During planning process, various steps or stages are the determination of objectives, the establishment of assumptions of planning, evaluation of alternative modalities, selection of best modality and formulation of subsidiary plans, etc.
Planning is fundamentally choosing and a planning problem arises only when an alternative course of action is discovered.
Planning process is basically a choosing process because through planning the best alternative is selected and implemented from various available alternatives, to achieve the predetermined objectives.
Essential Steps in Planning Process
Following are the various steps of planning process.
1. Determination of Objectives
Determination of objectives and goals is the first step of planning process.
So, first of all, the objectives of planning of the business institution should be determined.
Thereafter, the objectives of the departments and sub-departments should be determined. While doing so, it should be kept in view that these should be in consonance with the objectives of the institution and may also be sufficiently balanced.
All employees of the organization should be made well aware of the objectives of the institution, so that they may direct their efforts towards them.
It is true that planning should be for some meaningful objectives because the objectives specify that what is to be basically done, where the attention is to be mainly concentrated and what use is to be made of the policies, procedures, budgets, and programmes.
The objectives and goals of planning should be so determined that all concerned persons may understand and execute them easily.
2. Collection and Analysis of information
Necessary facts and information for the activities related to planning are collected, after determination of the objectives or goals of planning.
This information may be obtained from internal and external sources. for it, old records, files, experience and observation of the activities of the competitive institutions are used.
After the collection of information, there are suitably analyzed. while analyzing the situation, it should be known, how these facts and information may affect planning and may prove useful.
The basic objective of analysis should be to make information useful, simple and according to the objectives.
3. Establishment of Planning Premises
After collection and analysis of information relating to planning, the premises of planning established.
These premises forecasts are a type of those assumptions, which are related to future conditions.
Hence, proper estimation of future conditions is quite essential for the success of planning. These premises provide necessary information for uncertain circumstances of the future.
For example, what will be the market conditions in future, what will be the volume of sales, in which direction will be the price trends, what will be the status of capital market, how much will be the labour supply, what will be the tax structure and what will be the nature of government policies, etc.
For obtaining information on these issues of planning, forecasts are to be determined, as premises of future planning.
4. Determination Alternative Courses of Action
At this stage or steps of planning process, the collected information, facts and knowledge are used to determine the alternative course of action.
Possibly no scheme is such, for which various logical alternatives are not available. There are more than one methods of doing any work.
Hence, the best method should be found, for which techniques and methods of decision making are used, so that any best alternative may be selected, out of various alternative methods or possibilities.
Good planning cannot be formulated, and the good result is expected until alternative methods or courses of actions are not developed.
So, it is essential to find out possible alternative courses of action.
5. Evaluating Alternative Courses of Action
The fifth important step or stage of planning process is to evaluate alternative courses of action. A planner should keep the following points into consideration while evaluating alternative courses of action.
- This should be done by keeping the premises and goals, into consideration.
- It should be done with sufficient caution, alertness, and foresightedness.
- Every alternative or alternative procedures have their own advantages and disadvantages and their use requires different sources and their risks are also different. Hence, all alternatives should have a detailed evaluation and test.
- Sometimes, it so happens that an alternative appears best from one angle, whereas another alternative appears best from another angle.
Hence, all alternatives should mathematically be evaluated and tested in details on same points.
For example, a particular method may appear to be quite useful for doing any work, but that large amount may be required.
The Second method may be less profitable but may require lesser capital and involve lesser risks also.
The Third method may be more beneficial to achieve the long term objectives of the company.
In all such conditions, comparative evaluation is essential. Only then, successful planning may be formulated.
6. Selecting the Best Course of Action
The best course of action is selected after evaluating various alternatives available for any work. This is a point at which decision is taken and from where plan formulation begins.
Here, it is noteworthy that sometimes, evaluation of alternative courses of action makes it clear that a single course of action is not sufficiently useful to achieve the objectives or goals of the institutions rather the combination of various courses of action will be more useful.
In such conditions, the use of a combination of various courses of action should be done in place of selecting any particular course of action.
7. Plan Formulation
After the selection of the best course of action or the best alternative, the next stage is to formulate the plan or to give it final shape.
At this step or stage of planning process, the plan is formulated in details, various aspects of the plan are thoroughly considered, sequential stages of the plan are determined and the whole plan is divided department wise and this way the plan emerges in its final shape.
Here, it is noteworthy that the work of planning does not end with the formulation of the plan, but includes following planning procedures in its function.
8. Formulation of Subsidiary or Derivative Plan
After formulation of any master plan, subsidiary or sub-plans are also required to be formulated, for proper implementation of the master plan.
Subsidiary or sub-plans are not completely independent but are the parts of the master plan.
Subsidiary or sub-plans ate very necessary or developing new policies and courses of action to effectively implement any plan.
Although there is only one master plan for achieving the determined objective of the institution, by various departments of the institution, like– purchase department, sales department, production department, finance department, and personnel departments have their own different plans, which are called sub-plans, which is part of the master plan.
9. Determining Timings and Sequence of Activities
After preparation of the plan and related sub-plan, timings and sequence of various activities of these plans should be determined to give them practical shape.
Timing has been regarded as an important component of planning. Timings provide firmness to plans and programmes.
At this stage or steps of planning process time schedules are decided, when any particular activity, will start and when it will conclude.
Similarly, the sequencing of the activities is also fixed. It is determined that all activities are arranged in preference or sequences.
10. Securing Participation
The determined objectives and goals can not be achieved only by formulating plans and sub-plans.
For achieving the determined goals, the participation of which persons of the organization should be essentially ensured.
Hence, all related persons should have sufficient knowledge of planning and their advice should be taken for implementation and adequate attention should be paid to their suggestions for implementation of plans.
Thus, at this step/stage of planning, plans are executed by securing the cooperation of the employees.
11. Formulation and Use of Strategies
At this steps or stage of planning process, strategies are formulated to accomplish plans, in the context of changed timings and human tendencies.
Specific strategies are used when special circumstances arise.
12. Follow Up
The success of planning depends upon its results. The Follow Up should also get due to place in planning, so that the plans may be changed, in the context of change, requirements, circumstances, and changes.
On various occasions, problems by the then circumstances necessitate changes in the plan.
For the solution of the problems, to continue plans to be favorable and to achieve the desired results, follow up of plans are also necessary.
Therefore, it has been accepted as a step of planning process itself.
Thus, now you know all the important steps of planning process.