The various steps involved in planning process are as follows:
1. Awareness of opportunities and problems:
The first step in planning process is the awareness of business opportunity or the problems to provide for in future. Present and future opportunities must be found out so that planning may be undertaken to take advantage of them.
2. Collecting and analysing information:
The next step is to gather adequate information and data relating to the planning to be made. The facts and figures collected will help in framing realistic plans. Further, the information gathered has to be analysed for proper interpretation.
3. Establishment of clear-cut objectives:
After collecting and analysing information, the management should lay down in clear-cut terms, the objectives of the enterprise as a whole as well as objectives of every section of the enterprise.
4. Determining planning premises and constraints:
Planning is always based on certain assumptions regarding the future which are known as planning premises. Thus it is a forecast of conditions like trends in population, political and economic environment, production costs, advertisement policy, availability of labour, material, power, etc. Further there will be constraints like Government control which affect the plans. Plans should be formulated by the management in the backdrop of such premises and constraints.
5. Finding out the alternative courses of action
Generally, in every situation there is more than one possible course of action. As such, in the light of the analysis of the information gathered, the possible alternative course of action should be ascertained.
6. Evaluation of alternatives and selection
The next step is to evaluate all possible alternatives with reference to cost, speed, quality, etc., and selecting best course of action.
7. Determinig secondary plans:
After selecting the best course of action, the management has to formulate the secondary plans to support the basic plan. For example, after developing the basic production plan, a number of secondary plans for the purchasing of raw materials, acquisition of plant and machinery, training of workers, arranging for adequate finance etc. have to be prepared for the successful operation of the basic plan
8. Providing for follow-up and future evaluation:
In order to see that the plans are proceeding along the right lines, it is necessary for the management to device a system for continuous evaluation and appraisal of the plan.