A setup is a commitment come a details course of activity for achieving details results. Indigenous this it complies with that there space a variety of plans because that achieving various goals. Managers, normally, walk the mistake of taking major programmes only as plans. But a number of future process of action are likewise plans. Because that example, beginning the production of a brand-new product or setups up a new factory is taken into consideration plans. The plans might be classified follow to origin, use, purpose, kind etc.
Some the the plans are in the kind of standing plans while others are solitary use plans. Solitary use to plan are supplied only once and not over and over again whereas, repeat usage plans are provided again and again. Because that example, objectives, policies, strategies, rules, measures etc., are standing plans since once formulated, they will be provided for a long duration and repeatedly. ~ above the various other hand, programmes and budgets are solitary use plans because once these room achieved, these are to be formulated again.
Following diagram illustrates various plans:
Planning is a commitment come a particular course of action undertaken come achieve specific results. It is composed of several materials or derivative plans that are usually bound together. These components are known as plans. There can be several species of plans. That is easy to see a significant plan such as establishing a new enterprise yet some future process of plot are likewise plans. Any course of future activity is a plan.
You are watching: There are three kinds of ____ plans. they are single-use plans, standing plans, and budgets.
Various plans might be classified into:
(1) stand plans and
(2) Single-use plans.
1. Stand Plans:
Standing plans are made come be provided time and also again. This plans room formulated to guide managerial decisions and actions on problems which are recurring in nature. Standing to plan are also called ‘repeated use’ plans because these administer guidelines because that actions to be taken in future. These plans provide unity and uniformity of efforts in meeting repetitive situations developing at assorted levels that the enterprise. This plans carry out ready guidelines for tackling situations of recurring nature. These plans no only aid in co-ordination yet in efficient management also. Was standing plans encompass objectives policies, procedures, methods, rules and also strategies.
Standing plans help an enterprise in the following ways:
(i) stand plans aid in achieving co-ordination in the enterprise. This plans carry consistency, uniformity and unity in efforts.
(ii) senior executives room able come delegate their occupational to subordinates due to the fact that procedures, rules, regulation etc. Have been laid down for taking crucial decisions.
(iii) this plans aid in afford goals also if these space vague, facility or multi-dimensional. The policies, methods, rules, actions etc. Administer ready frames of referral whenever some challenge arises in taking decisions.
(iv) Standing plan are formed after a many thinking, discussions and arguments. Whenever decision are essential to be taken, these plans aid in quick decision making. These plans are great labour saving devices as they administer frames of recommendations for tackling recurring situations.
(v) this plans help in far better administrative control. They carry out rational bases for examining the results of various efforts put by different persons functioning at assorted levels that the enterprise.
2. Single-Use Plans:
These plans space made for handling non-recurring problems. Single-use to plan are also referred to together ‘specific plans’ due to the fact that these room meant to fix a certain problem. This plans are formulated to take care of non-repetitive and also unique problem. This plans can not be supplied again and also again; these come to be obsolete after achieving their purpose. The examples of this plans are: projects, budgets, programmes.Purpose or Mission:
The mission or purpose identifies the basic role or task of an enterprise. Every organization has or should have actually a purpose so that its working becomes meaningful. The purpose or mission is assigned come every company by the society. The objective of a organization is to produce and also distribute goods or services, the function of public works department is to construct and also maintain roads, the objective of courts is come interpret and apply laws and also so on. The objective is a standing plan in a service organization which specifies its an easy purpose in the light of which various other actions are designed.
An organization’s purpose consists of a long term vision the what it looks for to do and the factors why that exists. The organization’s mission indicates precisely what tasks the organization intends to communicate in now and also in future.
The basic questions to it is in answered by an company are:
(i) What business we room in?
(ii) What wall surface our organization be?
(iii) Who are our customers?
(iv) What space our values and beliefs?
(v) What will be our energy to the society? and also so on.Objectives:
Objectives or goals are the ends towards which every activity is aimed-they room the results to be achieved. Objectives are a prerequisite for planning. No to plan is feasible without setting up of objectives. If enterprise objectives are the straightforward plan the the firm, a room may also have its very own objectives. Though departmental objectives will contribute to the attainment of companies objectives however the 2 sets of goals may totally be different. Because that example, the objective of the enterprise may be to knife a particular amount that profit, while selling its products.
Enterprise objectives influence the monitoring philosophy and also practice. Goals have higher influence ~ above the functioning of an organization. Every other varieties of plan such together policies, strategies, procedures, rules, budgets etc. Assist in the attainment of proclaimed enterprise objectives in one economical and also efficient manner. Objectives are pertained to the future and also are vital part of the to plan process.Policies:
Policies are basic statements or knowledge which provide guidance in decision-making to assorted managers. These space standing plans giving guidance to management in the conduct of managerial operations. Policies define limits within i beg your pardon decisions deserve to be made and decisions room directed in the direction of the achievement of objectives. Policies also help in deciding issues before they become problems and making the unnecessary to analysis the same case every time it come up. Managers deserve to delegate authority in ~ the offered parameters and also can quiet retain control over what their subordinates do. In the native of Koontz and Weihrich. “Policy is a way of encouraging discretion and initiative, yet within limits.”Strategies:
The native ‘strategy’ has actually long been offered in the contents of military action plans. That was supplied to state the cool plans made in the light of what it is thought an adversely might or could not do. Supervisors now use tactics in the broader areas of service operations. A strategy is a substantial and integrated arrangement designed to assure that company objectives are accomplished. The lengthy term missions of the enterprise space determined and also requisite resources are allocated and deployed to attain the wanted results. The function of strategies is to determine a picture of the kind of enterprise that is envisaged. Strategies carry out not effort to summary the programmes because that achieving objectives but they furnish a framework for guiding thinking and also action.Procedures:
Procedures room details of activity or the guidelines for the success of service objectives. Procedures give details of just how things space to be done. No room is left because that judgment. This should assist in implementation that policies. Procedures likewise determine the policy of responsibility and also accountability. Follow to Terry, “A procedure is a collection of related tasks that consist of the chronological sequence and also the established method of performing the occupational to be accomplished.”
Procedures should be differentiated from policies. A procedure is a overview to activity whereas a plan is a guide to thinking. Policies are indict for taking decisions and procedures consist of various approaches to attain each phase of work. Policies offer scope for interpretation in bespeak to view that castle fit in a certain situation whereas steps are tailor-made and do no offer any kind of scope because that interpretation.
A procedure is explained with the help of acquisition the situation of purchase raw products for a concern:
(i) Every room needing raw materials will send a purchase requisition to the purchase department giving quantity specifications, type and quality materials required.
(ii) The purchase department will consolidate the needs of various departments. A linked order is prepared and sent come the suppliers. The acquisition department maintains the perform of suppliers and regularly collection quotations native them. The copy of the purchase order is also sent to the receiving and inspecting department.
(iii) The receiving department compares the goods received with the bespeak placed. Any kind of discrepancy in quantity, quality, etc. Is reported to the acquisition department.
If the goods are proper and according come the order then a report about it is submitted to the purchase department.
(iv) after ~ receiving a satisfactory report from receiving and also inspecting department, acquisition department forwards the invoice to accounting department because that payment.
(v) audit department checks the bill and also then provides the payment to the supplier.
Whenever a material purchase is needed then the very same procedure is followed. Different tasks require different procedures and also they are followed in the same way.Advantages the Procedures:
1. Basis that Control:
Procedures give a detail of sequences come be adhered to for perfect a task. It can be viewed whether the job-related is proceeding according to the plan or not. Steps are offered as a regulate mechanism because any discrepancy in perfect the work can be figured out at once.
Procedures aid to certain consistency and uniformity that performance. Once the measures are established, they deserve to be likewise used again and again.
The standardization of measures reduces the require for decision-making in similar situation. Wherever a task is to be performed, the very same procedure will be complied with for act it. This increases performance in act a work.
Procedures establish a succession to be adhered to for each work. This help in coordinating the activities of various departments or sections because same procedures will be adhered to by all of them.Limitations:
Rigidity is adhered to in following procedures. They room continuously supplied over and also over again. This uniform initiative and also discoveries.
2. Constant Review:
The same actions cannot be followed for long terms. The an altering situations necessitate the testimonial of procedures. To store them efficient they have to be continuous updated. They must be suitably readjusted to fit the existing situation.Rules:
A rule is a plan that lays down a compelled course of action with regard come a situation. A ascendancy is in the nature the a decision make by management concerning what is to be done and what is not to be excellent in a particular situation. A rule is definite and rigid and enables no deviation or discretion to the subordinates. Choose procedures, rules execute not prescribe a chronological succession of measures to be taken to attain a offered objective. A rule may or might not be a component of the procedure. A dominion such together ‘No cigarette smoking in the factory’ will not form a component of the procedure. Top top the other, a ascendancy to do payment within 21 days will certainly be the component of a procedure.
“Rules prescribe the borders of acceptable behaviour that the members that the organization. Rule will allow managers come predict the action of your subordinates, just how will they action in a given situation. Rule channel the action of employees in a desired direction. Workers sometimes resent rules because that stifling your actions. The problem does not lie with the rules, however the way in which they are placed to the workers. Management should try to structure only those rule which are necessary and also those too should additionally be defined properly come the employees.Programmes:
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A programme is a succession of activities designed come implement policies and accomplish objectives. It is devised to accomplish a details situation. Programme may be taken as a combination of policies, procedures, rules, budgets, job assignments, etc. Developed for the particular purpose of moving out a certain course the action. Separate programmes are prepared for accomplishing different tasks. The same programme might not be supplied for achieving various other goals. That is a solitary use setup laid down for new and non-repetitive activities.
In the indigenous of Koontz and also O’Donnell, “Programmes space complexes that goals, policies, procedures, rules, job assignment, actions to be taken, resources to be employed and other facets necessary to carry out a provided course of action.” to quote George Terry, “A programme deserve to be defined as a considerable plan that consists of future usage of different resources in an integrated pattern and also establishes a sequence of compelled actions and also time schedules for each in order to achieve the conventional objectives.”
Characteristics that Programmes:
The adhering to are the characteristics of programmes:
1. A programme is a single use substantial plan. That is created to achieve a details purpose only. As soon as the score is completed the programme will not be provided again.
2. A number of small plan are prepared to build a programme. The programme for increasing sales through 20 every cent might require a number of small plan to it is in formed.
3. A programme is all set to achieve organisational goals.
4. It gives a time limit up to which the programme is to be implemented. A strict time table is addressed for law a certain task.
5. A programme should ensure coordinated planning efforts.
Advantages that Programmes:
Following room the benefits of programmes:
1. Program lay under a food of action to be followed for afford organisational goals. The details of actions to it is in taken and time schedule come be complied with are all made decision in advance. This enables smooth implementation the plans.
2. Program are advantageous in creating far better co-ordination in the organisation. The policies, procedures, rules, budgets, etc. Room in bespeak to administer proper coordination.
3. The programmes room action-oriented plans and administer motivation come employees.
Limitations the Programmes:
1. If the programmes space not carefully framed, over there is a peril of their being failing. The actions to it is in taken and the actions to be adhered to may be properly selected. Such lapses in ~ the initial phase will make the program ineffective.
2. Over there is always a threat of insufficient co-ordination. In case various elements of programmes favor policies, procedures, rules, etc. Are not balanced properly climate the programmes will not be appropriately coordinated.
3. The significant programmes have a variety of sub- programmes. All the sub-programmes have to be successfully brought out because that completing the main programme. Any lapse in implementing a small programme can endanger the totality exercise.Budgets:
A budget is the financial or/and quantitative expression of service plans and policies come be gone after in the future period of time. The hatchet budgeting is offered for preparing budgets and also other steps for planning, co-ordination and control of service enterprise.
According to institute of Cost and also Works Accountants, London, “A budget plan is a jae won statement and /or quantitative declare prepared prior to a defined period of time, the the plan to it is in pursued throughout that duration for the objective of attaining a offered objective.” In the native of George R. Terry, “A budget is an calculation of future needs, i ordered it according to an orderly bases, covering some or every one of the activities of an companies for a definite duration of time.” In the words of Crown and Howard a budget has been identified as, “A pre-determined explain of monitoring policy throughout a given duration which offers a traditional for comparison v the outcomes actually achieved.”
Characteristics the Budget:
1. A budget plan should be based upon past figures. The possibilities in future should likewise be taken into account.
2. A budget be versatile so the it is modified according to the requirements of the situation. Rigidity in budgets periodically creates difficulties.
3. The persons at various levels need to be involved in preparing a budget. This will aid in acquiring willing cooperation the everybody if implementing budgets.
4. A budget plan should it is in a details statement. The amounts or monetary info should be clearly mentioned in a budget.
5. There must be an active involvement that top management while prepare a budget.
Need for Preparing Budgets:
Budgeting is crucial for policy planning and control. The budgets space essential as result of following reasons:
1. Budgets are required for formulating future policies.
2. They are needed for ensuring co-ordination among various departments or segments of an enterprise.
3. Budgets act together a tool of manage in the hand of management. Budgets addressed for various persons will be the criterion fixed for assessing performance.
4. Budgets plot as motivation for assorted employees. Once targets for power are fixed then people will try to attain them at the earliest. They have been offered a goal because that which they must work.
Classification and varieties of Budgets:
The budgets room usually classified according to your nature. The adhering to are the varieties of budgets i m sorry are commonly used.
A. Group on the basis of Time:
1. Irreversible budgets.
2. Temporary budgets.
3. Existing budgets.
B. Category on the basis of Functions:
1. Sensible or Subsidiary Budget.
2. Understand Budget.
C. Classification on the communication of Flexibility:
1. Resolved budget.
2. Functional budget.
A. Group According to Time:
1. Long-term Budgets:
The budgets are prepared to depict a irreversible planning the the business. The duration of permanent budgets varies in between five come ten years. The permanent planning is done by the optimal level management; that is not generally known to reduced level that management. Long-term budgets are all set for some sectors the the worry such as funding expenditure, research and also development, irreversible finances, etc. These budgets are useful for those industries where gestation duration is long i.e. Machinery, electricity, engineering, etc.
2. Short-term Budgets:
These budgets are normally for one or 2 years and are in the type of financial terms. The consumers items industries like sugar, cotton, textile, etc. Use short-lived budgets.
3. Current Budgets:
The duration of existing budgets is typically of months and weeks. This budgets relate to the current activities of the business. According to I.C.W.A., London. “Current budget is a budget which is created for usage over a short duration of time and also is connected to current conditions.”
B. Group on the basis of Functions:
1. Functional Budgets:
These budgets are associated to various functions, the variety of these budgets counts upon the size and nature of the business.
The generally used sensible budgets are:
(a) Sales Budget.
(b) Production budget including:
(i) raw material budget plan
(ii) Labour budget plan
(iii) tree utilisation Budget.
(c) purchase Budget.
(d) Cash Budget.
(e) Finance Budget.
2. Master Budget:
Various functional budgets are integrated into master budget. This budget is all set by the ultimate integration of separate sensible budgets. According to I.C.W.A., London, “The Master spending plan is the review budget combine its sensible budget.” Master budget is all set by the spending plan office and also it stays with the top level management. This budget is offered to co-ordinate the tasks of miscellaneous functional departments and also is also helping as a regulate device.
C. Group on the communication of Flexibility:
1. Addressed Budget:
The solved budgets are all set for a offered level of activity, the spending plan is prepared prior to the beginning of the financial year. If the jae won year start in January then the spending plan will be all set a month or two previously i.e. November or December. The alters in expenditure occurring out that the anticipated transforms will no be changed in the budget. Over there is a distinction of about twelve month in the budgeted and actual figures.
According come I.C.W.A., London, “Fixed spending plan is a spending plan which is draft to stay unchanged regardless of of the level of activity actually attained.” resolved budgets are suitable under static conditions. If sales, expenses and also costs can be forecast with higher accuracy then this budget can be advantageously used.
2. Functional Budget:
A flexible budget consists the a collection of budgets for various levels the activity. It, therefore, varies v the levels of activity attained. A flexible budget plan is all set after taking into factor to consider unforeseen changes in the conditions of the business. A fixed spending plan is defined as a spending plan which by recognizing the difference between fixed, semi- fixed and variable cost is design to adjust in relation to the level of activity.
The flexible budgets will be beneficial where level of task changes native time to time. As soon as the forecasting of demand is uncertain and the undertaking operates under conditions of shortage the materials, labour, etc., then the spending plan will be much more suited.
Advantages the Budgeting:
Budgets act together a device in the hands of management. They assist in improving the effectiveness of the business.
The following are several of the benefits of budgeting:
1. Improves Efficiency:
Budgeting help in improving effectiveness in the organization. Every human gets a target because that achievement. Because performance is evaluated versus the targets given, employees try to enhance their efficiency.
The working of various departments and sectors is correctly coordinated through the assist of budgeting. The budgets of various departments have a bearing top top one another. The co-operation of miscellaneous executives and subordinates is necessary for achieving budgeted targets.
The to plan of expenditure will certainly be systematic and also there will be an economic climate in spending. The finances will certainly be placed to optimum use. The benefits acquired for the issue will at some point extended to industry and then to national economy.
4. Consciousness amongst Employees:
Budgeting create consciousness amongst employees. By addressing targets for the employees, they are made mindful of their responsibility. Everybody knows what he is meant to do and also he proceeds with the work uninterrupted.
5. Time Bound:
The budgets are all set for particular periods and the performance is judged at the finish of these periods. The results of employees’ working can be well-known after a stated time.