Meaning of Planning Premises

Planning premises are the basic assumptions about the environment.

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These assumptions are essential to make plans more realistic and operational. Planning premises
provide a framework. All plans are made within this framework. There are many environmental
factors, which influence the plan. Assumptions are made about these factors. These assumptions
are called premises.

Types of Planning Premises

Different types of planning premises are depicted in the picture (figure) below.

Types of Planning Premises are briefly explained as follows:-

1. Internal and External Premises

1. Internal Premises come from the business itself. It includes skills of the workers, capital
investment policies, philosophy of management, sales forecasts, etc.
2. External Premises come from the external environment. That is, economic, social,
political, cultural and technological environment. External premises cannot be controlled
by the business.

2. Controllable, Semi-controllable and Uncontrollable Premises

1. Controllable Premises are those which are fully controlled by the management. They
include factors like materials, machines and money.
2. Semi-controllable Premises are partly controllable. They include marketing strategy.
3. Uncontrollable Premises are those over which the management has absolutely no
control. They include weather conditions, consumers' behaviour, government policy,
natural calamities, wars, etc.

3. Tangible and Intangible Premises

1. Tangible Premises can be measured in quantitative terms. They include units of
production and sale, money, time, hours of work, etc.
2. Intangible Premises cannot be measured in quantitative terms. They include goodwill of
the business, employee's morale, employee's attitude and public relations.

4. Constant and Variable Premises

1. Constant Premises do not change. They remain the same, even if there is a change in the
course of action. They include men, money and machines.
2. Variable Premises are subject to change. They change according to the course of action.
They include union-management relations
PLANNING PREMISES :
PLANNING PREMISES PRESENTED BY:----- KUNAL GOSWAMI

UNDER THE GUIDANCE OF:--------Prof; Hemant kawate :
UNDER THE GUIDANCE OF:--------Prof; Hemant kawate

DEFINIATION:----- :
DEFINIATION:----- Planning premises means systemic & logical estimate for
the future effecting planning. According to Dr.C.R Terry Planning premise are
the assumption providing a sack ground against which the estimated events
affecting the planning will take place.

TYPES OF PLANNING PREMISE :
TYPES OF PLANNING PREMISE Premises at the view point of place. External
premises Internal premises Premises at the view point of calculation.
Controllable premises Uncontrollable premises Premises at the view point of
control. Tangible premises Intangible premises

Number of factor affecting planning considering the place of the factors. Some factors
are internal and some are external :
Number of factor affecting planning considering the place of the factors. Some
factors are internal and some are external Economic Political-legal competitive
Socio-cultural technological THE EXTERNAL factor are: ---

Slide 8:
Social cultural factor:--- Acceptance of new products Change in lifestyle of
people Economical factor:---- Fiscal factor Infrastructure Raw material Political
factor:--- Law relating to business Political interference in business Competitive
factor:-- Strength & weakness of competitor Price change by competitor
Product feature of competitor

Slide 9:
The internal factor are:----- Organization structure Management System
Research and Development Production Operations Procurement Marketing
Products Human Resources Financial Resources Organization Image
Organization Climate and Change Relations with the customer

Slide 10:
Controllable premises are:----- Controllable premises are those that can be
controlled by an organizations actions. This are mostly internal like:
organizational policies, structure, system, process. Uncontrollable premises
are:----- Its those which dose not controlled by organization. And those are
mostly external factor like:---- Economic growth, population growth, taxation
policy of government.

Slide 11:
TANGIBLE PREMISES;------- Tangible premises are those which can be
expressed in Quantitative terms like monetary unit, unit of product, labour
hour, machine hour. e.g:-- sales forecasting. The intangible premises are
Qualitative in nature and can not translate into quantity. e.g:--- image of the
company. INTANGIBLE PREMISES:------

Slide 12:
STRENGTH (Internal Factor) WEAKNESS (Internal Factor) OPPORTUNITIES
(External Factor) THREATS (External Factor) SWOT ANALYSIS

Planning Premises Presentation Transcript
1. Planning premises
2. Planning premises means systemic and logical estimate for the future factors affecting
planning.
3. According to Dr.G.R.Terry ,planning premise are the assumptions providing a
background against which the estimated events affecting the planning will take place.
4. Koontz and ODonnel , a key part of planning is the establishment of clear planning
premises. To assure co-ordination among all managers who make plans in organization ,
these premises should be used by all concern persons premises guides planning.
5. Quantitative premises Premises at the view point of control Types of Planning
Premises Premises at the view point of place Premise at the view Point of calculation
Internal premises External premises Controllable premises Quantitative Premises.
Numerical premises Uncontrollable Premises. Number of factors affecting planning
considering the place of the factors, some factors are internal and some are external.
Internal premises of planning : they are as under : 1. premise about basis policies such as
should the purchase be centralized or decentralized? Whether to give importance to
quality or low price? whether to implement the policy of centralization of power or not?
The methods of directing to be followed . Policies and rules of employment selection ,
promotion , transfer, demotion and relieve. Premises about automation of office. premises
about pricing , price discrimination , after sale services and so on. B. Premise about
capital investment and utilization :a. premises for long term capital b. premises for short
term capital 3. Premise about obtaining raw material:1. what type of raw material is
needed and in what quantity . 2. what are the sources of raw material . 3. what will be the
prices of raw material ? 3. what will be the price of raw material. 4. how much would be
the expense of transportation. 5. is there any possibility to prepare required raw material
in the company ? 6. if raw material is going to be purchased , should it be imported or
indigenously acquired?. 4.Premises about personnel: among all the means of production ,
the personnel are the only alive one. The premises about this factor can be enumerated as
under : 1. how much skilled , unskilled , male, female, workmen, are needed for
implementation of a plan? 2. how much training should be imparted in the context of new
technological development ? 3. To make an estimate regarding present and future
employees. 4. premises about the trend , co-operation, and association of employees. 5.
what should be the steps of moving worker ? 6. what is the condition of organization , co-
operation and work attitudes of personnel ? 5. Premises about organization : organization
is necessary for the implementation of planning . For this following premises are
necessary : 1. about type of organization will be required 2. premises about the powers
and responsibility. 3. premises about the flexibility in the organization. 4. premises about
the co-ordination between the departments. 5. premises about the stability in the
organization. 6. Premise about different expenses : Each activity undertakes in a unit
leads to expenses, the assumption about them are as under :1. what would be the possible
expense oflabout recruitment in the context of rate of labour turnover? 2. what would be
the expense of storage and maintenance of materials ? 4. premises about packing and
packing expense.5. premises about expense of labour welfare. 6. premises about research
and development expenses, 7. premises about empenses of stationey , post telegram ,
telephone . 8. premises about expenses of selling activities and trade exhibitions . 7.
Premises about development the area covered by developmental premises are as under: 1.
possibility of present and potential competitors of the unit. 2. Estimate of product
development , product enrichment and product enlargement. 3. time span over which the
plant will operate at full capacity. 4. Annual return on capital expense incurred. 5.
possibility for developing new product. 7. possibility of future development from the
point of view of market competition after considering the popularity of a given product.
8. premises about the future development on the bases of government industrial policy. 8.
Premises about selling : 1. premise about the quantum of sale, product and sale areas. 2.
How much sale should be done on credit and on cash? 3. premises about direct sale and
indirect sale. 4. premises about packing, advertisement and after sale service. 5. premises
about channel of distribution and expenses for distribution. B. EXTERNAL PREMISES
OF PLANNING : Certain external factors like price level, employment , population ,
technical research, different resources of production, market demand etc. are affecting
business activity. Therefore premises regarding these factors are inevitable. These
external factors are not under the control of management. So they are uncontrollable
premises, which are as under: 1. General premises about business environment. 2.
Premises about the production resources. 3. Premises about the demand of the product. 1 .
General premises about business environment: a. Premises about price level. b. Premises
about the employment. C. Premises about the technical research. d. Premises about the
population. e. Premises about productivity. f. Premises about the government policy. g.
Premises about government control. h. Premises about the political factors, i. Premises
about the social and moral standards. 2. Premises about the production resources :
Premises about location of business. Premises about the capital. Premises about the fuel.
Premises about supply of labour. 3. Premises about the demand of the product : Premises
about the demand of the industry. Premises about the demand of specific area. Premises
about the demand of the firm. Planning premises at the point of view of control : 1.
Controllable premises 2. Uncontrollable premises. 1. Controllable premises : those
factors which are internal are mostly controllable. It includes the formation of
organization, policy matters, methods of direction , methods of control, types of budget,
salary, financial, motivation , promotion , transfer, facility etc. 2. Uncontrollable premises
: there os no control on certain premises which are external premises affecting the
planning. It includes supply of raw material, manpower, fuel, market competition,
government policy, price fluctuation, technical research, government control etc. 1.
Numerical premises : the premises which can be measurable by any scale of
measurement such as inch, feet meter, liter , kilometer, dozen, gross, tone, etc. is called
numerical premise. It is also called physical premises. 2. Invisible premise : these
premises are those premises which cannot be measurable in numerical term . Such as
group feeling , co-operation, honest , faithfulness, efficiency, effectiveness of
advertisement , satisfaction
6. Importance of planning premises
7. 1. Well organized planning can be done.
8. 2. Risk of uncertainty reduces.
9. 3. Risk of flexibility reduces.
10. 4. co-ordination becomes effective. .
11. 7. Increase in profitability