According to Koontz O'Donnel - "Planning is an intellectual
process, the conscious determination of courses of action, the basing of
decisions on purpose, acts and considered estimates".
NATURE AND PURPOSE OF PLANNING
Nature of Planning
Planning is goal-oriented: Every plan must contribute in some positive way
towards the accomplishment of group
objectives. Planning has no meaning without being related to goals.
Primacy of Planning: Planning is the first of the managerial
functions. It precedes all other management
Pervasiveness of Planning: Planning is found at all levels of management.
Top management looks after strategic
planning. Middle management is in charge of administrative planning. Lower
management has to concentrate on operational planning.
Efficiency, Economy and Accuracy: Efficiency of plan is measured by its
contribution to the objectives as
economically as possible. Planning also focuses on accurate forecasts.
Co-ordination: Planning co-ordinates the what, who, how, where
and why of planning. Without
co-ordination of all activities, we cannot have united efforts.
Limiting Factors: A planner must recognize the limiting factors
(money, manpower etc) and formulate
plans in the light of these critical factors.
Flexibility: The process of planning should be adaptable to changing environmental conditions.
Planning is an intellectual process: The quality of planning will vary according to
the quality of the mind of the
Purpose of Planning
managerial function planning is important due to the following reasons:-
To manage by objectives: All the activities of an organization are
designed to achieve certain
specified objectives. However, planning makes the objectives more concrete by
focusing attention on them.
To offset uncertainty and change: Future is always full of uncertainties and
changes. Planning foresees the
future and makes the necessary provisions for it.
To secure economy in operation: Planning involves, the selection of most
profitable course of action that
would lead to the best result at the minimum costs.
To help in co-ordination: Co-ordination is, indeed, the essence of
management, the planning is the base
of it. Without planning it is not possible to co-ordinate the different
activities of an organization.
To make control effective: The controlling function of management relates
to the comparison of the planned
performance with the actual performance. In the absence of plans, a management
will have no standards for controlling other's performance.
To increase organizational effectiveness: Mere efficiency in the organization is not important; it should also lead to
productivity and effectiveness. Planning enables the manager to measure the
organizational effectiveness in the context of the stated objectives and take
further actions in this direction.
Features of Planning
It is primary function of management.
It is an intellectual process
Focuses on determining the objectives
Involves choice and decision making
It is a continuous process
It is a pervasive function
Classification of Planning
On the basis of content
It is the process of deciding on Long-term
objectives of the organization.
It encompasses all the functional areas of
– It involves conversion of detailed and specific plans
into detailed and specific
It is the blue print for current action and it
supports the strategic plans.
On the basis of time period
Time frame beyond five years.
It specifies what the organization wants to
become in long run.
It involves great deal of uncertainty.
Time frame between two and five years.
It is designed to implement long term plans.
Time frame of one year or less.
It provide basis for day to day operations.