Planning: meaning, purpose and main concepts
Planning means deciding in advance what to do, how, when and by whom. It sets goals and the strategies and plans to reach them.
What planning is
Koontz and Weihrich describe planning as deciding in advance what to do, how to do it, when to do it and who is to do it. It bridges the gap between where we are and where we want to be. Robbins and Coulter define planning as defining the organization's goals, establishing strategies for achieving them, and developing plans to integrate and coordinate work. Planning can be formal (written, specific, covering several years) or informal (kept in the owner's head and rarely written down).
Why managers plan
- Gives direction to managers and staff, so everyone pulls the same way.
- Reduces uncertainty by making managers look ahead and think about change.
- Minimizes waste and duplicated work.
- Sets the goals and standards that are later used in controlling.
- Improves coordination between departments.
- Encourages new ideas and better decisions.
Nature of planning
- Primary function: it comes first and guides the other functions.
- Goal-oriented and future-oriented.
- Pervasive: done at every level, from the board to the supervisor.
- Continuous: plans are revised as conditions change.
- Involves choice among alternatives.
- An intellectual process that needs foresight and judgement.
Main concepts in planning
| Concept | Meaning | Example |
|---|---|---|
| Vision | A picture of the future the organization wants | To be the region's most trusted food retailer |
| Mission | The organization's basic purpose and the business it is in | Bringing fresh, affordable food to every town |
| Goals (objectives) | Desired outcomes or targets | Open 20 new outlets by March 2028 |
| Strategy | The overall plan for how the organization will compete and reach its goals | Low prices through direct buying from farmers |
| Policy | A broad guideline for decisions, leaving room for judgement | Promote from within wherever possible |
| Procedure | A fixed series of steps for a routine task | The steps for approving a customer refund |
| Rule | An exact statement of what must or must not be done | No smoking anywhere in the factory |
| Programme | A single-use plan for a set of related activities | A new-branch opening programme |
| Budget | A plan expressed in numbers, such as rupees or hours | A Rs. 2 million annual training budget |
Writing good goals
Management by objectives (MBO), made popular by Peter Drucker in 1954, sets goals jointly with employees and reviews progress regularly.
A supermarket chain like Cargills has a mission, yearly goals for new Food City outlets, policies such as buying vegetables directly from farmers through collection centres, procedures for opening a store, and a capital budget in rupees. Each level of plan supports the one above it.
Short answer: “Distinguish a policy from a rule.” A policy is a broad guideline that leaves room for judgement; a rule states exactly what must or must not be done, with no discretion.
Structured question: “Why do managers plan?” Direction, less uncertainty, less waste, standards for control, better coordination: one line and one example each.
Essay: “Define planning. Explain its importance and the main concepts used in planning.” Two definitions, the nature of planning, its purposes, then vision, mission, goals, strategies, policies, procedures, rules, programmes and budgets with examples.
From broad to narrow: Vision → Mission → Goals → Strategies → Policies → Procedures → Rules: 'Very Many Good Students Pass Principles Readily'.