Karnataka 2nd PUC Business Studies Notes Chapter 4 Planning
→ It is the first function to be performed in the process of management.
→ It is a base for all other functions of management.
→ It is an intellectual process.
→ It is a continuous and never ending process
→ It concentrates on setting objectives and determines future course of action.
→ Importance: It provides direction, reduce the risk of uncertainty, reduce overlapping and wasteful activities, provide innovative ideas, facilitate decision making, and establish standards for controlling.
→ Limitation of planning: It leads to rigidity, may not work in dynamic environment, and reduce creativity, involves huge costs and time consuming, it never guarantee the success.
→ Steps in planning: Setting objectives, Developing premises, Identification of alternative course . of action, Evaluating alternative courses, Selecting an alternative, Implementing the plan, Follow up action.
→ Types of Plans:
- Objectives,
- Strategies,
- Polices,
- Procedure,
- Methods,
- Rules,
- Programmes,
- Budgets.
(a) Objectives: Objectives lay down guidelines for the activities and serves as a bench mark for measuring the performance of the organization.
(b) Strategies: Strategies are the specific programmes of action for achieving the objectives of the organization by employing the resources efficiently and economically. Examples of strategies: Strike iron while it is hot Divide and rule, Time is a great healer.
(c) Policies: They are the general statements which serve as guideline in the decision making process. An established policy helps to resolve the problems and issues easily.
(d) Procedures: They are the plans prescribing the exact time sequence for the work to be done. Procedures are the guidelines to action and they are suited to the works which are repetitive in nature.
(e) Methods: The prescribed way or the manner of doing each planned task to achieve the
goals is known as method.
(f) Rules: Every organization likes to operate in an orderly way. Rules are the established principles for carrying out the activities in a systematic manner.
(g) Programme: A programme is a precise plan laying down the operations to be carried out to complete a given task within a specified period of time.
(h) Budgets: Budget is a statement of expected results expressed in numerical terms. Budget is also considered as a controlling device. Preparing a budget involves forecasting and estimation.