Chapter-4 Business studies

Planning

Meaning:

Planning refers to a process of thinking in advance about the future. We can say that planning is a bridge between where we are and where we want to go.

Importance of planning

1 Provides direction

2. Reduces the risk of uncertainty

3. Facilitates decision making-

4. Reduces overlapping and wasteful activities

5. Establishes standard for controlling.

Limitations of planning

1. Reduces creativity

2. Rigidity

3. Does not give guarantee of success

4. Costly affairs

5. Does not work in dynamic environment

Steps in planning process

i) Setting up objectives:

ii) Developing planning premises-

iii) Identifying alternative course of action:

iv) Evaluating the alternative course –

v) Selecting the best alternative –

vi) Implementing the plan:

vii) Follow up plan:

Types of plans:(A) Standing or Repeatedly used plans: As their name indicates that these

plans are formulated once and they are repeatedly used. These plans continuously guide the managers. That is why it is said that a standing plan is a standing guide to recurring problems. These plans include:

1. Objectives 2. Strategies 3. Policies 4. Procedures Methods and

5. Rules(B) Single – use special or Adhoc plans: These plans are connected with

some special problem. These plans end the moment the problems are solved. After having been used once there is no importance of these plans and in future, whenever they are needed they are re-created. These plans includes.

1. Budget and 2. Programme.