What is the Process of Planning?

Process of Planning

The process of Planning consists various steps. Each one have a specific importance in the process.

1. Perception of the Opportunities: Perception of opportunities is not strictly a part of the planning process. But this awareness of opportunities in the external environment as well as within the organisation is the real starting point for planning. It is important to take a preliminary look at possible future opportunities and see them clearly and completely. The manager must first identify the opportunity that calls for planning and action.

2. Setting Objectives: The next step in the planning process lies in the setting up of objectives to be achieved by the enterprise in the clearest possible terms keeping in view its strength and limitation. The planning process begins with the setting of objectives. Objectives are end results which the management wants to achieve by its operations. Objectives are specific and are measurable in terms of units. Objectives are set for the organisation as a whole for all departments and then departments set their own objectives within the framework of organisational objectives.

3. Identifying the Alternatives: The next step in planning process is to search for various alternative courses of action based on the organisational objectives and planning premises. A particular objective can be achieved through various actions. For example, if an organisation has set its objective to grow further, it can be achieved in several ways like expanding the field of business or product line, joining with other organisations, or taking over another organisation, and so on. Within each category, there may be several alternatives.

4. Evaluation of the Alternatives: The various alternative course of action should be analysed in the light of premises and goals. There are various techniques available to evaluate alternatives. The evaluation is to be done in the light of various factors. Example, cash inflow and outflow, risks, limited resources, expected pay back etc., the alternatives should give us the best chance of meeting our goals at the lowest cost and highest profit.

5. Selecting One Best Alternative: The best plan which is the most profitable plan and with minimum negative effects is adopted and implemented. In such cases, the manager’s experience and judgement play an important role in selecting the best alternative.


6. Implementing the Plan: This is the step where other managerial functions come into the picture. This step is concerned with “DOING WHAT IS REQUIRED”. In this step, managers communicate the plan to the employees clearly to convert the plans into action. This step involves allocating the resources, organizing for labour and purchase of machinery.

7. Follow Up Action: Monitoring the plan constantly and taking feedback at regular intervals is called follow-up. Monitoring of plans is very important to ensure that the plans are being implemented according to the schedule. Regular checks and comparisons of the results with set standards are done to ensure that objectives are achieved.