Segregation of master plan into departmental, sectional and individual plans, helps to understand the real nature of future uncertainties. Budgets are generally financial, though they may be expressed in other terms also such as labour hours. Implementation of plans is the final step in the process of planning. Hence, the effective manager evaluates these alter­natives against the considerations for both feasibility and consequences. It requires the use of other management functions, such as organizing, staffing, directing and controlling. The rate of success of planning will be in direct proportion to the rate of the success of forecasting. The next step is determining available alternative ways of achieving objec­tives. The planning process is different from one plan to another and one organisation to another. It helps in making realistic assumptions about sale, costs, prices, products, and technological developments etc. Our product planning methodology uses six steps to guide you through the entire process. policies, social values, political conditions, international situation and other externalities that may have effect on the organisation in future. Due consideration is made on the availability of resources, profitability, plant capacity, available manpower, communication effectiveness and the like. He proposed this process to ensure a higher success rate for planning. Hence, the success of the planning depends very much upon the forecasts. How to improve the processes should be also planned continuously. The process of planning does not end with the implementation of plans. Numberizing Plans by Budgeting 9. These objectives are based on the number of factors like mission of the organization, abilities of the organization. However, there are some important steps to be followed by all types of companies for having a comprehensive planning for execution. Establishing Objectives 3. 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. The strategic planning process is essentially a list of steps that managers should follow to complete and implement a strategy within a company. Hence, the process of controlling is a critical part of any plan. How and when these derivate objectives are to be accomplished? Generally in all situations, there is more than one possible course of action. The product planning process begins with an idea. Marketing Planning includes specific, market precise, or company-wide policy that describes actions involved in achieving a particular objective that is set within a selected timeframe for the biz. Collection, Classification and Processing of Information: Only relevant information facilities the planning. 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. Various factors will be weighed against each other. The fourth step is planning is to search for and examining alternative courses of action. For example, if thinking of the government is to develop rural areas … (f) The changing pattern of consumer preferences. A course of action is determined according to the circumstances prevailing. Disclaimer Copyright, Share Your Knowledge Good managers assume changes and plan for them. Plan must make sure that every activity undertaken contributes to the achievement of objectives. It is a combination of information handling and decision making systems based on information inputs, outputs and a feedback loop. It means that the actual performance is compared with the planning and then corrective action is taken if there is any deviation. The basis of planning are those factors/assumptions which influence the possible results of different alternatives. The planning must consider the likely behaviour of these factors. External premises include total factors in task environment like political, social, technological, competitors’ plans and actions, government policies, etc. Managers need to check the progress of their plans so that they can (a) take whatever remedial action is necessary to make the plan work, or (b) change the original plan if it is unrealistic. In the second step, the organization sets forth goals based on … (4) Determining Planning Premises and Constraints: Premises are planning assumptions on the basis of which planning takes place. To develop premises, planners need to do realistic forecasting. If no gap is found from the above analysis (step six), there is hardly any problem. Organisational goals provide direction to and control the objectives of subordinate departments. Process Selection 4. Secondary plans flow from the primary or basic plan. They must monitor and maintain their plans. In each case, however, there is always some logic in selecting a particular time range for planning. Plans are prepared with a view to achieve certain goals. Keeping in view the uncertainties of future it is justifiable to select more than one good alternative course. Once the organisation’s objectives are determined, the section-wise or department-wise objectives are planned at the lower level. For example, once a basic plan of sales is decided upon, a number of secondary plans could be prepared. 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. For example, once production plan is decided then a number of plans for procurement of raw materials, purchase of plant and equipment, recruitment of personnel will be required. In the light of the above analysis the possible alternative courses of action will have to be ascertained and examined. This portion of the planning process should include a detailed overview of … An appropriate time schedule has to be prepared and detailed instructions are written for communication of the plan. Evaluating Alternative Courses 6. Planning Process. While it can be time consuming, in the long run it is worth the investment. The effect of various factors should be carefully weighed. Formulation of Supporting Plan 8. Such sources are located as well as identified and required information is gathered from them. Through the monitoring function, managers can take corrective action if they observe unexpected and unwanted deviations. The main plan should be supported by a number of derivative plans. Plan should be formulated by the management in the backdrop of such premises and constraints. Once a main plan is formulated then a number of supportive plans are required. Thus planning needs review, evaluation and recycling. We have information inputs, outputs and a feed-back. For example, planning process for a large organization may not be the same as for a small organization. 1. Hence, establishing the objectives is an important step in the process of planning. This is the point at which the plan is adopted – the point of decision making. They are described as derivative plans. In view of this, the management should involve employees in planning through communication, consolation and participation. The behaviour of certain variables is forecasted for constituting planning premises. 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. Deciding Alternative Course of Action: To fulfil an objective, there can be more than one course of action. Hence to implement master plan, each departmental head prepares a plan of his department. Prediction of general economic conditions. By this, the management can notice short comings in time and can also take immediate suitable corrective actions. Operational research can be used to evaluate the alternative sources of action. For a socio-economic system, the only vehicle for change (adaptation or innovation) is the business planning and decision making process as described above. It should be easily acceptable by the operating personnel. Some alternatives can be seen through, some may appear to be the most profitable and will be too expensive. Human Resource Planning Process – 3 Main Steps: Human Resource Demand Forecasting, Human Resource Supply Forecasting and Initiating Human Resource Actions Human resource planning (HRP) involves developing strategies for acquisition, utilization, improvement and retention of human resources. Most good product ideas are born when a consumer notices a need for a specific tool that will solve their problems. This will help in evaluating and selecting plan or course of action which will be the optimum or the best, considering all the factors in the interest of the company. Koontz and O’Donnell state: “There is seldom a plan made for which reasonable alternatives do not exist.” Therefore, managers should search for and examine alternative courses of action. Management planning process is a step by step guide to creating a realistic organizational plan to meet set goals after assessment of available resources. The steps generally involved in planning are as follows: The first step in planning is to determine the enterprise objectives. The graphic above and the next graphic provide an overview of the planning levels preceding production in the R/3 System. Planning will be reliable when the forecast methods are accurate. Managers have to “sell” the plan to the people who will be responsible for turning it into reality. The last step in planning process is the implementation part. The planner should study all the alternatives and then a final selection should be made. Securing Participation of Employees 11. For instance a basic marketing plan may result in other derivative plans such as the advertising plan, recruiting personnel plan, training plan etc. The first step of the management planning process is to identify specific company goals. So, the management should involve employees in planning through communication, consultation and participation. The continuous evaluation of planning is also necessary. Budgeting is telling money where to go rather than asking it where it went. Each alternative weighed against the other alternatives. (ii) Is an entirely new plan necessary or is it sufficient to modify the existing plan? Objectives are the goals which the management tries to achieve. (e) The economic policies of the government. After choosing a course of action, the next step will be to make an evaluation of those courses of actions. It is essential to identify the assumptions on which the plans will be based. Here we establish the objectives for the whole organization and also individual departments. Similarly, products may be sold directly to the consumer by the company’s salesmen or through exclusive agencies. The fifth and most important step in planning process is evaluation and selection of the optimum plan. The term action programme includes fixing time limit for performance, allocation of work to individuals and work schedule. in the future. There is however, one problem which confronts us while analysing these alternative courses. Best results will be achieved only when best way of doing a work is selected. Before taking a final decision about any alternative, a forecast of these assumptions is made. Subsequently, a career plan will help you capitalize on these and find a successful career path. Identification of Alternatives 5. iii. Overall objectives define the goals to be achieved in general, whereas derivative objectives provide focus on their details i.e. The short comings can be rectified as early as possible. Determining Planning Premises and Constraints: Planning is forward looking. Working from the top … iv. It is necessary to clearly ascertain the areas requiring improvement for which planning is to be visualised. We have the following major steps, in the 5 step planning process: Defining Objectives There are five major stages in the planning process. It is an intellectual exercise and a conscious determination of courses of action. The assumptions along with the future forecasts provide a basis for the plans. 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. Planning is not complete as soon as the best course is selected. The process map should depict all phases including the early planning steps, feasibility and master plans, the permitting process and final implementation. Planning starts with the determination of objectives. 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. Preparation of Working Drawing 2. (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. Common steps in planning are mentioned below: 1. Everything you need to know about the steps involved in planning process. Therefore determination of objectives of business starts the planning process. Important derivative plans used in business include policies, procedures programmes, projects, methods, budget, rules etc. The six steps to the strategic planning process include: Identifying your strategic position; Gathering people and information; Performing a SWOT analysis; Formulating a strategic plan; Executing a strategic plan; Constantly monitoring performance Once upper-level managers have selected the basic long-term goals and the planning premises, the next task is to decide the period of the plan. Without the secondary plans, the basic plan which is prepared for the whole enterprises cannot be effectively operated. They are required to be balanced in the form of balance sheet. The expectation of technology change in production. Flexible plans can adapt with changes in the environment. Therefore, the management may decide to select two or more alternatives and combine them to have most feasible plan. There is seldom a plan for which reasonable alternatives do not exit, and quite often an alternative that is not obvious proves to be the best. In some instances, plans are made for a year only while in others they span decades. After determining the organization’s objectives, we fix up the departmental objectives and then the objectives of sections of the department. Strategy thinktanks also call this an explicit approach. Information must be classified, analyzed and processed. Planning involves a number of steps ranging from determining the objectives to follow-up action as detailed below. Establishing Objectives 3. 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. Objectives can be long term and short term as well. (c) Whether it is necessary to devise a new plan or will it be sufficient to modify the existing plan? The planning of the sales and production quantities can be carried out in different levels of detail. Therefore, it requires a serious thought on numerous factors necessary to be considered in making plans. Each alternative has its own strong and weak points. Keeping the general economic conditions in mind, a study of the industry is made. Thus, planning is a continuing and ongoing process involving planning action-control and re-planning and plans are subject to alterations in the light of new circumstances. The implementation will require establishment of policies, procedures, standards and budgets. (9) Providing for Follow-Up and Future Evaluation: In order to see that the plans are proceeding along right lines, it is necessary for the management to devise a system for continuous evaluation and appraisal of the plan. Normally, managers will select the alterna­tive that, in their judgement, will best enable the firm to accomplish its goals. Objectives should clearly define as to what is to be achieved by policies, procedures, rules, strategies, budgets and programmes. The trend of economic situation should also be visualised. To make the planning process more effective, it should also provide for a feedback mechanism. Welcome to the Planning Process -ERP PP page. But, every organisation has to prepare the plan according to the changing trends in the external environment. The planning process is different from one plan to another and varies from company to company. What would be their manufacturing costs? iv. Plans are prepared with a view to achieve certain goals. 5 step planning is an example of a formal planning process. In fact secondary plans are meant for the implementation of principal plan. The steps in the planning process are: Develop objectives ; Develop tasks to meet those objectives ; Determine resources needed to implement tasks ; Create a timeline All these possibilities must be explored during the planning process. Present and future opportunities must be found so that planning may be undertaken for them. Premises include actual forecast data, policies and plans of the enterprise. Evaluation involves the study of performance of various actions. This involves converting it into action. The management should watch how the planning is being done. Computer based mathematical plans and techniques can also be utilized to identify best course of action. Constant monitoring of plans is necessary so that adjustments and corrections can be made in a timely and relevant manner. Determining the alternative courses of action is an important step in the planning process. After implementing the plans, the sequence of different activities has to be decided. Goal setting: Plans are the means to achieve certain ends or objec­tives. In such a situation, the planners should evolve a new alternative course by a mixture of different alternative courses. The following is a simple guide that explains the basic steps of project management planning. Since future environments are so complex and uncertain; it would not be realistic to make assumptions in great details about every environmental factor. Throughout the planning process, premises must be monitored and updated. 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. The adviser may ask open-ended questions to … For example, if thinking of the government is to develop rural areas as industrial centres, a farsighted businessman will think of setting up units suitable to that environment and will avail the facilities offered for this purpose. The success or failure of planning will depend upon the forecasts for various factors mentioned above. The career planning process applies to any career at any given point. An intelligent manager must make plans anticipating the conditions or limitations that might restrict the smooth operation of the plans. This further includes identification of problems to which solutions are to be provided and the opportunities that can be grabbed to make use of. Such identified strength and weakness are assets and liabilities. In the planning process, objectives are determined and defined first of all so that all the employees concerned can be informed about them to get their complete cooperation. They indicate the end result the company wishes to achieve. 5. These are described as derivative plans. Following steps are taken in planning process: 1. The ultimate objective of the plan is to achieve certain objectives, results or goals. Once management team establish… The plan should be objective oriented. In this sense, these constitute the planning premises. The evaluation of various alternatives will help in knowing which of them offers the greatest chance of success in reaching the desired objectives. Objectives are the guides of employees. Doing the ground work Page14 What is planning? Project Planning Process Step #15: Create process improvement plan. That is, managers should be able to restate the objectives of the firm in definite and clear terms that will motivate examination and evaluation of performance against targeted performance in the plan. Such an evaluation must be made at the earliest possible opportunity so that adequate controlling is resorted to for ensuring achievement of planned goals. The strategic planning process helps an organization fill the gap between its current state and the desired state. Although the strategic planning process … 6. Understanding goals and plans of the … Ingenuity and imagination as well as experience are required to ascertain a number of possible alternative courses of action available in a given situation. Moreover, before weighing alternatives and reaching a decision, one is wise to search for alternatives that may not be immediately apparent. Strategy is a framework of plans or methods that help and organisation to achievement of the main objective. 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