Lecture 5 enterprise activity planning

1. Methodological Fundamentals of Planning

Planning as an important function of the business (organisation) operation is an objectively necessary process of defining the activity purposes and also the means, ways and conditions of their achievement for a certain period. Planning unites structural subsections of the enterprise (the organisation) with the activity overall aim, gives unidirectional approach and coordination to all processes that gives the chance to use most fully and effectively the available resources, to solve professionally various administrative problems.

Planning is carried out according to certain specific principles.

The purposes choice and grounding is planning starting point. As a rule, there are the following main objectives:

Scientific and technical;

Manufacturing and technological;

Economic;

Social;

Ecological.

Systematic approach requires coverage by planning of all fields of the enterprise (organisation) activity; all tendencies, changes and feedbacks in its system.

The continuity means the support of continuous planned prospect and periodic changes of planning horizon; long -, medium- and short-term plans interconsistency; timely correcting perspective and current plans.

The optimality of resources use focuses on market conditions requirements, introduction of social, scientific and technical and organizational progress achievements, the best use of resources.

Equilibration provides necessary and sufficient quantitative correspondence between the basic plan sections and indicators, coordination between necessary and available resources.

Adequacy of planning system to the conditions of objects activity requires constant revising and improving planning methods, organising the process of the enterprise (organisation) plans working out.

Depending on the duration of the period, planning is subdivided into two kinds: perspective planning and current one.

Perspective planning can be long-term and medium-term. The long-term plan displays mainly the enterprise (organisation) development strategy, and the medium-term plan is more detailed strategic plan for several years of the enterprise (organisation) activity.

Current planning consists in working out plans at all levels of the business (organisation) management for all directions of its activity for shorter periods (a year, a half-year, a quarter, a month). Current planning version is calendar operation planning.

The enterprise (the organisation) planning methods should consider external managing conditions, the profile of the enterprise activity and a kind of the plan, which is being developed.

The description of specific planning methods

The resource planning method with taking into account market management conditions and available resources usually is applied for the enterprise monopoly position or under conditions of weak competition. Tasks of this kind of planning are defined depending on the available enterprise resources, i.e. proceeding from its possibilities.

The target planning method is used under conditions of market competition strengthening and is based on the demand for production (services). In this case the enterprise (the organisation) independently defines its activity purposes on the basis of the market needs and forms its plans according to this.

There are also the following planning methods:

Extrapolation planning method;

Interpolation method;

Research and statistical planning method;

Factor planning method;

Standard (normative) planning method (which is considered the most exact one);

Balance planning method;

Matrix method

Taking into account the necessity of working out several variants of the plan, some sections indicators need optimisation by means of economic and mathematical modelling.