Planning Process

Planning is the very first step in the management of a business organization. Plans set the tone for how all activities of the business will pan out. One needs to go through several steps in the process of planning. Simple plans are relatively easier to make but strategic planning is more complicated.

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Strategic Planning

Strategic plans are basically those which are meant to achieve strategic goals. Because of this reason, they are generally long-term in duration.

Almost all of these plans aim at targets that are at least 5 years ahead in time. For example, the decision of telecom companies to shift from 2G to 3G and 4G technologies would be strategic planning.

These kinds of plans are generally responses to diversifying circumstances. All elements of the business environment affect the final implementation of plans. Strategic planning helps to overcome them.

 

Planning Process

Planning may be either simple or complicated. Simple plans involve fewer considerations and have a narrow scope. On the contrary, complicated plans need deeper thinking in implementation. Strategic planning is a great example of this.

Browse more Topics under Planning

• Importance, Features, and Limitations of Planning
• Types of Plans
• Planning Components
• Concept of Forecasting
• Principles in Decision Making
• Steps in Decision Making
• Decision Making in Groups

Regardless of the kinds of plans, however, the processes and steps involved remain the same. One has to go through the following steps while planning:

1. Establishing objectives

This is the very first and most basic step of the planning process. It involves the planners to basically first law down their objectives. One simply cannot make a plan without knowing what it aims to achieves.

Objectives are nothing but the end goals of every activity. Every action of an organization and its members aim at a certain target. These objectives are the first elements of the planning process.

It is important to keep in mind that objectives must be practical. This is because impractical and unachievable objectives are worthless. Furthermore, objectives must be clear and concise.

This is even more important for strategic planning which involves serious considerations. Every person must know the larger organizational objectives that he works towards achieving.

2. Premising

Premising is the second step in the planning process. This step, in simple words, means making assumptions of future scenarios on which the plans will take place. Since plans are made to achieve future targets, they must be based on future conditions that will affect them.

For example, let’s consider our previous example of telecom companies shifting to 4G networks. While planning for this, they must consider government policies, market expectations, taxes and future technology.

Premising is important because it reduces the chances of the plans failing. This happens because planners consider possible future scenario before planning. The plan almost becomes full-proof from factors that may affect it in the future.

Premising is even more important for strategic planning. Since strategic planning aims at achieving big objectives, their chances of failure should not be high. Premising helps in this regard by preparing for all possible risks and hindrances.

Not all premises and assumptions apply to all industries and sectors. Planners must consider only the relevant aspects of premises that will apply to them. Tailor-made plans like these increase the chances of success.

3. Determining Alternative Courses

Planners must always ensure that they have alternative plans for their main plans. One must always keep a back up for any eventualities that could lead to the failure of main plans. Sometimes, it may even so happen that the alternative may be more successful than the main plan.

Having more than one course of action in mind also provides more choice and flexibility. As a result, the business can ensure that it will fulfill its objectives in any way possible.

4. Evaluating Alternatives

Once planners list down their alternatives, they must now evaluate each of them.  They have to consider all the pros and cons of every plan. This is done because such evaluations ensure that the chances of the fulfillment of objectives increase.

5. Selecting a Course of Action

After evaluating all alternatives, planners must zero in on one and finalize it. One part of this step involves communication of its details to everybody.

Since strategic planning has long-term objectives, all relevant members must be aware of them properly. Selection of a plan and its communication must be clear and concise.

6. Formulating Derivative Plans

All big plans, especially those under strategic planning, require derivative plans. Such plans have generally involve many smaller sub-plans that complement the main plan.

For example, while planning to shift to 4G technology, a telecom company will also have to consider other things like funding, mobile network, towers, etc.

7. Numbering Plans under Budgets

Finally, all plans have to be converted into budgets. This is because budgets show objectives in numerical terms and this explains them better. Furthermore, this also helps in measuring the success and failure of plans.

Planners this way can even make changes in their implementation later. Effective implementation of plans ensures almost guaranteed results.

Solved Question on Strategic Planning

 

Question: Mention which step of the planning process do the following statements relate to.

1. Planners must consider the pros and cons of each alternative.

2. Each possible future scenario must be considered.

3. Plans should be converted into budgets.

4. All plans must be backed by substitutes.

5. Long-term strategic planning requires many sub-plans as well.

Answers: (1) Evaluation ; (2) Premising ; (3) Numbering ; (4) Determining alternative courses ; (5) Formulating derivative plans