Table of Contents
Meaning of Planning Process:
Planning is a continuous process which is concerned with “what to do” and “how to do”. It basically acts as a bridge that fills the gap between “where we are” and “where we want to go”.
Planning is the primary function of management because planning precedes all other functions of management and it helps in determining the course of action to be followed for achieving various organizational objectives.
Steps of Planning Process:
The steps of the planning process are briefly discussed below:
(i) Setting Objectives:- The first & foremost step in the planning process is setting organizational objectives which define what the organization wants to achieve. For example – increasing profit by 10% could be the objective of a company manufacturing soft toys.
(ii) Developing Premises:- Planning is related to future happening which is uncertain. Therefore, the manager is required to make certain assumptions about the future. These assumptions are known as Planning Premises, which are considered to be the base material on which plans are to be drawn.
Q- how these assumptions are made?
A- assumptions are made in the form of predictions about the demand for the company’s product, government policy, wage rates, tax rates, etc.
(iii) Identifying alternative courses of action:- once the objectives are set & assumptions are made, then the next step is to identify all possible alternative courses of action.
For ex- in order to achieve the organizational objective of increasing profit by 10%, the alternatives may be:
- Purchasing new high speed machinery
- Taking raw material in bilk so that cost per unit can be decreased
- Using waste material in stuffing of soft toys etc.
(iv) Evaluating alternative courses:- The next step is to evaluate the positive & negative of each alternative listed above in the light of their feasibility and consequences.
(v) Selecting an alternative:– This is the real point of decision making. The best alternative must be selected which is most feasible (easy to achieve), profitable & with the least negative consequences.
For ex- using “waste material in stiffing of soft toys” is the best solution for increasing the profits.
(vi) Implementing the plan:- This is the step where other managerial functions also come into the picture. The step is concerned with putting the plan into action, i.e., doing what is required.
For example, if there is a plan to increase profit by 10% then more labor or more machinery will be required. This step would also involve organizing for labor or purchase of machinery.
(vii) Follow-up Action:- Planning is a continuous process so the manager’s job does not end simply by putting the plan into action. The manager monitors the plan carefully while it is implemented. Monitoring the plans is equally important because it ensures that objectives achievement.
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