Planning Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step.

It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said Well plan is half done . Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. According to Urwick, Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses . Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals. According to Koontz & O Donell, Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur . Steps in Planning Function Planning function of management involves following steps:Establishment of objectives Planning requires a systematic approach. Planning starts with the setting of goals and objectives to be achieved. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts. Moreover objectives focus the attention of managers on the end results to be achieved. As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective. As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of personnel manager. Such goals should be specified in qualitative terms. Hence objectives should be practical, acceptable, workable and achievable. Establishment of Planning Premises Planning premises are the assumptions about the lively shape of events in future. They serve as a basis of planning. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations. It is to find out what obstacles are there in the way of business during the course of operations. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent. Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes. Internal premises are controllable whereas external are non- controllable. Choice of alternative course of action When forecast are available and premises are established, a number of alternative course of actions have to be considered. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made. After objective and scientific evaluation, the best alternative is chosen. The planners should take help of various quantitative techniques to judge the stability of an alternative. Formulation of derivative plans Derivative plans are the sub plans or secondary plans which help in the achievement of main plan. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization. Derivative plans indicate time schedule and sequence of accomplishing various tasks. Securing Co-operation After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.

The purposes behind taking them into confidence are : Subordinates may feel motivated since they are involved in decision making process. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans. Also the employees will be more interested in the execution of these plans. Follow up/Appraisal of plans After choosing a particular course of action, it is put into action. After the selected plan is implemented, it is important to appraise its effectiveness. This is done on the basis of feedback or information received from departments or persons concerned. This enables the management to correct deviations or modify the plan. This step establishes a link between planning and controlling function. The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic. Approaches to Planning Three proven approaches to planning include: top-down execution and responsibility, bottom-up execution and responsibility, and top-down policy and bottom-up planning and execution. Whatever approach you use, ongoing improvement and updates are better than total revision when new information, policies, or procedures occur. Top-down execution and responsibility One department in the company is responsible for planning and coordinating policies and procedures. A centralized operations staff might be responsible for all or most computers running Windows 2000 and for executing backups. This method allows for creating a specialized group to develop procedures, procure and install hardware, conduct tests, and train personnel. Two disadvantages to this approach are that the specialists might not understand how data from the various departments relates to the overall business, and each department might not get appropriate attention. Bottom-up execution and responsibility Each department is responsible for developing and implementing its own plans. Each department might also be responsible for the computers that its members use and for developing backup procedures. It is the department manager who best understands the impact of data loss. However, this approach can be costly because each department must train its own personnel and do its own research. Top-down policy and bottom-up planning and execution One department develops the planning policy, which includes overall planning guidelines. Each department is responsible for developing and implementing its own plans and procedures. This method offers a consistent approach, which helps to ensure that each department knows the important details for a successful operation. Detailing Types of Plans Plans commit individuals, departments, organizations, and the resources of each to specific actions for the future. Effectively designed organizational goals fit into a hierarchy so that the achievement of goals at low levels permits the attainment of high-level goals. This process is called a means-ends chain because low-level goals lead to accomplishment of high-level goals. Three major types of plans can help managers achieve their organization's goals: strategic, tactical, and operational. Operational plans lead to the achievement of tactical plans, which in turn lead to the attainment of strategic plans. In addition to these three types of plans, managers should also develop a contingency plan in case their original plans fail. Operational plans The specific results expected from departments, work groups, and individuals are the operational goals. These goals are precise and measurable. Process 150 sales applications each week or Publish 20 books this quarter are examples of operational goals. An operational plan is one that a manager uses to accomplish his or her job responsibilities. Supervisors, team leaders, and facilitators develop operational plans to support tactical plans (see the next section). Operational plans can be a single-use plan or an ongoing plan. Single-use plans apply to activities that do not recur or repeat. A one-time occurrence, such as a special sales program, is a single-use plan because it deals with the who, what, where, how, and how much of an activity. A budget is also a single-use plan because it predicts sources and amounts of income and how much they are used for a specific project. Continuing or ongoing plans are usually made once and retain their value over a period of years while undergoing periodic revisions and updates. The following are examples of ongoing plans: A policy provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. Typical human resources policies, for example, address such matters as employee hiring, terminations, performance appraisals, pay increases, and discipline. A procedure is a set of step-by-step directions that explains how activities or tasks are to be carried out. Most organizations have procedures for purchasing supplies and equipment, for example. This procedure usually begins with a supervisor completing a purchasing requisition. The requisition is then sent to the next level of management for approval. The approved requisition is forwarded to the purchasing department. Depending on the amount of the request, the purchasing department may place an order, or they may need to secure quotations and/or bids

for several vendors before placing the order. By defining the steps to be taken and the order in which they are to be done, procedures provide a standardized way of responding to a repetitive problem. A rule is an explicit statement that tells an employee what he or she can and cannot do. Rules are do and don't statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of fairness. Tactical plans A tactical plan is concerned with what the lower level units within each division must do, how they must do it, and who is in charge at each level. Tactics are the means needed to activate a strategy and make it work. Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans. These plans usually span one year or less because they are considered short-term goals. Long-term goals, on the other hand, can take several years or more to accomplish. Normally, it is the middle manager's responsibility to take the broad strategic plan and identify specific tactical actions. Strategic plans A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind, rather than with the goals of specific divisions or departments. Strategic planning begins with an organization's mission. Strategic plans look ahead over the next two, three, five, or even more years to move the organization from where it currently is to where it wants to be. Requiring multilevel involvement, these plans demand harmony among all levels of management within the organization. Top-level management develops the directional objectives for the entire organization, while lower levels of management develop compatible objectives and plans to achieve them. Top management's strategic plan for the entire organization becomes the framework and sets dimensions for the lower level planning. Contingency plans Intelligent and successful management depends upon a constant pursuit of adaptation, flexibility, and mastery of changing conditions. Strong management requires a keeping all options open approach at all times that's where contingency planning comes in. Contingency planning involves identifying alternative courses of action that can be implemented if and when the original plan proves inadequate because of changing circumstances. Keep in mind that events beyond a manager's control may cause even the most carefully prepared alternative future scenarios to go awry. Unexpected problems and events frequently occur. When they do, managers may need to change their plans. Anticipating change during the planning process is best in case things don't go as expected. Management can then develop alternatives to the existing plan and ready them for use when and if circumstances make these alternatives appropriate. "Vision without action is a daydream. Action without vision is a nightmare." ~ Japanese proverb "If you don't know where you're going, then sure as anything you won't get there" Vision Vision refers to the category of intentions that are broad, all-intrusive and forward-thinking. The corporate success depends on the vision articulated by the chief executive or the top management. A vision is the image that a business must have of its goals before it sets out to reach them. It describes aspirations for the future, without specifying the means that will be used to achieve those desired ends. For a vision to have any impact of the employees of an organization it has to be conveyed in a dramatic and enduring way. The most effective visions are those that inspire, usually asking employees for the best, the most or the greatest. Make sure you keep stretch in your vision, communicate it constantly, and keep linking the events of today to your vision, underscoring the relationship between the two. Warren Bennis, a noted writer on leadership, says: "To choose a direction, an executive must have developed a mental image of the possible and desirable future state of the organization. This image, which we call a vision, may be as vague as a dream or as precise as a goal or a mission statement." Mission Statement A mission statement is an organization's vision translated into written form. It makes concrete the leader's view of the direction and purpose of the organization. For many corporate leaders it is a vital element in any attempt to motivate employees and to give them a sense of priorities. A mission statement should be a short and concise statement of goals and priorities. In turn, goals are specific objectives that relate to specific time periods and are stated in terms of facts. The primary goal of any business is to increase stakeholder value. The most important stakeholders are shareholders who own the business, employees who work for the business, and clients or customers who purchase products and/or services from the business. For instance, Chrysler's goal, as written in their mission statement, is clear - it is focused on consumer satisfaction: "Chrysler's primary goal is to achieve consumer satisfaction. We do it through engineering excellence, innovative products, high quality and superior service. And we do it as a team." (1988) Setting Goals

The major outcome of strategic road-mapping and strategic planning, after gathering all necessary information, is the setting of goals for the organization based on its vision and mission statement. A goal is a long-range aim for a specific period. It must be specific and realistic. Long-range goals set through strategic planning are translated into activities that will ensure reaching the goal through operational planning. Setting Objectives (more) Setting objectives involves a continuous process of research and decision-making. Knowledge of yourself and your unit is a vital starting point in setting objectives. Strategic planning takes place at the highest levels; other managers are involved with operational planning. The first step in operational planning is defining objectives - the result expected by the end of the budget (or other designated) cycle. The objectives must be: be focused on a result, not an activity be consistent be specific be measurable be related to time be attainable Corporate Strategy (more) Successful companies are those that focus their efforts strategically. To meet and exceed customer satisfaction, the business team needs to follow an overall organizational strategy. A successful strategy adds value for the targeted customers over the long run by consistently meeting their needs better than the competition does. Strategy is the way in which a company orients itself towards the market in which it operates and towards the other companies in the marketplace against which it competes. It is a plan an organization formulates to gain a sustainable advantage over the competition. Strategy answers the following questions: what are the sources of the company's sustainable competitive advantage? how a company will position itself against competition in the market over the long run to secure a sustainable competitive advantage? what are the key strategic priorities?.. More Business Goals From a planning perspective there is a big problem with the mission statement you have written. It promises a lot but does not say how the company intends to deliver on that promise. That is why a business plan also needs goals. The purpose of this lesson is to assist you in writing several goals for your e-business. The lesson describes business goals through a list of characteristics and examples, and then provides instructions to write several business goals for your e-business plan. The lesson outline is: What is a Business Goal? --Business goal characteristics --Business goal examples How to Write Business Goals What is a Business Goal? A goal is a statement that clearly describes actions to be taken or tasks to be accomplished by a company, a department or an individual. A business will have a number of goals, each describing a desired future condition toward which efforts are directed. If the goals are accomplished, then the business should be a success. The dual purposes of goal setting are (a) to establish a measure for evaluating the success of the business and (b) set priorities for its management and staff, who should be held accountable for the accomplishment of the goals. Goals help keep management focused on success and away from distractive activities that drain business resources and accomplish little. Business goal characteristics: Common characteristics of a business goal are: y Derived from the mission statement: The starting point in writing business goals is to ask "what do we need to do to accomplish our mission." In other words, a mission statement says "what" and business goals say "how". y Task-oriented: A business goal must state what is to be accomplished as clearly as possible. Effective goals use actionoriented verbs such as deliver, implement, establish, and supply; avoid poor activity indicators such as facilitate and analyze that can mean nothing significant or measurable gets done. y Short term: Goals used to be long term indicators, something an organization would accomplish in three or more years. Today business moves faster and e-commerce companies function at "Internet speed". Accordingly, goals tend to have shorter durations, rarely more than three years and frequently one year or less. Most business plans will have a mixture of time frames for accomplishing goals. y Specific: A goal must state, in one or two sentences, the conditions that will exist if the goal is to be accomplished. The more well-defined a goal is, the easier it will be to understand what is required and to measure successful achievement. y Challenging: A goal should challenge the people who are responsible for its achievement. A goal should require considerable effort, but be achievable.

Business goal examples: What does a goal look like? Here are a few examples that support the mission statement for Purma Top Gifts: y Implement an on-line store that contains a range of top quality Purma-made products that our customers will want to buy. y Create a well-designed Web site that is fast, easy to navigate, responsive, and gives visitors the information they need. y Set up a product distribution system that offers flexibility and reliability to our customers. y Establish a partnership program that generates increased exposure and income for Purma Top Gifts and provides additional services for our customers. y Promote Purma Top Gifts selectively in traditional and on-line media. y Put in place a management structure that is able to accomplish the business of Purma Top Gifts efficiently and profitably. In the business plan, each goal statement should include 1-3 sentences of explanation to explain the goal to the business plan reader. For example: Establish a partnership program that generates increased exposure and income for Purma Top Gifts and provides additional services for our customers. Purma Top Gifts cannot be all things to all customers, so Purma Top Gifts will partner with vendors who offer goods and services our customers need, but which we do not provide. Potential partners include Purma-oriented information services, travel agencies, and tourism operators. Partnership activities such as link exchanges, affiliate programs, and banner ad exchanges will give Purma Top Gifts increased visibility on the Web at minimum cost while assisting our customers. How to Write Business Goals Writing business goals is a fairly straightforward exercise that can use some of the information you generated while writing the mission statement (e.g., target markets, services or products your company will provide). With the mission statement in mind, make a list of the things that have to happen to fulfill that mission. This is an exercise that focuses on the task-oriented characteristic of a business goal. Then frame the goal statement and the brief explanation around the other goal characteristics -- especially specific and challenging. Mission Statement Every business needs a purpose that says what it is and a vision that describes what it wants to be. This purpose and vision come together in the mission statement. A mission statement then becomes the starting point for the development of business goals, and goals are the basis for setting measurable project objectives and corresponding metrics. Since it all starts with a mission, this is obviously a critical part of creating your business. The purpose of this lesson is to assist you in writing a mission statement for your e-business. The lesson describes a mission statement through a list of characteristics and examples and provides instructions to develop a mission statement for your ebusiness plan. The lesson outline is: What is a Mission Statement? --Mission statement characteristics --Mission statement examples How to Write a Mission Statement What is a Mission Statement? A mission statement is a declaration of what a business aspires to be. The statement is the business' reason for being, a proclamation of why it exists, a clarification of who it serves, and an expression of what it hopes to achieve in the future. A carefully crafted mission statement accurately describes the business and inspires the people who contribute to its success. Just as important as the mission statement itself is the process of writing the statement. This process helps a new or established business clarify questions such as: y What business are we really in? y What type of business do we want to be? y What is our target market? y What inspires us? The writing process and the statement itself both provide clarity of purpose and motivation for business success. Mission statement characteristics: A mission statement has the following key characteristics: y Visionary: Above all else a mission statement offers a vision of what a business aspires to be. A visionary mission statement helps people understand what the business is about and how they can contribute to the achievement of the vision. So mission statements frequently contain wording such as "to be the best", "the highest quality", and "in the world". y Broad: A company cannot be all things to all people, but a mission statement should not limit a company's area of service or expertise too narrowly. Especially in the fast-paced world of electronic commerce, customer needs, and customers, can change rapidly. A mission statement should be broad enough to allow the company to meet those needs without annual revisions of the statement. For example, the original mission of classmates.com was to reunite classmates in American high schools. However, the business quickly found a market in colleges and universities as well, and then the military and the workplace. Soon classmates.com found it was not in the classmates business, it was in the personal networking business. CEO Michael

Schutzer acknowledges that he would choose another name, and a broader mission, had he started the business today. "Our business is more than high school reunions," he says. "It is a personal network for reconnecting people." (Dot-com Content that Works?) Realistic: The broad vision needs to be tempered with realism, to be both practical and workable. Mission statements that include everything or over promise will not give a clear indication of what the business is about. A lofty, unrealistic mission statement will not have great credibility. Instead the best statements are direct and powerful.

For example, in October 2002 Microsoft changed its mission statement from "To empower people through great software -any time, any place, and on any device" to "To enable people and businesses throughout the world to realize their full potential". The new mission statement is certainly broad enough, but is it realistic? Does it overpromise? Does it give any indication what Microsoft is about? Most mission statement writers would think the new mission statement is a step backward, using the criteria listed here. y Motivational: The statement should be written in such a way that it inspires commitment among employees, customers, partners, and funding agencies about what this company will do or produce. Some organizations emphasize the inspirational value of their mission statement above all else, using it to express the company's philosophy and values. y Short and concise: The mission statement should be no longer than 25 words. Some consultants recommend that the mission statement be short enough that an employee can easily remember it and readily repeat it. Similarly, management guru Peter Drucker suggests it should be able to fit on a t-shirt. y Easily understood: The statement should use plain language that is convincing and easy to understand. For example, a technology company's mission statement should not include jargon or technology concepts that are unfamiliar to people outside the area. Consider using the "grandmother test" on your mission statement -- would your grandmother understand what your company is about if she read your mission statement? Most, if not all of these characteristics are reflected in Purma Top Gift's mission statement: "The mission of Purma Top Gifts is to be the world's premier retailer of top quality Purma-made gifts and souvenirs." Mission statement examples: Sometimes the best way to understand what is a mission statement is to see what other companies have selected as their mission statement. Obviously you should not copy another company's mission statement because you lose the benefits the process provides, you will want to distinguish yourself in the marketplace, and you violate that company's copyright on its mission statement. However, exemplary mission statements can suggest wording or an approach that you may want to use. Here are some mission statements from real companies and organizations: y McDonalds: "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile." y J. Sainsbury: "Our mission is to be the consumer's first choice for food, delivering products of outstanding quality and great service at a competitive cost through working faster, simpler, and together." y Success Networks: "Our mission is to inform, inspire, and empower people and organizations to be their best -- both personally and professionally." y Big Binoculars: "Our mission is simply to offer our customers the most binocular aperture, at the highest quality, for the lowest price." y Levi-Strauss: "We will market the most appealing and widely worn casual clothing in the world. We will clothe the world." y OHCHR: "The mission of the Office of the United Nations High Commissioner for Human Rights (OHCHR) is to protect and promote all human rights for all." Now that you know what a mission statement is, how do you develop one for your e-business? How to Write a Mission Statement An existing, large, corporate organization needs a lengthy, highly consultative process to create or revise a mission statement, as described in How to Develop a Mission Statement. A small business owner also needs to consult with employees and customers, in a process similar to one outlined in Build the Perfect Mission. Really serious mission statement writers would benefit from The Mission Statement Book which includes over 300 exemplary mission statements and several chapters that offer guidance about how to write a mission statement. For the purposes of this lesson -- writing a mission statement for a new e-business -- the process described below will be more than satisfactory. The place to begin is to realize that the process of writing a mission statement is an inclusive process. All members of the e-business team must be involved in the process. Even if someone thinks they are unable to contribute, essential buy-in to the concept will be insured if their opinion is solicited at every step. A good place to start is with the vision part of the statement. In a brainstorming exercise, conduct the following exercises to clarify what you and others intend for the business to be: y List 5-10 words or phrases that describe your business. Highlight the three most important. y List 3-5 words or phrases that describe the company's ideal image from a customer's point-of-view. y List 3-5 words or phrases that describe the company's ideal image from a management and employee point-of-view. This vision must be tempered with a focus on the purpose of the business:

List the market opportunities and/or customer needs that your company intends to address (e.g., the business' value proposition). y Who are your customers? List the company's primary and secondary target markets (target markets are discussed in the Market Analysis lesson). y With your customers in mind, list each service or product your business will provide. y List 3-5 measures of your business' success. These exercises will provide you with the raw material necessary to write a mission statement and other parts of the e-business plan, as the parenthetical comments suggest. If you are working in a group, you may find actually writing the statement in a group exercise can be difficult. Instead each member of the group should write a draft statement which is shared with others in a meeting to decide on the mission statement. It is unlikely any individual's statement will meet with instant approval. Instead the team should, in an open and consensus-seeking discussion, look for the best parts in each nominated statement and craft them together into a statement most members can support. Keep in mind that this is the first step in your business plan writing process. If you can't agree on a perfect statement now, then settle on an imperfect statement and come back to it later. However it is essential that a preliminary mission statement come out of this process as a guide in subsequent steps. Another key point is that this process can produce more than a mission statement. Much of this work can be used in writing business goals next, and in other parts of the business plan in subsequent lessons. Also you may find that a nominated mission statement doesn't work as a mission statement, but would be a good motto, slogan, or advertising tagline. Companies also sometimes use this process to develop two mission statements -- one for external use to customers, suppliers, and others, and an internal mission statement that is posted prominently around the workplace for employees. For example, McDonalds has extracted the words "quality, service, cleanliness, and value" from their mission statement (listed above) and made them a key part of each employee's orientation. y