What is Planning Process?
Planning is the fundamental function of an organization to achieve the desired goals. Defining goals and the course of action required to obtain defined objectives is introduced as the planning process.
For systematic and good planning it is essential to complete some procedures. Following are the important steps in the process of planning for an effective plan.
8 Essential Steps of the Process of Planning
The important steps of the planning process:
- Analyze opportunities
- Set goals or objectives
- Determining premises
- Identify alternatives
- Evaluate alternatives
- Select a best course of action
- Formulate supportive plal
- Implement the plan
- Review the planning process
#1 Analyze Opportunities
This is the pre-step of the planning process. It is essential to make a successful plan. The manager has to do a SWOT analysis of the changing business environment.
Strength and weakness are the outcome of the internal environment of the organization like the availability of materials, machines, manpower, organizational structure, and adopted technology, etc. Similarly, threats and opportunities are the outcome of the external environment and are affected by many factors like political, economic, socio-cultural, government policies, and technology advancement, etc. Thus, it is essential to make a detailed study while going to set goals.
#2 Set Goals or Objectives
This is the first step and an actual starting point of the planning process. The objectives should be specific, clear, and practical. They should be time-bound and expressed in numerical terms. Objectives should not be idealistic or over-ambitious. A minor mistake in setting objectives might affect the implementation of a plan.
Thus, a manager has to define the objective clearly by considering organizational resources and opportunities. After clarification of broad objectives, it should be broken down into specific objectives of different departments, branches, sections, and individuals.
In short, the organizational objectives should be SMART, that is specific, measurable, achievable, realistic, and time-bound.
#3 Determine Premises
Premises are the assumptions of the future, it is made because of the uncertainty of the future environment. And, on the basis of premises, the plan is formulated. The future environment is estimated on the basis of forecasting.
It can be tangible and intangible or internal and external. Tangible premises involve capital investment, units of production, units sold, cost per unit, time available, etc. Similarly, intangible premises involve an employee’s morale, goodwill, motivation, managerial attitude, etc. Internal premises involve money, materials, machines, management whereas external premises involve competitor’s strategies, government strategy, technological change, social and cultural beliefs.
#4 Identify Alternatives
A manager needs to identify various alternative courses of action for the achievement of organizational objectives. For this, it is necessary to recognize all the likely options.
The manager must develop alternatives through the support of experienced and intellectual experts in management. The determination of the alternative course of action is the basis for plan formulation.
#5 Evaluate Alternatives
This is another most important step in the planning process. This is a logical step to evaluate each and every alternative from a cost and benefits point of view. Each alternative is studied and evaluated in terms of some common factors such as risk, responsibility, planning premises, resources, technology, etc.
According to requirements, managers may apply many techniques of analysis from different disciplines such as mathematics, sociology, psychology, and economics, etc. The evaluation technique must be scientific and practical so that the best course of action can be selected.
#6 Select A Best Course of Action (Best Alternative)
This is a decision-making process from available alternatives. Here the manager selects the best and most feasible course of action after evaluating all the alternatives. For this purpose, the manager has to consider past experience, present situation, and future contingencies of such a decision.
Thus it is essential to consider the various premises and environments of an organization and their impact on the future course of action. Besides it, the alternative which has less cost and sound profit is chosen.
#7 Formulate Supportive Plans
After selecting the course of action, it is essential to develop support plans for each department of the organization. The secondary plans help to implement the main plan. These supportive plans involve the formulation of policies, rules, schedules, and budgets to achieve defined objectives.
For example, may, getting proper training, media advertising, sponsoring are supportive plans for a good seminar.
#8 Implemente the Plan
After selecting the best course of action and preparation of supportive plans, if not implemented, the plan remains on paper only. This is the last step in planning where the selected plan actually comes into action to implement.
For the implementation of the plan, the manager needs to take some steps such as to communicate with subordinates who initiates plan into action, provide necessary instruction and guidance, making arrangement of all resources like materials, money, machine, equipment, etc. and make timely supervision and control of subordinates.
#9 Review the whole Planning Process
Planning is a continuous function and lasts till the organization, is in existence. Implementation of the plan is crucial but if performance is not evaluated the result is unknown.
For this, it is necessary to know about the actual performance of the plan. The manager can take corrective action only after evaluating the actual performance. And, the right decision at the right time is necessary to achieve objectives according to the plan.