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 are introduced in 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.
Steps of Planning Process
The important steps of the planning process:
- Analyze opportunities
- Set goals or objectives
- Determining premises
- Identify alternatives
- Evaluate alternatives
- Select the best course of action
- Formulate supportive plan
- Implement the plan
- Review the planning process
This is the pre-step of the planning process. It is vital to create an effective plan. The management must do a SWOT analysis of the changing business environment. The internal environment of the organization determines the organization’s strengths and limitations, such as the availability of resources, machinery, labor, organizational structure, adopted technology, and so on.
Threats and opportunities, on the other hand, are influenced by a range of factors such as political, economic, socio-cultural, government policies, technical advancements, and so on. As a result, conducting a comprehensive analysis prior to formulating objectives is crucial.
Set Goals or Objectives
This is the first and most important phase in the planning process. The goals should be concise, obvious, and attainable. They should be time-bound and numerically stated. Idealistic or too ambitious goals should be avoided. A little mistake in goal-setting could risk a plan’s implementation.
As a result, a manager must clearly state the goal while taking into account organizational resources and opportunities. It should be broken down into specific objectives of different departments, branches, divisions, and individuals after the basic objectives have been clarified.
In short, the organizational objectives should be SMART, that is specific, measurable, achievable, realistic, and time-bound.
Premises are future assumptions that are established due to the unknown nature of the future environment. The plan is then created based on the premises. Forecasting is used to estimate the future environment. It can be both physical and intangible, as well as internal and external.
Tangible premises involve capital investment, units of production, units sold, cost per unit, time available, etc. Intangible premises, on the other hand, include an employee’s morale, goodwill, motivation, and so on.
External premises include competitors’ strategies, government strategy, technological change, and social and cultural views, whereas internal premises include money, materials, machinery, and management.
For the attainment of corporate goals, a manager must identify numerous potential courses of action. It is vital to recognize all possible possibilities in order to do so. With the help of competent and creative management professionals, the manager must develop alternatives. The premise for plan formation is the determination of the alternative course of action.
This is yet another crucial stage in the planning process. This is a logical step in the process of weighing the costs and benefits of each option. Each alternative is examined and weighed against a set of common criteria, such as risk, accountability, planning grounds, resources, technology, time, efforts, and so on.
Managers can use a variety of analytical approaches from other disciplines, including mathematics, sociology, psychology, and economics, depending on the situation. To choose the optimal course of action, the evaluation technique must be scientific and practical.
Select The Best Course of Action (Best Alternative)
This is a decision-making process based on the available options. After weighing all of the options, the manager chooses the best and most viable course of action. The manager must examine prior experience, current circumstances, and future contingencies while making such a decision.
As a result, it is critical to analyze an organization’s diverse premises and settings, as well as their impact on the future course of action. Aside from that, the option with the lowest cost and highest profit margin is chosen.
Formulate Supportive Plans
It is critical to building support plans for each area of the company after deciding on a course of action. The subsidiary plans to aid in the execution of the primary plan. These supporting plans entail the creation of laws, rules, timetables, and budgets in order to attain specific goals.
For example, may, getting proper training, media advertising, and sponsoring are supportive plans for a good seminar.
Implement The Plan
After identifying the optimal course of action and compilation of complementary strategies, if not implemented, the plan stays on paper only. This is the step in the planning process when the chosen plan is put into effect.
The manager must take certain steps to put the plan into action, including communicating with subordinates who initiate the plan, providing necessary instruction and guidance, arranging all resources, such as materials, money, machines, and equipment, and ensuring timely supervision and control of subordinates.
Review The Whole Planning Process
Planning is a continuous process that continues until the company ceases to exist. The strategy must be implemented, but if the performance is not reviewed, the outcome is unknown. It is vital to know about the plan’s real performance in order to do so. Only after reviewing real performance can the manager take corrective action. And, in order to achieve the plan’s objectives, the appropriate decision at the right moment is required.