Q1. Explain planning and the types of planning premises .
Ans – Planning is the process which lays down an organisation’s objectives and develops various courses of action to achieve those objectives.
Planning premises are assumptions about the expected environmental and internal conditions in future on the basis of which plans are formulated.
Planning premises are classified as-
- External premises- exists in organisation’s environment which either present an opportunity or threat to the organisation.
- Internal premises- relevant to plan formulation which present strengths or weaknesses of the organisation.
- Tangible premises – can be expressed in quantitative terms like monetary unit, etc.
- Intangible premises– are of qualitative nature and cannot be translated into quantity.eg- image of the organisation.
- Controllable premises– can be controlled by an organisation’s actions.
- Uncontrollable premises– are mostly external and cannot be controlled.
Q2 . How does long term planning differ from short term planning?
Ans– Planning is concerned with future course of action. It may either be long term or short term.
There are following differences between long term and short term planning –
- Long term planning is of strategic nature and involves 3-5 year period. short term planning is 1 year period.
- Long term planning usually covers all functional areas of business and undertaken within long term future environmental scenario. High emphasis is placed on environmental factors. Short term planning directly and immediately affects functional areas- production, marketing, finance.