A plan is a commitment to a specific course of action for achieving certain results. Native this it follows that there are a number of plans because that achieving different goals. Managers, normally, go the failure of taking major programmes only as plans. Yet a variety of future courses of activity are likewise plans. Because that example, beginning the production of a new product or settings up a brand-new factory is taken into consideration plans. The plans might be classified follow to origin, use, purpose, type etc.

Some that the plans are in the type of standing plan while others are solitary use plans. Single use to plan are provided only once and also not over and over again whereas, repeat usage plans are provided again and again. For example, objectives, policies, strategies, rules, procedures etc., space standing plans since once formulated, they will be used for a long duration and repeatedly. On the various other hand, programmes and also budgets are solitary use plans due to the fact that once these are achieved, these space to be recipe again.

Following diagram illustrates various plans:

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Planning is a commitment come a particular course of activity undertaken to achieve particular results. It consists of several contents or derivative plans that are typically bound together. These contents are known as plans. There deserve to be several species of plans. That is basic to see a significant plan together as establishing a brand-new enterprise but some future process of plot are likewise plans. Any kind of course the future activity is a plan.




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Various plans might be classified into:

(1) standing plans and also

(2) Single-use plans.

1. Stand Plans:

Standing plans are made to be provided time and also again. This plans room formulated to overview managerial decisions and actions on troubles which space recurring in nature. Standing to plan are also called ‘repeated use’ plans because these carry out guidelines for actions to it is in taken in future. These plans administer unity and also uniformity of efforts in meeting recurring situations emerging at miscellaneous levels the the enterprise. This plans administer ready guidelines for tackling cases of recurring nature. These plans not only assist in co-ordination yet in reliable management also. Was standing plans encompass objectives policies, procedures, methods, rules and strategies.


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Standing to plan help an enterprise in the following ways:

(i) stand plans aid in achieving co-ordination in the enterprise. These plans bring consistency, uniformity and unity in efforts.

(ii) an elderly executives space able come delegate their job-related to subordinates due to the fact that procedures, rules, regulations etc. Have actually been laid down for taking crucial decisions.


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(iii) this plans assist in achieving goals also if these space vague, complicated or multi-dimensional. The policies, methods, rules, procedures etc. Carry out ready frames of referral whenever some an obstacle arises in taking decisions.

(iv) Standing plans are created after a the majority of thinking, discussions and also arguments. Whenever decisions are essential to it is in taken, these plans aid in fast decision making. These plans are great labour saving gadgets as they provide frames of references for tackling recurring situations.

(v) this plans help in much better administrative control. They provide rational bases for examining the outcomes of various efforts put by different persons working at miscellaneous levels of the enterprise.

2. Single-Use Plans:

These plans room made for dealing with non-recurring problems. Single-use plan are also referred to together ‘specific plans’ since these are meant to fix a specific problem. These plans room formulated to handle non-repetitive and also unique problem. This plans can not be provided again and also again; these become obsolete after ~ achieving your purpose. The instances of this plans are: projects, budgets, programmes.

Purpose or Mission:

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The mission or purpose identifies the basic role or task of one enterprise. Every organization has actually or should have a purpose so the its working becomes meaningful. The purpose or mission is assigned come every company by the society. The purpose of a company is to produce and distribute products or services, the objective of public functions department is come construct and maintain roads, the purpose of courts is come interpret and also apply laws and also so on. The function is a standing arrangement in a company organization which specifies its simple purpose in the irradiate of which various other actions are designed.

An organization’s purpose is composed of a long term vision of what it looks for to do and also the factors why the exists. The organization’s mission indicates exactly what tasks the organization intends to connect in now and in future.

The an easy questions to it is in answered by an organization are:

(i) What company we are in?


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(ii) What wall surface our organization be?

(iii) Who space our customers?

(iv) What are our values and beliefs?

(v) What will be our utility to the society? and so on.

Objectives:

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Objectives or goals are the ends towards which every activity is aimed-they room the outcomes to be achieved. Missions are a prerequisite because that planning. No to plan is possible without setting up of objectives. While enterprise goals are the straightforward plan that the firm, a department may additionally have its own objectives. Though departmental objectives will add to the attainment of companies objectives but the 2 sets of objectives may completely be different. Because that example, the target of the enterprise might be to earn a certain amount of profit, while selling its products.

Enterprise objectives influence the management philosophy and practice. Goals have better influence on the working of one organization. Every other species of to plan such together policies, strategies, procedures, rules, budgets etc. Aid in the attainment of proclaimed enterprise missions in an economical and also efficient manner. Objectives are regarded the future and are critical part that the planning process.

Policies:

Policies are basic statements or understandings which administer guidance in decision-making to assorted managers. These are standing plans giving guidance to administration in the conduct of managerial operations. Plans define limits within which decisions can be made and also decisions are directed towards the success of objectives. Policies also help in deciding issues prior to they end up being problems and making it unnecessary to analysis the same case every time it comes up. Managers have the right to delegate authority within the given parameters and can tho retain regulate over what their subordinates do. In the native of Koontz and Weihrich. “Policy is a means of encouraging discretion and initiative, but within limits.”

Strategies:

The indigenous ‘strategy’ has actually long been used in the content of military activity plans. That was used to state the grand plans made in the irradiate of what it is believed an adversely might or can not do. Supervisors now use techniques in the wider areas of organization operations. A strategy is a substantial and integrated arrangement designed to assure that company objectives are accomplished. The lengthy term missions of the enterprise space determined and also requisite resources are allocated and also deployed to achieve the desired results. The function of techniques is to identify a picture of the type of enterprise the is envisaged. Strategies carry out not effort to synopsis the programmes for achieving objectives yet they furnish a structure for guiding thinking and action.

Procedures:

Procedures space details of action or the guidelines for the achievement of business objectives. Procedures offer details of exactly how things are to it is in done. No room is left for judgment. These should help in implementation of policies. Procedures additionally determine the policy of responsibility and accountability. Follow to Terry, “A procedure is a series of related work that comprise the chronological sequence and also the established means of performing the work-related to be accomplished.”

Procedures have to be identified from policies. A procedure is a overview to activity whereas a policy is a guide to thinking. Policies are indict for taking decisions and procedures consists various methods to attain each phase of work. Policies offer border for translate in stimulate to check out that castle fit in a particular situation whereas steps are tailor-made and do not offer any scope because that interpretation.

A procedure is described with the aid of taking the instance of purchase raw materials for a concern:

(i) Every department needing raw products will send a acquisition requisition to the purchase department providing quantity specifications, form and quality products required.

(ii) The purchase department will certainly consolidate the requirements of miscellaneous departments. A combined order is prepared and sent to the suppliers. The acquisition department maintains the perform of suppliers and also regularly collects quotations from them. The copy the the purchase order is also sent come the receiving and inspecting department.

(iii) The receiving room compares the goods received through the order placed. Any discrepancy in quantity, quality, etc. Is report to the acquisition department.


If the goods are proper and also according to the order climate a report around it is it is registered to the purchase department.

(iv) after receiving a satisfactory report native receiving and also inspecting department, purchase department forwards the bill to accountancy department for payment.

(v) accounting department check the bill and also then makes the payment to the supplier.

Whenever a product purchase is required then the very same procedure is followed. Different tasks require different procedures and also they are adhered to in the very same way.

Advantages that Procedures:

1. Basis that Control:

Procedures provide a detail of sequences come be complied with for perfect a task. It can be viewed whether the work is proceeding follow to the setup or not. Steps are offered as a manage mechanism because any discrepancy in completing the work can be established at once.


2. Consistency:

Procedures help to for sure consistency and also uniformity of performance. When the actions are established, they have the right to be likewise used again and also again.

3. Standardization:

The standardization of procedures reduces the require for decision-making in comparable situation. Wherever a job is to it is in performed, the very same procedure will be complied with for law it. This increases efficiency in doing a work.

4. Co-ordination:

Procedures establish a sequence to be adhered to for every work. This helps in coordinating the activities of different departments or sections since same actions will be followed by all of them.

Limitations:

1. Rigidity:

Rigidity is complied with in complying with procedures. They are continuously offered over and over again. This uniform initiative and discoveries.

2. Constant Review:

The same measures cannot be followed for lengthy terms. The transforming situations necessitate the review of procedures. To store them efficient they have to be constantly updated. They need to be suitably adjusted to suit the present situation.

Rules:

A rule is a arrangement that lays under a required course of action with regard to a situation. A dominance is in the nature that a decision do by management about what is to be done and what is no to be done in a particular situation. A ascendancy is definite and rigid and allows no deviation or discretion come the subordinates. Prefer procedures, rules perform not prescribe a chronological sequence of measures to it is in taken to attain a provided objective. A dominance may or might not be a component of the procedure. A rule such as ‘No cigarette smoking in the factory’ will not form a part of the procedure. On the other, a preeminence to do payment in ~ 21 days will be the component of a procedure.

“Rules prescribe the borders of agree behaviour that the members that the organization. Rule will enable managers come predict the behaviour of their subordinates, just how will they plot in a offered situation. Rules channel the behaviour of workers in a desired direction. Workers periodically resent rules for stifling your actions. The problem does no lie through the rules, but the manner in which castle are put to the workers. Management should shot to frame only those rules which space necessary and those also should likewise be explained properly to the employees.

Programmes:


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A programme is a succession of activities designed come implement policies and achieve objectives. That is devised to meet a certain situation. Programme might be taken together a mix of policies, procedures, rules, budgets, task assignments, etc. Arisen for the specific purpose of transferring out a certain course of action. Separate programmes are all set for accomplishing various tasks. The same programme may not be supplied for achieving various other goals. It is a solitary use arrangement laid under for brand-new and non-repetitive activities.

In the indigenous of Koontz and O’Donnell, “Programmes space complexes that goals, policies, procedures, rules, task assignment, actions to it is in taken, resources to it is in employed and other elements necessary to bring out a provided course that action.” come quote George Terry, “A programme deserve to be defined as a considerable plan that consists of future usage of various resources in an integrated pattern and establishes a succession of compelled actions and time schedules because that each in bespeak to achieve the traditional objectives.”

Characteristics that Programmes:

The adhering to are the characteristics of programmes:

1. A programme is a solitary use considerable plan. That is created to achieve a details purpose only. When the score is achieved the programme will certainly not be used again.

2. A variety of small to plan are ready to build a programme. The programme for enhancing sales by 20 every cent may require a number of small plans to be formed.


3. A programme is all set to accomplish organisational goals.

4. It offers a time limit up to which the programme is to it is in implemented. A strictly time table is fixed for doing a details task.

5. A programme should ensure combination planning efforts.

Advantages the Programmes:

Following are the advantages of programmes:

1. Program lay under a course of action to be adhered to for afford organisational goals. The details of plot to it is in taken and time schedule to be followed are all determined in advance. This permits smooth implementation of plans.

2. Program are helpful in creating much better co-ordination in the organisation. The policies, procedures, rules, budgets, etc. Room in order to provide proper co­ordination.

3. The programmes space action-oriented to plan and provide motivation to employees.

Limitations the Programmes:

1. If the programmes room not very closely framed, over there is a danger of your being failing. The plot to it is in taken and also the actions to be complied with may be effectively selected. Together lapses in ~ the initial stage will do the programmes ineffective.

2. Over there is constantly a danger of insufficient co-ordination. In instance various elements of programmes favor policies, procedures, rules, etc. Space not well balanced properly climate the programmes will certainly not be effectively coordinated.

3. The significant programmes have a variety of sub- programmes. All the sub-programmes must be successfully lugged out for completing the main programme. Any kind of lapse in implementing a small programme deserve to endanger the totality exercise.

Budgets:

A budget plan is the monetary or/and quantitative expression of organization plans and policies come be gone after in the future period of time. The term budgeting is offered for prepare budgets and also other procedures for planning, co-ordination and control of service enterprise.

According to academy of Cost and Works Accountants, London, “A budget plan is a gaue won statement and /or quantitative statement prepared prior to a defined duration of time, that the plan to be pursued throughout that duration for the purpose of attaining a offered objective.” In the native of George R. Terry, “A budget is an estimate of future needs, i ordered it according come an orderly bases, extending some or all of the activities of an enterprise for a definite period of time.” In the native of Crown and Howard a budget plan has been characterized as, “A pre-determined statement of monitoring policy throughout a given duration which gives a traditional for comparison v the outcomes actually achieved.”

Characteristics that Budget:

1. A budget should be based upon past figures. The possibilities in future should likewise be taken right into account.

2. A spending plan be flexible so that it is modified follow to the demands of the situation. Rigidity in budgets occasionally creates difficulties.

3. The persons at various levels should be associated in preparing a budget. This will assist in getting willing co­operation that everybody if implementing budgets.

4. A budget should it is in a certain statement. The amounts or monetary details should be plainly mentioned in a budget.

5. There need to be an energetic involvement the top management while preparing a budget.

Need because that Preparing Budgets:

Budgeting is vital for plan planning and control. The budgets space essential due to following reasons:

1. Budgets are required for formulating future policies.

2. Lock are essential for ensuring co-ordination among various department or segment of an enterprise.

3. Budgets act as a tool of control in the hands of management. Budgets addressed for various persons will be the criterion addressed for assessing performance.

4. Budgets act as an ideas for assorted employees. Once targets for performance are solved then persons will try to achieve them at the earliest. They have been offered a goal for which they have to work.

Classification and types of Budgets:

The budgets are usually classified according to their nature. The following are the varieties of budgets which are commonly used.

A. Group on the communication of Time:

1. Long-term budgets.

2. Short-term budgets.

3. Present budgets.

B. Category on the communication of Functions:

1. Functional or Subsidiary Budget.

2. Master Budget.

C. Group on the basis of Flexibility:

1. Addressed budget.

2. Functional budget.

A. Category According to Time:

1. Long-term Budgets:

The budgets are ready to depict a irreversible planning that the business. The period of irreversible budgets varies between five come ten years. The permanent planning is excellent by the optimal level management; that is not usually known to reduced level the management. Irreversible budgets are all set for part sectors the the concern such as resources expenditure, research and also development, permanent finances, etc. These budgets are advantageous for those sectors where gestation duration is lengthy i.e. Machinery, electricity, engineering, etc.

2. Short-term Budgets:

These budgets are normally for one or two years and also are in the type of financial terms. The consumers products industries choose sugar, cotton, textile, etc. Use short-term budgets.

3. Current Budgets:

The period of existing budgets is usually of months and also weeks. This budgets relate come the current activities of the business. Follow to I.C.W.A., London. “Current budget is a budget which is created for usage over a short duration of time and also is connected to existing conditions.”

B. Category on the communication of Functions:

1. Functional Budgets:

These budgets are related to various functions, the variety of these budgets counts upon the size and nature that the business.

The frequently used functional budgets are:

(a) Sales Budget.

(b) Production spending plan including:

(i) life material budget plan

(ii) Labour spending plan

(iii) plant utilisation Budget.

(c) acquisition Budget.

(d) Cash Budget.

(e) Finance Budget.

2. Master Budget:

Various practical budgets are combined into understand budget. This budget plan is ready by the ultimate integration that separate useful budgets. Follow to I.C.W.A., London, “The Master budget is the an overview budget incorporating its practical budget.” Master spending plan is all set by the spending plan office and also it stays with the top level management. This budget is provided to co-ordinate the tasks of assorted functional departments and is also helping as a manage device.

C. Classification on the basis of Flexibility:

1. Solved Budget:

The addressed budgets are all set for a offered level the activity, the budget is prepared prior to the beginning of the gaue won year. If the financial year start in January climate the spending plan will be prepared a month or two previously i.e. November or December. The transforms in expenditure emerging out the the anticipated alters will not be readjusted in the budget. There is a difference of about twelve months in the budgeted and also actual figures.

According to I.C.W.A., London, “Fixed budget is a budget plan which is designed to remain unchanged regardless of of the level of activity actually attained.” fixed budgets are suitable under revolution conditions. If sales, expenses and costs can be prediction with higher accuracy climate this budget can be advantageously used.

2. Functional Budget:

A flexible spending plan consists of a collection of budgets for various levels that activity. It, therefore, varies v the level of task attained. A flexible budget plan is ready after taking into consideration unforeseen changes in the conditions of the business. A fixed spending plan is identified as a spending plan which by recognizing the difference in between fixed, semi- fixed and also variable cost is draft to adjust in relationship to the level of activity.

The versatile budgets will certainly be beneficial where level of task changes native time to time. When the forecasting of need is uncertain and also the undertaking operates under problems of shortage of materials, labour, etc., then the budget will be more suited.

Advantages the Budgeting:

Budgets act as a tool in the hand of management. They help in enhancing the efficiency of the business.

The following are few of the benefits of budgeting:

1. Improves Efficiency:

Budgeting help in improving efficiency in the organization. Every human being gets a target because that achievement. Because performance is evaluated against the targets given, employees try to enhance their efficiency.

2. Coordination:

The functioning of different departments and sectors is properly coordinated v the help of budgeting. The budgets of various departments have actually a bearing on one another. The co-operation of various executives and also subordinates is vital for achieving budgeted targets.

3. Economy:

The plan of expenditure will certainly be systematic and there will certainly be an economic climate in spending. The finances will certainly be put to optimum use. The benefits acquired for the issue will ultimately extended come industry and then to nationwide economy.

4. Consciousness among Employees:

Budgeting creates consciousness among employees. By solving targets for the employees, they space made conscious of your responsibility. Everybody to know what the is expected to do and also he proceeds with the work-related uninterrupted.

5. Time Bound:

The budgets are all set for particular periods and also the power is judged in ~ the end of this periods. The results of employees’ working have the right to be well-known after a stated time.