Date: 4th September, 2009
Junaid khan
Course Instructor,
School of Business,
North South University
Subject: Submission of the Intern report.
Dear Sir,
I am very pleased to submit this report, which has been prepared for the requirement of the course of BUS-498. I tried my level best to complete this report properly and to write an efficient term paper within all the constraints.
In spite of the various difficulties faced in preparing this project, I tried to be as thorough as possible. I therefore request you to accept this report as per the requirement of the course.
Sincerely,

Importance of planning in country less developed and developing countries
The meaning of economic planning differ from country to country and person to person. Keeping in view the various definitions we can say that aim of all the plans is to utilize the available resources more effectively achieving the well defined objectives during given period of time.

Importance or Objectives or Advantages of Planning

1. In crease in National Income :-
The objective of planning is to utilize the resources of the country in such a manner that it should increase the size of national income. In the developing countries planning is very useful for increasing the production of the country.

2. Superior Decisions :-
The decision of planning authority are more superior as compared to the individuals. Planning authority keeps in view the interest of the whole nation. It prepares the plan keeping in view the economic condition of the country.

3. Achievement of Full Employment :-
In the less developed countries and in the advanced countries the objectives of planning is to achieve the full employment.The main objectives of the planning to create jobs for the people of the country.

4. Equal Distribution Of Wealth :-
In the capitalistic countries the gap between rich and poor is increasing. It creates social evils. Through planning we can reduce the inequalities in income.

5. Elimination or Regional Disparity :-
Through planning the regional economic disparities can be removed. In the plan special fund can be allocated for the development of backward areas. It is the one of main objective of planning that there will be reduction in the regional disparity.

6. Improvement in The Balance Of Payment :-
The balance of payment of developing countries remains deficit. It adversely affects the rate of economic growth. Through planning government can reduce the imports and can increase the exports.

7. Balanced Economy :-
If one sector of the economy is developed the country will not achieve maximum rate of development. Through planning resources of the country can be allocated in such a manner that it provides balance to the economy.

8. Control of Economic Crises :-
Due to economic crises, economy faces many problems. Through planning depression can be controlled and production can be increased.

9. Solution of Over Population :-
When the size of population is greater than the size of natural resources it can be adjusted through effective planning.

10. Self Sufficiency In Food :-
Each country wants to become self sufficient in food. So this objective is also achieved through planning. In the each development the target was proposed for the agriculture sector.

11. Industrial Development :-
Today without industrialization no any country can improve its economic condition. For the establishment of new industries, planning is very effective.

12. Increase In welfare Program :-
The provision of social services is main aim of the planning. For example some developing countries plan various facilities like housing, schooling, transport and water provided to the people.

13. Increase In Capital Formation :-
Without increasing the rate of capital formation, we can not increase the rate of development. In the less developed countries rate of saving is very low and due to this rate of investment is low. Through effective planning we can increase the rate of savings in the country.

14. Elimination of Poverty :-
Through planning we can increase the rate of economic development in the country. National income and per capita income will rise and poverty will remove.

Advantages
1. Planning facilitates management by objectives.
a. Planning begins with determination of objectives.
b. It highlights the purposes for which various activities are to be undertaken.
c. In fact, it makes objectives more clear and specific.
d. Planning helps in focusing the attention of employees on the objectives or goals of enterprise.
e. Without planning an organization has no guide.
f. Planning compels manager to prepare a Blue-print of the courses of action to be followed for accomplishment of objectives.
g. Therefore, planning brings order and rationality into the organization.
2. Planning minimizes uncertainties.
a. Business is full of uncertainties.
b. There are risks of various types due to uncertainties.
c. Planning helps in reducing uncertainties of future as it involves anticipation of future events.
d. Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks by necessary provisions to meet unexpected turn of events.
e. Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.
3. Planning facilitates co-ordination.
a. Planning revolves around organizational goals.
b. All activities are directed towards common goals.
c. There is an integrated effort throughout the enterprise in various departments and groups.
d. It avoids duplication of efforts. In other words, it leads to better co-ordination.
e. It helps in finding out problems of work performance and aims at rectifying the same.
4. Planning improves employee’s moral.
a. Planning creates an atmosphere of order and discipline in organization.
b. Employees know in advance what is expected of them and therefore conformity can be achieved easily.
c. This encourages employees to show their best and also earn reward for the same.
d. Planning creates a healthy attitude towards work environment which helps in boosting employees moral and efficiency.
5. Planning helps in achieving economies.
a. Effective planning secures economy since it leads to orderly allocation ofresources to various operations.
b. It also facilitates optimum utilization of resources which brings economy in operations.
c. It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise. For example, raw materials can be purchased in bulk and transportation cost can be minimized. At the same time it ensures regular supply for the production department, that is, overall efficiency.
6. Planning facilitates controlling.
a. Planning facilitates existence of certain planned goals and standard of performance.
b. It provides basis of controlling.
c. We cannot think of an effective system of controlling without existence of well thought out plans.
d. Planning provides pre-determined goals against which actual performance is compared.
e. In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.
7. Planning provides competitive edge.
a. Planning provides competitive edge to the enterprise over the others which do not have effective planning. This is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc.
b. With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate the future motives of it’s competitor which helps in facing future challenges.
c. Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the competitive strength of the enterprise is improved.
8. Planning encourages innovations.
a. In the process of planning, managers have the opportunities of suggesting ways and means of improving performance.
b. Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.

Disadvantages

internal Limitations
There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves.
1. Rigidity
a. Planning has tendency to make administration inflexible.
b. Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances.
c. There is no scope for individual freedom.
d. The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
e. Planning therefore introduces inelasticity and discourages individual initiative and experimentation.
2. Misdirected Planning
a. Planning may be used to serve individual interests rather than the interest of the enterprise.
b. Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit ones own requirement rather than that of whole organization.
c. Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning.
3. Time consuming
a. Planning is a time consuming process because it involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
b. Therefore planning is not suitable during emergency or crisis when quick decisions are required.
4. Probability in planning
a. Planning is based on forecasts which are mere estimates about future.
b. These estimates may prove to be inexact due to the uncertainty of future.
c. Any change in the anticipated situation may render plans ineffective.
d. Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is unpredictable.
e. Thus, excessive reliance on plans may prove to be fatal.
5. False sense of security
a. Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
b. Managers assume that as long as they work as per plans, it is satisfactory.
c. Therefore they fail to take up timely actions and an opportunity is lost.
d. Employees are more concerned about fulfillment of plan performance rather than any kind of change.
6. Expensive
a. Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
b. According to Koontz and O’Donell, ’ Expenses on planning should never exceed the estimated benefits from planning. ’
External Limitations of Planning
1. Political Climate- Change of government from Congress to some other political party, etc.
2. Labour Union- Strikes, lockouts, agitations.
3. Technological changes- Modern techniques and equipments, computerization.
4. Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
5. Natural Calamities- Earthquakes and floods.
6. Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.