What are the steps taken by management in the planning process?

Or

Explain the process of planning.

Following are the steps of planning process:

(i) Setting Objectives: Objectives are those end points for whose attainment all the activities are undertaken. 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. Objectives have a hierarchy of their own, e.g., organisational objectives, departmental objectives, and individual objectives. They are determined and defined in the same hierarchical order.

(ii) Developing Premises: The basis of planning are those factors/assumptions which influence the possible results of different alternatives. Before taking a final decision about any alternative a forecast of these assumptions is made. The rate of success of planning will be in direct proportion to the rate of the success of forecasting. The assumptions/premises of planning are of two types:

(a) Internal Premises: Capital, labours, raw material, machinery, etc.

(b) External Premises: Governmental policies, business competition, tastes of customers, rate of interest, rate of taxes, etc.

(iii) Identifying Alternative Courses of Action: Generally, there is no work which has no alternative method of doing it. On the basis of the objectives of the organisation and the limitations of planning, alternative courses of doing a particular work can be discovered.

(iv) Evaluating Alternative Courses: At this stage, it is seen as to what extent a particular alternative course can help in the attainment of the objectives of the organisation. There is, however, one problem which confronts us while analysing these alternative courses. Every alternative course has its merits and demerits. In such a situation the planners should evolve a new alternative course by a mixture of different alternative courses.

(v) Selecting an Alternative: After a careful analysis of different alternatives the best one is selected. Sometimes the analysis yields more than one alternative course with similar merits. Keeping in view the uncertainties of future it is justifiable to select more than one good alternative course. One of such alternatives is adopted and the other is kept in reserve. In case the future forecast proves wrong and the first alternative course fails, the reserve one can immediately be brought into operation and failure can be averted.

(vi) Implementing the Plan: After having decided the chief plan and the subsidiary plans, they are to be implemented. After implementing the plans the sequence of different activities has to be decided. In other words, it is decided as to who will do a particular job and at what time.

(vii) Follow Up Action: The process of planning does not end with the implementation of plans. Plans are formulated for future which is uncertain. It is of great importance that there is a constant review of plans so as to ensure success in the uncertain future. The moment there appears to be changes in the assumptions on which the plans are based, there should be corresponding changes in the plans also. In this way we can say planning is a continuously moving process.