Business Studies Class 12- Planning- Concept, Importance, Limitations, and Process.
In this article, we will discuss the topic ‘Concept, Importance, Limitations and Process’ from the chapter ‘Planning’ out for Business Studies Class 12.
Planning is done in advance to achieve future objectives. It is basically setting up the target and formulating the action of the plan to achieve the business goal. Plans are always developed for a fixed period of time.
We can define Plans as “setting targets and objective for a fixed period of time and formulating multiple courses of action to achieve them and selecting the best alternative course of action”
“Planning is a function that determines in advance what should be done. It consists of selecting the enterprise objective, policy, programs, procedures and other means of achieving those objectives. In planning, the manager must decide which of the alternative plans to be executed and followed. Planning is intellectual in nature. It is mental work. It is looking ahead and preparing for the future” Theo Haimann
Features of Planning
- Focus on achieving objective– It contributes to the achievement of the objective. It starts with the determination of objective and then the course of action is planned.
- A primary function of the organization– it is the basic function performed by the management team. No other actions can take place without planning.
- Pervasive in nature– it is performed at all the level of management. It is applicable to all the departments of the organization.
- Based on forwarding thinking– it is futuristic in nature. Planning is based on forecasting and assumptions.
- Continuous in nature– Planning is a never-ending process. After making plans manager keep updating the plan as per the requirement of the organization.
- Decision-making process– Planning involves decision making of the best alternative out of the various course of action.
- Mental exercise– Planning is a mental exercise which requires a higher level of intelligence.
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Importance of Planning
- Provides direction– it provides the direction to efforts of management. It makes the employee do things in the right way.
- Reduce the risk of uncertainty– Planning is the systematic process and it is done to overcome uncertainties.
- Reduce wasteful activities– it reduces the overlapping of course of action.
- Facilitate decision making – it helps management to take best, fast and quick decisions.
- Promote innovative ideas– It is an intellectual process which promotes innovative ideas.
- Facilitates controlling– managers with the help of planning identify deviations to match the output planned.
- Focused on the objective– to achieve the objective of the company manager sets the objective, process, methods, rules etc as a plan of action.
Limitation of Planning
- It leads to rigidity.
- Not applicable in the dynamic environment.
- It involves a huge amount of cost.
- It reduces creativity.
- It is a time-consuming process.
Defining organizational objective– the basic process of planning is defining the objective. On the basis of the objective, all the policies and procedures are planned.
Developing premises– Plans are made on the basis of the premises. The planning is done on the basis of assumptions for the future. Forecasting is done before making any plans.
Listing multiple alternatives– after defining the objective the manager list the various alternatives through which objectives can be achieved.
Evaluation of alternatives– after identifying the various course of actions. All the negative and positive aspects of all the alternatives are analyzed and evaluated.
Selection of best alternative– the most feasible alternative with less negative and maximum profit is selected. The manager might select the combination of alternatives. After making a big plan, derived plans are made out of it.
Implementation of the plan– After the selection, the plan is put into action.
Follow up– Planning is a continuous process of implementation manager monitors the plan. If it is not showing the desired result, it is altered accordingly.
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Types of planning in management
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