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MBA Ist Semester Planning Long Study Material Notes Questions Answers

MBA Ist Semester Planning Long Study Material Notes Questions Answers 3 mock papers for self-assessmet unit-wise division of the content.

MBA Ist Semester Planning Long Study Material Notes Questions Answers
MBA Ist Semester Planning Long Study Material Notes Questions Answers

Section C


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Q.1. Discuss various types of planning in detail. Or Discuss the classification of planning. Also explain process of planning. (2011-12)

Ans. Types of Planning: Planning can take many forms and styles in practice. It may differ on the basis of the period level of management, the determination of goals and targets, participation and form of organization. The various types of planning are as follows:

1. Formal and Informal Planning

(a) Formal Planning: A formal plan is a well documented plan, a record to what the organization intends to do within time frame which is prepared after a careful evaluation of all relevant factors likely to affect the organization. Managers at all levels are involved in formulation and implementation process. It is systematic and rational.

(b) Informal Planning: On the other hand, informal planning is not based on written records. No direction is given to this end. Unwritten managerial thoughts are known as informal plans. It lays no liability on the managers. It results in unjustifiable tendencies like carelessness, haphazard actions, loss of memory and directly this sort of planning is not adhered to.

2. Functional and Corporate Planning

(a) Functional Planning: Functional planning is a unit planning. It deals with parts such as production, marketing, finance and manufacturing in an isolated manner. It develops a part mentally among the planners. It does not see the total big picture. It does not care for the impact on internal as well as external factors on business.

(b) Corporate Planning: Corporate plan is a comprehensive plan that outline the broad objectives of the company as a whole and develops plans to achieve these objectives. The various functional plans are integrated. It takes a long-term view and tries to strike a balance between organization resources and environmental challenges.

3. Long-Range Planning vs Short-Range Planning

(a) Long-Range Planning: It covers a relatively long period of time (five years or more) and affects many departments/divisions of an organization. It includes determination of broad objectives and selection of an appropriate means. It is the result of a series of inter-related steps:

(i) Estimation of the situation—local, national and international.

(ii) Defining the goals to be pursued and the philosophy to be adopted in achieving the goals.

(iii) An objective assessment of the degree of success on day-to-day basis.

Finding out of the strength and weakness in plan implementation.

(iv) Developing a complete plan and sending it to the higher authorities for its approval.

(v) Converting the plan into work.

(b) Short-Range Planning: Short-range planning covers relatively a short period of time (one to twelve months). It is also called an operational plan. It emphasises on flexible budgets, on goals and targets. The primary concern of this plan is efficiency rather than effectiveness. A short-range plan gathers information, evaluate alternatives and selects the most suitable course of action. In fact, short-range planning is an extension of long-range corporate plans and provides content and form to long-range plans.

4. Operational Planning vs Strategic Planning without Fold

Strategy refers to the ideas and plans that a firm employs to complete successfully against their rivals and helps firms to achieve competitive advantage over others. The important features of strategic planning are:

(a) Strategic Planning: These are as follows:

(i) It is conceptually and functionally long-term (five years or more).

(ii) It involves the deployment of a substantial percentage of organization resources.

(iii)It covers a wide spectrum of activities.

(iv) It adopts to external environment based on internal strength.

(v) It is the job of top management and being long its predictability is uncertain.

(vi) Planning and forecasting dominate the management functions.

(b) Operational Planning: It is a short-range plan. The main features of this planning are as follows:

(i) It is short planning (upto one year only).

(ii) The main purpose is to implement internal goals.

(iii)Plans are formulated by middle and lower management.

(iv) For planning, exact data and standards are used.

(v) Its predictability is highly certain. Being a single option plan, it is almost complete.

5. Tactical and/or Coordinative Planning

The main characteristic of tactical plan is its brevity. It is less detailed than the short-range plan. It is meant for implementation of strategic plans by coordinating the work of different departments in the organization. If a mid-term review is undertaken, the success/failure of the plan is assessed and the need for readjustment is suggested.

6. Proactive and Reactive Planning

(a) Proactive Planning: It is a way of thinking about managing the future risks and challenges. Plans are made for a time-frame and managers have to be alert and sensitive to all changes as may occur during this period. For this purpose, they have to be active, creative,

dynamic and have to be ready with alternative plans and actions if need be.

(b) Reactive Planning: In this planning the organization merely reacts to external events as a when they arise. In a fast changing world, it may prove to be costly. Ducker suggest manages should not wait for future. They should make future by initiating original actions. Planning Process: Refer to Section-B, Q.9.

MBA Ist Semester Planning Long Study Material Notes Questions Answers

Q.2. What are the barriers and difficulties to effective planning?

Ans.                                        Barriers to Effective Planning

Following are the barriers to effective planning:

1. Difficulty in the Selection of Best Alternative: Planning forces the selection of best alternative from among the various alternatives as a variable for a particular problem but the selection of best alternative is a big problem in itself because the word best is itself not static.

2. Lack of Required Flexibility: Planning lacks flexibility, rigid planning may kill initiative and judgment of the managers. The reason of this is that circumstances go on changing and necessary changes are required to be made in planning to adjust the changes in circumstances but the managers feel themselves unable to make the required change because they are committed to implement the plans.

3. Lack of Adequate Managerial Ability or Intelligence: Planning is a process. Planning may become unrealistic and ineffective if the managers do not possess managerial ability. Plans must be revised from time to time otherwise they may become outdated and useless. But there is no formula to guide the managers about such changes and modifications. Therefore, lack of managerial ability may become a curse for the planning.

4. Psychological Barriers: There are many psychological barriers in the planning process. The managers do not get the information from their subordinates while making the plans. The subordinates do not cooperate with them in the implementation of plans. Planning without whole hearted cooperation of all the employees of an organization is of no use. This way, planning suffers from some psychological limitations also.

5. Uncertainty of Future Events or Conditions: Planning can never be perfect or completely effective because it is based on forecasts and forecasts are made in the atmosphere of uncertainty of future events or circumstances. Forecasts are not much reliable and the reliability of forecasts further reduces if these are made for long-term because future events or future circumstances are uncertain and indefinite. If the forecasts are unreliable, plans would be misleading.

6. Expensive Method: Planning process involves the investment of time, money and energy. It requires the collection and analysis of data, periodic review and revision of plans, comparison of actual results with the plans. All these steps involve heavy expenditure, sometimes and in some organization, it may happen that the benefits of planned efforts are less than those of the expenditure incurred in the process. Therefore, planning should be adopted only to the extent of the benefits and not to be the point of creating a loss.

7. Non-availability of Reliability Facts and Information: The success of planning depends upon the facts and information used in planning. If accurate up-to-date facts and information are not available then the planning becomes meaningless. Availability of reliable facts and information is a big barrier in itself.

The above discussion makes it clear that planning has various limitations. These limitations may be removed by taking certain steps. Top management must give due time to planning so that planning is implemented successfully.

Q.3. what are planning premises? What are the factors that affect planning premised?

Or why is planning regarded as the primary function of management? Discuss the important features of planning and point out its internal and external limitations.

Or ‘Planning is the primary function of the business’. Explain the main features of planning. (2014-15) 

Ans. Planning: Refer to Section-B,

Planning Premises: Meaning and Definitions

Planning premises constitute the framework within which planning is done. They are defined as the anticipated environment in which plans are expected to operate. They are varied in differ in importance for different organizations and industries. Every basic programmed of an industry must be related to the factors that affect it. These factors are external as well as internal.

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