9 important Elements of Planning

A plan has the following elements:-

1. Aim:

Any organisation should have definite aim. The aim should be clearly defined so that it can guide and direct the activities of the enterprise. The main aim of a cooperative organisation is to do service and to improve the economic conditions of members. Calvert’s definition of cooperation clearly exhibits this aim.


2. Objectives:

Webster’s Dictionary defines objectives as “that towards which effort is directed or end of action or goal”. Hence objectives or goals may be described as the ends towards which the group activities are aimed.

People say “Effective management is management by objectives”. A cooperative organisation can have sub-objectives for each department or sections and they can be united to have board based objective.

3. Policies:


A policy is a verbal, written or implied basic guide that provides direction to a manager for action. Policies guide the actions of an organization’s performance and its objectives in the various areas of operation.

4. Procedures:

Procedures spell out the actions to be taken out in practice to achieve the organizations objectives as stated in the policies. Procedures may be static or changed often. Organizations have set procedures for procuring raw materials, recruitment of personnel etc.

5. Methods:


Methods are work plans, since they provide the manner and order, keeping the objectives, time and facilities available. Methods involve only one department and one person. They contribute to the efficiency in working and help work planning and control. Methods are used in manufacturing, marketing and office work.

6. Rules:

Rules are different from procedures and policies. A rule requires a specific and definite action be taken or not taken with respect to a situation. Rules do not allow any discretion in their application. Also they do not allow any leniency to come in the way of their application.

7. Budget:


Budget is essentially a plan expressed in quantitative terms. Budgets involve both planning and control element. Like the plan, budget is flexible, realistic and operates within a framework. A budget is differentiated from other plans in the following respects:-

a. It is a tool for planning and control.

b. A budget covers specific period.

c. Budget is expressed in financial terms.


8. Programmes:

Programmes show the way and lay down procedure for activities to take place within a time limit for accomplishing, the stated objectives. The constituents of a programme are objectives, policies, procedures, rules, methods and resources to be made use for obtaining the objectives. Programmes enable the management to anticipate and prepare them ahead to meet future eventualities.

9. Strategics:

Koontz and O’Donnell consider this as an important planning element. “Strategy concerns the direction in which human and physical resources will be deployed and applied in order to maximize the chance of achieving a selected objective in the face of difficulties”.


In corporate planning strategy serves as a master plan which the company adopts for the realization of the objectives. It provides skill and judgment to the management to predict and foresee what difficult and complex situations are likely to arise and they can take timely action to avert them or at least to minimize the risk and uncertainty.