Q.The Government of India in its budget for the financial year of 2021-22 reiterated its support for Electric Vehicle sector. The Government launched several schemes and incentives to boost their demand as well as to motivate manufacturers to invest in the same. Inspired by these incentives and concerned about the environmental impact of gas and diesel-powered engines, Nitin Kothari has set up an electric car manufacturing unit at Bhilwara. He set a target of earning Return On Investment of 10% in the first year itself and forecasted that the demand for electric cars will increase by 20 million in the next few years. The above case highlights the first two steps of the process of one of the important functions of management.

The function of management discussed here is Planning. The case describes the first two steps of the planning process: (i) setting objectives (earning a 10% ROI in the first year) and (ii) developing premises (forecasting a demand increase of 20 million electric cars).

The remaining steps required to complete the planning process are:

• Identifying alternative courses of action — listing all possible ways to achieve the target ROI and meet the forecasted demand.
• Evaluating alternative courses — weighing the pros and cons of each alternative against factors like cost, risk, and resources.
• Selecting an alternative — choosing the best course of action from the evaluated options.
• Implementing the plan — putting the chosen alternative into action. …

The scene is set in the electric vehicle sector, where government incentives and environmental concerns have prompted Nitin Kothari to launch an electric car manufacturing unit in Bhilwara. He has set a clear target: a 10% return on investment in the first year. He has also made a forecast: demand for electric cars will rise by 20 million units in the coming years. These two actions — setting an objective and making a forecast — are the opening moves in the planning function of management.

Planning is the most fundamental function of management. It involves deciding in advance what to do, how to do it, when to do it, and who is to do it. It bridges the gap between where we are and where we want to go. The process of planning consists of a sequence of steps. The case highlights only the first two steps:

1. Setting Objectives — Every organisation must first decide what it wants to achieve. Objectives are the end results that guide all other activities. Here, Nitin Kothari’s objective is a 10% ROI in the first year.
2. Developing Premises — This means making assumptions about the future. Forecasts about demand, costs, government policy, and market conditions are all premises on which plans are built. The forecast of a 20-million-unit increase in demand is a key premise.

Now, the question asks for the remaining steps required to complete the planning process. After setting objectives and developing premises, a manager must proceed through the following stages:

• Identifying Alternative Courses of Action — There is rarely only one way to achieve an objective. A manager must search for and list all possible courses of action. For example, Nitin could choose to manufacture only sedans, or SUVs, or both; he could target the domestic market or export; he could use in-house battery technology or outsource it. Each alternative must be identified.

• Evaluating Alternative Courses — Once alternatives are listed, they must be weighed against each other. The pros and cons of each option are examined in light of the premises and objectives. Which alternative offers the best chance of achieving the 10% ROI? Which is most feasible given the forecasted demand? This step involves careful analysis using quantitative and qualitative factors.

• Selecting an Alternative — This is the point of decision. The best alternative (or a combination of alternatives) is chosen. This becomes the official plan. For instance, Nitin might decide to manufacture a mid-range electric sedan using a partnership with a battery supplier, targeting the domestic market first. …