Concept of Planning Premises
The term premise refers to a proposition stated or assumed at the beginning of a deed. Using this term in the context of planning, it involves various assumptions on which plans are formulated. Since there are many factors which affect the implementation of a plan, assumptions are made in respect of these factors. Therefore, there will be various assumptions on which a plan is formulated.
“Planning premises are the anticipated environment in which plans are expected to operate. They include assumptions or forecasts of the future and known conditions that will affect the operation of plans.
TYPES OF PLANNING PREMISES
Since there are many factors which art? considered in plan formulation, these may be identified in different ways, For example, one way of classifying these is to group into external and internal premises which is more relevant.
External Premises
External planning premises are the most important elements in plan formulation. These exist in an organisation’s external environment. Various external factors are grouped into five broad categories: economic, political-legal, technological, socio-cultural, and competitive. These factors either present opportunity or threat to an organisation. An opportunity is a favourable condition in the organisation’s environment which enables it to strengthen its position. A threat is an unfavourable condition in the organisation’s environment which causes a risk, or damage, to the organisation’s position.
Internal Premises
Besides external factors, internal factors of the organisation are also taken into consideration for plan formulation. Various internal premises are related to the events occuring within the organisation like organisation structure, management systems, etc. Such factors may lie in various functions of the organisation such as production/operations, marketing, finance, and personnel and management. These factors may be either strength or weakness of the organisation.
Tangible and Intangible Premises :
Various planning premises may be classified as tangible and intangible. Tangible Premises are those which can be expressed in quantitative terms like monetary unit, unit of product, labour hour, machine hour, and so on. For example, sales forecast which provides premiseĀ for operative plans can be expressed in terms of rupees or units of products. Intangible premises are of qualitative nature and cannot be translated into quantity. For example, image of the company in its environment can expressed in qualitative terms and interpretation has to be drawn from these.
Controllable and Uncontrollable Premises
Planning premises can be classified on the basis of their controllability. Thus, premises may be either controllable or uncontrollable. Controllable premises are those that can be controlled by an organisation’s actions. Such premises are mostly internal, for example, organisational policies, structure, systems, procedures, etc. Uncontrollable premises are mostly external and cannot be controlled by an organisation’s actions, for example, rale of economic growth, population growth, taxation policy of government, etc.