Planning is getting ready to some thing. It is the basic of all management functions. Plans are classified into various categories in number of ways on the basis of their functions and frequency of use and the time horizon. There are following types of plans.
Purpose or Mission
It identifies the basic function or task of an enterprise or agency or any part of it. Every kind of organized effort needs a purpose. Mission is social aspect of purpose. Although, they are used interchangeably.
Objectives or Goals
Interchangeably used, there are the ends towards which activity is arrived. They represent the end point of planning as well as the end towards which other managerial functions are arrived.
It is defined as the determination of the basic long term objective of an enterprise and adoption of course and allocation of resources necessary for the achievement of the objective. They furnish a frame work for guiding thinking and action.
These are also plans in a way that they are general statements or understandings that guide or channels thinking in decision making. Policies define an area within which a decision is to be made and ensure that the decision will be consistent with, and contribute to an objective. Policies help sole the issues before they may become problems. Policies exist on almost all levels of organization. Policies are guides to decision making, therefore, they have certain direction. Without direction guide lines are referred to as rules. Policies are mean of encouraging discretion and initiative within limits. The amount of freedom depends on the policy and in turn reflects position and authority in the organization.
Reasons for non-consistency of policies and enterprise objectives
- Policies are not always defined in working. So they are normally misinterpreted.
- Policies entail delegation of authority. This results in decentralization of decision-making. More the involvement of people at various more are the chances of disagreement between participants due to varying perceptions.
- Controlling a policy is always a difficult task
There are not and can’t be consistent and integrated enough in realizing event objective due to following reasons.
Relationship Between Policies & Procedures
- Policy. Employee may get loan against his provident fund.
- Procedure. How much amount can be advanced to employee and how.
There are plans that establish ways and methods of doing an activity (in future). There are chronological sequences of required action. Thus these policies are guides to action ratter than thinking and outline the exact method/manner of accomplishing activities. Procedures often cut across the department live. It is a sequence of rules.
Rules spell out specific required action on non-actions, allowing no discretion. These are the simplest type of plans. Rules unlike policies have no direction and guide action without specifying a time sequence.
It is a combination of goals, policies, procedures, rules, task assignment, steps to be taken, resources to be employed etc. these are usually supported by budgets.
It is a numberized program, or, the qualified expected outcomes of a program make a budget. A budget may be expressed in financial terms, in terms of time or units of production or else. A budget forces mangers to fore-see and plan all the expected activities with high level of precision. A budget implements program but it can be a program in itself. As a company may implement budget very strictly in order to better its financial position. There are two types of budgets one is variable/flexible budget and second is zero-based budget.