8 major steps in the process of planning in an organisation:
1. Identifying and establishing objectives:
These connote establishing objectives for the entire organisation and then for each subordinate units. Koontz & O’Donnell say, “objectives specifying results expected indicate the end points of what is to be done, what the primary emphasis is to be placed, and what is to be accomplished by the network of policies, strategies, procedures, rules, budgets and programmes”.
This involves assessment of present status of the organisation and the future outlook on activities to be planned and their possible effect on the environment. This step envisages forecasting. “These are forecast data of a factual nature, applicable basic policies and existing company plans. Premises, the planning assumptions in other words the expected environment of plans in operation”.
3. Making assumptions:
Assumptions as to how the environmental factors will behave along with future under good, average and bad economic conditions.
4. Determining alternative courses:
This is necessary to ensure success of the objectives and to reduce cost. The number of alternative courses can be minimized by eliminating the less promising ones.
5. Evaluating alternative courses:
After identifying the alternatives, next step in planning is to evaluate them for feasibility and consequences in the light of premises and goals. In this step mathematical and computing techniques have their primary application.
For identifying and choosing between the available alternatives the technique called “decision tree’ is used. The decision tree begins with a single root question and adds alternatives of alternatives until a sizable chart exists to show that all alternatives have been explored and compared.
6. Selecting the best course:
This step involves selecting of most desirable course of action. This is the point at which the plan is adopted the real point of decision making.
7. Setting Specific targets:
This calls for working out its details, formulate the steps in full sequence, to break it down for each department or branch, for each product, for each month or quarter etc.
8. Follow up and review:
After implementation of the selected plan necessary follow up action should be taken, review and if necessary with the modification or revision of the initial plan in the light of the experience gained.