Co – Operative form of Business
COMPANIES: Meaning:
II) Single Use plan a) Programmes
A programme is a plan of action - indicating what work is to be done to carry out a particular objective. For example to popularize the products there-is a need for an advertising programme. Again, to improve the skills of personnel in performing their jobs; there is required a 'training and development' programme. For undertaking the manufacturing activities, there is a production programme, and so on. b) Budgets
A budget is a plan, which states expected results of a given future period in numerical terms. It is a plan of action or blueprint designed to achieve a specific goal. It may be expressed in time, money, or other measurable units. It is a projection defining the anticipated costs and results and the allocation of resources. It may reflect capital outlay, cash flow, production and sales targets. It expresses organizational objectives in financial and physical units. For example, man-hours, machine hours, sales-targets, expense estimates in money terms or revenue estimates in money terms etc.
There are various types budgets according to their nature. These are Variable Budgets or Flexible Budget
These budgets vary according to the organization output. Programme Budget
In this budget, the agency identifies goals, develops detailed programmes to meet the goals, and estimates the cost of each programme.
Zero – base budget
It is a combination of programme and variable budget. c) Schedules
A schedule is a time – table of work. It specifies the date when a task is to begin and the time needed to complete each task. The starting and completion date for each part of the programme are specified in the time schedule.
Three main elements are involved in planning a schedule. Identify activities or tasks,
Determine their sequence, and
d) Projects
A project is a complex scheme for the investment of resources, which can be analyzed and evaluated as an independent unit. The main features of a project are as follows.
It is a non – recurring plan
It has a specific mission or objective
It involves time bound plan with a long time. It has a clear termination point.
e) Methods
Methods specify the detailed and best manner of perform a particular step, comprised in a procedure. Methods are formalized and standardized ways of accomplishing repetitive and routine jobs. They are designed to keep operations running on planned and desired lines, to prevent confusion and adhocism and to ensure economy and efficiency. Methods provide detailed and specific guidance for day – to – day operations. Methods are helpful in the simplification, standardization and systematization of work. They serve as uniform norms to guide and control operations and performance. Standard methods represent the best way of performing jobs.
Summary of Various Plans
Name of Plan Definition Nature Example
Objective Goal or target to be achieved Basis of all plans Increase sales by 10 per cent
Policy General statement or understanding to guide thinking
Boundary within which decisions are to be made
Employees are to be promoted on the basis of seniority
Strategy
Action plan to face environmental uncertainties
Relates the organisation to its environment
Combative advertising to face price cuts by competitors
Procedure
Manner in which activities are to be performed
Sequence of steps Purchase procedure
Rule
States what should or should not be done in a given situation
Rigid plan, no scope for discretion
No smoking in the factory
Programme
Combination plan for goal achievement, non- repetitive
States activities and resources to be undertaken
Installation of a computer
Schedule Time-table for activities Specifies priority of work and time for each activity
Complete installation of computer within 3 months w.e.f. Jan, 1989.
Budget
Statement of expected results and resources to be used
Quantitative and time
bound plan of action Produce 10,000 tonnes of sugar next year Project Cluster of interrelated activities-a separate unit Scheme for deployment of resources Construction of a flyover
(a) Differences between policies and strategies. Sl.
No Policies Strategies
1 Guides to thinking and actions of those who make decisions Provide direction in which human and physical resources will be deployed 2 Guidelines for making decisions in repetitive situations Contingent decisions
3 Taken for problems about which facts are known. Only time of occurrence is not specific
Taken for problems where alternatives cannot be analysed in advance.
4 Implementation of policy can be delegated Implementation of strategy cannot be delegated as it requires last-minute executive decision
5 Standing plan or long lasting Non-repetitive plans, may need frequent revision 6 Not based specially on the moves of competitors Formulated in the light of competitors’ moves
(b) Differences between policy and procedure. Sl.
No Policies Procedures
1 General guides to thinking and decision-
making Operational guides to action
2 Expressions of management’s attitude
towards certain issues Systematic ways of handling routine events 3 Leave room for executive discretion and judgement Leave little room for reflection and deviation
4 Lay down broad area Provide route through the area
5 Provide bridge between purpose and performance Provide bridge between activities and outcomes 6 Provide norms for thinking and discretion.
Broad, general and flexible
Detailed and rigid. More specific. Provide manner of doing something
7 Form part of strategies Serve as tactical tools
8 Formulated mainly by top management Laid down at middle and lower levels 9 Derived from objectives of the organisation Specifies chronological sequence of steps. Derived from policies
(c) Difference between Policies and Rules Sl.
No Policies Rules
1 A general statement A most specific statement
2 Guide to decision-making Guide to behaviour
3 Lays down management attitude Indicates what should or should not be done 4 Flexible, may have some exceptions Rigid, no exceptations or deviations
5 Provides discretion during implementation Provide no scope for discretion
(d) Distinction between Objectives and Policies Sl.
No Objectives Policies
1 Ends towards which all activities of an organisation are directed
Guidelines which facilitate the accomplishment of predetermined objectives
2 Determine what is to be done Determine how the work is to be done 3 End-points of planning Means by which objectives are to be
achieved
4 Determined by top management Formulated at top and middle levels 5 One objective may require more than one policy Every policy related to one particular objective 6 Derived from philosophy of business Derived from objectives
7 Indicate the destination Provide the route
8 Basic to the very existence of an organisation Not basic to existence
2.9. Objectives
2.9.1. Meaning
Every organization exists to achieve some purposes, which is called its objectives. Objectives are the results which management wants to achieve through the making and implementation of a plan.
2.9.2. Definition
“Objectives are goals established to guide the efforts of the Company and each of its components”.
2.9.3. Nature/Characteristics of Objectives 1.An organization has multiple objectives
Objectives are numerous. Even the mission and broad major enterprise objectives are normally multiple. For example, profits, survival, growth, service to society etc… This multiplicity of objectives creates the problem of fixing priorities among different objectives and of harmonizing them.
2.Objectives have time Span
An organization must have short term, middle term and long-term objectives. Short term and middle term objectives are means of achieving long term objectives. All these objectives need to be integrated so that they reinforce each other.
3 Objectives are either tangible or intangible
Some of the objectives are tangible such as areas of market standing, productivity, and physical and financial resources are quantifiable values available. Other areas of objectives are not readily quantifiable and are completely intangible which are qualitative natures, such as manager’s performance, worker’s morale, public responsibility etc…
4.objectives form a hierarchy
Objectives form a hierarchy, ranging from the broad aim to specific individual objectives. Generally, a top-level management of an organization assigning a part of a mission to a particular department. Then the mission is subdivided into few parts and assigned among sections and individuals. This process creates hierarchy of objectives. Objectives at all levels in the organization are interrelated and form a network.