Concept of Planning
The concept of planning is a fundamental and systematic process that plays a crucial role in various aspects of personal, organizational, and societal endeavors. Planning means thinking before doing. It involves making course of actions to achieve desired objectives.
Planning involves setting specific goals, identifying the necessary steps to achieve those goals, and allocating resources efficiently to attain them. This process applies to diverse fields, including business, education, infrastructure development, and more. In Nepal, as the country strives for sustainable economic growth and social development, planning becomes a cornerstone of achieving these aspirations.
For businesses in Nepal, planning involves formulating strategies, outlining objectives, and determining the means to accomplish them. It encompasses decisions about production, marketing, finance, and human resources. With proper planning, businesses can accept challenges, optimize resources, and seize opportunities, contributing to economic growth and employment generation. To sum up, Planning means to decide in advance regarding ‘What is to be done?, How it is to be done?, and Who should do it?
According to W.H. Newman, “Generally Speaking, Planning is deciding in advance what is to be done.”
According to George R. Terry, “Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired objectives.”
Features/ Nature of Planning
1. Goal Orientation: Planning revolves around setting clear and specific goals and objectives. These goals provide a sense of direction and purpose, guiding the planning process towards achieving desired outcomes.
2. Systematic Approach: Planning involves a structured and organized approach. It follows a logical sequence of steps, from analyzing the current situation to formulating strategies, allocating resources, and implementing actions.
3. Future Focus: Planning is inherently future-oriented. It involves envisioning future scenarios and designing strategies to influence those outcomes. It allows individuals and organizations to anticipate potential challenges and capitalize on opportunities.
4. Flexibility: While planning aims to provide a roadmap, it also acknowledges the dynamic nature of environments. Effective planning incorporates flexibility to adapt to changing circumstances, ensuring that the strategies remain relevant and responsive.
5. Decision-Making Tool: Planning aids in informed decision-making. It enables individuals and groups to evaluate alternatives, consider potential consequences, and select the best course of action based on available information and resources.
6. Coordination and Integration: Planning fosters coordination and integration among different activities and departments within an organization. It aligns efforts, resources, and functions to work cohesively towards shared objectives.
7. Resource Allocation: Planning involves the allocation of resources such as time, money, manpower, and materials. It ensures that resources are utilized optimally to achieve goals while minimizing waste and inefficiencies.
Needs or Rationale of Planning
1. Direction and Focus: Planning provides a clear sense of direction by setting specific goals and objectives. It helps individuals and organizations channel their efforts towards well-defined targets, avoiding aimlessness and uncertainty.
2. Coordination: In complex systems, multiple activities and departments need to work together. Planning facilitates coordination by aligning efforts, resources, and timelines, ensuring that various components function harmoniously towards shared goals.
3. Resource Allocation: Effective planning involves allocating resources such as time, money, manpower, and materials in an efficient manner. This prevents resource wastage and ensures optimal utilization, thereby improving overall productivity.
4. Risk Management: Planning allows for the identification and assessment of potential risks and challenges. By anticipating uncertainties, planning enables the creation of contingency plans and risk mitigation strategies to minimize negative impacts.
5. Decision-Making: Planning provides a structured framework for decision-making. It helps individuals and organizations evaluate different options, weigh pros and cons, and select the best course of action based on available information and objectives.
6. Efficiency and Productivity: Through careful planning, tasks are organized in a logical sequence, reducing redundancy and inefficiency. This leads to increased productivity as resources are used effectively to achieve goals.
7. Innovation and Creativity: Planning encourages creative thinking and innovative solutions. While planning for the future, individuals and organizations often explore new ideas and approaches to address challenges and opportunities.
Process of Planning
The Process of planning can be clarified by the help of following flow diagram.
1. SWOT Analysis: The planning process often begins with a SWOT analysis – an assessment of an organization’s strengths, weaknesses, opportunities, and threats. This analysis helps identify internal factors that the organization can leverage (strengths), areas that need improvement (weaknesses), external factors that can be advantageous (opportunities), and potential challenges from the external environment (threats).
The SWOT analysis provides the foundation for planning by identifying the current state of the organization and the external factors that can impact its success.
2. Setting Objectives: Based on the insights from the SWOT analysis, organizations set clear and specific objectives. Objectives define what the organization aims to achieve, whether they are financial, operational, or strategic in nature.
Objectives are derived from opportunities identified in the SWOT analysis, capitalizing on strengths while addressing weaknesses and mitigating threats.
3. Formulating Strategies: Once objectives are established, organizations develop strategies to achieve them. Strategies outline the broad approaches and actions that will be taken to reach the identified objectives.
Strategies are shaped by strengths that can be exploited, weaknesses that need to be overcome, opportunities that can be pursued, and threats that must be addressed.
4. Tactical Planning: Tactical planning involves breaking down the strategies into more detailed plans. It outlines the specific actions, resources, and timelines required to implement the strategies effectively.
Tactical plans are a direct result of the strategies formulated earlier. They translate high-level strategies into actionable steps.
5. Resource Allocation: During this step, organizations allocate resources such as budget, personnel, and technology to execute the tactical plans effectively.
Resource allocation is closely tied to tactical plans, ensuring that the necessary resources are available to implement the identified actions.
6. Implementation: Implementation involves putting the tactical plans into action. This step requires effective communication, coordination, and execution to achieve the desired outcomes.
Successful implementation relies on the alignment of actions with strategies and objectives set earlier in the planning process.
7. Monitoring and Evaluation: Organizations continuously monitor progress and evaluate the results against the established objectives. This step involves measuring performance, identifying deviations, and making necessary adjustments.
Monitoring and evaluation ensure that the implementation aligns with the strategies and objectives identified in the earlier stages.
8. Feedback and Revision: Based on the evaluation, organizations receive feedback on the effectiveness of their plans. They then revise and refine their strategies and tactics as needed.
Feedback and revision are essential to ensure that the planning process remains dynamic and responsive to changes in the internal and external environment, as identified in the SWOT analysis.
Advantages/ Benefits/ Merits of Planning
- Clarity of Goals: Planning sets a roadmap with well-defined objectives. When goals are clear and communicated throughout the organization, employees understand what’s expected of them. This clarity reduces ambiguity, aligns efforts, and focuses everyone on a common purpose.
- Resource Allocation Efficiency: Efficient planning ensures that resources are allocated in the most effective manner. By identifying needs and assigning resources accordingly, organizations avoid wasteful spending and maximize resource utilization, leading to cost savings.
- Coordination and Alignment: In complex organizations, planning acts as a guide for various departments and teams. When everyone understands their role and how it contributes to the overall objectives, it promotes alignment and smooth collaboration.
- Risk Management: Planning involves identifying potential risks and challenges that could hinder success. By considering possible scenarios and creating contingency plans, organizations are better equipped to navigate unexpected situations, minimizing negative impacts.
- Informed Decision-Making: Planning requires a systematic analysis of available options. This process ensures that decisions are based on data and facts rather than assumptions, leading to more effective and strategic choices.
- Motivation and Employee Engagement: When employees comprehend their roles within the larger organizational context, they feel a stronger connection to the company’s mission. This sense of purpose increases their motivation to perform well and actively contribute to the achievement of organizational goals.
Disadvantages/ Pitfalls/ Limitations/ Demerits of Planning
- Rigidity and Inflexibility: Overly detailed plans can become rigid and difficult to adapt to changing circumstances. In dynamic environments, plans may not account for unexpected developments or new opportunities.
- Time-Consuming Process: Developing comprehensive plans requires time and effort. This can delay quick responses to urgent situations or hinder timely decision-making.
- Uncertainty and Inaccuracy: Plans are based on assumptions about the future, which can be uncertain. If these assumptions prove inaccurate, plans may not yield the intended results.
- Costly Process: Developing and implementing plans may involve considerable costs, including financial resources and manpower. This can increase operational expenses and impact the organization’s budget.
- Resistance to Change: Employees may resist changes outlined in the plan if they deviate from established practices. This resistance can hinder the smooth implementation of new strategies.
- Lack of Creativity and Innovation: Rigid adherence to planning may stifle creativity and innovation. Employees may feel confined by predetermined plans and hesitate to explore new ideas or unconventional approaches.
Types of Plans
1. Corporate or Strategic Plan
A Corporate or Strategic Plan is a high-level plan that outlines an organization’s long-term goals, direction, and overall strategy. It encompasses the organization as a whole and sets the framework for decision-making across all levels. Key aspects of a strategic plan include:
- Time Horizon: Strategic plans typically cover a longer time horizon, often spanning three to five years or more.
- Objectives: These plans define the overarching objectives that guide the organization’s growth, profitability, market positioning, and expansion.
- Scope: A strategic plan addresses the allocation of resources to major initiatives, mergers, acquisitions, market penetration, diversification, and more.
- Flexibility: While strategic plans set a clear direction, they should also allow for adaptation to changes in the external environment.
2. Tactical or Division Plan
Tactical or Division Plans bridge the gap between the overarching strategic plan and the detailed operational plans. These plans are developed by various divisions or departments within an organization to align their activities with the broader organizational strategy. Key characteristics of tactical plans include:
- Time Horizon: Tactical plans cover a medium-term time frame, often a year or less.
- Objectives: These plans break down strategic objectives into specific targets for individual departments or divisions.
- Scope: Tactical plans focus on how each division will contribute to achieving the organization’s strategic goals. They involve resource allocation and coordination among different units.
- Coordination: Tactical plans ensure that different departments work cohesively and collaboratively to accomplish shared objectives.
3. Operational or Unit Plan
Operational or Unit Plans are detailed plans developed by specific departments, teams, or units within an organization. These plans provide the blueprint for executing day-to-day tasks and achieving short-term objectives. Key features of operational plans include:
- Time Horizon: Operational plans are short-term and often cover a week, a month, or a quarter.
- Objectives: These plans specify the concrete steps required to achieve tactical objectives. They focus on specific tasks, projects, and responsibilities.
- Scope: Operational plans address the nitty-gritty details of how work will be carried out. They include resource allocation, timelines, and specific action plans.
- Control and Evaluation: Operational plans provide a basis for monitoring progress and evaluating performance against set targets.