Planning is the first managerial function to be performed in the process of management.

It is
concerned with deciding in advance what is to be done, when where, how and by whom it is be
done. Thus, it is a predetermined course of action to achieve a specified aim or goal. bestroo

2.01 Definition of planning:

analq to gaiy

brc alanodnot be anovo no 22500 In the words of Alfred and Beatty. "Planning is a thinking process,
the organized foresight, the vision based on facts and experience that is required for intelligent
action".marm Ainmoganom JR.N. Farmer and B.M. Richman regard that "planning essentially
decision-making since it involves choosing from among alternatives". According to George Terry,
"planning is the selecting and relating of facts and making and using assumptions regarding the
future in the visualization and formulation of proposed actrites sribelieved necessary to achieve the
desired results", ivdOsvitam gniaoors to aasoon doiw obioob A careful analysis of the above
definition of planning reveals that:assoon ginnsl

❖ Planning is concerned with future and its essence is looking ahead;

bluoda

It involves thinking and analysis of information;

It involves a predetermined course of action;

of alsog

sanoo odigiven diferit

→ It is concerned with establishment of objectives to be attainted in the future;

It is fundamentally a problem of choosing after a careful study of alternative courses; 0.5 It involves
decision-making; si del booga to alaitazas slowU 1 of guibron

→ Its objective is to achieve better results; to borilabolo a no bound of blade 11

It is continuous and integrated process.

olgmiz od taumil S

In every human activity, there is an element of planning. For instance, we find that the head of the
family plans his expenditure, the housewife plans her daily chores, the teacher plans his teaching
work, the student plans his studies and the farmer plans his agricultural activities. In the business
fields, the need for planning is all the more because of various factors such as fluctuations in
demand, growing competition, introduction of new products, scarcity of resources, changing
technology, change in prices, government policy, etc. organizational activity without a plan is likely to
be ineffective and will drift without achieving success. Hence, planning is a must for business
organizations. us of asilimuhogo bas asosan oldaliavs lesen 2.02 Characteristics of planning
allow The following are the important characteristics of planning: moi sen sd blues

1. Focus on objectives. A plan starts with the setting of objectives and then makes efforts to realize
them by developing policies, procedures, strategics, etc. noqonq ad blunde

012. It is an intellectual process. According to Koontz and O'Donnell, planning is an intellectual

process involving mental exercise, foresceing future developments, making forecasts and the
determination of the best course of action.

SES

3. Planning is a selective process. It involves the selection of the best one after making a careful
analysis of various alternative courses of action. It is concerned with decision-making relating to (a)
what is to be done, (b) how it is to be done, (c) when it is to be done, and (d) by whom it is to be
done.

4. Planning is pervasive. Planning is a pervasive activity covering all the levels of enterprise. While
top management and the lower management are concerned with administrative planning and
operational planning respectively. cavitas do gaims.100.5 5. Planning is an integrated process.
Planning involves not only the determination of objectives but also the formulation of sound policies,
programmes, procedures and strategies other managerial functions like organizing, staffing, directing
and controlling.

6. Planning is directed towards efficiency. To increase the efficiency of the enterprise is the main
purpose of planning. The guiding principles of a good plan is the maximum output and profit at the
minimum cost. Terry has aptly stated that "planning is the foundation of the most successful action
of monos a an enterprise". muhogod of naitonu) lesgentem tent sdrai grinnel 7. Planning is flexible.
The process of planning should be adaptable to the changes that take place in the environment.
Koontz and O'Donnell emphasize that "effective planning requires continual checking on events and
forecasts and the redrawing of plans gainant to soltinned to.s lai 8. First function in the process of
management. Planning is the beginning of the process of management. A manager must plan before
he can possibly organize, staff, direct or control. Because lovni ti planning sets all other functions into
action, it can be seen as the most basic function of the management. og Without planning, other
functions become meaningless activity, producing nothing, but chaos.orfo 9. It is decision making
process. Decision-making is an integral part of planning. It is defined as the process of choosing
among alternatives. Obviously, decision-making will occur at many point in the planning process. For
example, in planning, for their organization, the mangers first decide which goals to pursue: shall we
manufacture all parts internally or buy some parts from outside? 10. It is a continuous process.
Planning is a continuous process. Koontz and Konnell rightly observe that like a navigator constantly
checking where his ship is going in the vast occan, a manager should constantly watch the progress
of his plans. He must constantly monitor the conditions, both within and outside the organization, to
determine changes that are required in his plans.

aid

2.03 Essentials of good plan busa len ofte gni lo moldong sylistnsinsbru al l According to I.F. Urwick,
essentials of a good plan are as follows:-noiziobavlovni!> 1. It should be based on a clearly-defined
objective, od svairios of a vida 2. It must be simple 229our beturgoini brus aurounitnos ai no3,ob It
should be rational and appropriate, algo smolo ne ai orot xivit nau yvonl but 4. It should be
comprehensive.nodoylish rod ansi stiwsand or antibo to nooub It should be provide for proper
analysis and classification of actions. lart or baa soibute aid analq aforury lo saunood orom od Di6. It
must be flexible. ong ni agrado golontoerynignari moto tiouse, atubong gin7. It must be balanced.
dos uodti frb liw brus ovisioni ad or load ainsiqa tuorli jivitas It must use all available resources and
opportunities to the utmost before creating new authorities and new resources. gainnslq to 2ɔith
50.5

8.

9.

It should be free from social and psychological biases of the planners as well as of 20 subordinates.
bns zovitodo lo gnitio or diwata malg Aviosido no 200 10. There should be proper co-ordination
among short-term and long-term-plans.d

2.04 Importance of planning

2000

Jon

The following points emphasize the importance and benefits of planning:q: enoittimi 120.5 1. Future
uncertainty and change. A business concern has to work in an environment which is uncertain and
ever-changing. Planning helps the manager in carving out the future course of action and this brings
a higher degree of certainty and order into the organization than would bed prr at without planning

2. Complexity in modern business. To run a modern business undertaking, there is need for a large
solser number of people with different specialization and complex machines. This makes it necessary
for the management to depend on planning to get a clear idea of what is to be done, if it is to be
done, where it is to be done and how it is to be done.

103. Coordination. Planning, through its defined objectives, well-publicized policies programmes's
and agnsrit procedures help the management in the coordination process. According to Koontz and
O'Donnell, anovi "plans are selected courses along which the management desires to coordinate
group action."

4. Effective control. Planning involves the determination in advance of the work to be done, the
vlbigen person responsible to do it, the time to be taken to do that work and the costs to be
incurred. This bogmakes it easy to compare to actual performance with the planned one. In the case
of deviations, bonnalosteps may be taken to find out the reasons for such deviations. Thus, planning
helps in exercising

effective control. H.G Hicks has rightly said that "planning is clearly a prerequisite for effective
badeild controlling. It is utterly foolish to think that controlling could be accomplished without
planning 10 are without planning, there is no pre-determined understanding of the desired
performance."

5. Utilization of resources: As planning involves deciding in advance of what is to be done, when, of

list where and by whom it is to be done, etc., there is a possibility for the proper utilization of
company's osobjectives at the cheapest and the best manner.

6. Unity of action: Under planning, policies, procedures and programmes are predetermined and
every decision and action should be within the framework of predetermined policies and procedures
and programmers. This facilitates the procedures and programmers. This facilitates unity of action
topit and also avoids confusion or misunderstanding at any level.

7. business failures: As planning involves the selection of best objectives, unity of action,
coordination of activities, economy in operation and Offsetting of future uncertainly and change,
there is great possibility of avoiding business failures.

8. Focus on organizational goals. This makes it easier to apply and coordinate the resources of od to
organization more efficiently. The whole organization is made free to embrace identical goals and

collaborate in achieving them.

9. Competitive strength: The enterprise which adopts planning will have a competitive edge because,
planning enables the enterprise to discover new opportunities and thereby shape its own future.
According to Eamest Dale, the enterprises which have planning continually monitor the environment
So for new ideas and development. fliwno nalq won s saivab of quaasoon ai s

10. Adaptability: Planning helps the organization in coping with the changing environment. Planning
gritalon precedes action. The anticipation of future events and changing conditions prepare the
organization sino to meet them and adapt to them for managing the operations effectively. of insig
ad of

11. Decision-making: The success of an organization depends to a great extent on the type of
organization. ser Decision making involves making a choice from the various available alternatives
after evaluating preach of these. Planning targets, objectives and courses of action provide managers
with guidelines and criteria against which to evaluate available alternatives and choose those which
are the most alasd suitable. Thus planning guides decision-making.o be asaimsiq gaina

Ispitlom

13. Economy in operation: As planning involves the selection of the most profitable course of action
slidwold after evaluating the various alternatives, the enterprise can achieve the best results at
minimum cost.

2.05 Limitations of planning

gninnaly to national 10.

Though planning is a primary function of management and facilitates various other management
functions and brings orderliness, stability and continuity in operation, it suffers from certain
limitations. They are: 1. Limitation of forecasts: Planning is based on forecasts and if reliable
information data are not available for making forecasts, planning is sure to lose much of its value.

2. Rigidity: Planning implies strict adherence to predetermined policies, procedures and

programmes. This restricts individual's freedom, initiative and desire for creativity

3. Time-consuming: Planning is time-consuming and may delay action in certain cases. But to make
plans realistic, it is necessary that sufficient time should be given to the planning process.

4. Costly: Planning is an expensive exercise as a lot of money has to be spent for preparing estimates,
collecting information and facts for analysis, etc. Influence of external factors: Sometimes, because of
so the influence of external factors like government control, natural calamities, break-out of war,
changes in political and economic situations, etc., which are beyond the control of the planners, the
effectiveness of planning become limited.mi wvlovni animals on top vibog 25b Limited Scope: The
scope of planning is said to be limited in the case of organizations with rapidly changing situations. It
is claimed that for industries producing fashionable articles or for those engaged in the publication of
text-books, working on a day-to-day basis is more economical than on a planned basis. lq iar bisa
yligin as liH D.H

6. People's resist: ace: Planning may sometimes generate people's resistance to it. In old established
organizations,anagers are often frustrated in instituting a new plan simply by the unwillingness or
inability of people to accept it. niboob tovlovni guinm

desilit

7. Failure of people in planning: Sometimes, the persons involved in the planning process fail to
formulate correct plans. Some of the reasons for failure are lack of commitment to planning, failure
to bas beformulate sound strategics, lack of clearly-defined objectives, tendencies to overlook
planning premises, not having a clear idea of the scope of plans, lack of support form top
management, lack of effective control technique, lack of delegation of authority etc.

Some of the above limitations can be overcome by taking measures such as proper organization of
the management's information system for collecting relevant facts and figures for making forecasts,
making of flexible plans, etc.

2.06 STEPS IN PLANNING

The various steps involved in the planning process are follows:

hol Awareness of opportunities and problems. The first step in planning is the. wareness of the
unexploited business opportunities or the problems to be provided for in future. The following types
of questions will help in ascertaining clearly the opportunities and problems:

(a) What business opportunities or problems are likely to arise in future?

(b) What is the plan to be formed to exploit such opportunities or such problems?

(c) Whether it is necessary to devise a new plan or will it he sufficient to nodify the existing plan? (d)
By effectuating the plan, what benefit the organization will get? no2. Collecting and analyzing
information: The next step is to gather adequate information and data relating gebA (0) to the
planning to be made and to analyze it to find out the cause-effect relationship between the noiss
various factors.

g3le Determination of objectives: Analysis and interpretation of data facilitate in determining the
enterprise ailabjectives, Objectives must be specific and activity based. The objectives should be for
the enterprise taom or as whole. oldalievs sisulavs

noir

4. Determining planning premises and constraints: Premises are planning assumptions on the basis
of which planning takes place. Thus, it is a forecast of conditions like trends in population, political
and econonic environment, production costs, advertising policy, availability of labour, material,
power, etc. some of the premises like population growth and political environment are
uncontrollable while

"almon some degree of control can be exercised on the technology to be used, availability of raw
materials, bins bo etc. further, there will constraints like government control which affects the plans.
Plans should be formulated by the management in the backdrop of such premises and contraints.
5.de Finding out the alternative courses of action: The next step is to find out the various alternative
courses of action. For every plan there are a number of altcmatives and hence, all possible
alternatives to work out a plan for achieving the desired objectives should be found out for their
evaluation. bb. Evaluation of alternatives and selection: The next step is to evaluate all possible
alternatives with dul reference to cost, speed, quality, etc., and select the best course of action.

7. Determining secondary plans: After selecting the best course of action, the management has to
formulate alt ei the secondary plans to support the basic plan. Without the secondary plans, the
basic plan which is ahlprepared for the whole enterprise cannot be effectively operated. For
example, for effective operation

of the basic production plan, a number of secondary plans for purchasing of raw materials,
acquisition avitool of plant and machinery, training of workers, arranging for adequate finance, etc.,
have to be prepared nouns in for the successful operation of the basic plan.

Ja8. Securing participation of employees: The successful execution of plan depends to a large extent
on 18 also the wholehearted cooperation of the employees. In view of this, the management should
involve To aq employees in planning through communication, consultation and participation.

oqque of boeg 9. Providing for follow-up and future evaluation: In order to see that the plans are
proceeding along bright system for continuous evaluation and appraisal of the plan. By this, the
management can notice shortcomings in time and can also take immediate suitable corrective
action.

2.07 TYPES OF MANAGEMENT PLANS

ablory

Depending on their use, management plans, may be classified into two broad categories as show in
Fig. saviko do to visigilumaidi. dainos al soivis Plans Javivine aldong.s

und gan

anvilbodo mat-gnolleniva

dino in Multi-use plans loval orli od svitab Objectives

misno

sm-b

Veido savitooido to sunitnon to a old to level of

Strategies dou2 i ovode lavalot of avite rareo

doso sonotnios yori tart or botangani ode

Single-use plans

Budgets Programmes

Policies

Procedures Rules

Schedules
Projects

Methods

ация

Multi-use or standing plans are used repeatedly in situation of a similar nature. They are long term in
nature and represent standing answers to recurring problems. They serve as ready guides to action.
These plans help in training of employees and in job rotation. They enable the performance of work
by persons with less experience. These plans help to save time and effort of executives. They
facilitate delegation of authority, coordination and control. Objectives, strategies, policies procedures
and rules are standing plans or repeated use plans. Standing plans help operational goals of an
organization. They provide a ready reference for executive action. Standing plans are useful in
ensuring unity of effort and coordination. If well-communicated and well- understood, they ensure
uniformity of action. Standing plans become the habit pattem for guiding and specifying human
behavior in organizations.

Single-use or ad hoc plans are formulated to meet novel, unique and non-repetitive situations. These
are tailored to fit specific situations. A single-use plan is used up once the objectives are achieved. It
is of short duration and non-recurring in nature. Programmes, budgets, schedules, projects and
methods are examples of single-use plans.

2.08 OBJECTIVES

Every organization exists to achieve some purposes which are called its objectives. Objectives are the
aims or purposes, for which an organization is set up and operated. Objectives indicate the
destination or an organization. The planning process begins with the setting up of objectives.
Objectives may be defined as the

ends, purposes or aims which an organization wants to achieve over varying periods of time.
According to Allen, "Objectives are goals established to guide the efforts of the company and each of
its components." Organizational objectives are the goals or ends towards which the activities of
organization are directed and the standards against which the performance is evaluated.

botslumol

The terms, objectives, mission, goal, target, standard, quota, deadline, etc., are used interchangeably
in management literature. Some distinction can, however, be made between these terms.posto

boo

Mission: Mission is a broad term reflecting idealism. It represents the overall philosophy of an
organization. It indicates the end which is to be achieved over the whole lie of an organization or at
least over a long period. The term mission is used generally in non business organizatioOns like a
college, a religious trust, a club, a government, etc. for example, eradication of poverty is the mission
of the Government of India. It is generally difficult to achieve. Mission serves as the (raisondeter) for
the existence of an organization. Mission is the central guiding concept that makes an organization
meaningful. It indicates the line of business of an enterprise and its link-term commitments. hol
aniqyasbroode to odmus si noitouborg niend

Goal: A goal is a desired state of affairs which an organization wants to realize. Goals are collective
ends towards which organizations direct their energies and activities. Goals legitimize the role of an
organization in society and provide a motive for its activities. For example, the goal of Maruti Udyog
is to provide low cost, economic and quality automobiles to the public. Goals may be short term in
nature. Short term goals are supposed to support and merge into long-term goals. In reality a conflict
may arise between the two types of goals. Such conflict arises due to two reasons: First, there may
be a trading off between immediate profit (short-term goal) and growth (long-term). Secondly,
management priorities may change, e.g., quick gains and lasting yields. nodos vidoemos sidativa
staibommi solat els no bas emit mi egrimootorla 2.09 Characteristics o Objectives ГИАЛЯ
ТИЯМЯРАЙАМ ПО 23ЧУТ Objectives are characterized by the following features: sqm

to brago 1. multiple or several. e.g., profits, survival, growth, service to society, etc. this multiplicity
of objectives creates the problem of fixing priorities among different objectives and of harmonizing
them.

2. time-span. Short-term and medium-term objectives are meant for achieving long-term objectives.
All these objectives need to be integrated so that they reinforce each other.

3. hierarchy. There is a graded series or continue of objectives. Objectives of cach lower unit
contribute to the objectives of the next higher unit. Each level of objectives stands as ends relative to
the level below it and as a means relative to the level above it. Such a hierarchy is known as end-
means chain as shown in Fig.

MEANS

ni mat gnol

abodioM

asioilo 29ubooo19

гоня

ENDS

yodTsuden elimiz a'lo poitsutialbogor beau ons analq gnibnsta to 5-M

sean notocol asbing ybson an ovisa Yod among gain riw and show lo sonamoto odt sidan

OVERALL

horitus lo mitsgalob statiliost yodT vix CORPORATE bots to a gnibnsta sis aslin bas booo OBJECTIVES
avituooxs sol solorybears obivongnoitssh -llow bn bote nummoo-llow'll noubo

of awans gnibnste insanqo stan ni bas svolgms to gainie

odens

a of qlort anulq peoT consoqxo saol ovitoido lonnoo has no tambroo0

alapa lamango girl anal gribnssl seu liseus ansiq gnib.noitos

gnitiooga bananibing not matteq tod DEPARTMENTAL CR oitos to volitur sans var bootemb

hoda to ai ti ovoidos todo o

DIVISIONAL

OBJECTIVES

anxingo ni oivaded anmod

sin of batelumot 915 2 od be 1000-ini2 nslgeau-ignia A anoilgutia oliooga til

bonolist

10 algmaxo sabortoms alojong astub SECTIONAL OR GROUP Por sunan ni grimuon-non bes noiemb

art as bonitahad you anitaido

OBJECTIVES

INDIVIDUAL OBJECTIVES

ansiqueu-alynia Заутрано 80.2

alixo noilesinesnova

(4) objectives may be tangible or intangible fairway so zmie

2.10 MEANING OF POLICY

Jagbud noor

Efficient management always sorts objectives which are the goals towards the attainment of which
all the activities of the management are directed. But the activities are directed according to a mode
of thought and set principles. Policy may thus be termed thoughts and principles which the activities
of the organization. It is a guideline. Activities need guidance. Policies provide such guidance. They
guide the activities so as to attain the objectives of the organization with efficiency and with success.
A policy may be defined as a guide,ne that helps in attaining the aims of the objectives of the
organization.

2.11 CHARACTERISTICS OF POLICY

anoitals modal

A policy should have the following characteristics: noutoubong to a banana bo

1. Flexible. It must have the character of adaptability. The required changes should not disturb the
organization too much. Neither the changes should be such as may require rethinking so far as the
aims and objectives of the organization are concerned. It should not be static. But it should be

od ni slowly to the extent to which it makes sense with the objectives, plans and requirements of the

dongan

2. Instrument: It should be prove an effective instrument for the execution of the plans of the
organization. 3. The code prescribed should state procedure which is to be followed in a given
situation. 4. Normal Procedure should be clearly defined and should usually follow the conventional
and established course since they have withstood time and have now been accepted by the
organization. The change, if required, may incorporate if it is going to help the working. But such a
change should be adequately tested before it is given effect.

5. A particular policy may be good in one set of circumstances but it may not prove useful in another
set of circumstances. Since circumstances may not. nobegites to notevo

2.12 Types of Policies

bills to
2.12.1. Operating policies: Operating force is responsible for accomplishing the given task. It is the
task force in true sense of the term. The policies already defined are jotted down in the note book of
every member of the operating force. In order to refresh his memory, time and again and to
accomplish the job to the satisfaction of his superiors, his specifications, he consults his note book
and saves himself from unpleasant circumstances in which he may land into if challenged by his
superiors. With the help of his note book he follows stated and established policies and thus satisfies
himself as well as his superiors.

2.12.2. Sales policies: Within the framework of general policy of the organization sales department
may have and pursue an independent sales policy. A sale includes:

1. the decision regarding location of market,

bos met

2. the channel of distribution, lost be able brushedivision and sub-division of the market for better
marketing results, rib soft

3. c

pricing,

00 and no mundo on nosio ni noitasinagio adito voiloq libono ar

radio si no,arolistor

4. moits 5 sale incentives, pemilu bu aliter loro griber voilog notab 6. advertising and related
activities,

7.

salc control-policies and incentives,

8. sale budgets, trbos lati

yoilon bmbivibodu .01 stovni s

grihow latiq bit of bruger mi nozivong Insoles adi. S olana be nosiliu, noitede hut off

9. expenses budgets, and to wipe 10. other matters related to sales and selling personnel.

2.12.3. Production Policies - scheduling, programming and other allied matters. Purchase and
Materials Management may form part of production policies. If the organization does have
independent department of Purchase and Materials Management, which usually a manufacturing
concern has, then it is given free-hand to frame its own policy and pursue within the set objectives
and organizational policies of the enterprise. A production policy, among other things, includes:

1. production budget.

sai 11 3.
selection of production executives,

selection of labour force, but

4. arrangement for training,

6. inventory control,

7.

labour relations,

duvida que tengamos sitivitos ort tu botoorib are thomogenem odt to asuivins olqining bas atrod
bomo odur yang t combing dove sbivong asioilo consping bounaoitiviA.anilsbing

8. mode, systems and time of production,

Jarl 5.bifactory layout, od yam voilog A2250 ti ne yonsaft driw noitesinegro orti to zavitado noising or
to soviosido odito amin se grinishtni qld УЭНОЯТО ГОНТІЯЗТЭЛЯАНО П.С ogniwolfotoevad bluorla
voilog A or dig,aib cost control,gnado bezpen on gilidegabe to our dadum oldixol 10. production
control, and are of bluorik gaan dito o gossinsgto 11. other allied matters.vojdo odu diw pane sapien
idow of f.bomson moitexinegro odt to asvitoido bas amis it of vigo oldinal 2.12.4. Research policies.
Research, as has already been emphasized, plays a dominant role in the success or failure of the
organization. In today's competitive business and industrial world it is the research which decides the
fate of the organization. Research policies are related to:

od blunda

art to

1.

the selection of project for investigation,

2.

noita

blot 3.

4.

bong ofate blizode boding aboadT yhuolo ad bluoda 9001 ammo

the selection of method for investigation, bootartir svari orit sortie seuroo badial dates the selection
of mechanism for investigation,

the selection of personnel's for investigation,

or 5. the determination of research budgets,

ads or o

6.

moonboporti, ognario on T

is novig zi i moled barest lotsupobe od

ozono ni boog od vam yoilog alsing A

the evaluation of investigation results, andamostani soni sono lo toa 7. other allied matters,

1.

asioilo to zoqyT £1.5

dal 2.12.5. Financial policies: The financial policies deal with the following matters:q0.1.SI.S the ways
and means of raising funds, bybeste estiloqsil mo cart and i sorollast the location of various sources
of funds, ideator of no al Ignitego se lo admom ord 3. the respective valuation of different sources of
funds in relation to the need and general policy of the organization,

2.

‫اقاله‬

4 the determination of risk involved, the expenses to be incurred and the risk which the organization

can cover,

the return expected,

6. the actual procurement of funds and financial control system of the organization,

ad S

the different financial ratios - their computation and study,

zleiste

to

b-duz bna noizivit

2 the credit policy of the organization in relation the consumer or the one hand and wholesales and
retailers, on the other,

9. the distribution policy taking the wholesalers, retailers and ultimate consumers intoconsideration,
10. the dividend policy,

11. the investment policy, if any,

grizitovbs

12. the relevant provisions in regard to fixed capital, working capital and their utilization, 13. the
funds absorption, utilization and expansion capacity of the organization, and 14. Merall: tenters.
grille bris solza of ballstari

? 126. Cog policy: In a costing policy include are:

bretoanethod of costing,
P

to 01 ado-sibile ottubo.EST.S bobos lo hay mat yum nomogen nomagens Malang Mbased

As 2. method of (a) allocating: (b) apportioning, (c) reapportioning, and (d) absorbing the overheads,

3. other athed matters.

asbuloni agnirtorito gnoms, voilor noitaubo

2521.

Tolo 2.12.7. Accounting policy: An accounting policy includes the following: ano novo the
determination of the basis of valuation of stock, food boyod anotlibro nomognem yoom to anni ni
botineup od nas dfw 2. the determination of issue price of materials, stileg jodio bus sletom svolge
lliwboog 5d 13. the depreciation provisions and methods for making provisions, ogniunt ni mami

4.

the treatment of different types of expenditure, such as capital, revenue, deferred of botimil
expenditure, tangible and intangible assets, fictitious access good will and preliminary expenses etc.,
different types of receipts such as capital and revenue receipts ctc., qas sed 5. capitalization policy,
yllens :nol Ato 2500 svileni seist gnive Tony 6m provision for doubtful debts and other
contingencies.ni ai bao ni siqmexs 107 fog muse of beni7.pl investment policy, if any, and carubong
lovilaup set over to souben gninimalo vogn bas rigienot noitanigami eiupon ain

8. other allied matter.

2.12.8. Promotion policy is related to the utilization available human resources in a manner which
helps in maximum benefit to the organization and through which it secures the services and goodwill
of the working force-managerial, supervisory and operating-for the growth and prosperity of the
organization. The objectives of a promotion policy may be:

1.

orlato utilize the human resources to its fullest capacity,

asitiv

odtam botnono

2. to extract the best out of he available human resources by helping them grow with the
organization, 3. to provide opportunity to the working force of the organization - all the managerial,
supervisory and operating - for personal advancement, growth and prosperity,

to prepare a basis for promotion,

to frame rules etc., for assessment and merit rating,

5.

6.

to provide promotional avenues, and

7. to prepare a guideline in the matter, mo

owtiq sitziles-leond yadT babicob 18 hobinob od oals bluoda

qolave

It is the promotion policy which retains the available talent with the organization and attracts all
those who are outside the organization but wish to join it for their own betterment but indirectly
they are incidental to put their heart and soul in the organization so that the organization may grow.
With the organization growth their personal growth and prosperity is linked. This fact must be clearly
indicated through the promotion policy of the organization which should also be clearly spelt out to
the force working for the organization.

Thus, an operational plan defines the detailed manner and programme of caryying out the current
operations. It regulates the daily routine of the organization.

2.13 Steps in Corporate Planning Processin

bas waive

Organizations differ in terms of their size and complexity. Therefore, there is no single planning
procedure applicable to all organizations. However, the main steps in planning process are as follows:

1. Identify Goals: Plans are formulated to achieve certain objectives. Therefore, the first step in the
planning process is to identify the goals of the organization. The objectives fixed must clearly indicate
what is to be achieved, where action should take place and who is to perform it and when it is to be
accomplished. Objectives set must be stated clearly and in measurable terms. For example, quantity
standards, cost targets and quality specifications are measurable objctives. Objectives should be
established in all key areas where. performance affects the health of the origination. Objectives
should be laid down after an analysis of the external and internal environment of the organization.

2. Develop Planning Premises: Planning is done for future which is uncertain. Therefore, certain
assumptions are made about the future environment. These assumptions are known as planning
premises. Planning premises lay down the boundary or limitations with which plans are to be
implemented. In order to develop good planning premises, it is necessary to collect data on the
current status of the organization and to forecast future changes.

Planning Premises arc of several types. Internal premises refer to the resources of the enterprise, e.g
sales forecast, capital investment, labour skills, technology, etc. On the other hand external premises
imply the external environment of the organization, e.g., product market and factor market
conditions, government

47

policy, population trends, etc. Controllable premises are the policies and programmes under the
control of management. Conditions beyond the control of management are known as uncontrollable
premises. Premises which can be quantified in terms of money, time units of output are called
tangible premises. Public relations, goodwill, employee morale and other qualitative factors are
known as intangible premises. These factors are very important in planning process and
management should not overlook them just because they cannot be quantified. Counsver lesiqeo as
done slibnsqzs lo zoq solib to smisen od Visa Premising involves assessment of the future which is
uncertain. Therefore, premises should be limited to those aspects which are critical or strategic to
plan. bu qison to q

3. Determine Alternative Courses of Action: Generally, there are alternative ways of achieving the
same goal. For example, in order to increase sales an enterprise may launch advertising campaign or
reduce prices or improve the quality of products. Therefore, alternative courses of action should be
determined. This requires imagination, foresight and ingenuity. Determining alternatives the critical
or limiting factors must be kept in view.

4. Evaluate the Alternatives: Once alternative courses of action have been determined, they must be
evaluated. Alternative courses of action can be evaluated against the criteria o cost, risks, benefit and
organizational facilities. The strong and weak points of every alternative should be analyzed carefully.
Computer. - oriented mathematical techniques may be used wherever necessary.

ility of

5. Select a Course of Action: The most appropriate alternative is selected as the plan. This is the point
of decision where a plan is adopted for accomplishing identified goals.

6. Formulate Derivative Plans: The final step in planning process is to develop sub-plans, required.
Once a choice is made and the master plan is adopted, functional and tactical plans and action
programmes are decided. They break-realistic picture of the actions to be taken in future. A time
sequence of activities should also be decided. noitomonqol aiand a song of banasunove lanoitoring
abiver of Formulate oni onils Choose song of Strategies

Determine

Seo Objectives nous

Develop Planning

Policies among si til

of Isinabi sa vodi viibi Premises od wood or ti moj of law tud noites regio ont obiatuo om ontw i
dwocolissingooh di wong var nodexinggo or tartoz noitesinego oni luce has root Torogorong or got
botsoin salo ed eum to air besinilai visokong bus wong lanang itesinanood not amphow contortor
molage sol of els bluota doir moitasinggo od

Review and

bub Revise Plans

ort ni gola

To

awollol flor,stored

2.14 Planning Premises:

mangong bisa belistab s onits alquilergo naud noitesinegro off to smiton ylish dastaligi 200 Integrate
2019 gnian Develop i L.S Different aid to arst Derivative

Implement

Plans list

ang ginnala ni eqs Plans

singi

wol Plansingtos of designs

svilo nisha voirie of boislumot on anal al vinsb zavitoajdo od noitesinego ant lo alcog or disbi of a
song gina immons of zi odw brisooni eet bluoda noibe narw beveidos ed Plans are prepared for
future. But future is uncertain. Therefore, management makes certain assumption about the future.
These assumptions should not be based upon hunch, institution or guesswork. Rather these should
be developed through scientific forecasting of future events. The assumptions about future derived
from forecasting and used in planning are known as planning premises. According to Koontz and
O'Donnell, "Planning premises are the anticipated environment in which plans are expected to
operate. They include assumptions or forecasts of the future and known conditions that will affect
the course of plans such as prevailing policies and existing company plans that control the basic
nature of supporting plans."

Planning premises are the building blocks on which the super structure of planning is based. These
premises relate to the strategic or crucial and limiting factors. Consistent and coordinated plans can
be prepared on the basis of good planning premises. One of the major purposes of premises is to
facilitate the planning process by guiding, directing, simplifying and reducing the degree of
uncertainty in it. Premises guide planning. Developing sound premises is vital for successful planning.
3.9 noisin6910 prit to tommotivas lampix

2.15 Types of premises

29vido bila to also

1. External and Internal Premises: External premises are those, which lie outside the firm. These are
of many kinds: (a) general business environment including economic, technologic..political and social
conditions, (b) the product market consisting of the demand and sply forces for the product or
service, and (c) the factor market for land, labour, capital, etc. Internal premises refer to the factors
within the enterprise. These include sales forecast, capital investment in plant and equipment,
competence of management personnel, skill of labour force, etc.

2. Tangible and Intangible Premises: Tangible premises are those which can be quantified, e.g.,
money, time, units of production, etc. on the other hand, intangible premises refer to the qualitative
factors like public relations company's reputation, employee morale, etc. these cannot be expressed
Toto in quantitative terms. However, such premises play an important role in planning.ido 10/13.
[Controllable and Uncontrollable Premises: Those premises that are entirely within the control
sonamot and realm of management are known as controllable premises. These include the policies,
programmes luisce brand rules of the enterprise. Premises over which an enterprise has absolutely
no control are uncontrollable premises. War, natural calamites, new inventions, population trends,
etc. are examples of such premises. Some premises are such as over which the management has
partial control, c.g, union-management relations, supply position in the industry, etc. such premises
are called semi- controllable premises.

2.16 Objectives:

10 л

Effective management is management by objectives. According to Luther Gullick, "In administration

God helps hose who have a clearly defined objectives.

Objectives determine largely the size, shape and design of an organization. Organization are
purposive entities. Therefore, careful selection and clear definition of objectives provided a sense of
purpose and direction to employees. Objectives serve the following functions: bilizoq botizobs of
stutzog naviga moit noitssinsgro 1. Legitimacy.ood too-ooing astugisins smegenem si stqmsxo
701250rol Innsmotivas lais Tomar Objectives embody the basic philosophy and mission of an
Organization. They help legitimize its existence and provide a unique identify to it, objectives help to
link the organization with various groups in its environment. Objectives have a social sanction. levito
Inioqwoiv ori moni mod is dool bus 27otitogoo to anal or 2. Direction. it slid vid voids of sodales et
iyotan nitoet moi botsitenib Objectives give a meaning to the activities of an organization. They
provide direction to thinking and actions. They serve as the pole star towards which all organizational
e ganizational efforts are directed. Objectives facilitate delegation and decentralization of authority.

3. Unified Planning.

αμποτίνης

ogned

Objectives are the key to planning. Objectives serve as the basis of reference points for the
formulation of policies, strategies, procedures, programmers and other plans. They help to develop
an integrated structure or network of plans.

4. Individual motivation.

Objectives make clear to every individual what he is expected to achieve. Specific and challenging
goals stimulate employees to work hard and be innovative. They enable managers to secure
appropriate responses from employees. Objectives make jobs meaningful and worthwhile. Inil
vgsisita / if not noitoonib mat-gnol odi nobyal il.bhow 5. Co-ordination. bonoizivno ai forral
Objectives make clear to every individual what he is expected to achieve. Specific and challenging
goals stimulate employees to work hard and be innovative. They enable managers to secure
appropriate responses from employees. Objectives make jobs meaningful and worthwhile.

6. Performance control.

2 to 81.5

Objectives serve as the center around which executives can Integrate the efforts of their
subordinates. Mutually agreed objectives promote voluntary coordination by stimulating a sense of
unity and mutual cooperation lesierig bus ad

Essentials of Valid Objectives

sedi 1.

bas le 2.

Joubon 3,

s of 49

5.

aving to asges

Objectives must be clear and specific. lamines fatal ban lent They should be stated in measurable
terms. vizud taong (e) abril you to Objectives must be result oriented and time bound (d) antiboo
luisa Objectives must be mutually supportive. 50 is hem total art (0) bas sovi 10
pengistro orb niti

Objectives should be challenging but attainable or realistic.org to constamoo 6.Objectives must be

acceptable to employees.

ovital7.p Objectives must have social sanction.

zim919 sldignatal bas sidigan noitubong to atinu milyonom

bees8. Objectives should be interconnected and mutually supported.oils sildung oil anotost

9. Objectives should be laid down in all the key result areas (KRAs) of business. Peter looo at Drunker
has identified eight key areas in which objectives should be established; market zorgstanding,
innovation, productivity, physical and financial resources, manager performance 1 loinoo and
development, worker performance and attitudes, profitability, public and social asiq responsibility.

10. Objectives should provide some flexibility.

que

Sub-goals should be laid down for every objective. non non-noim casing oldaloninco

2.17 STRATEGIES

The concept of strategy in business has been borrowed from military science where it implies the art
of the military general to fi at the enemy. The term 'strategy began to be used in business with
increase in competition and complexity of operations.

A strategy may be defined as a special type of plan prepared for meeting. The challenge posed by the
activities of competitors and other environmental forces. "Strategy is the complex plan for bringing
the organization from a given posture to a desired position in a future period of time. "It is essentially
a response to external environmental forces. For example, if the management anticipates price-cut
by competitors, it may decide upon a strategy of launching an advertising campaign to educate the
customers and to convince them of the superiority of its products. In order to formulate an effective
strategy, management must anticipate accurately the plans of competitors and look at them from the
viewpoint of rival firms. The term strategy should be differentiated from tactics. Strategy is the basic
plan chose to achieve objectives while tactics are the means of implementing the plan.

A strategy is a broad plan of action for the development of sources in pursuit of defined objectives. It
is an 'interpretative plan' formulated by top management to give meaning and shape to other plans.
It reflects the way in which an enterprise will react to its environment. The long-term success of an
enterprise depends largely on how it responds to changes in its environment. A strategy provides
answers to the following questions: nolo What business are we in?

What should be our business? o bang

iii.

Who are our customers?

iv.

alsog g

What do they buy and why?

Why should society accept us?

ido

bigature asioiloto enaligto towbarito

Colaviton luubivibal.

T oqo ai ori adw isubivibalyove of solo solem svitsjdo brus ber how of angolom stalumite A strategy
links the resources of the organization with the links and challenges posed by the outside world. It
lays down the long-term direction for the enterprise. It outlines the picture of what kind of
enterprise

is envisioned.

aloog 80A strategy is different from tactics which are specific ways executing a strategy. Tactics have
short-term orientation while strategies have a long-term perspective.

2.18 Nature of Strategy.

These definitions reveal the following characteristics of a strategy:

Jos somos.

Strategy is a contingent plan as it is designed to meet the demands of a particular situation. ii.
Strategy provides the direction in which the direction in which human and physical resources will be

deployed for achieving organizational goals in the face of environmental pressures and constraints. It
is a guideline for future course of action.

ii. Strategy relates an organization to its external environment. Strategic decisions are primarily
concerned. with external forces. ayew gniwollol or ni nosinago no iv. Strategy is an interpretative
plan formulate to interpret and give meaning to other plans in the light of specific situations. Silog
bris non-pipos llanova on mirti to popissing V. Strategic is the right combination of different factors.
Strategy-making is largely the responsibility of gmo ni top management. 12 norm

20invio Strategy is forward looking.

habi

gotze gaitalummot slidWagnollers Istominotivas

vi It is a means to an end not an end in itself. It is a means of coping with changes in the boost

environment.

viii. It is generally formulated at the top level of management.

It is generally long term in nature.

X. It is flexible and dynamic.

in the external

Bobbypsit higront &

an roue anoitesop laisina baa luv ombe of own Snow on soniaud tan(s)
xi. It involves assumption of certain calculated risks. Si od ow blunda aonieud ad (d) xii. It is action-
oriented.

xi It may involve contradictory action. For example, a manager may adopt a particular course of
action beyolgab today but he may revise his action tomorrow due to changes in the situation, le gro

Evaluation of a Strategy (Essentials of a Good Strategy) The following criteria may be used to evaluate
a strategy:

1. Internal Consistency.

als A business strategy must be consistent with the goals and Policies of the organization. There
should be perfect co-ordination between objectives and strategies. Strategies in different areas of
business should he integrated into a strategic framework. Lack of consistency will make
implementation of strategies difficult. to anvom vlooi 2. Consistency with environment.

A strategy is basically a response to cope with changes in the external environment. Therefore, it
should be designed to fit the opportunities and threats into a strategic framework. Lack of
consistency will make implementation of strategies difficult..

3. Appropriate time horizon.

ono ai tl.stboo

Time is a crucial element of a strategy. A longer-time span improves flexibility and reduces accuracy
of forecasting. Environmental conditions, objectives to be achieved and judgment of management
should be considered in deciding the optimal-time span. Timing of the action must be appropriate.

4. Realistic.

borisM

A strategy should reflect the strengths and weaknesses of the enterprise. It should be appropriate in
the light of available resources.

5. Acceptable degree of risk. aj nosibebst

milieibens of beius noitesibabrate o

Every strategy contains an element of risk and uncertainty. But the degree of risk inherent in a
strategy should be such that the enterprise can bear it. Resources should not be committed
irrevocably nor they should be concentrated on a single activity. A proper match should be created
between risk and return.

6. Feasibility.

bas isipito as bobnegaЯ

A strategy should be workable and capable of producing results within the constraints and
parameters known to management.

7. Social sanction.

Ihonib botsinosas o

Strategy must fulfil ethical and social responsibilitics.

Tontoo riw batsioo22A

To solveriod of bojalasi aquons beu algubivibal

Need and Importance Strategies:

to so se ni aloog Inouesnego giorno boyoqub

Strategy defines the way in which an organization will react to its environment. It is a scheme for the
marshalling and development of resources of organizational objectives. A strategy contributes to the
success of an organization in the following ways:

(a) ed orHelps in facing environmental challenges: talumo asiq svitsteignis aivan

vi

Every organization operates within the overall socio-economic and political environment of a
country. Business environment has become increasingly turbulent. The long-term success of a
business enterprise depends, to a great, extent, upon how it responds to the dynamic environment.
Strategies, are helpful in facing environmental challenges. While formulating strategies, an
organization identifies the threats and opportunities posed by the likely future environment. It
prepares itself to successfully face the threats and exploit the opportunities formulating strategies.

2. Provides Direction.

insmogenem to level quted te betalumot vilmas aliv Corporate strategy serves as the long-term guide
towards the achievement of objectives. It provided answers to some vital and crucial questions such
as:

(a) What business are we in?

(b) What business should we be in? (c) Who are our (Customers, etc.)

oimanyb has aldixaflaix

lah batsfoleo nisso to nodomus asylovni ilix

botnsino-noitos a l

be loviyam Ji

3. Optimum utilization of resources.gemsplomax 101 not Corporate strategy indicates how the
resources of the organization should be marshelled and deployed for the best results. It ensures
more efficient and effective utilization of organizational resources, et, time, money, talents, etc.,

4. Facilitates coordination and control: Master stagy interrelates the different departments and
groups of the organization. It provides a unifying force by focusing attention on common
objectivities. Strategy also Simplifies control by prescribing board standards of performance.

5. Competitive strength: Strategies are specially designed to counter the actions of competitors. A
competitive strategy is formulated keeping in view the likely moves of competitors. It helps in
maintaining or increasing the firm's market share in the face of competition.

bluda Performing jobs. Amethod prescribes the manner of performing a task. Therefore, it is helpful
in the use of a procedure with minimum expenditure of time, money and efforts. A method is more
limited in scope than a procedure. It is one step of a procedure.
2.19 Tactics

noshod omit shqoqqa.E To you Tactics are short-term action plans designed to handle specific
situations. The objective of tactics is to achieve success in a give situation with in a series of related
actions, noibmootto

S.No

Rules

Table-Rules and Methods - A comparison 50t gnibisabi bonsbizno

oril ni onquiq Taboos and norms to

2.

3.

Seck to ensure discipline.

No standardization required

Method

miss Standard ways of doing things.

selfalisys to Jdgil Seek to increase efficiency of operations. Standardization is essential.

go4, nis Based on commonsense, istub Based pm research and analysis. Objectives and social
valuesbode ours

bluoda yad on v

5.

6.

Penalty attached to violation.

Regarded as official and

od biurode dotem

oldats A.2

sins et doua sd bluore viivitas olgnias no betinsono ad

No penalty for violation.

vilidiens.d

coming bout Authoritative multiwall gobong Regarded as logical or rational diavolenia A

Associated with control

7.

8.

Related to behavior of Individuals and groups.

Insmogensm of wor

Not associated directly with control na Isiso2.r

pid Relate to physical and individuals Tasks.

2.20 Budgets luberise or quod of Loitions at bo i umixem bra mumini slubarke Tis A budget is a plans
which states expected results of a given future period in numerical terms. It is a plan of action or
blueprint designed to achieve a specific goal. It may be expressed in time, money or other units. It is
a projection defining the anticipated costs and results and the allocation of resources. Abudget may
reflect capital outlay, cash flows, production and sales targets. It expresses organizational objectives
in financial and physical units, lang zijgbud Acomamotolo abrabataan om at

mood stand

Budgets may be prepared for production, sales, materials, cash, capital expenditure, etc. A budget is
ar instrument of both planning and control. As goals are expressed in numerical terms coordination
of departmentcl plans complete each task at the right time. oslo tromlevi odol omare volqm

While planning a schedule, the availability of resources, processing time and the delivery
commitments should be kept in view. Due allowance should be made for delays created by factors
beyond the control of management as well as for non-productive time. ovitojdono noizeim oftione &
and t

A programme serves as a useful guide in day-to-day operations. It is action-based and result-based

and result-oriented. It helps to maintain the motivation among employees. But there is great risk of
failure of a programme due to changes in the environment.

2.21 Basic Steps in Planning:

noitesinegro

ning noitenim molo

1. Division of work. giup is a nobod of how old (1) marw baboon si ga rajong anoia Before developing
a programme, the purpose of the programme, the steps to be taken, the quantity and quality of
effort required for each step should be clearly defined, Division of work facilitates proper assignment
of tasks to persons and facilities review of progress at each step. noisinegro oo

2. Sequence between steps. haqob lavee atolls yliammon losjonqs aA aluisanoo vilaup bre 200 10 old
Assigning priority to different steps and developing a chronological sequence are necessary. The
work done and the time spent on one step affect the subsequent steps. These relationships and
sequential arrangements should be observed carefully. Sequencing helps to overcome the problem
of coordination created by division of work. Doug to sense & sobivog dilidianogen lo noitaxit

3. Fixing responsibility.

4. Arranging resources, got

el
After division of work and flow of work, accountability for each step should be fixed on specific
individuals i.e., who will do what. saillot woll communia daliloq, alnog to noitanidos a zil to get too
tiges dailqmoods of bongresborde brus is The success of a programme depends on the timely
availability of physical, financial an human resources. Therefore, the resources required for the
programme should be determined.mmgongoniasdal worl 5. Time scheduling.

In the last step, the date when an operation can begin and the time needed for its co pletion are
decided. Availability of resources, delivery schedule, processing time, etc. should be considered in
deciding time schedule. A definite date sheet for each part of the programme will facilitate control.
Due allowance should be made for delays created by factors beyond the control of managers. Every
operation may be divided into discrete tasks and plotted against a time line (Gantt chart) to show at a
glance the time sche-fule to the employee.

A sound programme should be stable enough to meet internal demands and to instill confidence. At
the same time, it should be flexible enough to take care of external changes. bi slq hoitos sai 2.22
Schedules

nolasinago or loginoiton toifle bas ritoome sueno of bongobei

A schedule is a timetable of work. It specifies the date when a task is to begin and the time needc.
complete cach task. The starting and completion date for each part of the programme are; specified
in the tim

schedule. Minimum and maximum time periods may be specified to keep the schedule realistic and
flexible. Three main elements are involved in planning a schedule; (a) identify activities or tasks, (b)
determine their sequence, and (c) specify starting and finishing dates for each activity as well as for
the sequence as a whole. Scheduling is the process of establishing a time sequence for the work to
be done, schedules translate programmes into actions. Scheduling is necessary in all organizations to
provide for an even flow of operations and to ensure becomes easier. Budgets serve as standards of
performance. A budget is generally prepared for one year. Further details about budgets are given in
the chapter on 'control aids.qqan h

2.23 Projects oilanib

olla

spes se aleog A Jounoo bus gninnale diod to insuran

A project is a complex scheme for the investment of resources which can be analysed and evaluated
as an independent unit. The main features of a project arc as follows: vodi albora ginnalq olarW It is a
non recurring plan. velob tot bar or bluora sonwall work ni to od blode It has a specific mission or
objective. Somitavitsubong-tion as llora stronggieret

To four.

2.

bumbo 3.

4.

It involves time bound plan with a long time.bobing lines immergo A It involves considerable
investment of resources and is significant for the fu Jnsmadrives and magma of sub ammungong
organization.
5. It has a clear termination point.

future of the

gainus19 al eqsi siena IS.S

Project approach is needed when (a) the work to be done is special requiring expertise form different
departments, (b) the work is very complex and unfamiliar, (c) high cost is involved, (d) errors and
omissions are to be minimized, (e) the work is time bound.

oto to vitam

In other words, project organization is often used to complete the complex task within prescribed
time, cost and quality constraints. As a project normally affects several departments, effective co-
ordination of departmental efforts is required. Several techniques, e.g., network, PERT, CPM, etc. are
now available for planning, monitoring and control of projects. Tag spade os quiz toga omit od bas
onob olivi Projects is helpful in precise allocation of duties, effective control, easy implementation of
the plan and fixation of responsibility. It provides a sense of purpose.

2.24 Programmes

how to

fub A Programme is a comprehensive plan designed to implement the policies and accomplish the
objectives. It is a combination of goals, policies, task assignments, resource flows, etc. It is a concrete
or well-defined scheme designed to accomplish a specific objective. It spells out clearly the steps to
be taken, resources to be used, and the time period within which the task in to be completed. It also
indicates who should do what and how. In business, programmes are used in various areas, e.g.,
developing a new product, training programme, advertising programme, expansion programme, etc.

guilubedos smiT.2

Programmes may be of two types. A major programme is the basic plan, e.g., programine to
eradicate poverty, programme for modernization of plant, etc. A minor programme is a derivative
programme designed to implement the major programme. Programmes may be developed for both
repetitive as well as for novel situation.

2.25 Features of a programme:

rotast vd bainst avslob not abam od bluoria bris) prif sett a large bottoly be land stuneibetri bebivib
1. A programme is a single use but comprehensive plan.

or

2.

volqms orit

It is based on the objectives, and policies of the organization.uora magon boa 3. It is an action plan
indicating the activities to be performed and time for each activity, amb sisa It is designed to ensure
smooth and efficient functioning of the organization.

29lubedo SS.S

Table Summary of Various Plans ЧО ЗОЙАТЯОЧНЕТЕ

250b Name of Plan W

Objective

vortium bris song gilam-achieveda vllain

bem enolat

Policy sonipola General statement od 120m anotaioob nimusmor understanding to ziyinishonla-

noizibob guide thinking

Example

Basis of all plansoo Increase sales by 10 bralqonpercent niboo

Definition

Nature

Goal or target to be

goinishooes not bris Boundary within which decisions

are to be made

Action plan to face environmental

Relates the organization to its

gardem sol oldianozi

Employees are to be

promoted on the basis of seniority

obem

Strategy

angnam y bolites on loon biodh notesinsgroenvironment ou anoton of and enam pdf gammal ninot
grisiq ni tushoqi signolam-noisegni ai noi Procedure.no oe brManner in which

notesinano to out

Rule

nobenibal Jontoo bou notonil

nl logos brus gritsib,noi

od gribicob noitevitom abubnate to guibiseb of

Programme

gridell dates hot, sonsten

10 ibu sloe a

activities are to be

1
States what should

or should not be

situation

Combative supena eir

advertising to face stil price cuts by !!A competitors ootad diw

Sequence of steps Purchase procedure

Rigid plan, no

scope for

discretion

States activities

no No smoking in the b oeln a factory maizi

done in a given

Combination plan

for plan

and resources to be

an

achievement

of

undertaken

doue nodisinagioto a

Non-repetitive

or

Specifies priority

of work and time

mon Schedule fodsbor

nombbim ruou o ling Time-table for

bi borBudget gomi boftizant

activities of laivai gnols for each activity agode

wolle anal anqui estoit

otti di ambidong to quilts

Statement of expected results

bolo to a dehqon and resources to be

Installation of a

computer -по

mog lontoo

contro se asiaud

Completeqil installation of

computer within 3

2012

months w.c.f. jan.

qui letov

Quantitative and wale time bound plan of action

vna vo motos to braci od ot be used rod to boottam air bed at

beau od binoda onun basate vititager af molding aid a noisibob not

viso Project aditi,breCluster of

non givloviti moldong a suit

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2.26 DECISION MAKING

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sqA manager's duties mostly involve making decisions of one kind or another. Everyday hundreds of
decisions are made in a company consciously and unconsciously According to Peter F. Drucker,
"Whatever manager does, he does through making, establishin objectives, laying down policies and
so on. According to Rustom S. Davar, "Decision-making can be defined as the selection based on
some criteria of one's behaviour alternative from two or m or more possible alternatives. To decide r
s to cut off or in practical content to come.
to a conclusion."

2.27 IMPORTANCE OF DECISION-MAKING immu skat

Decision-making permeates through all managerial functions, and management and decision-making
are inseparable. Managers use the tool of decision-making for discharging their duties. Whatever a
manager does, he can do it by taking some decision the selection of suitable course of action from a
number of alternatives.

According to Melvin T. Copland, "Administration essentially is a decision-making process and

authority is responsible for making decisions and for ascertaining that the decisions made are carried
out." In business, whether the enterprise is large or small, changes in condition occur, shifts in
personnel take place and unforeseen contingencies arise. Moreover, just to get the wheels started
and tokeep them turning, decisions must be made. "The business executive", observed John
McDonald, "is by profession a decision-maker. Uncertainly is his consequence of luck or of wisdom,
the moment of decision is without doubt t doubt the most creative event in the att of noitexingto

life of the executive."

All management functions such as planning, organization, direction and control are settled by
mangers with the tool of decision-making. Decision-making is important in planning, for in planning,
the manager has to decide many things such as what to produce, what to sell, where, when, how
and so on. In an organization is necessary in a business concern because many a, decision-making
relates to the structure, nature of organization, division of work and so on. onaalq bigist bluorla farw
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Decision-making is also an important tool in the management functions, direction and control. In
direction, decisions relate to determining the course of action, deciding the type of motivation,
directing and control. In direction, decisions relate to determining the course of action, deciding the
type of motivation, deciding the orders and instructions to be given etc., whereas in control, the
decisions relate to deciding of standards, asiq noilanidmo control points, procedures etc.,

Decision-making is an alternative course of action to most business situations. For instance, for
establishing a business, the entrepreneur may select one of the forms of organization such as a sole
trading concern or a partnership or a joint-stock company. For raising money, he may issue shares or
debentures or borrow from financial institutions. Similarly, for selling his finished products, he may
sell through a retailer or through middlemen or through his own retail shops. Thus, decision-making
is vital to all management activities. 2.28 TYPE OF DECISIONS

Decisions are of several types. Classification of these types is as follows:

€1.9.0 Programmed and non-programmed decisions: Decisions are classified into programmed and
non-programmed decisions. While the former deals with the routine and repetitive type of
problems, the latter deals with problems which are routine and non-repetitive. For example, an
enterprise has a set of procedures to handle normal orders from the buyers and this matter need not
be referred to the Board of Directors or any other higher authorities for decision. As this problem is
repetitive, a standard procedure should be used for handling such problems. This is a case of
programmed decision. On the other hand, if the enterprise receives unusually very large orders for
its products in any particular year, it would constitute a problem involving non- programmed
decision. For handling such large orders, the sales department may take the guidance of board of
directors, since it has to deal with the problem which is non-repetitive and for which no definite
procedure has been laid down.

To about 2. Major and Minor decisions: Decisions may be classified as major and minor. For example,
a decision to purchase a machine worth lakhs of rupees, deciding to open some branches is a major
decision. On the other hand, purchase of some pencils or paper for office use in a minor decision
which can be taken by the office superintendent. Inoitoolsa oli as bonitab od neo gniolam-noiai" ved
2 motau tobioob oT asvitgiptle oldjang

3. Routine and strategic decisions: One more method of classification of decisions is routine and
strategic decision. Usually, routine decisions do not require lengthy deliberations and such decisions
are taken

in a routine w... Some of the examples of routine decisions are: deciding to send samples to
government test house, deciding to place an order with the supplier who has given a favourable
quotation, deputing an employec to annual conferences, etc. Strategic decisions generally involve
lengthy deliberations and also may have much impact on the functioning of the business concem.
Some examples of strategic decisions are: decisions relating to product diversification or product line,
entering a new market, pricing strategy, advertising strategy etc.,

4. Policy and operating decisions: Decisions can be policy decisions and operating decisions. Whiic
policy decisions are taken at a high level after lengthy deliberations, operating decisions are taken at
a much lower level. For example, deciding to grant leave encashment benefit to employees is a policy
decision whereas calculating the amount due to each employee because of the leave encashment
benefit is an operating decision.

5. Organisational and personal decision: If any decision is taken by an executive in his official capacity,
that decision is called organizational decision. For example, decision relating to appointment,
promotion or transfer of employees are organizational decisions. In the case of personal decisions,
an executive takes decisions as an individual and not in his official capacity. For example, to opt for
voluntary retirement from the business concern is the personal decision of the executive.

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tulevo och bis 106. Individual and group decisions: Another method of classification of decisions is
individual and group decisions. Individual decisions are taken by any individual and generally, they
relate to routine matters. For example, sanctioning of leave to a worker is an individual decision. illa a
nav svlovni yarn, alubong noiai In the case of group decision, the superior managers take decisions in
collaboration with their subordinates. For example, taking a decision by the production manager in
consultation with his subordinates to change the design of the product slightly is a group
decision.anoo of and tnsmagansin edi,secquq aid of boqolovab mo7. Departmental, inter-
departmental and enterprise decisions: Decisions can be departmental, inter-departmental or
enterprise decisions. Departmental decisions relate to the concerned department and they are taken
by the departmental heads. For example, allotting work to the employees of a department is a
departmental decision.

Inter-departmental decisions are made by he managers of the concerned or affected departments

with the help of the controlling manager. For example, a decision relating to change the product
design slightly is an inter-departmental decision. anilam-noiaioob ont iw botsioon boys Enterprise
decisions are those which are taken at a higher level, i.c., Managing Director or Board of Directors.
These decisions are concerned with the entire enterprise. For example, decisions relating to opening
of branches, entering a new market pricing decisions or decisions relating to giving of bonus to
employees are enterprise decisions. DIAM-MARIMGA 0.5 2.29 STEPS IN DECISION-MAKING yd boost
se tarit enroldorg svitsainimba uonavod

Decision-making consists of the following steps in the order of their sequence. wollol as ons glam Jus
1. Making the Diagnosis: The first step in decision-making is finding out what really is the problem. If
the problem is not correctly diagnosed, efforts made to solve it will be of no use. For example, if the
sales decline, the management may think that the problem is one of increasing cost. But the real
problem may be inadequate sales planning or decrease in quality or inadequate publicity. Hence, the
efforts made by the management to reduce cost may not help in increasing sales. Joseph L. Massic
has rightly said that "a good decision is dependent upon the recognition of the right problem." A
correct diagnosis of the problem is of utmost importance because a disease can be cured only if it is
properly diagnosed.

2. Analysing the problem: After ascertaining the correct problem, it should be thoroughly analysed
and information and data relating to it should be collected. This will help the management to get a
clear idea of the problem. There may be innumerable factors involved in any problem, but to
minimize the expense of time and effort, analysis should be directed towards pertinent and closely
connected factors for the purpose of collecting information and data. Further, out of the data and
information collected, the management should separate facts from beliefs and opinions and it should
depend mainly on facts for making decisions.

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3. Developing alternative solutions or courses of action: The next step is to develop alternative
solutions or courses of action. The management after evaluating the various alternatives can make
the decision and the evaluation of alternatives help the management in taking the best decision. For
instance, if the management wants to fill up a vacancy, it should consider various alternatives such as
whether to promote from within, or recruit from outside or to appoint a relative of the previous
employee. Similarly, the methods of selling its products, may involve varic is alternatives such as
whether to sell directly, or through middlemen or a combination of both, viz., direct selling. There
are alternatives and they should be evaluated before taking a final decision. art 4.Selecting the) est
solution: The next step is to select the best solution out of the several alteratives developed. For this
purpose, the management has to consider the merits and demerits of each alternative solution and
costs and sacrifices involved in cach. Some criteria for selecting the best solution are the economy of
effort, degree of risk, time required for implementation, practicability of the solution, availability of
resources, consonance with the goals of the enterprise, etc. Generally, sound knowledge and
practical experience of the executive will help him to select the best solution.

5. Converting the decision into effective action: After selecting the best solution or decision, the
management takes steps to translate the decision into action with the cooperation of the employees.
In order to avoid opposition from the employees in implementing the decision, it is desirable that the
employees should be associated with the decision-making process.

Jobs 6. Follow up of the decision: Sometimes, it is possible that a decision taken by a manager may
not be a decision into action, should introduce a system of follow up. This helps in safeguarding
against incorrect decision and also in modifying or altering the decision without loss or time. won a
grimoto,adfonend? 2.30 ADMINISTRATIVE PROBLEMS IN DECISION-MAKING

The various administrative problems that are faced by the management in the process of decision-
making are as follows: suposto lo abroad ni aqsiz gniwollol odito atzianooga-osio mldd1. Correctness
of decision: Correctness of decision is a very important problem of management. Correctness
depends on several factors such as sophistication of the decision-maker, accuracy of information and
ability of decision-maker to visualize all possible alternative courses of action available in a given
situation. odtyd 2. The decision environment: The environment, organizational as well as physical
that is prevailing in the enterprise, influences the nature of the decision taken. If the general
environment is satisfactory, there will bę mutual confidence among managers, and also
wholehearted co-operation by the subordinates for implementing the decision effectively. Further,
there will be great scope for conducting research and analysis of the factors that have a bearing on
the decision. Again, a good environment encourages managers to take decisions with confidence
instead of avoiding them.

3. Timing of decisions: In decision-making, timing is an important factor. The problem is not merely
taking a decision, but when to take it. If the decisions are not taken at the right time, they will not
serve any purpose. For example, if the management has to decide the time of introducing a new
product in the market, and if the decision taken in his respect is not correct, it may lose the market to
its competitors. Thus, timing of decision plays an important role.

4. Effective communication of decision. Another important administrative problem is the effective

communication of decisions to those for whom they are meant. The decision should be
communicated in a simple language and without any ambiguity. If the decisions are properly
communicated, the implementation' would not be difficult.

5. Participation in decision-making: Employees who are likely to be affected by a decision should be

encouraged to take part in arriving at the final decision so that their whole hearted co-operation will
be available for the effective implementation of decision. However, the extent of participation
depends on the nature of organization. If it is an authoritarian organization in which the executives
feel that decision-making is their monopoly, the extent of participation is at a minimum and if it is a
"democratic organization", the extent of participation is great. gribing 101 yn enem sill yd bolaitini
voilog

6. Implementation of decision: After taking a decision, the problem that has to be faced is its
effective implementation. Fro implementation, not merely effective communication but also good
incentives and motivation of subordinates are essential. The management should create such an
environment that would help the subordinates perform their jobs better and more easily.

2.31 Summary
sono wod zsitiosqe-

Planning involves determining the objectives and selecting a course of action to achieve them. The
process of planning consists of determination of objectives, forecasting and choice of a course of
action, formation of policies, programs, budgets, schedules etc to achieve the objectives, laying
down of procedures and standards of performance. Planning is the management function of
anticipating the future and the conscious determination of a future course of action to achieve the
desired results. Obstacles or hazards to effective planning are inadequate inputs, lack of ability,
sudden emergencies and need for Creativity. The measures that help in overcoming obstacles to
planning are set clear cut objectives, develop a sound management information system, create
carefully planned premises, develop a dynamic outlook among managers, keep plans flexible,
provide required resources, undertake a cost benefit analysis of all plans. Strategic consideration in
plan formulation can be identified as external and intemal which is more common and relevant.
Other classifications are tangible and intangible, controllable and uncontrollable.

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Policy is a part of planning which provides guidelines for future decision. A Policy is a general
statement which is formulated by an organisation for the guidance of its personnel. Policies are
important management tools that facilitate some transfer for decision-making to lower levels of the
organization. When policies are stated clearly, supported by suitably making Policy Formulation,
Policy Communication, Policy Application, Policy Review and Appraisal. Basic areas of policy making
are Production and purchasing policies, marketing policy, financial policy, personnel policy and is up
from

Decision-making is thus a key part of a manger's activities. It permeates through all managerial
functions such as planning, organization, direction and control. Decisions can be classified in a
number of ways as programmed and non-programmed decisions, major and minor decisions. Six
steps are involved in the process of rational decision-making; Recognizing the problem, deciding
priorities among problems, diagnosing the problem, consequences of alterative solutions, converting
the decision into effective action and follow-up of Insmgolavab

action.

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