What Is Economic Planning?

Economic planning refers to the subjective planning and arrangement of people focusing on future economic activities. From a micro perspective, it manifests itself in the planning and arrangements made by the organization of production.

Economic plan

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Economic planning refers to the subjective planning and arrangement of people focusing on future economic activities. From a micro perspective, it manifests itself in the production

Economic planning refers to the subjective planning and arrangement of people focusing on future economic activities. From a micro perspective, it manifests itself in the planning and arrangements made by the organization of production. The purpose is to make the optimal allocation of internal resources of the enterprise and obtain better economic benefits. From a macro perspective, it manifests itself as a pre-planning and arrangement of social resources allocation and regulation by the state and society, so that the development of the national economy reaches a certain Specific goals. The plan mentioned here generally refers to the national economic plan, which is a long-term or short-term plan and program of economic activities formulated by the country in order to develop the national economy. From a broad perspective, the plan also includes certain economic policies and measures formulated by the state according to needs in the socio-economic operation.

• (I) Elements and contents of the economic plan

Any plan must have three elements: goals, measures and steps. Some foreign management literatures are also called the four elements, namely problems, goals, activities and resources. This generalization is not much different from what we call the three elements of the plan.

The goal of the plan is the soul of the plan. A plan is made to accomplish a certain task or solve a problem. The goal is the cause of the plan and the direction of the plan. Without effort and no deductions, there is no need to make a plan. Therefore, before making a plan, analyze the current status of the research work, and clearly set out the purpose and requirements of the work, as well as the basis for these requirements, so that the plan's implementers can know the future results of the work in advance, and be sure of the future. Planned measures are the guarantee measures and methods for implementing the plan, which mainly refer to what means are needed to achieve the set goals, which forces are mobilized, what conditions are created, and what difficulties are eliminated. If it is a collective plan, the person responsible for a certain task should also be indicated, which is convenient for inspection and supervision to ensure the implementation of the plan. The planning steps are the procedures and schedules for planning work. It is necessary to distinguish priorities, priorities and non-emphasis. Therefore, when formulating a plan, after having the total time limit, there must also be time requirements for each stage, and the allocation and use of human, material and financial resources, so that the relevant units and personnel know that within a certain period of time and under certain conditions, To what extent the work is done in order to take the initiative and coordinate. This is the main content of the plan.

In addition, each plan should also include the following: one is to have a clear and clear title that reflects the content of the plan and the validity period of the plan; the other is to have a planner and a date for the plan; Some content needs to be represented by diagrams or textual descriptions. The diagrams or explanations should also be attached to the text of the plan, which has actually become an integral part of the plan.

• (B) the form and characteristics of the plan

According to the requirements of the socialist market economy system, the basic forms of plan management mainly include the following:

• 1. Prescriptive plan

The prescriptive plan refers to the plan issued by the government or superior planning unit to the executing units and individuals in accordance with the affiliation relationship and must be completed. Its characteristics are: (1) mandatory. It is formulated and controlled by the state, and must be resolutely implemented. It is legally enforceable. (2) Authority. It is a plan issued in the form of a government directive. It must not be changed or changed without authorization during execution. It must be completed. (3) Administrative. It is mainly implemented by administrative measures and indicators issued according to administrative affiliation. (4) Indirect marketability. It also uses market mechanisms, but market mechanisms work indirectly.

The public ownership of socialist means of production as the house and the socialization of production is the main basis of the mandatory plan. Its planning object refers to the important products that are related to the overall national economy, the parts allocated and allocated by the state, and the major economic activities that are related to the overall situation. Its content is the production and consumption data related to the national economy and the people's livelihood, the concentration and distribution of financial, human and material resources that have a comprehensive impact on the national economy, and the purchase and purchase of important agricultural and sideline products produced by collectively owned economies. The implementation of this plan mainly depends on administrative means. At the same time, it must also consider market supply and demand and consciously use the law of value. The important materials needed are allocated by the state, and the products are purchased and distributed by the material department, the commercial department, and the supply and marketing department. Under the planned economy system, it is a main form of state management of economic activities. However, practice has proved that the state's direct control of the economic activities of enterprises in this form of planning is not conducive to invigorating enterprises, and is therefore not conducive to the development of the socialist commodity economy. Under the socialist market economic system, the state's management of enterprises has changed from the old control mode mainly based on direct control to the new macro-control mode mainly based on indirect control. In terms of plan management, it is necessary to gradually reduce the mandatory plan The scope is limited to important areas and important tasks, and cannot be too wide. It will no longer implement instructional and mandatory plans for the production and operation activities of general enterprises and the production and sales activities of general products, otherwise it will not be conducive to Mobilize the enthusiasm of enterprises and grass-roots economic units.

• 2. Guiding plan

Guiding plans are those formulated by governments at all levels or higher-level planning units and enterprises and negotiated by the government. They only specify the direction, requirements, or indicators of a certain range. They are not mandatory and are only used to guide subordinate departments and units. Is a form of reference implementation plan. It mainly uses economic levers such as price, taxation, and credit to guide and promote the implementation of the plan. At present, most of the economic plans formulated by developed western economies are such guiding plans. Its characteristics are: (1) It is binding. It is not as legally mandatory as a mandatory plan. It only calls for, guides, and has certain binding effects. It does not force subordinates to accept and enforce it. (2) Have flexibility. Its planning indicators are thick-lined and flexible, giving subordinate units flexibility and flexibility. (3) Indirect regulation. It mainly achieves the goals of superior plans through economic leverage, communication and other means.

Due to the existence of multiple ownerships and the need to develop a commodity economy, coupled with the difficulty of making accurate calculations on the complex needs of society and the difficulty of making enterprise production capacity, it is necessary to implement a guided plan management approach. Its targets are enterprises owned by the whole people, enterprises owned by collectives, and other economic organizations. Its content is the production and distribution of products that are not related to the overall situation of the national economy, and economic activities that have little overall impact on the national economy, including the production and operation of most agricultural and sideline products and industrial products. Its formulation and implementation are jointly decided by the state and the enterprise. The state generally does not adopt direct mandatory regulations to pre-produce the production and operation activities of the enterprise, but instead directs and controls the enterprise through indirect methods to adjust economic benefits, resulting in the necessary Economic pressure and economic stimulus have prompted companies to align their own planning goals with national planning goals. The focus of adjustment and management of the national guidance plan is not physical indicators but value indicators. Its adjustment is not rigid and static, but elastic and dynamic, and has great adaptability and flexibility. Guiding planning is mainly achieved through horizontal linkages and markets. The commercial sector can acquire according to its plans and market needs. The industrial sector can organize production according to sales contracts and market needs. The state guides it through economic means, economic policies, and economic regulations. When necessary, Administrative measures are also used to regulate it.

• 3 Autonomy plan

Autonomous planning, market regulation, refers to the state or superior planning unit does not plan the production and circulation of some products, even the direction requirements are no longer raised, and economic organizations and individuals engaged in these activities make planning arrangements based on actual conditions. The free fluctuation of prices caused by changes in supply and demand relations to regulate the production and needs of these products, to achieve automatic adjustment, self-control, independent operation, self-financing, and development. Its essence is to spontaneously regulate economic activities based on the market, market-oriented, and the law of value. It is a more flexible form formed with the establishment of the socialist market economic system. It is a form of plan management under the guidance of the state plan, and it is also a necessary part of the improvement of plan functions.

Under the socialist market economic system, enterprises are the micro-foundation of the market economy and the main body of market activities. They have the status of legal persons as independent commodity producers and operators. They have the right to establish their own production, supply, and sales plans according to market needs and to invigorate Micro-economy, independent operation. This is the main basis for market regulation. The scope of market regulation is extremely extensive, including the production, operation and labor exchange activities of all commodities except the national directive plan and the guiding plan, and its scope will continue to expand. Although the market adjustment part does not require the state to issue a plan, its business scope, supply of raw materials, and product sales must be carried out under the control or guidance of the state plan, subject to the overall balance of the state plan. The management method of market regulation is to manage through economic policies, economic regulations, industrial and commercial administrative management methods, and use economic levers such as taxes, prices, and credit to guide.

To implement the three forms of plan management, it is necessary to correctly divide the boundaries and scope of mandatory plans and guiding plans in market regulation. The principle is that the national plan should be market-based and should be a guiding plan in general. Except for important products related to the national economy and people's livelihood and major economic activities that affect the overall situation, a large number of other products and economic activities mainly rely on the role of economic leverage, and gradually implement guidance-oriented plan adjustments and expand their scope. In this way, the unified guidance of the state and the enthusiasm of the enterprises can be better combined, so that the plan can be more in line with reality and the economy can be effectively revitalized.

Economic planning is one of the important functions of economic management. It is in a programmatic position in the entire economic management and has a strong permeability to other management tasks. Its role is as follows:

• (1) Economic plans can make up for problems caused by uncertainties

The economic plan is future-oriented, and there are many uncertain factors in the future, so that the future is spatially and temporally uncertain and volatile. The important role of economic planning is that it can make future uncertainties and variability as relatively certain and unchanged as possible. To achieve this, the organization can formulate corresponding remedial measures based on careful and detailed forecasting, based on the fullest possible grasp of future possibilities and changes, and make necessary amendments to the plan when needed. To maximize the scientific nature of the plan.

• (2) Economic planning helps managers focus on goals

Economic planning enables organizations to stay in a complex and volatile environment full of uncertainties and always focus on certain goals, keep all the actions of the organization in the same direction, and promote the achievement of goals. However, a misguided plan can also plunge the organization into deep disaster. Therefore, the primary responsibility of the organization's executives is to ensure that the plan, and especially the goals themselves, are correct. Make the overall plan careful and meticulous, so that the work of each department of the organization can be unified and coordinated.

• (3) Economic planning is conducive to improving the efficiency of the organization

A scientific, well-thought-out plan enables organizations to have common goals and clear directions, thus replacing uncoordinated and decentralized states without a plan. Through economic planning, uniform work processes can be used to replace non-uniform work processes, and thoughtful decisions can be used to replace hastily and hasty judgments, so that the organization's various resources can be fully utilized, forming a global synergy, and generating great synergies. To greatly improve the efficiency of the organization.

• (4) Economic plans are conducive to effective control by managers

Economic planning involves setting goals and setting some indicators. These goals and indicators will be used for control. Conversely, control cannot be carried out without a plan as a standard. It can be seen that the planning function and the control function are inseparable. Almost all standards of control originate from the plan, and the implementation of the plan also requires the assurance of control activities. Deviations found in control activities may cause managers to revise plans and establish new goals.

A complete economic plan generally requires 8 steps to complete, that is, the selection of objectives, the determination of prerequisites, the discovery of feasible plans, the evaluation of plans, the selection of plans, the formulation of auxiliary plans, the implementation of corresponding budgets, and the execution of plans. These 8 steps do not necessarily go through all, nor do they necessarily follow this order. In actual work, you can choose according to the specific situation. However, considering the generality, the following steps are introduced one by one.

• (A) selected target

Objectives are the starting point and destination of organizational action. The overall objectives of the organization are of a nature that governs all plans within the organization. Therefore, the first step in economic planning is to select goals for the entire organization, and then to establish the goals of economic planning for subordinate units. There are three issues that need to be addressed during the target selection phase:

1. Content and order of selected targets. What expected results an organization will achieve in a given period of time should first be determined. Under certain time and conditions, different target content and order will lead to different measures and actions, and will also result in different order of resource allocation. Therefore, the content of the goals and their order should be clearly selected.

2. Choose the appropriate target time. The target time should be selected in accordance with the principle of commitment. We made a choice to "commit" to a series of actions to be taken in the future, and the reasonable target time should be the same as the time covered by the reasonable commitment. For example, the target time should be equal to the time it takes for the investment used to adopt a scheme to be fully recovered.

3 Goals should be reflected by clear scientific indicators. Goals cannot be vague and should be quantified as much as possible for measurement and control. It is necessary to comprehensively use quantitative and qualitative indicators to reflect the essence of things and accurately reflect the requirements of goals.

• (B) determine the prerequisites

The second step in economic planning is to identify some key planning prerequisites. Because plans are affected by some important limiting factors for future changes, they must be forecasted and assumed when planning. The prerequisites of the plan are the assumptions at the time of the plan's formulation, that is, the expected environment at the time of the plan's execution, and it includes forecast data explaining the facts, feasible basic policies and the current plan. Because the planned future environment is very complex, it is unrealistic and uneconomical to make assumptions about every detail of it. Therefore, the determination of plan prerequisites is generally limited to those prerequisites that are critical and strategic to the plan, that is, those prerequisites that have the greatest impact on the implementation of the plan. For example, to formulate an enterprise's production and operation plan, it is necessary to make predictions and assumptions on major projects that have a significant impact on the plan, such as economic situation, government policies, sales, and resources.

• (Three) explore feasible solutions

It is very rare that there is only one feasible solution for any thing. There are always many ways to accomplish a certain task, that is, every action has a different direction, which is called the principle of different directions. There is a saying in the management world that "if there is only one method for something, this method will most likely be the wrong method." Only by exploring various feasible solutions can it be possible to choose the best solution from them. In the practice of management, the ability to discover a plan is just as important to managers as the ability to choose a plan correctly. However, to explore a variety of feasible solutions, managers are required to broaden their minds, be bold and innovative, and try to mobilize the enthusiasm of group members, brainstorm and brainstorm.

• (IV) Evaluation plan

After discovering various feasible solutions and examining their respective advantages and disadvantages, the fourth step of the economic planning work is to weigh various factors according to the premise and goals, and evaluate various alternative feasible solutions in this way. The characteristics of the economic plan are full of uncertainty. In most cases, there are many options to choose from, and there are a large number of variables and restrictions, so the evaluation of feasible solutions may be quite complicated. For this reason, in this step of economic planning, it is necessary to use the various achievements of modern computing science and computing technology to combine it with the experience and intuitive judgment ability of planners in the work.

• (V) Selection plan

The fifth step in the economic plan is to choose a plan, which is a crucial step in making decisions. Choosing one or several better solutions from many feasible solutions is usually based on experience, research analysis and practice. The role of experience should be brought into full play when selecting a plan. The experience here is not only the personal experience of a certain manager, but also the experience of everyone. It is not the accidental connection of things on the surface, but the intrinsic connection of things. However, the choice based on experience will often cause mistakes. Therefore, when selecting a plan, it is also necessary to actively research and analyze by means of establishing a mathematical model to increase the scientificity of the plan selection. This method first decomposes the problem into various parts and finds all the important parameters and limiting factors that affect the achievement of the goal; secondly, it analyzes and finds the causal relationship between the parameters and the limiting factors and the goal to establish a mathematical model; finally, Substitute the hypothetical variable values of each feasible scheme into the model, find the results, and compare each other to determine the better scheme. However, experience and mathematical analysis are also unique in some aspects. For some problems that cannot rely on experience and intuition and mathematical analysis to make correct decisions, they usually rely on experiments and experiments to solve them. However, the experimental and experimental methods are time-consuming, labor-intensive, and expensive, so only use this method when other methods are not suitable, and try to learn from previous experience to reduce the test volume.

• (6) Formulating auxiliary plans

After making a decision, a supplementary plan is drawn up. This is because, in general, a basic plan must always be supported by several auxiliary plans, and it is only possible to complete the basic plan on the basis of completing the auxiliary plan. For example, after an enterprise has formulated an overall plan, each business unit and its subordinate units must also develop auxiliary plans (detailed plans) such as production plans, sales plans, and financial plans. At this stage, we should pay attention to the following aspects: First, we must make the relevant personnel and departments understand the goals and prerequisites of the overall plan of the organization, and grasp the guiding ideology and content of the overall plan; Second, coordinate and ensure that all auxiliary The planning direction is consistent to support the master plan, so as not to pursue the unit's goals and hinder the overall goal. Third, coordinate the working time sequence of the auxiliary plans and the use of funds.

• (7) Make corresponding budgets and use plans to digitize plans

After the plan is finalized, a budget must be made. An organization's consolidated budget indicates the total budget for its income, expenses, and surplus. Each aspect of the programs formulated by its subordinate departments and units has its own budget, and these budgets are summarized into a comprehensive budget. The budget is a digitized plan, a comprehensive reflection of various organizational plans, and an economic goal of a unit. At the same time, it is an important criterion for evaluating plans. The organization's budget should be changed according to the actual situation in order to better guide the actual work. For enterprises, there are two ways to change the budget. One is to associate the budget with the output so that the budget changes with the change in output. One is the rolling budget, which is periodically revised at regular intervals to make it consistent with the new situation.

• (8) Implementation of the plan

The execution of the plan is the last step of the economic plan. During the implementation of the plan, managers must constantly check the progress and effectiveness, and adjust the plan for various changes and problems that occur. A plan can only be said to be successful if it achieves the intended results after the implementation of a plan and completes the original goal.

Economic plans play a very important role in management. The formulation of economic plans must meet the following basic requirements:

• (I) The formulation of the plan must reflect the purpose

It is necessary to formulate the overall goals of the organization and unify all aspects of the organization's actions to the overall goals. For an organization, its components are complex, specific to each department, each unit, and each member. The purpose and will are even more diverse, and different purposes will lead to various actions. The extent to which different actions can achieve their goals can vary greatly for the organization as a whole. Therefore, the most basic requirement for making a plan is to choose the appropriate actions and methods for the organization by determining the organization's monthly goals and tasks. Planning must also select tasks, goals, and methods for achieving them for each department within the organization. To achieve the organization's goals, plans must also be developed to create a consistent, coordinated structure within the organization.

• (2) The formulation of the plan must reflect democracy and masses

A scientific and rational plan needs to concentrate the wisdom of the masses. In the final analysis, the tasks stipulated in the plan still depend on the strength of the masses to complete. It is necessary to mobilize and rely on all members of the organization to participate in the formulation of the plan, and to properly handle the relationship of responsibility and rights of all management levels and the staff.

• (3) The formulation of plans must reflect the advancement

Planning should be ahead of other management tasks. In order to do all management work effectively, we must first formulate a thorough and advanced plan. The advancement of planning work mainly emphasizes that all aspects of the organization's work should be dynamic and variable, and there is no fixed pattern. The formulation of the plan needs to dynamically reflect changes in the internal and external conditions of the organization, including changes in the value orientation of organizational members. After the managers have clarified the plan, they know what kind of organization and qualified candidates are needed, what guidelines to choose the appropriate guidance and leadership methods, and what control methods to adopt, so as to achieve effective management.

• (D) the formulation of plans must reflect efficiency

For an organization, you should not plan for planning, but plan for efficiency. The efficiency of the plan is mainly manifested in three aspects: one is to effectively achieve the coordination between the organization and the external environment, to minimize the possibility of loss to the organization due to this inconsistency; and In order to maximize the synergies between the various components of the organization, not only to ensure output, but also to increase the ratio of output to input; the third is to effectively achieve the coordination of organizational goals and individual goals of organizational members. Only when the organization fully considers the needs of its members can its members devote themselves to the organization, thereby improving the efficiency of the organization.

The economic plans implemented by capitalist countries, in general, have played an active role in economic and social development, mainly in the following aspects.

Second, the national plan provides a basis for the comprehensive use and coordination of various economic policies. Modern capitalist countries use various policy measures to regulate socio-economic activities. Due to the differences in policy content, decision-making institutions, areas targeted by the policy, and the timing of policy implementation, the formulation and implementation of various policies are relatively independent. Under such circumstances, market stakeholders can not only coordinate policies with national plans, but also adjust the relationship between policies in accordance with national plans.

Third, in the process of formulating national plans, mediate conflicts of interest between various social classes and various interest groups. In capitalist countries, not only are there class contradictions, but also the competition between interest groups within the bourgeoisie is very fierce. Involving representatives from all parties to participate in the formulation of the national plan, providing them a place to express their opinions, bargain, negotiate and reconcile, to a certain extent, it has played a role in pre-empting certain social conflicts.

Fourth, by formulating and disclosing national plans to the world, other countries can understand their own development plans and intentions, which is conducive to international coordination and easing international frictions.