Business Studies - Planning (Chapter 4)

This set of vocabulary flashcards covers the fundamental concepts of business planning, including its definitions, features, process steps, limitations, and the various types of plans used in organizational management.

Planning

The basic managerial function of deciding in advance what to do and how to do it, seeking to bridge the gap between where we are and where we want to go.

Primacy of Planning

The principle that planning precedes all other functions of management and provides the framework within which they are performed.

Planning Cycle

A continuous process where a plan is framed, implemented, and subsequently followed by another plan on the basis of new requirements and conditions.

Futuristic Planning

A forward-looking function based on forecasting that involves peeping into the future, analyzing it, and predicting it to meet future events effectively.

Forecasting

A technique of gathering information to anticipate future events and conditions, such as demand for a product, policy changes, interest rates, or tax rates.

Planning Rigidity

A limitation where well-defined plans with specific time frames may prevent managers from being able to cope with changed circumstances.

Planning Premises

Assumptions made about the future that serve as the base material upon which plans are drawn, including forecasts, existing plans, or past information.

Single-use Plan

A plan developed for a one-time event or project designed for non-recurring situations, such as budgets, programmes, and projects.

Standing Plan

A plan used for activities that occur regularly over a period of time to ensure internal operations run smoothly, including policies, procedures, methods, and rules.

Objectives

The desired future position or end results that management seeks to achieve, which should be measurable in quantitative terms and within a given time period.

Strategy

A comprehensive plan for accomplishing an organization's objectives involving determining long-term objectives, adopting courses of action, and allocating necessary resources.

Policy

General statements that guide thinking or channel energies toward a particular direction, providing a basis for interpreting strategy and making decisions.

Procedure

Routine steps specified in a chronological order that detail the exact manner in which a work is to be performed.

Method

The prescribed way or manner in which a specific task, comprising one step of a procedure, is to be performed to save time, money, and effort.

Rule

A specific statement that informs exactly what must or must not be done, allowing for no flexibility, discretion, compromise, or change.

Programme

A detailed statement about a project that outlines the objectives, policies, procedures, rules, tasks, and resources required for implementation.

Budget

A statement of expected results expressed in numerical terms, quantifying future facts and figures to serve as both a planning instrument and a control device.

Follow-up Action

The step in the planning process concerned with monitoring plans to ensure they are being implemented and activities are performed according to schedule.

Risk-return Trade-off

A evaluation variable in financial plans where more risky investments are weighed against the likelihood of providing higher returns.

Cash Budget

A tool showing estimated cash inflows and outflows over a given period to determine the net cash position: $\text{inflows} - \text{outflows} = \text{surplus or deficiency}$.