Steps in Planning Process

 

Steps in Planning Process:

The steps in planning process are presented here in connection with major programs, such as the acquisition of a plant the development of a product, managers would follow essentially the same steps in any other through planning. Since minor plans are usually simpler, some of the steps would be more easily accomplished, but the practical steps listed below. In practice, however, managers must study the feasibility of possible courses of action at each step. These are the following steps of planning process.

1) Being Aware of Opportunities: This is first steps of planning. Although it precedes actual planning and is therefore not strictly a part of the planning process, an awareness of opportunities in the external environment as well as within the organization is the real starting point for planning. All managers should take a preliminary look at possible future opportunities and see them clearly and completely, know where they stand in light of their strengths and weakness understand what problems they wish to solve and why and why, and know what they expect to gain. Setting realistic objectives depends on this awareness. Planning requires a realistic diagnosis of the opportunity situation.

2) Setting Objectives or Goal/  Establishing Objectives: This is the second step in planning process in to establish objectives for the entire organization and then for each subordinate work unit. This is to be done for the long term as well as for the short range. Objectives specify the expected results and indicate results and indicate the end pints of what is to be done, where the primary emphasis is to be placed, and what is to be accomplished by the network of strategies, policies, procedures, rules budgets and programs. Organization objectives give direction to the major plans, which, by reflecting these objectives, define the objective of every major department. Major department objectives, in turn, control the objectives of subordinate departments, and so on down the line. In other words, Objective form a hierarchy. The objectives of lesser departments will be more accurate if subdivision managers understand the overall organization objectives and the derivative goals. Manager should also have the opportunity to contribute their ideas for setting their own goals and those of the bold (enterprise).   

3) Considering Planning / Developing Premises : The third logical step in planning is to establish, circulate, and obtain agreement to utilize critical planning premises such as forecasts, applicable basic policies , and existing company plans. They are assumptions about the environment in which the plan is to be carried out. It is important for all managers involved in planning to agree on the premises. The more thoroughly individuals changed with planning understand and agree to utilize consistent planning premises, the more coordinated enterprise planning will be.

4) Identifying Alternatives/ Determining Alternative Courses: The fourth step in planning is to search for and examine alternative courses of action, especially those not immediately apparent. There is seldom a plan for which reasonable alternative does not exit, and quite often an alternative that is not obvious proves to be the best.

    The more common problem is not finding alternative but reducing the number of alternative so that the most promising may be analyzed. Even with mathematical techniques and the computer, there is limit to the number of alternatives that can be thoroughly examined. The planner must usually make a preliminary examination to discover the most fruitful possibilities.   

5) Comparing Alternatives in light of goal / Evaluating Alternative courses: After seeking out alternative courses and examining their strong and weak points, the next step is to evaluate the alternatives by weighing them in light of premises and goals. One course may appear to be the most profitable, but it may require a large cash outlay and have a slow payback, another may look less profitable but may involve less risk, still another may better suit the company long range objective.

6) Choosing an Alternative/ Selecting a course: This is the point at which the plan is adopted, the real point of decision making. An analysis and evaluation of alternative courses will disclose that two or more are advisable and manger may decide to follow several courses rather than the one best plan.

7) Formulating supporting plans/ formulating derivative plans: When a decision is made, planning is seldom complete, and a seventh step is indicated. Derivative plans are almost invariably required to support the basic plan.

8) Number zing Plans by Budgeting: After decisions are made and plans are set, the final step in giving them meaning. As was indicated in the discussion of types of plans, it is numbered them by converting them into budgets. The overall budget of an enterprise represents the sum total of income and expenses, with resultant profit or surplus, and the budgets of major balance sheet items such as cash and capital expenditures. Each department can have won budgets, usually of expenses and capital expenditure, which tie into the overall budget.