Planning
Planning is the primary management function — it sets the direction for all other functions. Planning involves defining goals, establishing strategies, and developing plans to coordinate activities. ‘Failing to plan is planning to fail.’
Nature and Importance
Planning is future-oriented, intellectual, pervasive (all levels), continuous, and the primary function. Importance: provides direction, reduces uncertainty, minimises waste, facilitates coordination, encourages innovation, provides controlling standards. Limitations: cannot eliminate uncertainty, time-consuming, may create rigidity, based on assumptions.
Types of Plans
Strategic (long-term, organisation-wide, 3-5 years) vs Operational (short-term, department-specific, daily to 1 year). Directional (flexible guidelines) vs Specific (clearly defined targets). Standing plans (policies, procedures, rules — repeated use) vs Single-use plans (budgets, programmes — one-time).
Planning Process
Step 1: Establish objectives (SMART: Specific, Measurable, Achievable, Relevant, Time-bound). Step 2: Assess environment (SWOT, PESTEL). Step 3: Develop premises/assumptions. Step 4: Identify alternatives. Step 5: Evaluate alternatives (costs, benefits, risks, feasibility). Step 6: Select best alternative. Step 7: Formulate supporting plans (budgets, schedules). Step 8: Implementation and review.
SWOT Analysis
Strengths (internal advantages — skilled workforce, strong brand). Weaknesses (internal disadvantages — outdated technology, high debt). Opportunities (external favourable — growing market, new technology). Threats (external unfavourable — new competitors, economic downturn). SWOT matches internal capabilities with external possibilities.
MBO (Drucker, 1954)
Managers and employees jointly set specific, measurable objectives. Steps: set organisational → departmental → individual objectives → monitor progress → evaluate performance → feedback and reward. Improves motivation (participation), clarity (specific goals), and accountability (measurable outcomes). Limitations: paperwork, overemphasis on quantifiable objectives.
Decision Making
Choosing among alternatives. Rational model: identify problem → generate alternatives → evaluate → select → implement → monitor. Bounded rationality (Simon): limited information, managers ‘satisfice’ (first satisfactory option). Programmed (routine — use rules) vs Non-programmed (novel — require creativity). Conditions: certainty, risk, uncertainty.
Summary
Planning sets direction through goals, strategies, and action plans. SWOT aligns capabilities with environment. MBO aligns individual with organisational goals. Decision-making under various conditions completes the planning function.
Worked Example: SWOT Analysis of Nepal Airlines
| Internal Analysis | |
|---|---|
| Strengths • Government backing and national carrier status • Monopoly on some domestic routes • Established brand recognition in Nepal • Wide-body aircraft for international routes | Weaknesses • Aging fleet with frequent maintenance issues • Political interference in management decisions • Overstaffing and low employee productivity • Poor service quality vs private competitors • Financial losses requiring government subsidies |
| External Analysis | |
| Opportunities • Growing tourism industry (target 2.5M tourists) • New international airport (Pokhara, Bhairahawa) • Increasing diaspora travel demand • Regional connectivity (BIMSTEC, SAARC) | Threats • Competition from private airlines (Buddha Air, Yeti) • International carriers expanding Nepal routes • Fuel price volatility • EU blacklisting of Nepali airlines • Political instability affecting tourism |
Strategic implications: Nepal Airlines should leverage its government backing (strength) to modernise its fleet (addressing weakness) and capitalise on growing tourism (opportunity) while differentiating from private competitors (threat). The SWOT analysis reveals that internal weaknesses are the biggest challenge — without fixing management and fleet issues, external opportunities cannot be captured.
Types of Plans Comparison
| Aspect | Strategic Plans | Operational Plans |
|---|---|---|
| Level | Top management | Middle/Lower management |
| Time frame | Long-term (3-5 years) | Short-term (daily to 1 year) |
| Scope | Organisation-wide | Department/unit specific |
| Detail | Broad direction | Specific, detailed |
| Example | “Expand to 5 new cities by 2028” | “Hire 20 sales staff in Q1” |
Exam Tips
Tip 1: SWOT analysis with a real Nepali company is the most common planning question — prepare 2-3 companies (Nepal Airlines, Daraz, a local bank). Tip 2: The 8-step planning process must be in correct sequence — memorise the logical flow. Tip 3: MBO vs traditional management comparison is frequently asked — know 5+ differences. Tip 4: Decision-making conditions (certainty, risk, uncertainty) with business examples score high marks. Tip 5: SMART objectives — give examples: “Increase sales by 15% in FY 2082 through digital marketing” (specific, measurable, achievable, relevant, time-bound).