PLANNING UNIT III FORECASTING AND PLANNING

Forecasting and Planning:

Forecasting is the process of estimating the relevant future events based on analysis of their past and present behavior. According to Neter and Wasserman, “Business forecasting refers to the statistical analysis of the past and current movement in the given time series so as to obtain clues about the future pattern of those movements”.

Forecasting is one of the major ingredients of planning process since planning involves determination of the future course of action with the help of forecast made. But both are different. Planning involves many sub-processes and elements in order to arrive at decisions in terms of what is to be done, how and when. Thus, planning is more comprehensive and the commitment of actions is the basic ingredient of it. On the other hand, forecasting processes are used to project what will happen in future that may help in planning the future course of action. However, forecasting does not involve any commitment of actions.

What is the need for Forecasting?

Forecasting generates the planning process. It provides the knowledge of the planning premises within which managers can analyze their strengths and weaknesses and can take appropriate actions in advance. For example- if there is a change in consumers preferences for a substitute product, managers can take appropriate action to combat this problem by choosing a suitable product mix.

Thus, forecasting helps in effective planning by providing a scientific and reliable basis for anticipating future operations like sales, production inventory, supply of capital, etc.

INTRODUCTION TO PRINCIPLES OF MANAGEMENT II NATURE OF MGMT

Nature of Management

Management is a distinct activity having the following features or characteristics:

1.      Economic Resource:- Traditionally, management is considered as an important economic resource together with land, labor and capital. Efficient management is the most critical input in the success of any organized group activity. It is the force which assembles and integrates other factors of production, namely; labor, capital & materials. Inputs of labor, capital & materials do not by themselves ensure production; they require the catalyst of management to produce goods & services required by the society.

2.      Goal Oriented:- Management is a purposeful activity. It coordinates the efforts of workers to achieve the goals of the organization. The success of management is measured by the extent to which the organizational goals are achieved.

3.      Continuous Process:- Management is a distinct process consisting of functions like; planning, organizing, staffing, directing and controlling. These functions are so interwoven that it is not possible to lay down exactly the sequence of various functions or their relative significance.

4.      Integrative Force:- The essence of management is integration of human & other resources to achieve the desired objectives. All these resources are made available to those who manage. Managers apply their knowledge, experience & management principle for getting the results from the workers by the use of non-human resources.

5.      Intangible Force:- Management has been called as unseen force. Its presence is evidenced by the result of its efforts – orderliness, informed employees & adequate work output. Thus, feeling of management is result oriented.

6.      A Science and an Art:- Management has an organized body of knowledge consisting of well-defined concepts, principle and techniques, which have wide applications. So it is treated as a science. The applications of these concepts, principles & techniques required specialized knowledge & skills on the part of the manager. Since the skills acquired by a manager are his personal possession, management is viewed as an art.

7.      Universal Application:- Management is universal in character. The principles & techniques of management are equally applicable in fields of business, education, military, govt. etc; Henri Fayol suggests the principles of management would apply more or less in every situation.