Introduction
You have just read about the plans
of Indian Oil Company Limited
(IOCL). Of course, these are broad
statements given by the company
and they have to be broken down
into steps for implementation. This
is an example of a company with a
nation‑wide reach striving to be one
of t...
Planning
4
CHAPTER
Indian Oil Company Limited (IOCL) - Plans to
Energize with sustainability L E A R N I N G
Indian Oil is India’s largest commercial organisation. It is top
ranked Indian company in the latest Fortune ‘Global 500’
OBJECTIVES
listings (2017). Indian Oil’s vision is driven by a group of After studying this
dynamic leaders who have made it a name to reckon with.
With over 34,000 strong work force, a Maharatna Company, chapter, you will be
Indian Oil has been helping to meet India’s energy demands able to:
and reaching petroleum products to every part of India for
over five decades. It plans to increase its business operations n State the meaning
all around the world. The company plans to invest ` 20,000 of planning;
crore in 2017-18 acquisitions and plans to expand overseas.
The company always believed to be ahead of the demand. Last n Describe the
year too, IOC had invested close to ` 20,000 crore, including features and
around ` 16,000 crore in various Indian projects and on importance of
acquisition for upstream in Russia.
It is noteworthy, between 2012-17, IOCL ended up investing
planning;
around ` 75,000 crore against the targeted planned investment n Explain the
of around ` 56,200 crore. All investments have been in refinery
expansion, upgradation of quality of refineries, building new
limitations of
pipelines, getting more aggressive in petrochemical projects, planning;
setting up new natural gas facilities etc. IOC is also looking at the
n Analyse the steps
overseas market. Recently it was decided to open an office in
Bangladesh apart from talking to the Government of Bangladesh in the planning
on many accounts, especially regarding LPG and natural gas process; and
where it is trying to take a linkage from IOC pipeline going
up from Damra project and West Bengal border before finally n Identity the
connecting to the Bangladesh network. For Nepal, IOC plans different types of
to build a pipeline between Motihari terminal of IOCL, which is plans.
currently coming up, and their own facilities inside Nepal. The
company has already signed a memorandum of understanding
(MoU) with Bhutan and looking at newly opening markets such
as Myanmar.
The company always feels that they have to keep their eyes
open for new acquisitions. The company has got good reserves
and were able to generate funds through internal accruals. But
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, 92 Business Studies
on a project basis IOC will certainly go into the market — both
India and Overseas, depending on which is cheaper — to borrow
money, if needed.
Source: https://www.business-standard.com/article/
companies/ioc-to-invest-around-rs-20-000-in-2017-18-
plans-expansion-acquisitions-117051600438_1.html.
Introduction managers think in advance on what
You have just read about the plans to do and how to do it. This is the
of Indian Oil Company Limited essence of planning.
(IOCL). Of course, these are broad
statements given by the company
Concept
and they have to be broken down Planning is deciding in advance what
into steps for implementation. This to do and how to do. It is one of the
is an example of a company with a basic managerial functions. Before
nation‑wide reach striving to be one doing something, the manager must
of the top companies in India. Further formulate an idea of how to work on
more, every organisation whether a particular task. Thus, planning is
it is government-owned, a privately closely connected with creativity and
owned business or a company in the innovation. But the manager would
private sector requires planning. The first have to set objectives, only then
government makes five year plans will a manager know where he has
for the country, a small business to go. Planning seeks to bridge the
has it’s own plans, while other gap between where we are and where
companies have big plans, sales we want to go. Planning is what
plans, production plans. All of them managers at all levels do. It requires
have some plans. taking decisions since it involves
All business firms would like to be making a choice from alternative
successful, increase their sales and courses of action.
earn profits. All managers dream Planning, thus, involves setting
of these and strive to achieve their objectives and developing appropriate
goals. But to turn these dreams courses of action to achieve these obj
into reality managers need to work ectives. Objectives provide direction
hard in thinking about the future, for all managerial decisions and
in making business predictions and actions. Planning provides a rational
achieving targets. Dreams can be approach for achieving predetermined
turned into reality only if business objectives. All members, therefore,
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Ch_04.indd 92 08-08-2022 09:43:21
, Planning 93
definition of planning? One of the
ways to do so would be to define
planning as setting objectives for
a given time period, formulating
various courses of action to
achieve them, and then selecting
the best possible alternative from
among the various courses of
action available.
Importance of Planning
You must have seen in films and
Planning: Keeping the
advertisements how executives
objective in view and
being in action draw up plans and make powerful
presentations in boardrooms. Do
those plans actually work? Does
it improve efficiency? After all why
need to work towards achieving should we plan? These are numerous
organisational goals. These goals
questions to which we would like to
set the targets which need to be
find solutions. Planning is certainly
achieved and against which actual
important as it tells us where to go,
performance is measured. Therefore,
it provides direction and reduces
planning means setting objectives
the risk of uncertainty by preparing
and targets and formulating an
action plan to achieve them. It forecasts. The major benefits of
is concerned with both ends and planning are given below:
means i.e., what is to be done and (i) Planning provides directions:
how it is to be done. By stating in advance how
The plan that is developed has to work is to be done planning
have a given time frame but time provides direction for action.
is a limited resource. It needs to be Planning ensures that the goals
utilised judiciously. If time factor or objectives are clearly stated
is not taken into consideration, so that they act as a guide for
conditions in the environment may deciding what action should be
change and all business plans may taken and in which direction.
go waste. Planning will be a futile If goals are well defined,
exercise if it is not acted upon or employees are aware of what
implemented. the organisation has to do and
Do you think from the above we what they must do to achieve
can formulate a comprehensive those goals. Departments and
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Ch_04.indd 93 08-08-2022 09:43:23
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