Planning Process

   Planning can be accomplished in a series of steps, it is called as planning process. It starts from perception of opportunities to realisation of opportunities. it determines the future course of action for utilizing resources in the best possible manner to get optimum possible results. The various steps in planning process are described below.

Steps in Planning process:

i) Awareness of opportunities: While planning basically managers are needed to know the availability of opportunities to the organisation. Opportunities are available from environment. These are new project can be had from changing needs of customers, technological changes, competitors weaknesses and innovative patterns of the organisation. Awareness of opportunities involves preliminary understanding and estimation of opportunities and analysing them in the light of strengths and weakness of the organisation for the purpose of assuming them. When the managers are utilising the opportunities, it is to be observed they should be free from threats.

ii) Establishing Objectives: The second steps in planning is to setup objectives for the enterprise as a whole, and for the departments and individuals. Objectives are to be set for the long run as well as for the short run. These are the end points for managerial course of action and they are the destination for all the activities. Objectives specify the expected results and show how the destination is to be achieved and where emphasis is to be placed. 

Objectives of enterprise are to be translated into departmental objectives, and departmental objectives are to be converted into individual goals. Then only overall objectives for which the organisation is established can be achieved  Enterprise objectives give direction to major plans, in turn they are used to setup objectives for lower levels. Objectives appear in different forms, they are mission, overall objectives, divisional objectives and individual objectives etc.

iii)Planning Premises: Once the objectives are determined the next step is establishing the planning premises. Planning premises refer to the environmental conditions or surrounding circumstances in which plans work. Plans will operate in future, hence it is appropriate to expect future conditions and should plan accordingly.

iv) Identifying the Alternatives: In order to achieve the objectives under expected conditions managers first must identify various alternative courses of action. For instance, to achieve the objectives of securing desired profits, necessary plant and machinery should be established in the organisation. The machinery can be of different types like-

Manual plant,

Semi automatic plant,

Complete automatic plant.

These are known as alternatives. While developing the alternatives, organisational frame work like constraint of capital, manpower and philosophies may be taken into account.

v) Evaluating the Alternatives: After identifying the alternatives, the following stage is to evaluate their advantages and disadvantages. Their evaluation should be done in the light of the enterprise objectives.

vi) Selecting a course of Action: Choice of a particular alternative is the next step after evolution. Evolution explains the merits and demerits. Selection is the real point of decision making. At many times, it is confirmed  that selection of two or more alternatives is better than choosing only one alternative. Hence, managers should plan in such a manner to select right combination.

vii) Formulating Derivative Plans: The developmental plans are know as Derivative Plans. For instance, in order to generate desired profits for the organisation, production department should have production plan regarding number and quality of units to be produced.

viii) Budgeting: A budget is forecasted statement of revenue and expenditure, it is a numberised plan. It allovates the various resources to the required activities keeping in view of objectives. The organisation and each department working in it can have their own budget. Hence, budgeting is the last stage of planning which puts the plan into action.

                                  The planning sequence discussed above, is almost similar to all the managers but may differ according to the complexity and time duration of plans like some steps may be prolonged and some stages may be shortened. Future, plans must be cost-effective. Thus, proper planning should be done keeping in view the circumstance, the need, the magnitude and level of commitment.

Posted in: Planning