Elements of Planning

• Planning in management involves deciding in advance what to do and how to do it through different types of plans.
• These plans include objectives, strategies, policies, procedures, methods, rules, programmes and budgets, which together guide organisational activities towards desired results.

Objectives

• Desired future position or end result that management wants to achieve (e.g., increase sales by 10%, earn 20% profit).
• Represent the end point of planning; set mostly by top management and expressed as specific, measurable written statements for a given time period.

Strategy

• Comprehensive long-term plan defining organisation’s direction and scope through objectives, course of action and resource allocation.
• Must consider economic, political, social, legal and technological environment; major decisions include staying in same business, adding new activities or seeking dominant market position.

Policy

• General statements that guide thinking and decisions, and help interpret broad strategy.
• Exist at all levels (major for outsiders, minor for insiders) and define parameters within which managers act, e.g., recruitment policy, pricing policy, Purchase Policy.

Procedure

• Routine, chronological steps showing exactly how work is to be performed.
• Intended for insiders; enforce policies and help achieve pre-determined objectives within a broad policy framework.

Method

• Prescribed way of performing a specific task or step of a procedure.
• Proper method selection saves time, money and effort; training methods differ for higher management (orientation, lectures, seminars) and supervisors (on-the-job, work-oriented).

Rule

• Specific statement of what must or must not be done, allowing no discretion.
• Simplest type of plan; not changed unless a policy decision is taken.

Programme

• Detailed project statement covering objectives, policies, procedures, rules, tasks, human and physical resources and budget.
• Includes all activities and aligns them with organisational policy within a broad framework.

Budget

• Statement of expected results in numerical terms; quantifies future facts and figures (e.g., sales budget, worker requirement).
• Facilitates comparison of actual vs expected figures, acts as a control device and is a fundamental planning instrument.

Cash Budget

• Basic tool for planning and controlling cash; shows estimated cash inflows and outflows over a period.
• Net cash position = inflows − outflows (surplus/deficiency); management must hold adequate but not excess cash.

• After the January 2001 earthquake, Mansukhbhai’s goods were damaged; he distributed undamaged stock to quake-affected people of Kutch.
• A photo of his broken water filter appeared in Sandesh Gujarati Daily with caption “The poor man’s broken fridge”.
• He received support from Gujarat Grass-roots Innovation Augmentation Network (GIAN), Ahmedabad.
• After several soil and design tests, he developed the Mitticool fridge in 2005 and later more clay products.
• The company follows a policy of keeping product prices low so they are affordable for poor people.
• Future plans include starting a factory with National Innovation Foundation at IIM Ahmedabad and building a Mitticool house, a green clay house using only renewable energy and no electricity.

• Objectives are specific, measurable end results and are the starting point of planning.
• Strategy is a comprehensive long-term plan shaped by the business environment.
• Policies, procedures, methods and rules translate strategy into guided day-to-day actions.
• Programmes combine objectives, policies, procedures, rules, tasks, resources and budgets into project plans.
• Budgets, especially cash budgets, quantify plans and act as key tools for planning and control.
• The Mitticool case shows how clear objectives, supportive strategy and low-price policy lead to innovative, eco-friendly products for poor communities.