Planning Test - 50

Planning is concerned with Looking forward. It is a proactive process that focuses on looking ahead and preparing for the future.

If organisation has different businesses and each business operates in a different environment then for each unit different strategy is required. Strategy for each unit can be termed as Sub strategy of corporate strategy.

Programmes are the detailed statement of a project which is prepared for various activities. It comprises of objectives, procedures, policies and rules etc.

Rule are norms for actions and non actions of employees. They are rigid in nature. The statement "No smoking in the factory" must be adhered. Thus it comes under Rule.

Under planning, various alternatives are listed and after evaluation of these alternatives the best alternative is selected. All this process involves mental exercise.

Plans are designed for short term goals and long term goals. Thus plans are of two types: 

1. Single use plans are used for only once
2. Standing plans are used over and over again

Importance or advantages of budgetary control are:

1. definite planning
2. enhanced efficiency
3. proper communication
4. control
5. co-ordination
6. delegation of authority
7. motivation
8. maximization of profit
9. forecasting credit needs and
10. uniform policy
11. optimum utilization of resources

Procedures suggest the exact manner in which a particular activity is to be done. They are the guidelines to the work that needs to be done to accomplish the organisational goals. They provide the management with exact channel in which the activities needs to be done to achieve the targets.

To perdict Cash inflows comes from sales and other revenue generating activities and cash outflows in the form of expenses over a period of time, a type of budget is prepared which is called cash budget.

Planning does not reduce profitability; instead, it helps organizations to maximize profitability by identifying opportunities and allocating resources efficiently.