PLANNINGPlanning is predetermination of objectives and future course of action to be taken to achieve define goal effectively and efficiently. It is the blue print of action and operation.

According to Ricky W. Griffin

“Planning is setting an organization’s goals and deciding how best to achieve them.”

LEVELS OF PLANNING

Strategic plan/Cooperate plan:-

It is prepared by top level management by considering long term objective of the firm.

Tactical plan:-

It is prepared by middle level management for implementing corporate.

Operational plan:-

This plan is consistent with tactical plan and is prepared by first line management.

PROCESS/STEPS OF PLANNING

1. Analyze the opportunity and threats

While planning, planner should be aware of strength, weakness, opportunities threats at organization.

2. Set goalTo determine in exact what an organization aims at achieving or set well defined objectives which provides direction to plan. Goals must be realistic, acceptable etc.

3. Develop premisesPremises are planning assumption about the environment where plans is to be carried out. Planner should consider various factor which are control and non control premises.

4. Determine and evaluate alternatives5. Select the course of action6. Formulate action plane

Particular objectives can be achieve through a number of way all the alternative must be determine. All the alternative should be studied and analyzed.

Cost, profit and judgment are important for selecting a a course of action.

Action plan activites to be performed. Person responsible for performing the activites and methods of doing the activites.

7.Review

Planning is continuous function and last till the organization is in existence. It is necessary to know what either the planning as been properly functioned

1. Forecasting

It is the process of anticipating the future event, happening and probable condition and situation that may significantly affect the business activities.

2. Network technique

Critical path method (CPM) and program evaluation review technique (PERT) network techniques are mostly used by the planner to plan and control the time and cost of the project.

3. Flow chartIt provides an ideas to identify the task component and work simplification process. It help planner to analyze various activities and there relevant link in proper sequence

TOOLS OF PLANNING

4. Gantt chart 5. Break even analysis6. Linear programming

It focuses on the activities and time required to compete the plan. It also help to take timely corrective action for the planer.

It indicate the level of activities in which the total cost equals to the total revenue

It provide the mathematical tool or model used for optimum combination of scarce recourses and activities.

Planning premises

Planning premises are the assumptions & prediction about future change in environment factors . The successful planning depends very much upon planning premises. Planning premises may be internal & external or tangible & intangible.

Pitfalls of planning

Although, planning is the basic function of management & facilitates other management function. It has following pitfalls.

• Lack of control:Basically, managers may have

little knowledge & less control over external activities & plans.External activities involves external environment, government policies affect organizational plans . There is often no way to bring external situations under the disciple.

• Expensive process:planning is the costly process. It

requires extra effort & resources to collect information, forecast etc. manager have to manage extra budgets besides normal investment.

• Inflexibility: Managers are likely to maintain an

strict compliance with pre-determined plans. Planning restricts the individuals freedom, initiatives & desire for creativity as it strictly addresses to pre-determined policies & programs.

• Delay in action:Planning is thinking before doing

anything. Thinking is slow process. So it will likely to delay in action. Many managers may not have the sufficient time for such exercises.

• Based on certain assumption:Plans are formulated on the

basis of certain assumption. Forecasting is not an exact science. When premises do not remain the same the overall plans of the organization is affected

• Difficult to change with the changing environment:

Planning is tough job in a rapidly changing environment. Sometimes plan may be outdated & relevant even before they are implemented.

Improving Planning

• Developing realistic plans:Plans are formulated at

different times by the management.

Planning should be consistent for proper education of planning.

• Setting clear goals:Effective planning requires objectives

.Objectives should be understandable

& rational.The goal should be set out first &

then departmental & unit goals should be consistent with the overall goals.

• Proper understanding:All members concerned with plan

execution must have proper understanding.

A good plan is the one which is well understood by those who are involved in implementation.

• Management information system:The facts & figures must be

available to the manager before formulating plans

• Economical : The planner must under take

cost benefit analysis to ensure that the benefit of planning is more than the cost involve in it.

• Comprehensive:The plan should cover each

& every aspect of business.

• Planning must start at the top level:Planning must be set at the top

levelThe top management rigorously

reviews performance. It naturally simulates planning

throughout the organization.

• Flexibility :For achieving effective

results , there should always be some scope to make necessary additional, deletions or alternative in the plan, as per requirement

DECISION MAKING

Decision making is the process of selecting a best course of action out of many available alternatives .Decision making is the process of solving organizational problem by choosing a specific course of action.

According to the writers

Ricky W. Griffin:“Decision making is the

act of choosing one alternatives from among a set of alternatives.”

George R Terry:“Decision making is the

selection based on some criteria for two or more possible alternatives.”

Programmed and non programmed decisionProgrammed decision are taken for regular and repetitive problems

whereas non programmed decisions are needed for unique or new problems.

Routine and basic decisionRoutine decision are related with day to day operations whereas basic

decision is for long run survival and growth of business.

Organizational and personal decisionorganizational decisions are formal and official decisions whereas

personal decisions are informal or unofficial decisions.

Individual and group decisionIn individual decisions single person is involved in decision making

process whereas in group decisions a group of persons are involved in decisions making process.

Policy and operational decisionpolicy decision is taken by considering the long form functioning

Whereas operating decision is taken by considering day to day functioning.

Types Of Decision

Process of decision making

1. Identification of problem

Recognize the problem itself is half of its solution .Manger must develop a complete understanding of the problem, its causes and relationship to other factor. Wrong definition of problem leads to the wrong solution

2. Identify appropriate alternative course of action

The decision maker has to identify all the probable solution with the help of available information. It is the vital that the decision maker be capable of creative an innovative thinking for identifying alternatives.

3. Evaluate each alternative course of action

Selection of an alternative best solution for the problem depends on proper evaluation of each alternatives and compare with each other to find out the best under the prevailing condition

4. Selecting the best alternative course of action

The best alternative is that which contributes maximum to organizational goal. In selecting the best alternatives, three approaches criteria are followed:-a)Experience,

b)Experiment,c) Research and analysis

5. Implement the selected alternativeMangers must also consider people’s resistance to change while implementing change the decision are made effectively through the action of people. For this

a) Effective communication of decision is necessary.

b) Securing employee acceptance is necessary in the execution of the decision.

c) Correct timing of decision execution is necessary to minimize resistance of change.

6. Evaluate the result & follow up

The evaluated should be constantly monitored and evaluated. This result must be compared with standard performance in order to ascertain if the new action is achieving the desire result. Follow up system helps to find any weakness in the decision and the manager can modify them and remove the mistake as early as possible.

DECISION MAKING CONDITION

Certainty

certainty is the condition under which the manager is well informed about possible alternatives and their outcomes.

Risk

In risk , manager have knowledge about alternatives course of action but outcomes are associated with the probability estimates.

Uncertainty

In uncertainty , managers do not have full knowledge of the problem they face.