CBSE Business Studies Revision Notes Chapter-4 Planning 

Planning: - Planning refers to deciding in advance what to do and how to do.

Features of Planning are as follows:

1. Planning focuses on achieving objectives: Planning has no meaning unless it contributes to the achievement of organisational goals.
2. Planning is pervasive: Planning is required at all levels of management as well as in all departments of the organisation.
3. Planning is continuous: Planning is not a single time activity. It is required regular and ongoing basis.
4. Planning is futuristic: Plans are prepared for the future and not for the past.
5. Planning is a mental exercise: Planning involves thinking rather than doing. 
6. Planning involves decision making: Planning helps in decision making because it involves selection of the best alternative of various alternative. 
7. Planning is a primary function of management: Planning is a primary function. It provides basis for all other functions of management.

Planning process are as follows:

1. Setting objectives: The first and foremost step is setting objectives. Objectives or goals specify what the organisation wants to achieve.
2. Developing premises: Planning is concerned with the future which is uncertain. Manager is required to make certain assumptions about the future. These assumptions are called premises.
3. Identifying alternatives courses of action: There may be many ways to achieve objectives and all the alternatives courses of action should be identified. 
4. Evaluating alternative courses: After making the list of various alternatives, the manager starts evaluating the pros and cons of each alternative.
5. Selecting an alternative: The next step is to select the best alternative. The ideal plan would be the most feasible with less negative consequences.
6. Implementing the plan: The step is concerned with putting the plan into action. i.e. doing what is required.   
7. Follow up action: To see whether plans are being performed according to schedule. 

Importance of planning are followed as:

1. Planning provides directions: Planning provides the directions to the efforts of employees. Planning makes clear what employees have to do, how to do etc.
2. Planning reduces the risks of uncertainty: Planning helps the manager to face the uncertainty because planners try to foresee the future by making some assumptions. The plans are made to over come uncertainties. 
3. Planning reduces over lapping and wasteful activities: Planning evaluates useless and superfluous activities and helps in avoiding confusion and misunderstanding.
4. Planning promote innovative ideas: Planning requires high thinking and it is an intellectual process. so, it makes the manager innovative and creative. 
5. Planning facilitates decision making: Planning helps to make a choice from amongst various alternative courses of action.
6. Planning establishes standards for controlling: Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard. 

Limitations of planning are as follows:

1. Planning leads to rigidity: Once plans are made; the manager may not be in a position to change them.
2. Planning may not work in a dynamic environment: Business environment is very dynamic as there are continuous changes. It becomes very difficult to forecast these future changes.
3. Planning reduces creativity: Planning is usually done by top level management. As such, middle or lower level managers are not allowed to deviate from the plans. Therefore, their creativity is hampered. 
4. Planning involves huge costs: Planning process involves lot of cost because it is in an intellectual process and companies need to hire the professional experts to carry on this process.
5. Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.
6. Planning does not guarantee success: There is no guarantee of success of a well-drawn plan. Proper implementation of plan is also necessary.

Types of plan

Single Use Plan: It is developed for a one-time event or project. It is used for non-recurring situations.

   Single-use plans includes:

2. Programme: Programmes are detailed statements about a project which outlines the objectives, policies, procedures and rules.
3. Budget: A Budget is a statement of expected results expressed in numerical terms.

2. Standing plan:  It is used for activities that occur regularly over a period of time. It is recurring in nature.

Standing plans includes:

1. Procedure: Procedures are required steps established in advance to handle future conditions.
2. Policy: Policy are general statements that guide thinking or channelize energies towards a particular direction.
3. Methods: Methods provide the prescribed ways or manner in which a task has to be performed considering the objectives.
4. Rule: Rules are specific statements that inform what is to be done. They do not allow for any flexibility. 

These plans are not classified as single-use or standing plans

1. Objectives: are the end towards which the activities are directed. They are the end result of every activity. e.g. increase in sale by 10%.

ii. Strategy: A strategy is a comprehensive plan to achieve the organisational objectives.