Managing business can be tough because of the risk factor which is associated and also because of the uncertain and unpredictable future. We never know what the future holds for us and our business. Hence, it is said that a wise man will always be prepared for the uncertain future and will have his plan of action ready to reach his end goals. The same is the case with any business or organisation. Even they need a solid and strategized plan of action that could help them meet their targets and goals in the end. In this blog, we shall dig more into the chapter of planning class 12. Read this blog to find out more about the planning class 1 chapter of Business Studies.
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What is Planning?
According to the chapter of Planning class 12 Business Studies, planning can be explained or defined as a process of thinking in advance about:
- What is to be done
- When it is to done
- How it is to be done
- By whom it should be done
According to Fayol, “Planning is chalking out the plan of action, i.e., the result envisaged in the line of action to be followed, the stages to go through the methods to use.”
Importance of Planning
After learning the definition of planning, let us now understand why planning is important according to the chapter of planning class 12.
- Planning provides directions: it is said that good planning which is being done well in advance provides the directions to the business and the organisation as a whole and to the efforts of the employees.
- Planning reduces the risk of uncertainty: good and sound planning helps the management to be prepared for any risk or uncertainty which is always associated with any business. It reduces the risks as planners and management try to be prepared for the future which is uncertain and unpredictable by making certain assumptions.
- Planning reduces overlapping and wasteful activities: It has always been said that good and strategized planning will help the management to evaluate alternative uses of the available resources of the business and hence reduces overlapping and wasteful activities in an organisation.
- Planning promotes innovative ideas: Planning will enable the management as well as the employees to promote innovative ideas in the organisation as it is a process that requires a high level of thinking and hence it is an intellectual process.
- Planning facilitates decision making: Good and strategized planning will definitely help managers or the management to predict the future and make some assumptions and decisions based on these assumptions. It will also help them to make a choice from amongst various alternative courses of action.
- Planning establishes standards for controlling: Planning provides suitable and needful standards to the management with the help of which, the actual performance and tasks can be evaluated, judged and measured. The organisation has predetermined goals and based on these goals, the actual performances are compared and evaluated.
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Features of Planning
After knowing what is planning and learning the importance of planning class 12, let us now analyse and look upon some of the various features of planning.
- Planning leads to rigidity: Planning leads to rigidity as once plans are made or developed in order to decide the future course of actions, the managers may not be in a position or state to change plans over and over again.
- Planning may not work in a dynamic environment: Although good and sound planning helps the organisation to be ready and make certain decisions, based on certain assumptions, we can not ignore the fact that the business environment is dynamic and it frequently and continuously changes. Hence it becomes very difficult for top management to forecast future changes sometimes.
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- Planning reduces creativity: When the top management and managers in the organisation formulate an action plan, they blindly tryst and follow that plan to reach their end goals which therefore sometimes reduces creativity.
- Planning involves huge costs: One can not ignore the fact that planning is important for any business or organisation for the future smooth functioning but, having said that, planning also involves huge costs as well.
- Planning is a time-consuming process: It is true that the process of planning is indeed time-consuming for the planners and the managers and it takes a lot of efforts and future vision.
- Planning does not guarantee success: A plan of action or planning only provides a base to analyse the unpredictable and uncertain future. Planning is not the end solution for a particular problem that may arise in future or any course of action. It just prepares the organisation and management to be ready for any uncertainty.
Process/Steps of Planning
While studying and finding out more in the notes of planning class 12, we now move on to the process or the steps in planning.
- Setting Objectives: this is the first step in the planning process which deals with setting up the objectives, policies, procedures and methods.
- Developing the premises: the premises deal with making assumptions regarding the uncertain future. These assumptions are made on the basis of the forecasts that are being made by the managers.
- Identifying alternative courses: in the third step of the planning process, the alternative courses of action are identified after setting up the objectives.
- Evaluating alternative courses: after the step of identifying alternative courses, the next step is the evaluate each and every alternative course of action by the management.
- Selecting an alternative: after evaluating each and every alternative, the management selects the best alternative.
- Implementing the plan: now after selecting the best alternative from the various options available, the plan is implemented in the organisation and hence put into action to do or take essential steps for what is required.
- Follow-up Action: the process of planning never ends after just implementing the plan of action. Planning is regarded as a continuous process and hence continuous monitoring and follow-ups are required by the mangers of the existing implemented plan.
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Types of Plans
The last segment of our notes on planning class 12 comprises the types of plans. They are tabulated below.
|Types of Plans||Meaning|
|Objectives||Objectives are the end result of every activity. Example: increase in profits by 15%.|
|Strategy||This is a type of comprehensive plan that are formulated to achieve the organisational objectives.|
|Policies||They are the general statements that guide thinking or channelise energies in a particular direction in the organisation.|
|Procedures||Procedures are necessary for an organisation as they are defined as the required steps established in advance to handle any future conditions and tell us the exact manner in which an activity has to be accomplished.|
|Method||A method is a type of plan which provides the prescribed ways or manner in which a task has to be performed considering the objectives.|
|Rules||Rules of an organisation or any business are specific statements that inform or guide the employees regarding what is to be done. Rules do not allow for any flexibility.|
|Programme||A programme is regarded as a detailed statement about a project that majorly outlines the objectives, policies, procedures, rules.|
|Budget||It is a statement of expected results that is expressed in numerical terms.|
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