Planning
Features
Planning is the primary function, focuses on objectives, is pervasive, is a mental exercise, is continuous, looks ahead and involves choosing among alternatives.
Limitations
It can create rigidity, may fail in a dynamic environment, can reduce creativity, involves cost and time, and does not guarantee success.
The planning process
Setting objectives → developing premises → identifying alternatives → evaluating alternatives → selecting an alternative → implementing the plan → follow-up action.
Types of plans
Standing plans: objectives, strategy, policy, procedure, rule, method. Single-use plans: programme, budget.
- Policy: general guideline for decisions ('we promote from within').
- Procedure: chronological steps for a task (indent → quotations → approval → order).
- Rule: rigid statement with no discretion.
- Method: prescribed way of doing one step of a procedure.
Worked example
'No purchase order above ₹50,000 may be placed without two quotations' is a rule - specific, mandatory, no room for interpretation. A policy version would be 'we buy only from approved vendors', which still allows managerial judgement. Identifying which type is being described is the whole question.
Traps that cost marks
- Confusing a programme with a budget; a programme may contain several budgets.
- Saying planning is pervasive only for top management - it occurs at every level.
- Treating a rule and a policy as interchangeable.
- Forgetting that planning and controlling are linked, which is tested again in the controlling chapter.