Planning
Planning is deciding in advance what to do, how to do it, when to do it and who will do it. The exam tests features, the planning process, types of plans and limitations.
Core rules
- Features: primary function, pervasive, continuous, futuristic, involves choice and is a mental exercise.
- Process: set objectives; develop planning premises; identify alternatives; evaluate alternatives; select a plan; implement; follow up.
- Standing plans are used repeatedly: objectives, strategy, policy, procedure, rule, method. Single-use plans are used once: programme and budget.
- A policy is a general guideline; a rule is a specific do/don’t with no discretion; a procedure is a step sequence; a method is the prescribed way to perform one step.
Worked example
A firm targets 12,000 units. Option A costs ₹5 lakh and can make 10,000 units; Option B costs ₹6 lakh and can make 15,000 units. Only B can meet the target, so B is selected despite higher cost. The plan then sets monthly output and review points. The reasoning is feasibility first, then cost, not cost alone.
Traps
Planning does not eliminate risk; it only reduces uncertainty. Do not confuse policy with rule. A budget is a single-use plan, not a standing plan. Do not say planning is independent of controlling: plans supply standards for control.