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Two Years Ago Nishant, Completed His Degree in Textile Engineering. He Worked for Sometime in a Company Manufacturing Readymade Garments. He Was Not Happy in the Company and Decided to Have His Own Readymade Garments Manufacturing Unit. - Business Studies

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Two years ago Nishant, completed his degree in Textile Engineering. He worked for sometime in a company manufacturing readymade garments. He was not happy in the company and decided to have his own readymade garments manufacturing unit. He set the objectives and the targets and formulate action plan to achieve the same. One of his objectives was to earn 80% profit on the amount invested in the first year. It was decided that raw materials like cloth, thread, buttons etc. will be purchased on two months credit. He also decided to follow the steps required for marketing the products through his own outlets. He appointed Ritesh as a production manager, who decides the exact manner in which the production activities are to be carried out. Ritesh also prepared a statement showing the requirement of workers in the factory throughout the year. Nishant informed Ritesh about his sales target for different products areawise for the forthcoming quarter. A penalty of Rs 200 per day was announced for the workers who found smoking in the factory premises.

Quoting lines from the above para identify and explain the different types of plans discussed.

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Solution

Types of plans being discussed in the given paragraph are as follows.
i. Objective – An objective broadly outlines the key task or target to be reached at the end of a certain time period by the organization. In the given case, the objective is highlighted in the words “One of her objectives was to earn 80% profit on the amount invested in first year.

ii. Policy – A policy is a code of conduct to be followed by a particular organization in a particular scenario. It is not specific in nature and hence, is interpreted according to the situation. In the given case, the lines “It was decided that raw materials like cloth, thread, buttons etc, will be purchased on two months credit”

iii. Procedure- A procedure comprises of guidelines to be followed in a specific order to make a policy decision to come into reality. In the given case, the line” Decided to follow the steps required for marketing of the products through her own outlets” highlights the procedure to be followed.

iv. Method- A method is a specific process to be conducted to carry out a desired task. In the given case, the method is highlighted in the words “ the exact manner in which the production activities are to be carried out” highlight the type of plan called “method”.

v. Rule- A rule is the type of plan that mentions the exact way of completing a particular task and its degree of compulsion. A rule can also be negative and guide the employees about not doing a particular thing. In the given case, the line “A Penalty of Rs 200 per day was announced for the workers who found smoking in the factory premises" highlights a rule.

vi. Budget- A budget is usually a number that specifies the financial constraints and targeted achievements on an organization. It mentions the upper limit of the expenditure of resources. In the given case, the line "Ritesh also prepared a statement showing the requirement of workers in the factory throughout the year” implies a budget.

Concept: Concept of Planning
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