Prices and wage rates can also be forecast. Determining Planning Premises and Constraints: Planning is forward looking. In this sense, these constitute the planning premises. The basis of planning are those factors/assumptions which influence the possible results of different alternatives. Though nothing may be certain in the coming period but still certain assumptions will have to be made for formulating plans. With this, the plan can be considered to have been adopted. There are several key components that make up the strategic planning process, including common phases like strategic analysis and strategy formulation, along with implementation and monitoring. Project Planning Process Step #16: Determine all roles & responsibilities . Objectives must be specific and clear and should indicate the end result of planning activity. There are five major stages in the planning process. If no gap is found from the above analysis (step six), there is hardly any problem. Without the secondary plans, the basic plan which is prepared for the whole enterprises cannot be effectively operated. Strategy mapping is an effective tool to visualize your entire plan. A forecast means the assumption of future events. In the light of the above analysis the possible alternative courses of action will have to be ascertained and examined. Good managers assume changes and plan for them. This is the point at which the plan is adopted – the point of decision making. 6. Plans are blue prints of what is to be done, how is to be done, who has to do etc. Implementing the Plan 10. Forecasts will generally be made for the following: (a) The expectation of demand for the products. For Example—for effective operation of the basic production plan, a number of secondary plans for purchasing basic production plan, a number of secondary plans for purchasing of raw materials acquisition of plan and machinery, training of workers arranging for adequate finance, etc., have to be prepared for the successful operation of the basic plan. 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. Conduct an Environmental Scan. Determining the alternative courses of action is an important step in the planning process. Plan should be formulated by the management in the backdrop of such premises and constraints. The tie between planning and objectives helps employees to understand their duties. Budgeting is telling money where to go rather than asking it where it went. Planning Process comprises of: Setting Objectives, Developing Premises, Identifying alternative courses of action, Selecting an alternative, Implementing the plan and Follow-up action. Similarly, products may be sold directly to the consumer by the company’s salesmen or through exclusive agencies. Adjustments and Follow Up of Plan. For example, if an aviation company decides to buy aeroplanes, then it also prepares subsidiary plans like manpower supply, training, purchasing of ancillary etc. Follow up or feedback mechanism is an attempt to determine whether the plan has achieved the desired results. Establishing the Sequence of Activities: The determined course of action is adopted for each section or department, product, for a quarter, month, week, etc. 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. The objectives are the end products and all energies are diverted to achieve these goals. They help in achieving the overall organisational goals. The first step of the management planning process is to identify specific company goals. The main steps that are taken in planning process are as follows: Establishing the objectives is the first step in planning. Usually, alternative plans are evaluated against factors such as cost, risks, benefits, organizational facilities, etc. The planning must consider the likely behaviour of these factors. 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. Securing Participation of Employees 11. The planner should study all the alternatives and then a final selection should be made. Goals are a thread which bind the whole company. (iii) Identifying Alternative Courses of Action: Generally, there is no work which has no alternative method of doing it. Planning is not possible without definite objective. All these possibilities must be explored during the planning process. Cost benefit analysis of each alternative must be made. Organizational objectives provide a general direction, objectives of departments will be more planned and detailed. 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. Everything you need to know about the steps involved in planning process. We have the following major steps, in the 5 step planning process: Defining Objectives Changes in the environment and the organisation subvert even the best plans. Quite often an alternative does not immediately prove to be the most profitable way of undertaking a plan.”. (g) The impact of technological changes on production processes. Planning involves looking into the future which necessitates the enterprise to know, how future conditions will affect its activities. Important premises include- (a) forecasts, (b) basic policies and (c) existing company plans. The evaluation of various action patterns is essential for proper planning. Sometimes, the analysis yields more than one alternative course with similar merits. Common steps in planning are mentioned below: 1. Before taking a final decision about any alternative, a forecast of these assumptions is made. What will be the market force? Planning is deciding in advance what actions and resources are required to reach a goal. However, there are some important steps to be followed by all types of companies for having a comprehensive planning for execution. The trend of economic situation should also be visualized. Implementation means that resources are committed and employees act. Hence, the process of controlling is a critical part of any plan. Important derivative plans used in business include policies, procedures programmes, projects, methods, budget, rules etc. 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. Segregation of master plan into departmental, sectional and individual plans, helps to understand the real nature of future uncertainties. Through the monitoring function, managers can take corrective action if they observe unexpected and unwanted deviations. Planning Premises 4. 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. Assumptions denote the expected environment in the future and are known as planning premises. Budgets are expressions of expectations in numerical terms. Plans should reflect the enterprise’s objectives. Organisational goals provide direction to and control the objectives of subordinate departments. (iii) Will the organisation be benefited if such a plan is prepared and put into operation? This is done with the help of quantitative techniques and operations research. 4. We have information inputs, outputs and a feed-back. (c) To work along with the major plan to reach the same objective. Sometimes, in the best interests of the enterprise, several alternative courses can be adopted. Operational research can be used to evaluate the alternative sources of action. Planning Process. Being Aware of Opportunity 2. This portion of the planning process should include a detailed overview of … Hence to implement master plan, each departmental head prepares a plan of his department. 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. Hence, the effective manager evaluates these alter­natives against the considerations for both feasibility and consequences. The trend of economic situation should also be visualised. Planning is not complete as soon as the best course is selected. It is an intellectual exercise and a conscious determination of courses of action. v. The resources required for the implementation of the plan should be made available. Future in form at in is nothing but logical anticipation of near as well as distant future. After selecting the best course of action, the management has to formulate the secondary plans to support the basic plan. Strategic Planning 101. Planning process involves the setting up of business objectives and allocation of resources for achieving them. Facts are collected and analyzed and the best out of all is chosen and adopted. Establishing Sequence of Activities. The steps in the planning process are: Develop objectives ; Develop tasks to meet those objectives ; Determine resources needed to implement tasks ; Create a timeline 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 |. These plans are developed within the framework of the overall planning. The steps are: 1. Computer based mathematical plans and techniques can also be utilized to identify best course of action. (iv) If yes how? Budgets provide meaning to plans. Generally, forecasting is made in the following ways: i. The steps generally involved in planning are as follows: The first step in planning is to determine the enterprise objectives. Selection of the Best Alternative Course of Action: The selection of the best alternative is based on the weighing of various alternatives. policies, social values, political conditions, international situation and other externalities that may have effect on the organisation in future. Planning is a process, which embraces a number of steps to be taken. Managers charged with planning respon­sibility must establish, circulate, and obtain consent to utilize critical planning premises. The term action programme includes fixing time limit for performance, allocation of work to individuals and work schedule. After determination of organizational goals, the next step is establishing planning premises, that is, the conditions under which planning activities will be undertaken. Plans should be compared with actual results. The different steps involved in process planning are: 1. Plans provide the course of action to reach predetermined goals, by departments and ultimately by the organisation. These are described as derivative plans. Therefore, planning is based on forecasting. For example, once a basic plan of sales is decided upon, a number of secondary plans could be prepared. A good planner must consider combination of all possible limitations and make provision for them. The process map should depict all phases including the early planning steps, feasibility and master plans, the permitting process and final implementation. It is important to note that the number of alternatives should be reduced to the most promising and fruitful ones by preliminary look. It requires managers to keep a careful eye on plan progress and results. Thus, forecasting is an important step in planning. Companies generally base their period on a future that can reasonably be anticipated. 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.”. This is the second step in planning. Implementation of plans is the final step in the process of planning. Managers throughout the chain of command are planners-cum-controllers. 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 . Thus, planning premises are external and internal. First, an organization establishes its preplanning foundation, which reviews past events and describes the current situation. Business enterprise is an open, adaptive system with its own environment. Following steps are taken in planning process: 1. They analyze current state and have a preliminary look at possible future opportunities. Every alternative course has its merits and demerits. Ingenuity and imagination as well as experience are required to ascertain a number of possible alternative courses of action available in a given situation. The main plan should be supported by a number of derivative plans. Setting objectives is the most crucial part of planning. By this, the management can notice short comings in time and can also take immediate suitable corrective actions. Following a career planning process will enable you to discover your professional strengths. 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. Premises encompass the expected environment of plans in operation. The adviser may ask open-ended questions to … There are two types of forecasting namely. Forecasting means the assumption of and the anticipation of certain events. They indicate the end result the company wishes to achieve. 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. Before venturing into new areas the pros and cons of such projects should be evaluated. After deciding the main plan, subsidiary plans are prepared to implement the main plan successfully. This involves converting it into action. Planning premise is planning assumptions – the expected environmental and internal conditions. Steps in Planning – Determination of Objectives, Constructing Planning Premises, Evaluation of Alternatives, Selecting Plan, Controlling the Plan and a Few Others Every business has its own problems, and so planning details differ from business-to- business. The career planning process applies to any career at any given point. So objectives will percolate down from the managers and will also guide and push the employeesin the correct directi… Analysis and interpretation of data facilitate in determining the enterprise objectives. Evaluation of Alternatives 6. It implies a calculation of how certain factors will behave in future. Now it's time to create a strategic plan to successfully reach your goals. It is a course of actions that is designed to reach smaller goals thus leading to the main aim of the com… Objectives are the guides of employees. This step requires determining the tactics necessary to attain your objectives and designating a timeline and clear communication of responsibilities. TOS4. For instance a basic marketing plan may result in other derivative plans such as the advertising plan, recruiting personnel plan, training plan etc. 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. How is the finance raised for expansion and/or modernisation of the business? It means that the actual performance is compared with the planning and then corrective action is taken if there is any deviation. Premises include actual forecast data, policies and plans of the enterprise. In view of this, the management should involve employees in planning through communication, consolation and participation. Here we establish the objectives for the whole organization and also individual departments. Due consideration is made on the availability of resources, profitability, plant capacity, available manpower, communication effectiveness and the like. v. What would be the tax policy and economic policy of the Government? Throughout the planning process, premises must be monitored and updated. Information must be classified, analyzed and processed. what exactly is to be accomplished? and (iii) developing the basis for decisions and planning through systematic investigations. Plans are prepared with a view to achieve certain goals. i. Market force refers to demand, supply, buying capacity and the like. The fifth and most important step in planning process is evaluation and selection of the optimum plan. So, there is a need for weighing all the alternatives to determine the best alternative. in the future. 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. Content Guidelines 2. The strategic planning process is essentially a list of steps that managers should follow to complete and implement a strategy within a company. After choosing a course of action, the next step will be to make an evaluation of those courses of actions. Techniques of decision-making are applied to choose a particular course of action. In fact secondary plans are meant for the implementation of principal plan. The statistical methods and computers have greatly helped the evaluation process. Such base and anticipation is the information pertaining to past, present and future. Examination of Alternative Courses of Action: An action may be performed in many ways but a particular way is most suitable to the organisation. Planning means thinking in advance. Because there is always room for better doing an activity. These organizational goals are made by senior level managers after reviewing numerous objectives. Each alternative has its own strong and weak points. 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