These organizational goals are made by senior level managers after reviewing numerous objectives. Hence, the process of controlling is a critical part of any plan. (b) What is the plan to be performed to exploit such opportunities or such problems? Formulation of Supporting Plan 8. Such identified strength and weakness are assets and liabilities. 4 Basic Steps in the Business Planning Process Ultimately, the definition of business planning can be seen in the business planning process. Hence, establishing the objectives is an important step in the process of planning. The various stages in the process of planning are as follows: 1. It should be easily acceptable by the operating personnel. Follow up or feedback mechanism is an attempt to determine whether the plan has achieved the desired results. The shortcomings of planning can be identified through a follow-up action and rectified then and there. It is on the basis of the forecasts that planning is undertaken. 4. Changes in the environment and the organisation subvert even the best plans. Forecasts will generally be made for the following: (a) The expectation of demand for the products. Planning is deciding in advance what actions and resources are required to reach a goal. The strategic planning process helps an organization fill the gap between its current state and the desired state. After the overall plan has been adopted, it is necessary to develop other derived plans for each segment of the enterprise to support the major plan. Best results will be achieved only when best way of doing a work is selected. Developing Premises 4. For example, if an aviation company decides to buy aeroplanes, then it also prepares subsidiary plans like manpower supply, training, purchasing of ancillary etc. Managers have to “sell” the plan to the people who will be responsible for turning it into reality. Evaluating Alternative Courses 6. Amstrong developed the 5 step planning process. Feedback provides managers with input that can help them to update and adjust plan accordingly. However, there are some important steps to be followed by all types of companies for having a comprehensive planning for execution. A planning process helps an organization in developing the strategy. This further includes identification of problems to which solutions are to be provided and the opportunities that can be grabbed to make use of. The planning of the sales and production quantities can be carried out in different levels of detail. The planner should study all the alternatives and then a final selection should be made. So objectives will percolate down from the managers and will also guide and push the employeesin the correct directi… The various steps involved in the planning process are as follows: (1) Awareness of Opportunities and Problems: The first step in planning is the awareness of the unemployed business opportunity or the problem to be provided for in future. It is exactly the point at which decisions are made. (c) Whether it is necessary to devise a new plan or will it be sufficient to modify the existing plan? In the second step, the organization sets forth goals based on … Planning will be reliable when the forecast methods are accurate. Identification of Alternatives 5. Overall objectives define the goals to be achieved in general, whereas derivative objectives provide focus on their details i.e. Subsequently, a career plan will help you capitalize on these and find a successful career path. Here we establish the objectives for the whole organization and also individual departments. The type of goal selected will depend on number of factors – the basic mission of the organization, the values its managers hold, and the actual and potential ability of the organization. It has to be developed to meet the individual needs of a particular company. Share Your PDF File The statistical methods and computers have greatly helped the evaluation process. Because the future events are complex, premises must be limited to assumptions that are critical to a plan. Managers throughout the chain of command are planners-cum-controllers. Past information related to past objectives, courses of action being adopted, its effect and probability of achievement of objectives that can assess the effectiveness of current courses of action. In each case, however, there is always some logic in selecting a particular time range for planning. Again forecasting is important in premising. Following steps are taken in planning process: The first step in planning process is the awareness of business opportunity and the need for taking action. Other factors, which influence the choice of a period, are as follows: (a) Lead time in development and commercialization of a new product; (b) Time required to recover capital investments or the payback period; and. Sometimes, in the best interests of the enterprise, several alternative courses can be adopted. Planning starts with the determination of objectives. Information must be classified, analyzed and processed. Most good product ideas are born when a consumer notices a need for a specific tool that will solve their problems. It is essential to identify the assumptions on which the plans will be based. Evaluation involves the study of performance of various actions. Objectives can be long term and short term as well. Then the plan and its subsidiaries are implemented. Plans should reflect the enterprise’s objectives. Implementing the Plan 10. It can be otherwise called as Resource audit. The timing is fixed for introduction of plans. The trend of economic situation should also be visualized. Having sought alternative courses, the fifth step is to evaluate them in the light of the premises and goals and to select the best course or courses of action. The plan becomes a reality when it is put into operation. External premises include total factors in task environment like political, social, technological, competitors’ plans and actions, government policies, etc. After finding out the available alternatives and having made an analysis of their strong and weak points, the planner must evaluate the alternatives in the light of premises and goals. Plans should be compared with actual results. Long-range plans Eire most susceptible to change due to external forces. At this step of the strategic planning process, managers are faced with the question of whether a new strategy is required and, if so, what kind of strategy it will be. There are five major stages in the planning process. The fifth and most important step in planning process is evaluation and selection of the optimum plan. Constant monitoring of plans is necessary so that adjustments and corrections can be made in a timely and relevant manner. In such a situation, the planners should evolve a new alternative course by a mixture of different alternative courses. A course of action is determined according to the circumstances prevailing. (f) The changing pattern of consumer preferences. While it can be time consuming, in the long run it is worth the investment. He proposed this process to ensure a higher success rate for planning. Alternative courses so selected should be evaluated in the light of premises and goals. Though nothing may be certain in the coming period but still certain assumptions will have to be made for formulating plans. Everything you need to know about the steps involved in planning process. For example, once a basic plan of sales is decided upon, a number of secondary plans could be prepared. The purpose of evaluating the alternatives courses of action is to select the most suitable course of action, which will achieve organisational objectives. The main plan should be supported by a number of derivative plans. The basic project planning steps that every project manager needs to know can be broken down as parts of the first two phases of project management: Initiation and Planning.While those phases give a broad outline of what should be happening at different stages of a project’s lifecycle, they don’t provide much of a clear picture of how to go about your project planning. In this sense, these constitute the planning premises. Whether you’re planning your business’s opening, its growth, its projects, its risk mitigation, its sale, its closing, or anything else, all planning begins with a … In developing these derivative plans, lower-level managers take steps similar to those taken by upper-level managers – selecting realistic goals, assessing their subunits’ particular strength and weaknesses and analyzing those parts of the environment that can affect them. The process of forecasting generally involves- (i) calculation of probable future events; (ii) analysing changes in consumer attitude, technology, competitive forces, government policies etc. The preparation of a secondary plan is necessary to expedite the achievement of the basic plan. They indicate the end result the company wishes to achieve. After implementing the plans, the sequence of different activities has to be decided. The following are the major steps in the planning process: Crystalizing at the primary stage means analysing the external environment and opportunities as well as threats. All these possibilities must be explored during the planning process. Normally, managers will select the alterna­tive that, in their judgement, will best enable the firm to accomplish its goals. The planning process, valid for one organization and for one plan, may not be valid for all other organizations or all types of plans, because various factors that go into planning process may differ from organization to organization or plan to plan. Keeping the general economic conditions in mind, a study of the industry is made. This involves converting it into action. iv. It is a combination of information handling and decision making systems based on information inputs, outputs and a feedback loop. For example if we want to increase the profit, we must increase the sales by keeping the prices constant or we must reduce the cost of production by avoiding all sorts of wastes. After having evaluated the various alternatives, the most suitable alternative is selected. The product planning process begins with an idea. Strategy thinktanks also call this an explicit approach. There is however, one problem which confronts us while analysing these alternative courses. Plan should be formulated by the management in the backdrop of such premises and constraints. Naturally, after the setting of objectives, what is required to be done is to secure required information from various sources. policies, social values, political conditions, international situation and other externalities that may have effect on the organisation in future. Rather planning starts with it. Techniques of decision-making are applied to choose a particular course of action. Managers charged with planning respon­sibility must establish, circulate, and obtain consent to utilize critical planning premises. If the forecasts are accurate then planning will also be reliable. Thus, it is a forecast of conditions like trends in population, political and economic environment, production costs, advertising policy, availability of labour, material, power, etc. 5. Facts are collected and analyzed and the best out of all is chosen and adopted. In view of this, the management should involve employees in planning through communication, consolation and participation. Generally, forecasting is made in the following ways: i. Goal setting: Plans are the means to achieve certain ends or objec­tives. The objectives should be for the enterprise as a whole and then they must be broken down into departmental and sectional objectives. The last step in the planning process should be to pull all of the notes together into one formal document. what exactly is to be accomplished? The main steps that are taken in planning process are as follows: Establishing the objectives is the first step in planning. Sometimes, the analysis yields more than one alternative course with similar merits. Plans are prepared with a view to achieve certain goals. (2) Collecting and Analysing Information: The next step is to gather adequate information and data relating to the planning to be done and to analyse it to find out the cause-effect relationship between the various factors. Planning process involves the setting up of business objectives and allocation of resources for achieving them. (c) The anticipation of costs and the likely prices at which products will be marketed. So, the management should involve employees in planning through communication, consultation and participation. The fourth step is planning is to search for and examining alternative courses of action. According to Koontz and O’Donnell, “There is seldom a plan made for which reasonable alternatives do not exist. in the future. They are required to be balanced in the form of balance sheet. The implementation will require establishment of policies, procedures, standards and budgets. Management, Functions, Planning, Planning Process. Because there is always room for better doing an activity. vi. The planner should study all the alternatives, consider the strong and weak points of them and finally select the most promising ones. Defining the objectives of every department is a very essential one; then only clear-cut direction is available to the departments. Evaluation makes comparison of different plans possible in terms of results. Present and future opportunities must be found so that planning may be undertaken for them. Koontz and O’Donnell list the following steps in the process (see figure 5.1): During this stage, managers create a foundation from which they will deve­lop their plans. Premises encompass the expected environment of plans in operation. Selecting the most appropriate alternative involves choos­ing the plan. Organizational objectives provide a general direction, objectives of departments will be more planned and detailed. Forecasting will reveal those areas where control is lacking. Each alternative weighed against the other alternatives. Objectives should clearly define as to what is to be achieved by policies, procedures, rules, strategies, budgets and programmes. Without the secondary plans, the basic plan which is prepared for the whole enterprises cannot be effectively operated. The moment there appears to be changes in the assumptions on which the plans are based; there should be corresponding changes in the plans also. Hence to implement master plan, each departmental head prepares a plan of his department. It should also show some decision points or paths during this process for instance criteria for special procedural steps or competitions. If there is clarify about the objectives, we can plan for the future. Although the strategic planning process … The basis of planning are those factors/assumptions which influence the possible results of different alternatives. What kind of products are to be sold and in what price? Such base and anticipation is the information pertaining to past, present and future. Operational research can be used to evaluate the alternative sources of action. Strategy is a framework of plans or methods that help and organisation to achievement of the main objective. This step requires determining the tactics necessary to attain your objectives and designating a timeline and clear communication of responsibilities. These tools will enable a better implementation of plans. The adviser may ask open-ended questions to … Planning premises are vital to the success of planning as they supply economic conditions, production costs and prices, probable competitive behaviour, capital and material availability, governmental control, and so on. Examination of Alternative Courses of Action: An action may be performed in many ways but a particular way is most suitable to the organisation. (5) Finding Out the Alternative Courses of Action: The next step is to find out the various alternative courses of action. Business enterprise is an open, adaptive system with its own environment. Establishing goals or objectives:The initial phase of planning process is to establish the business objectives. Planning is always for uncertain future. The process/steps of human resource planning are as follows: Understanding goals and plans of the Organization; Assessment of current Human Resources Situation; Human Resource Forecasting (Demand and Supply) Implementation of the program (Action plan) Evaluation and Feedback (Audit and Adjustment) Human Resource Planning Process . Quite often an alternative does not immediately prove to be the most profitable way of undertaking a plan.”. Organisational goals provide direction to and control the objectives of subordinate departments. The plan should be objective oriented. Given below is a planning process which may be treated as commonly acceptable: It is necessary to consider the external environment of an organisation. Flexible plans can adapt with changes in the environment. Hence, the effective manager evaluates these alter­natives against the considerations for both feasibility and consequences. Study the most important initial steps in the event planning process, along with effective and accurate scheduling, creating plans using milestones and how to stick to a budget. Crystalizing the Opportunities or Problems: Crystalizing at the primary stage means analysing the external environment and opportunities as well as threats. Project Planning Process Step #16: Determine all roles & responsibilities . The effect of various factors should be carefully weighed. Constraints such as Governmental control will also exist. It is essential that objectives should be properly formulated and communicated to all members of the organisation. Internal factors include organization’s policies… It requires the use of other management functions, such as organizing, staffing, directing and controlling. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. Clemens and Mayer state: “The further you look back, the further you can see ahead.” Managers at this point must have an understanding of “why we wish to solve uncer­tainties, and a vision of what we expect to gain.”. The short comings can be rectified as early as possible. To get co-operation in imple­mentation, subordinates should be associated in the planning process. It means that the actual performance is compared with the planning and then corrective action is taken if there is any deviation. Hence, the management should find alternative ways and examine them in the light of planning premises. For example, if thinking of the government is to develop rural areas … The strategic planning process is essentially a list of steps that managers should follow to complete and implement a strategy within a company. Determining Planning Premises and Constraints: Planning is forward looking. The planning should be put into action so that business objectives may be achieved. Forecasts are essential for planning even if all may not prove correct. The ultimate objective of the plan is to achieve certain objectives, results or goals. Sometimes, the manager may de­cide to follow many viable, feasible or sufficient realistic courses rather than the one best course. The following type of questions will help in ascertaining clearly the opportunities and problems: (a) What business opportunities or problems are likely to arise in future? Effective implementation of a plan requires manage­rial co-ordination and teamwork. They help in achieving the overall organisational goals. Every alternative course has its merits and demerits. Planning premise is planning assumptions – the expected environmental and internal conditions. Plans and subsidiary plans are first used on trial basis to the possibility of their success. The document should include an overview of the decision-making process and the plan for the program. Constructive approach can reveal the deficiencies and pinpoint weaknesses, particularly in relation with competition. Prediction of market conditions for a specific product or service dealt with by the enterprise. These alternative courses of action will then be evaluated either by judgement alone or with the help of quantitative techniques and staff assistance. After selecting the best course of action, the management has to formulate the secondary plans to support the basic plan. The objectives are the end products and all energies are diverted to achieve these goals. The objectives fixed must clearly indicate what is to be achieved, where action should take place, who is to perform it, how it is to be undertaken and when it is to be accomplished. Objectives should clearly define as to what is to be achieved by policies, procedures, rules, strategies, budgets and programmes. Plans are formulated for future which is uncertain. In the light of the above analysis the possible alternative courses of action will have to be ascertained and examined. Objectives are always at the center of plan because every planned action is directed to the objectives. A manager should try to screen out the most viable alternative so that he has a small number of alternatives for final selection. Financial Planning Process Step 1: Establish the Goal / Relationship Establishing the goal or relationship is where the adviser introduces himself or herself a client or prospective client and explains the financial planning process. Throughout the planning process, premises must be monitored and updated. Before taking a final decision about any alternative, a forecast of these assumptions is made. Who is to take this action? Forecasting generates planning premises which are three types – (i) Beyond control (Population explosion and price level) (ii) Partially controllable (efficiency of work force) (iii) Fully controllable (development plan for future) qualitative and quantitative methods are used to make these forecasts. The second step in the planning process is to establish objectives for the entire organisation and then for each subordinate work unit. When action is to take place? Managers need to determine- (a) what threats to achieving the unit’s objectives are developing and (b) how changes in the environment present opportunities for greater achieve­ment of those objectives. Below, you can find the steps to take to create a … Assumptions denote the expected environment in the future and are known as planning premises. To develop premises, planners need to do realistic forecasting. Forecasting means the assumption of and the anticipation of certain events. Following steps are taken in planning process: 1. The type of customers to be dealt with, the circumstances under which goods are to be provided, value of products to the customers, etc., should be studied in detail. Planning process involves the setting up of business objectives and allocation of resources for achieving them. For instance, technical know-how may be secured by engaging a foreign technician or by training staff abroad. Are those factors/assumptions which influence the possible results of different alternatives these objectives are clearly defined of. Can not be effectively operated and capital expenditures long run it is that... 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