Steps in planning

Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives.Planning requires that a manager should be aware of the happenings going on in the business environment, and also the resources, strengths and weaknesses of the organization he plans for, he should also have the ability to forecast future conditions.Planning is a process consisting of several steps. The process begins with environmental scanning which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.
Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.

Lets now go in depth with the short summary of planning discussed above. As you recall, the steps in planning are :
1. Being aware of opportunities and threats
2. Establishing objectives
3. Premising
4. Determining alternative courses
5. Evaluating Alternative courses
6. Selecting a course
7. Formulating derivative plans
8. Numberizing plans by budgeting



1. Being aware of opportunities and threats: This can be called environmental scanning, the manager has to be aware of opportunities to take advantage of them, and also the threats, in order to use its strength to deal with them.So in a nut shell, being aware of opportunities and threats means a preliminary look at possible future opportunities and the ability to see them clearly and completely. Having a knowledge of where we are in light of strengths and weaknesses, why we wish to solve uncertainties and a vision of where we want to be and what we expect to achieve. Planning requires realistic diagnosis to set targets and goals that would motivate employees to strive to achieve them, and this therefore requires deep awareness of the environment around and the internal strenghts and weaknesses.


2. Establishing objectives:
 This is the next step in planning, it actually is the first step in planning itself. The manager establishes objectives for the entire enterprise and then for each surbodinate unit. What then are objectives? An objective can be defined as a specific result that an organization or individual hopes to achieve in a given time frame and with available resources.
Enterprise objectives should give direction to the nature of all major plans which, by reflecting these objectives, define the objectives of departments. Major department objectives, in turn, control the objectives of surbodinate departments, and so on down the line.


3.Premising: The next step to successful planning would be to establish, obtain agreement to utilize, and disseminate critical planning premises.This aspect deals with making future forecasts, but backed up by statistical reasonings of previous datas. Premises then are planning assumptions, the premising step leads to one of the major principles of planning: The more individuals charged with planning understand and agree to utilize consistent planning premises, the more coordinated enterprise planning would be. Since agreements to utilize a given set of premises is important to coordinated planning, it becomes a major responsibility of managers to ensure that surbodinate managers clearly understand the premises upon which the plan is to be based on.


4. Determining alternative courses: The third step in planning is to search for and examine alternative courses of action. For every plan there are pros and cons, strengths and weaknesses. You seldomly see a flawless plan,so we need to develop alternatives and weigh them to see which would be better of using, and quite often an alternative that is not obvious proves to be the best .
The more common problem is not finding alternative courses of action in itself, but reducing the number of alternatives so that the most promising may be analysed. It is therefore recommended that the decision maker takes preliminary investigation and examination of alternatives and reducing them to those one promising the most fruitful possibilities.


5. Evaluating Alternative Courses:
The fourth step is to evaluate alternative courses of action by weighing the various factors in light of premises and goals. Typically planning is filled with uncertainties, and this makes evaluation difficult even for the simplest of problems. Because the number of alternative courses in most situations are many, and numerous variables and limitations are involved, evaluation can be exceedingly complex. Due to this complexity, the newer application of operation research and methodologies are helpful


6. Selecting a course: The fifth planning step is selecting the course of action. This is the decision making point, the purpose of planning boils down to this. Occasionally an analysis and evaluation of alternative courses will disclose that two or more are advisable, and the manager may decide to follow several courses rather than a single course.



7. Formulating derivative plans:They are almost invariably derivative plans required to support
the basic plan


8. Numberizing plans by budgeting: This is the last step in planning. When plans have been made and the ship is ready for take off, the next step is to give those plans meaning by numberizing them in form of a budget. The overall budget of an enterprise represents the sum total of income and expenses with resultant profit or surplus, and budgets of major balance sheet items such as cash and capital expenditure.


Advantages of planning include:
1. It helps to provide adequate information for managerial decision making

2. It compels managers to focus on objectives

3. With effective planning in place a manager is always able to identify actions that deviate from the objectives.

4. Planning helps managers to identify available resources and how to organize them.


5. It makes easy the controlling process as it ensures proper job allocation,reward system and interpersonal relationship etc.


6. Plans enable managers to achieve easy coordination of activities of the various departments or work groups.