Planning
Planning is deciding in advance what to do, how to do it and when. This domain tests features, importance, limitations, the planning process and the classification of plans.
Features
Primary function of management, goal-oriented, pervasive, continuous, a mental exercise, involves choice among alternatives, forward-looking and flexible.
Importance and limitations
Importance: provides direction, reduces uncertainty, reduces overlapping and wasteful activity, promotes innovation, facilitates decision-making, sets standards for control. Limitations: may fail in a dynamic environment, cannot replace judgement, can reduce creativity among lower levels, involves cost, is time-consuming, and does not guarantee success.
Process
Set objectives, develop premises, identify alternatives, evaluate alternatives, select a plan, implement it, follow up.
Types of plans
Standing plans: objectives, strategy, policy, procedure, rule, method. Single-use plans: programme, budget.
- A policy is a guide to thinking; a procedure is a guide to action; a rule permits no discretion; a method is the prescribed way of doing one step.
Worked example
A firm states: "No purchase without a written order" (rule - no discretion), "purchases follow the steps: requisition, quotation, approval, order" (procedure - sequence of steps), and "orders are raised on the ERP portal" (method - the prescribed way of one step). Reasoning: the test is whether discretion exists and whether the statement covers a sequence or a single step.
Traps that cost marks
Treating policy and rule as synonyms; calling a budget a standing plan; claiming planning eliminates risk rather than reducing it; omitting follow-up as the last step.