THE PLANNING PROCESS

PLANNING
In simple terms, planning is; setting the direction of a system, and then; guiding the system to follow that direction. According to Koontaz & ODonell Planning is deciding in advance what to do, how to do it and who is to do it. Planning bridges the gap between where we are, to where we want to go. It makes possible things to occur which would not otherwise occur.

PLANNING
The planning process includes; Defining various phases of a plan, Setting up guidelines for effective implementation of the plan, Accessing the availability of human and physical resources of the organization so that effective co-ordination , contribution & the desired adjustment is achieved, Thus, detailed guidelines are formed for achieving an optimum balance between needs or demands and the available resources.

STEPS IN THE PLANNING PROCESS

1-Formulating objectives
Clear, precise and unambiguous objective are the nucleus of the planning process. Objective focus the attention of managers on the end results to be achieved. Objective provide a rationale for understanding various activities, as well as indicate the direction of efforts. As for as possible, objectives should be stated in quantitative terms e.g. number of persons required, wages to be product, etc Some objective should be specified in qualitative terms, such as the required standards of performance or the quality of the product. Hence, objective should be Specific, Manageable, Achievable, Reachable and Time-bound (SMART).

STEPS IN THE PLANNING PROCESS

2-Establish the planning process or Forecasting
Planning premises are assumption about the likely future events and form the basis for planning Planning premises are concerned with the causes, need and extent of deviation from actual plans. Forecasting helps to identify and remove internal or external obstacles in the way of business operations. Internal planning include capital, investment policy , labour relations, philosophy of management. External planning include socio-economics, political and fiscal policy changes. Internal planning are controlled whereas external are noncontrollable.

FORECASSTING
EXTERNAL CONDITIONS
Political factors likely to affect the organization Social trends and changes in morality, values, ethics, population trends etc. Economics indicators such as GNP, inflation rate, employment levels, interest rates, values of local currency etc. Technological development such as new discoveries, better communication systems etc. Market trends such as increased demand of a certain product or actions of competitors etc.

FORECASSTING
INTERNAL FACTORS
Revenue, computed by multiply the average sales by average price of each product sold. Expenses are more controllable than revenues. Both fixed and variable costs need to be considered carefully and matched with the revenues in order to predict profitability. Capital includes (1) cash required with interest rates, and (2) capital goods such as equipment, plant etc. Manpower means the number and the type of human resource to needed to meet organizational objectives.

STEPS IN THE PLANNING PROCESS

3-Chossing Alternative Courses of Action Keeping in view the establish premises, a number of alternative course of actions have to be considered. The pros and cons of each alternative need to be evaluated in the light of available resources and organizational requirements. Various quantitative techniques are used to judge the stability of an alternative and choose the best alternative.

STEPS IN THE PLANNING PROCESS

4-Formulating derivative plans Derivative plans are the sub plans or secondary plans which help in the achievement of the main plan. Secondary plans emerge from the basis plan. These are meant to support and expedite the achievement of the basic plan. Sub-plans include details regarding policies, procedures, rules, programs, budget, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization. Derivative plans include time schedule and sequence of accomplishing various tasks.

STEPS IN THE PLANNING PROCESS

5-Security Co-operation During the planning process, it is advisable to take subordinates, or those who have to implement these plans, into confidence so that: Subordinates may feel motivated since they are involved in decision making process.