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This document discusses the importance of planning premises in effective planning. Planning premises are the anticipated environments and conditions that plans will operate in, including assumptions about the future economic, technological, social, political and internal environments of an organization. They emphasize that plans will be implemented in both internal and external environments of the future. Effective managers anticipate how these future environments may affect plans by forecasting elements like changes in technology, social conditions, and political factors. The document also describes different types of planning premises and levels of predictability, as well as methods for forecasting economic conditions, technology, sales, and social/political environments.
This document discusses the importance of planning premises in effective planning. Planning premises are the anticipated environments and conditions that plans will operate in, including assumptions about the future economic, technological, social, political and internal environments of an organization. They emphasize that plans will be implemented in both internal and external environments of the future. Effective managers anticipate how these future environments may affect plans by forecasting elements like changes in technology, social conditions, and political factors. The document also describes different types of planning premises and levels of predictability, as well as methods for forecasting economic conditions, technology, sales, and social/political environments.
This document discusses the importance of planning premises in effective planning. Planning premises are the anticipated environments and conditions that plans will operate in, including assumptions about the future economic, technological, social, political and internal environments of an organization. They emphasize that plans will be implemented in both internal and external environments of the future. Effective managers anticipate how these future environments may affect plans by forecasting elements like changes in technology, social conditions, and political factors. The document also describes different types of planning premises and levels of predictability, as well as methods for forecasting economic conditions, technology, sales, and social/political environments.
One of the essential and often overlooked steps in effective and
coordinated planning is Premising.
Planning Premises are the anticipated environments in which the plans are expected to operate. Planning premises include assumptions or forecasts of the future and known conditions that will affect the course of the plans. Premising is recognition that plans operate in an environment both internal and external to the enterprise. It thus emphasizes the long known fact that management is an open- system approach. It is not enough-for the Manager to be responsive to the present environment. s Plans operate in the future an effective manager should anticipate the environment in which his plan will operate and forecast those elements in the environment! which will affect his plans. ".g.# $hanges in %echnology! &ocial conditions! Political factors etc. It is sometimes said! the successful manager is not one who 'ust responds to changes as they occur! but one who will rather forecast change. It is often also said that a successful manager is not one who dances to others tunes! but makes others to dance to his tunes by his ability to foresee changes in the environment much before they occur. %his does not mean that everything can be predicted. %here are in addition short and long range! "conomic! %echnological! &ocial and Political and even ethical changes that will affect what will or can be done in the near or far future. ( Planning Premises depending on the degree of Predictability )uite Predictable *easonably Predictable +npredictable ".g.# Population ,rowth, ".g.# Price -evels! ".g. &eptember ll ,ross .ational Product changes Population &hift and ttack on /%$! $ertain %echnological /ar on Ira0 "tc. %ypes of Planning Premises# "xternal Premises ,eneral "nvironment Product Market 1actor Market "conomic %echnological &ocial Political Internal Premises are those! which are absolutely under the control of management like investment in plant and machinery! inventory etc.
%angible Intangible /hich can be 0uantified which cannot be 0uantified and seen or felt. 2 Degree of controllability
+ncontrollable &emi $ontrollable $ontrollable ".g.# ,rowth of Population ".g.# 1irm ssumptions of -argely decided 1uture price levels! Political the share of the market. 3y company "nvironment! 3usiness$ycles %ype of -abour %urnover! Management. Types of Forecasting "conomic 1orecasting# 1airly reliable economic! premises can be obtained from the forecasts of employment! productivity! national income! and gross national income that are available to the planners. Most! economic forecasts are derived from calculating gross national product. ,ross national product is calculated by forecasting population! productivity increases! and unemployment percentage and average workweek available.
3ut problems occur in estimating such components of ,.P and government purchases! personal consumption expenditures! business fixed and inventory investments! residential construction and other investments. fter studying broad forecasts of national and regional economic trends! a company should translate them into their impact on its industry and on itself. %his re0uires two basic estimating procedures. One is the 4%op-5own procedure6 and the other is the 43ottom-+p Procedure6. 7 Technological Forecasting One of the more interesting aspects of premising in the recent years is the keen interest being shown on the %echnological 1orecasting. &ince the pace of %echnological changes are so rapid and drastically affecting the products and processes of several firms! the firms are emphasizing more on regular and complete %echnological forecasts affecting their industry. ".g.# *ate of product obsolesces is very high in software industry and in steel where the cost of production per tonne of steel has drastically come down by raising the appropriate technology. %he 1ollowing are some of the commonly used methods for forecasting technological changes# Opportunity Oriented %echni0ues#
%his %echni0ue looks at the future and raises the 0uestion as to whether a certain product may be made obsolete by a new development. If yes! is there any %echnological breakthrough that might be expected which would solve a problem seen to exist in the development of a certain product. ".g.# 8$* has become obsolete with the advent of 8$5 and 585. &imilarly traditional cameras are on decline with the advent of 5igital $ameras. One might forecast when it would be possible to economically desalinate the seawater to overcome the drinking water problem. ,oal Oriented %echni0ue# In this case a decision is made to reach a certain goal and then analysis is made to identify the technological needs re0uired to achieve the goal. ".g.# %he +& deciding to put the man onto the moon in (9:;. < 5elphi %echni0ue# &ocial and political 1orecasting# %his has become increasingly relevant and important with the process of -P,. If Mc5onald wants to introduce its product in the Muslim countries! it has to think twice about it because the culture doesn=t allow the people to consume pork. &imilarly political factors also have a significant impact on the commercial policies like the labor laws! income tax policies etc. &ales 1orecast# One of the ma'or planning premises in the typical business enterprise is the sale forecast. &ales forecast is very important because it sets the framework on which most internal plans are constructed and it must be regarded as the dominant Planning Premise of an "nterprise. Methods of &ales 1orecasting
>ury of "xecutive &ales 1orce +sers "xpectation +sers Pro'ection &tatistical Opinion Method $omposite Method of Past sales Methods ?
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