A plan is a predetermined course of action to be taken in the future. It is a document containing the details of how the action will be executed, and it is made against a time scale. The goals and the objectives that a plan is supposed to achieve are the pre-requisites of plan. The setting of the goals and the objectives is the primary task of the Management without which planning cannot begin.
Planning means taking a deep look into the future and assessing the likely events in the total business environment and taking a suitable action to meet any eventuality. It further means generating the courses of actions to meet the most likely eventuality. Planning is a dynamic process. As the future becomes the present reality, the course of action decided earlier may require a change. Planning, therefore, calls for a continuous assessment of the predetermined course of action versus the current requirements of the environment. The essence of planning is to see the opportunities and the threats in the future and predetermine the course of action to convert the opportunity into a business again, and to meet the threat to avoid any business loss.
Planning involves a chain of decisions, one dependent on the other, since it deals with a long term period. A successful implementation of a plan means the execution of these decisions in a right manner one after another.
Planning, in terms of future, can be long-range or short-range. Long-range planning is for a period of five years or more, while short-range planning is for one year at the most. The long-range planning is more concerned about the business as a whole, and deals with subjects like the growth and the rate of growth, the direction of business, establishing some position in the business world way of a corporate image, a business share and so on. On the other hand, short-range planning
is more concerned with the attainment of the business results of the year. It could also be in terms of action certain business tasks, such as launching of a new product, starting a manufacturing facility, completing the project, achieving intermediate milestones on the way to the attainment of goals. The goals relate to long-term planning and the objectives relate to the short-term planning. There is a hierarchy of objectives which together take the company to the attainment of goals. The plans, therefore, relate to the objectives when they are short-range and to goals when they are the long-range.
Long-range planning deals with resource selection, its acquisition and allocation. It deals with the technology and not with the methods or the procedures. It talks about the strategy of achieving the goals. The right strategy improves the chances of success tremendously. At the same time, a wrong strategy means a failure in achieving the goals.
Corporate business planning deals with the corporate business goals and objectives. The business may be a manufacturing or a service; it may deal with the industry or trade; may operate in a public or a private sector; may be national or international business. Corporate business planning is a necessity in all cases. Though the corporate business planning deals with a company, its universe is beyond the company. The corporate business plan considers the world trends in the business, the industry, the technology, the international markets, the national priorities, the competitors, the business plans, the corporate strengths and the weaknesses for preparing a corporate plan. Planning, therefore, is a complex exercise of steering the company through the complexities, the difficulties, the inhibitions and the uncertainties towards the attainment of goals and objectives.