Business Studies · Ch 4 — Planning
Key Terms
Key Terms
- Planning – Deciding in advance what to do and how to do it; one of the basic managerial functions. It bridges the gap between where the organisation is and where it wants to go.
- Objectives – The desired end results the management seeks to achieve; the ends towards which all managerial activity is directed, set for a given time period.
- Goals – The targets an organisation strives to reach; they set what must be achieved and provide the standard against which actual performance is measured.
- Decisions – The choices made from among alternative courses of action; planning requires decision making because it involves choosing the best alternative.
- Standards – The goals or benchmarks laid down through planning, against which actual performance is later measured during controlling.
- Controlling – The managerial function of comparing actual performance with the standards set by planning and correcting deviations; planning is a prerequisite for it.
- Premises – The assumptions about the future on which a plan is based; the base material, such as forecasts, upon which plans are drawn.
- Assumptions – Beliefs about future conditions taken as given while planning; all managers involved in planning should share the same assumptions.
- Alternatives – The different possible courses of action available for achieving an objective; planning presupposes their existence and requires choosing among them.
- Strategy – A comprehensive plan prepared by top management for accomplishing the organisation's objectives, taking resource allocation, priorities, the business environment and competition into account.
- Policy – A general statement that guides thinking and channelises energies in a particular direction; the organisation's general response to a recurring situation.
- Procedure – The routine, chronological steps laid down for carrying out an activity, generally within a broad policy framework. …