Levels and stages of planning

Levels of planning

In management theory, it is usual to consider that there are three basic levels of planning, though in practice there may be more than three levels of management and to an extent, there will be some overlapping of planning operations. The theree levels of planning are discussed below:

  1. Top level planning: also known as overall or strategic planning, top level planning is done by the top management, i.e., board of directors or governing body. It encompasses the long-range objectives and policies or organisation and is concerned with corporate results rather than sectional objectives. Top level planning is entirely long-range and inextricably linked with long-term objectives. It might be called the ‘what’ of planning.
  2. Second level planning: also known as tactical planning, it is done by middle level managers or departmental heads. It is concerned with ‘how’ of planning. It deals with development of resources to the best advantage. It is concerned mainly, not exclusively, with long-range planning, but its nature is such that the time spans are usually shorter than those of strategic planning. This is because its attentions are usually devoted to the step-by-step attainment of the organisation’s main objective. It is, in fact, oriented to functions and departments rather than to the organisation as a whole.
  3. Third level planning: also known as operational or activity planning, it is the concern of departmental managers and supervisors. It is confined to putting into effect the tactical or departmental plans. It is usually for a short-term and may be revised quite often to be in tune with the tactical planning.
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Types of plans commonly used in management

The term plan refers to a course of action determined in advance by the management. It has always a time frame in other words it is a package of decisions to make efforts to achieve some results in a specified term of period.

  1. Goals (Target): goal is a desired state of affairs, which an organisation wants to achieve. Overall goals are the collective ends for which the whole organisation makes efforts to achieve. Goals may be of short term or long term in nature. E.g. goal of an automobile company may be to provide low cost and higher quality of automobiles to the public.
  2. Objectives: objective is the ends towards which activity is aimed. In other words it is desired and end result of an activity. There must be a time frame for the achievement of predetermines objectives. Objectives may differ from one organisation to another. E.g. business organisation will have an objective of earning more profits where as co-operative society has an objective of well fare of its members more-over objectives may change from time to time. An organisation may have single objective or multiple objectives. E.g. single objective—maximization of profits, multiple objective increase in profits with other better facilities to the customers and employees. As per as possible objectives are expressed in miserable quantity and so these provide a path for planning. Because planning is made for the achievement of any objective. Overall these are the desired results in the form of quantity to be achieved by performing any activity there should be a specific time frame to achieve these objectives these should be challenging but achievable.
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Limitations of planning

Planning is an important function of management. However, the planning may fail if the following limitations.

  • Lack of accuracy: planning relates to future and future is always uncertain and so prediction about future is so much difficult. Moreover planning are based on data/information relating to past and as such planning based on any wrong information may not be useful to the organisation.
  • Costs: formulation of plans involves too much cost which are in the form of time spend, money spent etc. but some times there is little benefit from in plan and than it becomes a burden for the institution. If the plan is not useful than the amount or time spent on its formulation is a waste.
  • Advance effect on decisions: some plans are rigid and a manager faces difficulty while making any changes where as there may be continuous change in environment where as the quick decision is required as per the changed environment.
  • Delay in actions: planning requires some time for thinking, analyzing the situation and designing the final plan and so in case emergency decision is required it will take time and business will lose its opportunity. Moreover delay in decision will further delay the action.
  • Psychological barrier: people in organisation have to work strictly according to plan where as they may be able to give better performance in a way decided by themselves. Secondly they do not think beside the plan and performs their activities like a machine without using their psychology.
  • Limited flexibility: there may be some changes in planning only up to some extent because measure changes in plan will further attract the changes in supporting plans also and as such the whole system is disturbed moreover changes in plans time and again will prove a wastage of time and money spent on previous plan (pre-changed plan).
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Importance of planning in management

Accounting to Koontz, O’Donnell and weihrich, “planning is an intellectually demanding process; it requires the conscious determination of courses of action and the basing of decisions on purpose, knowledge and considered estimates. Planning is one of the most important function of management because of the following factors:

  1. Makes the objectives clear and specific: planning clearly specifies the objectives and the policies or activities to be performed to achieve these objective in other words what is to be done and how it is to be done are clarified in planning.
  2. Off setting the uncertainty and change: planning is necessary to look ahead towards future and to take decisions regard facing the expected changes/requirement of the future. E.g. before coming of summer session producers started production for the products to be used in summer.
  3. Plans facilitate decision-making: to achieve the objective predetermined under planning, business has to take various decisions by considering the available resources. If job may be completed by using various alternatives (e.g. manually or by machines) and the best alternative is decided by the management, which is more helpful in achieving the objective.
  4. Provides basis of control: under controlling actual performance is compared with the planed performance (target/objective). So planning is the base of controlling process.
  5. Leads to economy and efficiency: planning clarifies the work and its method of doing. Resultantly it reduces confusion and wastage of resources in the form of thinking at the time of doing. So efficiency of the worker will risen which will further result economy in production.
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Planning- Definition and it’s features


Planning is the process of deciding in advance what is to be done, who is to do it, how it is to be done and when it is to be done. It is the process of determining a course of action, so as to achieve the desired results. It helps to bridge the gap from where we are, to where we want to go. It makes it possible for things to occur which would not otherwise happen. Planning is a higher order mental process requiring the use of intellectual faculties, imagination, and foresight and sound judgment. Accounting to Koontz, O’Donnell and weihrich, “planning is an intellectually demanding process; it requires the conscious determination of courses of action and the basing of decisions on purpose, knowledge and considered estimates.

Planning is a process, which involves anticipation of future course of events and deciding the best course of action. It is a process of thinking before doing. “To plan is to produce a scheme for future action; to bring about specified results, at specified cost, in a specified period of time. It is deliberate attempt to influence, exploit, bring about, and controls the nature, direction, extent, speed and effects of change. It may even attempt deliberately to create change, remembering alwas that change (like decision) in any one sector will in the same way affect other sectors”. Planning is a deliberate and conscious effort done to formulate the design and orderly sequence actions through which it is expected to reach the objectives.… Read the rest

Managerial Ethics and Social Responsibilities

Managerial Ethics

The term ‘ethics’ refers to value-oriented decisions and behaviour. The word ethics comes from the Greek root, ethros, meaning character, giving beliefs, standards, or deals that pervade a group, a community or an individual. Today ethics is the study of moral behaviour—the study of how the standards of moral conduct among the individuals are established and expressed behaviourally. Terms such as business ethics, corporate ethics, medical ethics, or legal ethics are used to indicate the particular area of application. But to have meaning, the ethics involved in each area must still refer to the value-oriented decisions and behaviour of individuals. Ethics refer to a set of moral principles, which should pay a very significant role in guiding the conduct of managers and employees in the operation of any enterprise. Ethics is concerned with what is right and what is wrong is human behaviour. It is normative and prescriptive, not neutral. It addresses the question of what ought to be. Ethics refer both to the body of moral principles governing a particular society or group and to the personal normal precepts of an individual.

Some people subscribe to a utilitarian reference in determining what is wrong and what is right. They hold that a proposed course of action should be judged from the standpoint of greatest good for the greatest number of people. From this point of view, there are few absolute standards and each issue must be judged by studying its impact upon all affected parties.

Relationship Between Managerial Ethics and Social Responsibilities

The term ‘social responsibility’ conveys the moral conduct that relates to such broad issues as environmental pollution, discrimination, poverty, unemployment and inflation.… Read the rest