide with the purpose for which the business is being carried out.”
6. 1. Planning is the function of management which is being described in the above paragraph.
2. The various steps involved in the planning process are explained below:
• Setting objectives: The planning process is initiated by setting the objectives in clear, specific and measurable terms. The objectives may be set for the organization as a whole and for each department or unit within the organization.
“The company plans to increase the sale of its sedan cars by 20% in next quarter.”
• Developing Premises: Planning process is carried out keeping in view the assumptions related to the future, which is uncertain. These assumptions are called premises and may relate to government policy, interest rate, inflation, etc. Accurate forecasts are therefore essential for successful planning. “In order to achieve the desired target the marketing team of the company considers the impact of policy of the government towards diesel vehicles and level of competition in this segment of cars.” .
• Identifying alternative courses of action: The next step in the planning process involves identification of the various ways in which the goals can be achieved.“They explore the various available options like offering more discount to dealers and customers, providing more customer friendly finance options, lucky draws on test drives, increasing advertising, offering more of free accessories on the purchase of the car, etc.”
• Evaluating alternative courses: In order to select the best option, the relative positive and negative aspects of each alternative should be evaluated in the light of their feasibility and consequences.
“A thorough analysis of the various available options is done keeping in view the relative viability of each option.”
• Selecting an alternative: The best plan is adopted to achieve the desired goals. Sometimes, a combination of plans may be selected instead of one best course of action. “The company decides to pursue the option of offering more
discountto dealers and customers in order to boost the sale of sedan
cars.”
• Implement the plan: This step is concerned with putting plans into action.“In order to implement the plan, they determine the various discount packages and communicate the same to their product dealers. To make the prospective consumers aware about the new available benefits, advertisements are made through various sources of print and electronic media.”
• Follow up action: Monitoring of plans is equally important to ensure that objectives are achieved efficiently and effectively. “The market analysts of the company keep a close watch on the revenue from the sedan cars to study the effect of new initiatives by the company to promote its sales.”
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