Everything you need to know about the process of planning. Planning is deciding in advance what is to be done; it is a projected course of action.
To plan is to propose a forward programme for guiding the future affairs of an enterprise. Planning is the opposite of improvising. “It is organised foresight plus corrective hind sight.”
The planning process starts with the assumption that the future will be different from the present, and it attempts to determine how the enterprise can take advantage of that difference.
The steps involved in the process of planning are:-
1. Situation Analysis 2. Identification of Opportunity 3. Establishing Objectives or Goals 4. Developing the Planning Premises 5. Determining Alternative Courses of Action 6. Evaluating Alternative Courses
7. Selecting the Best Course 8. Formulation of Derivative Plans 9. Timing and Sequence of Operation 10. Securing Participation 11. Execution Strategy 12. Implementation of Plans 13. Follow Up.
Process and Steps of Planning: 6, 7 and 8 + Step Process of Planning – Explained!
Process of Planning – 7 Steps Process: Analysing Environment, Establishing Objectives, Developing the Planning Premises, Selecting the Best Course and a Few Others
It is difficult to specify the steps in the planning processes for all the organizations because of their differences in size and complexity. Nevertheless, it is possible to suggest some important steps for effective planning.
The steps which are applicable to the most types of plans are discussed below:
Step # I. Analysing Environment/Situation Analysis:
This is the first step of the planning process, and during this step all information relevant to the situation should be gathered and analyzed in depth. At the outset the internal and external environment is analyzed in order to identify company’s strengths and weaknesses (in internal environment)and opportunities and threats (existing in the external environment) this is also known as SWOT (Strengths Weaknesses Opportunities and Threats) analysis.
Managers operate in a complex environment. They are affected by—and to some extent influence—the environment. In the planning formation, managers must consider the external and internal environment.
The brief discussions of all these elements are given below:
External economic environment like capital, labour, market, government fiscal and monetary policies and tax policies, and the needs of the customer must be considered. All organization must operate within some form of economic domain—socialistic, communist capitalistic and mixed economy.
The environments economic health is reflected by a number of economic factors, including income and product, savings, investment, prices , wages, productivity, employment, government activities, etc,. Liberalisation, privatization, and globalization are essential features of the economic environment of any country.
No other development has affected the business environment as much in India as these have. Business firms are still in the process of coming to terms with the total impact that these developments are having impact on them. Strategists are acutely aware of the importance and impact of the economic environment on their organization.
Technology provides many benefits but also raises some problems. It’s main influence is on ways of doing things, on how we design, produce, distribute, and sell goods as well as services. Recent technological advances have been evidenced by the computer systems, robotics, optic fibres, lasers, nano technology and telecommunications that have revolutionized the entire process of transformation.
There are three strategic implications of technological change – it can change relative cost position within the business, it can create new markets and new business segments, and it can collapse or merge previously independent businesses by reducing or eliminating their segment cost barriers. Technology is often used as a strategic weapon by the firms operating in a highly competitive environment.
There is also a complex of social factors. Thus a manager should understand the social beliefs prevailing in a country. The socio-cultural dimension includes customers, traditions, beliefs, and values. As the society changes, so do the cultural dimensions of our lives and new needs are perceived, new products appear, and new managerial challenges evolve.
The socio-cultural dimensions defines those managerial behaviours that are acceptable in given situations and those that are not. This primarily affects the planning processes within the organization in the areas of mission and objective-setting, and decisions related to products and markets. Strategists must be fully aware of the impact of these factors on business.
The political-legal dimension contains those government regulations that define the rules by which businesses must operate. Typically, these governmental laws and rules are designed to foster the overall common good of a society or economic system. The laws are designed to provide operating parameters for what is seen by some as a rather imperfect market place that cannot govern itself.
This also includes the political farmers, businessmen, social reformers, political and governing groups, and cultural sects.
The political environment changes with the social demands and beliefs. Thus every organization is affected by it. Organizations, generally, are conscious of political environment that their organization faces. Most governmental decision related to business are based on political considerations, in line with the political philosophy followed by the ruling party at the centre and at the state.
The global environment consists of all those factors that operate at the transnational, cross- culture and across the border level which have an impact on the business of an organization.
This environment includes global economic forces, blocs, forums, of trade and commerce, financial system, geopolitical situations, demographic patterns, human resources, informations systems, technological systems, markets and competitiveness, and quality standards, which are certainly having an impact on those organizations which operate at global level.
The appraisal of external environment of a firm helps it to think of what it might choose to do. The appraisal of the internal environment, on the other hand, enables a firm to decide about what it can do. The resources, behavior, strengths and weaknesses, synergy and competencies constitute the internal environment.
The internal environment consists of all the forces and conditions within the organizations that influence its behaviour. The resources possessed by a firm are the physical, human and organizational resources.
Strengths and weaknesses combine to produce synergistic effects creating competencies which are special qualities that make organizations withstand pressures of competition in the market. The major goal of an organization is to secure strategic advantage.
Organizational, financial capabilities, marketing capabilities, operations capabilities, and personality capabilities factors should be identified, which further determine the organizational capabilities in terms of strengths and weaknesses that lie in the orgnizational functional areas.
The appraisal of organization could be done by a detailed organizational capability profile and a summarised strategic advantage profile. Internal analysis consists of value chain analysis, quantitative analysis and qualitative analysis. The manager must understand the internal profile by preparing SWOT and ETOP analysis.
Setting Objectives in the light of the environmental scanning is the second step in the planning process. Objectives or goals are clearly defined in specific terms along with priorities in all the key areas of operations. Major problems associated with such objectives are also identified and defined, so that there may be special emphasis on their planned solutions.
The objectives set must clearly indicate what is to be achieved, where action should take place, who should perform it and when it is to be accomplished.
The objectives should be established for the entire organisation and for each and every department. Planning has no utility if it is not related to certain objectives. Objectives specify the expected result and indicates the end points 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.
Organizational objectives give direction to the major plans, which, by reflecting these objectives, define the objectives of every major department.
Major department objectives, in turn, control the objectives of subordinate departments, and so on down the line. In other words, objectives form a hierarchy. The objectives of lower departments will be more accurate if sub-divisional managers understand the overall enterprise objectives and the derivative goals. Managers should also have the opportunity to contribute their ideas for setting goals and those of the enterprise.
Objective plays an important role in planning process. Objectives define the organization’s relationship with its environment and help an organization to pursue its vision and mission. It provides the basis for strategic decision-making and standards for performance appraisal.
Objectives, as measures of organizational behaviour and performance, should possess certain desirable feature in order to be effective:
1. Objectives should be understandable and should be specific and concrete.
2. Objectives should be related to a time frame.
3. Objectives should be measurable and controllable.
4. Objectives should be challenging, but not unrealistic.
5. Organization set many objectives in different areas. Different objectives should correlate with each other.
6. Objectives should be set within the constraints. There are many constraints -internal as well as external- which have to be considered in objective setting.
There are many issues which have a bearing on different aspects of objective-setting:
1. Objectives may be stated at different levels of specificity. At one extreme, they might be very broadly stated as goals while at the other they might be specifically stated as targets. The issue of specificity is resolved through stating objectives at different levels, and prefixing terms, such as, corporate, general, and particular so that they serve the needs for performance and its evaluation.
2. Since objectives deal with a number of performance areas, a variety of them have to be formulated to cover all aspects of the functioning of an organization. Organizations need to set adequate and appropriate objectives so as to cover all the major performance areas.
3. Objectives are formulated for different time periods. It is possible to set long-term, medium term, and short-term objectives. Whenever this is done, objectives for different time periods have to be integrated with each other.
4. The objective should be tested on the basis of it verifiability. It should be possible for a manager to state the basis on which to decide whether an objective has been met or not. Only verifiable objective are meaningful and useful for planning process.
5. The quality of objectives can be judged on the basis of its capabilities to provide direction and a tangible basis for evaluating performance.
Objectives have to be set in all those performance areas which are of strategic importance to an organization. In general according to Drucker, objectives need to set in the eight vital areas of market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development, worker performance and attitude and public responsibility. But in practice, organizations differ widely with regard to the objectives that they choose to set.
It is clear that organizations need to set objectives at different levels, of various types and for different time-periods, and that such objectives should possess certain desirable characteristics and should resolve certain issues before being used. The question that now is – How are objectives formulated.
Glueck identifies four factors that should be considered for objective-setting, these are as:
1. The forces in the environment
2. Realities of enterprise’s resources and internal power relationships
3. The value system of the top executive.
4. Awareness by the management of the past objectives of the firm.
Keeping in view the four factors, it has been observed that objective- setting is a complex process which is based on consensus-building and has no precise beginning or end. Vision and mission provide a “common thread” to bind together the different aspects of the objective setting process by providing a specific direction along which organization can move. These factors should be taken into account for objective setting.
Step # III. Establishing/Developing the Planning Premises:
Premises are the various factors that affect planning. There are several factors that affect organizational functioning. These factors include political factors, ethical standards, government control, fiscal and monetary policies, price demand and availability of various factors of production.
Their analysis lead to make certain forecasts and the limitation is determined In order to develop consistent and well-coordinated plans, it is necessary that planning is based upon carefully considered assumption and predictions.
Planning premises are these assumptions and predictions about the future. Forecasting is important in premising. It helps in making realistic assumptions about sales, costs, prices, products etc., in future. Planning premises are factors which effect the organizational functioning.
This is the third step to establish, circulate, and obtain agreement to utilize critical planning premises such as forecasts, applicable basic policies, and existing company plans. These are assumptions about the environment upon which plan is to be carried out.
Assumptions again depend on forecasting. Forecasting helps in making prediction about sales, costs, markets, products, and technical advancements which will take place in the future. Managers have a number of sources to draw from when preparing a forecast for their enterprises. However, it is advisable to limit premising to those factors which are strategic to the planning process.
Planning premises develop on the basis of:
(a) Scanning Internal and External Environment
(c) Basic Policies; and
(d) Company plans.
The analysis of external and internal environment leads to make certain forecasts and the limitations are determined within which proposed course of action is to be undertaken. Because the future is so complex, it would not be profitable or realistic to make assumptions about every detail of the future environment of a plan. There, premises are, as a practical matter, limited to assumptions that are critical, or strategic, to a plan, that is, those which most influence its operation.
Premises are planning assumptions for the future setting in which planning takes place, that is, the environment of plans in operation. These premises are varied and important in different degrees for different organizations and industry. Thus, an organization must relate its basic programme to those factors bearing materially on it. Some of these factors are external and others are internal to the organization.
For a business organization, the following major factors are important:
1. External Premises:
These lie in the environment in which a business organization works. These may be classified as- (a) general business environment, (b) product market, and (c) factors market.
These are internal to the firm and controllable to certain extent at the time of establishing premises – (a) Sales, (b) Basic policies, and (c) Organizational Structure.
An organization has to formulate plans within these limitations. Managers, in order to formulate accurate plans, have to find out the likely behaviour of these factors accurately. This can be done through forecasting, managers formulate alternative plans based on alternative premises which give them more flexible approach.
Normally the following three techniques are applied for business forecasting:
(a) Latest Information Method
(b) Programmes and Limit Method
(c) Spotting the Beginning of a Lengthy Process Method
(d) Diagnosing People’s Expectations Method
ii. Symptomatic Techniques, and
iii. Systematic Techniques-
(a) Intuitive Method
(b) Econometric Method.
Forecasting is an essential part of planning. Planning decides the future course of action, but this future course of action does not take place in a vacuum, also based upon certain conditions and circumstances.
Unless the managers know the behaviour of these conditions, they cannot go for effective planning. Forecasting provides the parameters to the planning. It provides the knowledge of premises within which managers are analysing their strength and weaknesses in the light of the future happenings and they can take right steps in advance.
Step # IV. Determining Alternative Courses of Action:
There are several alternatives for any plan. Management should try to find out these alternatives. These alternatives should be examined in the light of planning premises which reduce the number of alternatives which can be evaluated for selection.
To develop alternative courses, planner should try to emphasize the most promising alternatives to contribute to the achievement of objectives. The manager should try to find out the different type of alternatives by keeping its limitations in view.
These various alternatives should be examined in the light of planning premises which reduce the number of alternatives which can be evaluated for selection. This step relates to search for and examining alternative courses of action, especially those not immediately apparent. There is seldom a plan for which reasonable alternatives do not exist, and quite often an alternative that is not obvious proves to be the best.
Generally the following procedure has been adopted for the determination of alternative courses of action:
1. Finding/searching all the possible alternatives.
2. Examining the alternatives in the light of planning premises
3. Screening out the most unviable alternatives.
4. Emphasizing on most promising alternatives.
The basic objective of identifying alternatives is of choosing of the most promising alternatives to accomplishing our objectives. The most common problem is not finding alternatives but reducing the number of alternatives so that the most promising may be analysed.
Even with mathematical techniques and the computer, there is a 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.
Step # V. Evaluating Alternative Courses:
After seeking out alternative courses, the next step is to evaluate alternatives in the light of objectives and premises. This stage involves decision-making, because the manager has to decide upon suitable course of action. Courses of action have to be evaluated in terms of costs and risk involved derivation of profits, availability of resources and long-term objectives of the organization.
Many quantitative techniques are available to evaluate alternatives. Proper concentration must be required for maintaining proper balance among various factors while selecting a suitable course of action. The manager may take the help of these techniques to reach the most objective result. The best possible alternative may be chosen by the manager after detailed analysis.
Sometimes, evaluation of available alternatives may disclose that two or more courses are advisable and so the concerned manager may decide to choose two or more alternatives and combine them to suit the requirements of the situation. 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’s long-range objectives.
If the only objective were to maximize immediate profits in a certain business, if the future were not uncertain, if cash position and capital availability were not worrisome, and if most factors could be reduced to definite data, this evaluation would be relatively easy. But since planners typically encounter many uncertainties, problem of capital shortage, and various intangible factors, evaluation is usually very difficult even with relatively simple problems.
A company may wish to enter a new product line primarily for purposes of prestige, but the forecast may show a financial loss; even so, the question is still open as to whether the loss is worth the gain in prestige.
There are so many alternatives courses in most situations and so many variables and limitations to be considered that evaluation can be exceedingly difficult. Because of these complexities, the newer mythologies and applications of operations research and analysis are helpful.
Indeed, it is at this step in the planning process that operations research and mathematical as well as computing techniques have their primary application to the field of management.
The application of scientific method to the study of alternatives in a problem situation is used to obtain a quantitative basis for arriving at best solution.
These tools and methods are generally used for evaluating alternatives:
(a) Linear programming
(b) Inventory planning and control
(c) Just-in-time inventory system
(d) Distribution logistics
(e) Time-event networks
(f) Value engineering
(g) Total Quality Management
(h) Computer-aided design (CAD)
(i) Computer-aided Manufacturing (CAM)
(j) Manufacturing Automation Protocol (MAP)
The other quantitative techniques are used for evaluation of alternatives course of action:
(b) Operational Audit
(c) Gantt chart
(d) Milestone Budgeting
(e) Critical Path Method
(f) Programmed Evaluation and Review Technique (PERT)
(g) Management Information system.
Step # VI. Selecting the Best Course:
This is the point at which the plan is adopted—the real point of decision-making. After evaluation of alternative courses, the next alternative is the selection of the best. Planners have to select the courses of action which the organization will pursue.
Sometimes, an evaluation of alternative courses will disclose that two or more are advisable, and the managers may decide to follow several courses rather than one the best course. Managers have to select the most feasible plan.
In an organization various activities contribute to organizational objectives. After formulating the basic plan, various plans are derived for departments, units, activities, etc. In fact, there are invariable derivative plans to be constructed to support the basic plan. These are developed within the framework of the basic plan and with the help of derivative plan, the basic plan is implemented.
Derivative plans include objectives, policies, procedures, methods, rules, etc. The final step in the planning process is to select the most feasible plan and develop derivative plans. The plans must include the feedback mechanism. The hierarchy of the plans must be both integrated and flexible to meet the changing environment.
The derivative plans are required to support the basic and overall plans, because the latter cannot be executed effectively unless they are supported by the derivative or sub-plans. The derivative plans are developed within the framework of the basic overall plan. These planning components are devised to support the overall basic plan of the organization and are generally bound together.
These are following:
1. Standing Plans – Policies, Procedures, Methods, and Rules and Regulations.
2. Single use plans – Programmes, Projects, Budgets.
Standing plans are formulated to achieve unity and uniformity of efforts in meeting repetitive situations arising at various levels of the enterprise. Single use plans are made for handling non-recurring problems.
Process of Planning – 8+ Steps in Planning Process in Management: Situation Analysis, Identification of Opportunity, Objective Setting, Planning Premises and a Few Others
1. Situation Analysis:
Planning starts with situation analysis. Managers should collate all the information relevant to a given activity for which planning is to be made. The planner should analyse the information deeply to find out past trends, current developments and to forecast the future trend. They should assess the impact of both internal and external factors on the activity to be planned. This analysis would bring to light the issues and problems relating to the activity under planning.
2. Identification of Opportunity:
The net outcome of the situation analysis is to figure out the opportunities to be tapped. It is only here that the planning process starts. Having identified the opportunities, it has to conduct the strength, weakness, opportunity and threat analysis (SWOT).
This analysis helps the organization to understand whether it would be able to capitalize on the opportunity identified. When an organization gets positive results in the SWOT, it would pass on to the next stage. Otherwise the opportunity identified is dropped.
3. Objective Setting:
Objectives represent the destination of an enterprise. Under this phase, objectives for the whole organization and various departments, units and sections are fixed. Thus, there is hierarchy of objectives. The objectives are set, taking into account resources at the command of the organization and capability of human resources employed in the organization. The objectives are set in measurable terms. The time line with which the objectives are to be accomplished are also fixed.
4. Planning Premises:
It denotes the conditions under which planning will be undertaken. In other words, it represents assumptions. As planning is done for future which is uncertain, assumptions need to be made about the environmental conditions. The environment is of two types, internal and external. The internal environment includes organizational policies and various resources at the disposal while external environment includes public policy, technological advancement, level of competition, consumer behaviour, Suppliers response, shareholder’s expectation, etc.
The nature of planning premises vary at different levels of planning. Planner is not making assumptions about each and every factor in internal and external environment. It depends on the type of plans. Further assumptions aid in making forecast. When planning premises change, planner has to fall back on contingency options.
5. Determining Alternative Courses of Action:
There are so many alternative ways of achieving the goal. The planner has to screen all the alternative courses of an action. This requires imagination, foresight and ingenuity.
For example in order to improve productivity, an organization can screen various alternatives like increasing wages, giving incentives, buying quality inputs, increasing workload of workers, intensifying supervision, improving labour welfare measures, improving physical facilities, improving technology, engaging professionals, cutting idle time, reducing wastages and so on.
6. Evaluation of Alternatives:
Once alternatives are screened each alternatives should be scanned in detail. The positives and negatives are each alternative should be micro analysed in the light of constrains experienced by the enterprise. Besides each alternative should be viewed through prism of cost, benefit, risk and organizational facilities. Now a days computer aided mathematical models and software come in handy in alternatives evaluation.
7. Selection of Best Alternative:
After analysing each and every alternative in micro detail, best alternative is selected which is supposed to accomplish organizational goals effectively and efficiently.
8. Derivative Plans/Sub-Plans:
Once a particular option is chosen based on the criteria, the planner has to think about the outcome of the chosen alternative. He has to provide for those outcomes. For example, an organization chooses to provide transport facility to its staff members instead of outsourcing it. In such a case, it has to consider appointment of bus crew, fuel facility, maintenance of bus, spare parts, parking facilities, repairs and so on. These plans for various outcomes of a chosen alternative are called derivative plans.
9. Implementation of Plans:
Once a given alternative is chosen, the planner has to gear up for implementation.
He has to do the following:
i. Communication of the plan to all those concerned.
ii. Providing instructions to those concerned with its implementation.
iii. Deploying facilities like raw materials, man power, technical support, machinery, maintenance support, financial support and so on.
iv. Linking the implementation to reward system.
v. Planner has to ensure that all those connected with implementation are engaged in execution thereof.
10. Follow Up:
When the plan is under implementation, it is better to follow it up. It means watching the consequences of implementation so that necessary corrective actions can be taken to fine tune the plans.
Process of Planning – 7 Steps Followed by a Manager while Formulating Plans: Setting Objectives, Developing Premises, Evaluating Alternative Courses and a Few Others
Planning is a process of making decisions regarding what to do and how to do. Planning as an activity of decision-making and has to follow certain logical steps.
The steps followed by a manager while formulating plans can be listed as follows:
Step # 1. Setting Objectives:
The first step to planning is setting organisational objectives. Every business organisation must establish general and specific objectives, goals, short term and long term targets not only for the organisation but for each department, each division and in fact for each employee of the organisation. Clearly stated objectives give directions to the entire organisation to plan course of action to achieve the pre-determined goals.
For example, total business growth by 25% could be an organisational objective which can be further divided into targets for sales department, production department and for each individual working in the respective departments.
Step # 2. Developing Premises:
Since planning is futuristic it has to depend on certain assumptions of what might happen in the future. The assumptions, which provide basic material or act as a starting point for preparing plans are called premises. Premises may include forecasts, existing plans, policies or practices followed in the past etc. For successful and effective planning, it is a must that all managers involved in planning understand and agree with the assumptions or premises.
For example – Most plans are based on forecasting as it provides basic information to prepare plans. All managers must understand that forecasting can be used as a technique to collect information required to prepare plans.
Step # 3. Identifying Alternative Courses of Action:
Once the managers know about the objectives and assumptions to prepare plans, the next step is to identify various alternative courses of action which may be taken to achieve organisational objectives. Through discussions among members of the organisation, newer and innovative courses of action can be discovered.
Step # 4. Evaluating Alternative Courses:
To achieve objectives most efficiently it is a must that the best course of action is followed. In this step of planning, the already identified alternative courses of actions are evaluated. It is important that the alternative courses of action are compared with their respective negatives and positives, their contribution towards achievement of organisational objectives, their feasibility and viability.
For example – While planning to install a new machinery for increasing production capacity, production head must compare various models and brands of machinery available. He/she must discuss with supervisors and workers, compare the initial cost, maintenance cost, and other overheads before taking decision about the machinery to be installed.
Step # 5. Selecting an Alternative:
This is the real point of planning and decision making. A comparison based on mathematical approach is not always the foolproof method of selecting the best alternative. Though we must select an alternative which is most feasible, profitable and has least negative consequences but manager’s experience, personal judgement and intuitions must also be considered while making a final decision.
At times it may not be possible to achieve desired results with one single plan or a course of action, in such situations managers may select more than one course of action.
For example – Production manager has selected a machinery, which will increase productivity by 50% and reduce cost by 20% but it will increase idle time for workers. To overcome the problem of increased idle time manager suggested that the same workforce may be used for packing the finished goods.
Step # 6. Implement the Plan:
Once the final decision is made or best course of action is selected, then follows its implementation. It is the step where directions provided through planning are converted into actions i.e., it involves doing what is required. This step involves all other managerial functions as well.
For example – Once the production manager finalizes the machinery to be installed then it would require purchasing of machinery, organising raw material, appointing appropriate workforce etc.
Step # 7. Follow-Up Action:
To ensure successful implementation of plans follow-up actions are must. The managerial function of controlling compares the results of actual activities with the planned ones and takes corrective and preventive actions to ensure that desired objectives are achieved.
Process of Planning
The steps involved in the planning process involves situational analysis; formulating desired goals, objectives, and result; goal and plan evaluation; establishing goals and plans; chalking out strategies to reach goals; and acknowledging completion.
Process # 1. Situational Analysis:
The contingency approach to planning begins with situational analysis. Keeping in view the time and resource constraints, a planner should collect, process, analyse, and interpret all relevant data pertaining to the objectives under consideration. Scanning the internal environment helps in identifying the forces that operate within the system and their implication on the organizational goals.
An in-depth situational analysis enables understanding of past events, examination of current situations, and working out alternative future scenarios. ‘Taking stock’ is a basic prerequisite to any planning process, whether done consciously or unconsciously. For strategic planning, it is important to conduct an internal as well as external scanning of environment.
This scan usually involves considering various driving forces or major influences that are likely to have implications on the future working of the organization. For example, during strategic planning, planners often conduct a ‘SWOT analysis’. SWOT is an acronym for the strengths, weaknesses, opportunities, and threats faced by the organization.
During this analysis, planners can also use a variety of assessments or methods to ‘measure’ the health of a system.
Process # 2. Desired Goals, Objectives, and Results:
During planning, planners (consciously or unconsciously) have in mind an overall outcome. For example, during strategic planning, it is critical to keep in mind the mission, or overall purpose, of the organization. As an outcome of situational analysis, the planning process sets alternative goals that the organization plans to pursue and the ways and means to achieve the same.
This step unfolds creativity in the organization, resulting in multiple solutions to the issue under consideration. Any evaluation of the alternatives should only be thought of after generating all possible alternative solutions to the problem.
Process # 3. Goal and Plan Evaluation:
After having identified various alternatives to resolve the issue, decision-makers have to evaluate the advantages and disadvantages, and potential implications of each alternative goal and plan. These alternatives have to be evaluated in the light of organizational capabilities and competencies, existing or proposed, to be developed.
At this stage, the decision-maker has to prioritize various goals and eliminate those that do not agree with the organization’s existing potential and capacity. He also needs to consider the implications of various other plans designed to achieve high-priority goals.
Process # 4. Establish Goals and Plans:
Based on the analysis and alignment to the overall mission of the system, planners establish a set of goals that build on proven strengths to take advantage of the available opportunities. It is this step that enables a planner to select appropriate and feasible goals, and plan for the future growth of the organization.
The evaluation process should clearly identify the priorities and trade-offs among alternative goals and plans before the decision-maker makes his final decision. It is after this process that clearly defined goals and plans, feasible and workable within expected circumstances, emerge.
Process # 5. Strategies to Reach Goals and Implementation:
The particular strategies (or methods to reach the goals) chosen depend on affordability, practicality, and efficiency. The best laid plans are of no use unless they are properly implemented. Plans need to be meticulously implemented to achieve set goals and objectives.
Managers and their teams must understand the plan, have desired resources—human and non- human—to implement it, and motivated people to work for the achievement of goals as per the pre-specified roles for each employee.
The implementation phase turns out to be quite effective and efficient, if the managers along with their employees participate, in the planning process. Responsibilities are to be clearly assigned while implementing the plan. Ideally, deadlines are set for meeting each responsibility.
Process # 6. Acknowledge Completion and Celebrate Success:
This critical step is often ignored, eventually undermining the success of many future organizational planning efforts. The purpose of a plan is to address a current problem situation or pursue a developmental goal. It is important for the leader to acknowledge the team effort and celebrate after the problem has been solved or the goal met.
However, this step is often ignored in the planning process at times due to the unnecessary hurry to solve the next problem. Skipping this step results in apathy, scepticism, and cynicism amongst the employees. It is very important to celebrate success to boost the morale of employees and encourage them for performing better in their future tasks and roles.
Process of Planning – Establishing Objective, Premising, Selection of Operating Plan from Alternatives, Formulating Derivative Plan, Securing Participation and a Few Others
Important steps in the planning are a step-by-step approach to the adoption of a comprehensive plan ready for execution. For example, advertising of products, when neck to neck competition exists in the market for a particular item of two companies, the mode of product launching and advertisement makes the item to move faster in the market.
This activity is one of the strategies of business. Strategies are devised by managers to achieve certain ‘goals’. It may differ from individual to individual. These goals may be the same but the ways and means mostly differ according to personal factors like, intelligence, experience and capability of each manager while handling specific situation.
1. Establishing Objective:
The first step in planning is to determine the major objectives. These objectives set the pattern of the proposed course of action and make the structure of other subsidiary objectives in the organisation. The objectives of an enterprise, as a whole, need to be divided into objectives of different departments.
For example, the objective of an enterprise is to increase the profit. All connected departments have to set their target for achieving the results to improve profit like production department to increase production, sales department to Increase sales and such other coordinated activities by other departments.
Establishment of planning premising means assumptions about the future.
Thus, the process of forecasting is necessary in planning with following two main principles:
i. Anticipating future events.
ii. Calculation of various factors influencing future events.
The above principles play a paramount role in planning because these factors have limitations in planning.
Let us examine how these principal factors are to be considered in forecasting, while launching a new product in the market.
i. Trend of the market for such product.
ii. Any other competitor expected to bring out a product of the same specifications.
iii. Cost involved in production.
iv. Government’s Tax policies.
v. What price to be fixed for the new product?
vi. Any other relevant factor to be considered according to situation.
3. Selection of Operating Plan from Alternatives:
In a business, you may have a number of alternative courses of action to achieve desired results. All these alternative courses to be evaluated and then a preferential plan to be selected for execution.
4. Formulating Derivative Plan:
The overall operating plan has to be supported by the secondary plans, which are an off-shoot of the operative plan. These are basically to support and for speeding up of the basic operative plan. Basic plan is supported by the secondary plans of the organisation which activate at various departments level. These secondary plans are the ones, which give the material and human resource support to the main plan.
5. Timing and Sequence of Operation:
Time is an important factor in any planning activity. The time factor enables the plan to have proper form and practical approach. The starting and finishing times are fixed for each part of work so that they indicate as to when the work be commenced and will be accomplished.
6. Securing Participation:
Proper and effective implementation of the plan and its related programme, necessitate voluntary and willing participation from all those who are responsible for making the plan successful. Plans have to be communicated and explained in details to all personnel for making their involvement and cooperation for execution of plans.
7. Execution Strategy:
Strategy is an approach to perpetuity for the execution of a plan by which the resistance and reactions of people are encountered. It may be necessary to make some adjustment alternatives in a plan according to the needs of the personnel, who actually execute the plan.
Thus, adequate provisions must be there to accommodate such changes. Flexibility and adaptability on the part of planners and executors of the plan are expected in the strategy to achieve greater efficiency.