Process or Steps Involved in Planning
A plan can help to avoid mistakes and to recognize hidden opportunities. Preparing a satisfactory plan is essential and the management should understand the planning process clearly what they want to achieve, and how and when to do it. Planning involves number of steps; the main steps of planning are as follows.
1. Aware of business opportunities: It is necessary to analyse the internal and external environment to know the trends in near future. Business activities are influenced by Government regulations, technological changes, availability of raw material, labour etc. The business men have to look for opportunities by observing the business environment.
2. Setting Objectives: plans are prepared with a view to achieve certain goals. so establishing the objectives is an important step in planning. The overall objective of the enterprise must be stated along with the specific objectives of individual department and divisions in the organisation. The objectives must be stated in measurable terms i.e., Percentage, Production, Sales, number of units etc.
3. Considering planning premises: Planning premises are the anticipated environment in which plans are expected to operate. As planning is for future, certain assumption about the future is uncertain. It is necessary to make assumption about the factors influencing internal environment and external environment. The factors which affect the plan must be identified and evaluated.
4. Identifying the alternative course of action: For doing a work there are always certain alternatives. The planners should study the entire alternative, considering the strong and weak points of them and finally identify the most promising one to reach the goal.
5. Evaluating alternative course of action: once the alternative course of action are identified, the next step is to evaluate the same. Evaluation means studying the merits and demerits of each alternative. Each alternative should be closely studied to determine its suitability.
6. Choosing the best alternatives: once the alternative courses of action have been evaluated the next step is to select the best. The alternative selected should help the organisation in making an optimum use of available resources and help to attain the objective set in the most effective manner.
7. Formulation of supporting plans: The main plan should be supported by number of supporting plans to attain the goal. Ex: Once the production plan is ready the supportive plans such as purchase of raw materials, tools, equipments, engaging workers etc, have to be formulated. Without supportive plans it is not possible to carry out the main plan.
8. Implementation of plans: Implementation of plan means putting the plans into action so as to achieve the business objectives. After implementation of plans, it is necessary to ensure that the activities of the enterprises proceed in the right direction.