2.
1 PLANNING PROCESS
Being aware of opportunity
Establishing objectives
Considering the planning premises
Identifying the alternative courses
Comparing the alternatives
Formulating Supportive plans
Implementing the plans
Reviewing plans
The planning process consists of the following steps:
(1) Being aware of opportunity: Awareness of an opportunity is the real starting point for
planning. It includes identifying all possible future opportunities and then analyzing them in the
light of the organization’s strengths & weaknesses. Awareness of the opportunity in terms of
organizational capabilities helps in setting realistic objectives. So, as a first step, planning
requires realistic diagnosis of the opportunity situation.
(2) Establishing objectives: Objectives specify the end points of what is to be done, where the
primary emphasis is to be placed and what is to be accomplished by the network of strategies,
policies, procedures, rules, budgets and programs. At first overall objectives of the organization
are determined and based on that, the objectives of each department are laid down. Objectives
should be clear, definite and simple. The objectives should be communicated to everyone in the
organisation so that they fully contribute to the successful attainment of objectives.
(3) Considering the planning premises: Planning premises is the boundary under which plans
will operate. This boundary is determined by both anticipated internal and external environment.
These factors affect the practicality of planning and need to be forecasted. The accuracy with
which these factors are forecasted determines the success of planning.
(4) Identifying the alternative courses: - There are many methods of doing a work. On the basis
of objectives of the organization and the boundaries identified alternative courses of achieving
the objectives are discovered. For example, if a company is engaged in producing only men’s
products then it can start manufacturing women’s products or by purchasing or taking over any
other business. Keeping in mind the limiting factors all alternative courses of action should be
identified.
(5) Comparing the alternatives: - All those alternative courses which meet the expectations of
the minimum preliminary criteria are selected for intensive study. It will be seen as to what
extent a particular alternative can help in the attainment of the objectives of the organization.
Every alternative has merits and demerits. For example, one course of action may appear to be
the more profitable but require a large cash outlay and a slow payback, another may be less
profitable but involve less risk still another may better suit the company in long-range objectives.
After comparing all alternatives, the best alternative is selected.
(6) Formulating Supportive plans: To give practical shape to the main plan, many subsidiary
plans are needed. These subsidiary plans or sub plans are not independent plans but only a
reflection of the main plan. For example, different plans for the purchase department, sales
department, finance department, personnel department etc are prepared in light of the objectives
of the organisation.
(7) Implementing the plans: After the main plan and the subsidiary plans are formulated, they
remain to be implemented. Implementation should be done carefully. Even the best plan will not
achieve the objectives if badly implemented. For successful implementation plans should be
communicated to everyone in the organization.
(8) Reviewing plans: The process of planning does not end with the implementation of plans. 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 internal and external
environment, plans should be moulded accordingly. In this way we can say planning is a
continuously moving process.
Why do plans fail?
If managers know why plan fail, they can take steps to eliminate the factors that cause failure
and thereby increase the probability that their plans will be successful. Plans fail when:-
(1) Corporate planning is not integrated into the management system.
(2) Lack of understanding of the different steps of planning process.
(3) Lack of participation of managers at different levels in the organization in planning activities.
(4) Lack of coordination of different departments in planning and vesting the Responsibility for
planning to the planning department only.
(5) Management expects that plans developed will be realized with little effort.
(6) Over ambitious planning. At the starting phase, too much is attempted at once.
(7) Faulty implementation of the plans.
(8) Lack of understanding of the plans which may be due to poor communication of the plans or
because of failure to grasp the overall planning process.
(9) Financial projections are confused with planning.
(10) Inadequate inputs are used for planning.
