There are a number of ways of doing a thing. Companies generally base their period on a future that can reasonably be anticipated. Therefore determination of objectives of business starts the planning process. (ii) Is an entirely new plan necessary or is it sufficient to modify the existing plan? There is however, one problem which confronts us while analysing these alternative courses. Planning involves a number of steps ranging from determining the objectives to follow-up action as detailed below. The trend of economic situation should also be visualized. Page4 Regular planning step-by-step Page25 Planning tools – overview Page35 Monitoring and Evaluation Page43 Why plan? It helps in making realistic assumptions about sale, costs, prices, products, and technological developments etc. 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. In the light of the above analysis the possible alternative courses of action will have to be ascertained and examined. These plans are meant for the implementation of the main plan. Secondary plans flow from the primary or basic plan. The trend of economic situation should also be visualised. Resource audit means an analysis of the strength and weaknesses of an organisation. Preparation of Working Drawing 2. 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. Once the organisation’s objectives are determined, the section-wise or department-wise objectives are planned at the lower level. (b) External Premises – Rate of interest, rate of taxes, etc. An intelligent manager must make plans anticipating the conditions or limitations that might restrict the smooth operation of the plans. Changes in the environment and the organisation subvert even the best plans. 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 implies a calculation of how certain factors will behave in future. Then the manager proceeds to make a study of his company’s share of the market. With this, the plan can be considered to have been adopted. Facts are collected and analyzed and the best out of all is chosen and adopted. If there is clarify about the objectives, we can plan for the future. Planning is not possible without definite objective. Cost benefit analysis of each alternative must be made. The next step is determining available alternative ways of achieving objec­tives. It is an intellectual exercise and a conscious determination of courses of action. Below, we have explained the different steps you need to take along with tools that can accelerate the process. The plan should be objective oriented. 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. For every plan there are a number of alternatives and hence, all possible alternatives to work out a plan for achieving the desired objectives should be found out for their evaluation. Organizational objectives provide a general direction, objectives of departments will be more planned and detailed. Defining the objectives of every department is a very essential one; then only clear-cut direction is available to the departments. Determining Alternative Courses 5. According to Koontz and O’Donnell, “There is seldom a plan made for which reasonable alternatives do not exist.” All the pros and cons of methods should be weighed before a final selection. Perception of Opportunities 2. 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. Some of the premises such as population growth are uncontrollable by the organisation whereas others such as advertising policy to be adopted by the company are controllable. Planning will be in the backdrop of such premises and constraints which must be watched to detect changes and their effect on plans. From the basic plans as selected above, other plans will have to be developed, to support the basic plan. Through the monitoring function, managers can take corrective action if they observe unexpected and unwanted deviations. 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 … 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. Privacy Policy3. 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. The implementation will require establishment of policies, procedures, standards and budgets. 3. It is essential that objectives should be properly formulated and communicated to all members of the organisation. External environment includes Govt. Examining Alternative Course of Action: The next step in planning will be choosing the best course of action. Planning means thinking in advance. Formulation of Supporting Plan 8. So, the management should involve employees in planning through communication, consultation and participation. These organizational goals are made by senior level managers after reviewing numerous objectives. Planning is deciding in advance what actions and resources are required to reach a goal. Infographic on Important Steps in Planning Process, Capital Budgeting | Planning of Capital Expenditure, What is Business Process Re-engineering | Characteristics of BPRE, Differences between Policies and Procedures, 10 Important Objectives of Economic Planning, Sources of Power in Organization | Internal Source | External Source, Weaknesses of Trade Union Movement in India and Suggestion to Strengthen, Audit Planning & Developing an Active Audit Plan – Considerations, Advantages, Good and evil effects of Inflation on Economy, Vouching of Cash Receipts | General Guidelines to Auditors, Audit of Clubs, Hotels & Cinemas in India | Guidelines to Auditors, Depreciation – Meaning, Characteristics, Causes, Objectives, Factors Affecting Depreciation Calculation, Inequality of Income – Causes, Evils or Consequences, Accountlearning | Contents for Management Studies |. It takes into consideration both long-term and short-term corporate strategies and spells out the vision and the direction to which the company is headed. Important premises include- (a) forecasts, (b) basic policies and (c) existing company plans. Planning is a process, which embraces a number of steps to be taken. Internal factors include organization’s policies… Selecting the most appropriate alternative involves choos­ing the plan. 7. Then the plan and its subsidiaries are implemented. (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. Organisational goals provide direction to and control the objectives of subordinate departments. Managers use these premises to evaluate future events, and to develop ‘action statements’ and alternative course of action. policies, social values, political conditions, international situation and other externalities that may have effect on the organisation in future. Determining the alternative courses of action is an important step in the planning process. The career planning process applies to any career at any given point. Planning Process comprises of: Setting Objectives, Developing Premises, Identifying alternative courses of action, Selecting an alternative, Implementing the plan and Follow-up action. Hence, the management should find alternative ways and examine them in the light of planning premises. For instance, technical know-how may be secured by engaging a foreign technician or by training staff abroad. Planning premise is planning assumptions – the expected environmental and internal conditions. Evaluating Alternative Courses 6. i. Planning process involves the setting up of business objectives and allocation of resources for achieving them. If the forecasts are accurate then planning will also be reliable. The process map should depict all phases including the early planning steps, feasibility and master plans, the permitting process and final implementation. Obviously, it is foolish to let a plan run its course without monitoring its progress. Before venturing into new areas the pros and cons of such projects should be evaluated. They must monitor and maintain their plans. (g) The impact of technological changes on production processes. This portion of the planning process should include a detailed overview of … Welcome to the Planning Process -ERP PP page. It is a combination of information handling and decision making systems based on information inputs, outputs and a feedback loop. These objectives are based on the number of factors like mission of the organization, abilities of the organization. v. The resources required for the implementation of the plan should be made available. Middle and lower-level managers must draw up the appropriate plans, programmes and budgets for their subunits. 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. (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. (iv) If yes how? This will help you integrate the Basic Principles. The main steps that are taken in planning process are as follows: Establishing the objectives is the first step in planning. After selecting the few viable alternatives, they should be evaluated with the help of number of parameters which are related to planning premises and objectives. Planning determines the future course of action for utilising various resources in a best possible way. Here, the secondary plan includes production schedule, purchase of plant and machinery, purchase of raw materials, consumable stores, selection, training and placement of personnel and the like. Similarly, products may be sold directly to the consumer by the company’s salesmen or through exclusive agencies. All information relating to operations of the business should be collected in detail. Facts are collected and analyzed and the best out of all is chosen and adopted. Some of the premise like population growth and political environment are uncontrollable while some degree of control can be exercised on the technology to be used, availability of raw materials, etc. Plans provide the course of action to reach predetermined goals, by departments and ultimately by the organisation. After implementing the plans, the sequence of different activities has to be decided. Plans should be compared with actual results. Before actual planning is initiated relevant facts and figures are collected. 5. Disclaimer Copyright, Share Your Knowledge For example, once a basic plan of sales is decided upon, a number of secondary plans could be prepared. 4 Basic Steps in the Business Planning Process Ultimately, the definition of business planning can be seen in the business planning process. This process can also be used as motivation to individuals in achieving the objectives because they have helped in establishing them along with tasks to be performed for their achievement. Planning is always for uncertain future. This will help in knowing “where we stand in the market.”. In the second step, the organization sets forth goals based on … In this sense, these constitute the planning premises. Now it's time to create a strategic plan to successfully reach your goals. Process Selection 4. This involves putting the plans into action so as to achieve the business objectives Implementation of plans requires establishment of policies, procedures, standards, budgets, etc. The evaluation of various action patterns is essential for proper planning. Because the future events are complex, premises must be limited to assumptions that are critical to a plan. The success or failure of planning will depend upon the forecasts for various factors mentioned above. These are necessary to achieve the objectives within the specified period. Developing Premises 4. Again forecasting is important in premising. This is the point at which the plan is adopted – the point of decision making. The second step in the planning process is to establish objectives for the entire organisation and then for each subordinate work unit. The question of timing and who will do that, will then have to be enunciated. Formal planning is a systematic process. Constructive approach can reveal the deficiencies and pinpoint weaknesses, particularly in relation with competition. 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 . What will be the market force? Further, there will be constraints like Government Control which affect the plans. The worst decision is ‘to decide not to decide.’. After determining the organization’s objectives, we fix up the departmental objectives and then the objectives of sections of the department. The process of planning does not end with the implementation of plans. Present and future opportunities must be found so that planning may be undertaken for them. 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