Planning Test - 52

The sixth step involved in planning process is the Formulating derivative plans.

Formulating derivative plans: After selecting the best course of action, the management has to formulate the secondary plans to support the basic plan. 

Planning is called a mental function because it is mathematical calculation.

Planning is primarily a mental activity because it requires the planner to think about the facts of the project being planned, which may be a few or many, depending on the scope of the project.

Planning is an intellectual process. The planners make prediction for future by using their expertise, innovative ideas and creativity. Thus planning promotes creativity.

Implementation of plan means putting the plans into action. It can only be possible after selection of an alternative.

It is not possible to change the pre decided plans. With the changing situations, plans sometimes fail to give positive results. Thus we can say plans lead rigidity.

Rules are rigid, stringent and compulsive in nature. They must be followed and if are not followed then strict action can be taken. A fine or penality can be charged on violation.

Business Unit Strategy is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

The master budget is the sum total of all the divisional budgets that is prepared by all the divisions. Further, it also includes the financial planning, cash-flow forecast and budgeted profit and loss account and balance sheet of the organization.

Strategy is a comprehensive plan of the organisation and is influenced by business environment. Example:  sales promotion techniques, choice of advertising media etc.

Choice of advertising media is concerned with Strategy.

Programmes are a combination of goals, policies, procedures, rules. These are made to get a systematic working in the organisation.  e.g. development of new product, construction of shopping mall etc.