Steps in the planning
Perception of opportunities: Perception of opportunities is not strictly a planning process. However, this awareness is very important for the planning process because it leads to formulation of plans by providing clue whether opportunities exists for taking up particular plan. For this point of view, it can be considered as the beginning of planning process. Perception of opportunities includes a preliminary look at possible opportunities and the ability to see them clearly and completely, knowledge of where the organization stands in the light of its strengths and weaknesses, an understanding of why the organization wants to solve uncertainties, and a vision of what it expects to gain.
Establishing objectives: at this stage, major organization and unit objectives are set. Objectives specify the results expected and indicate the end points of what is be done, where the primary emphasis is to be placed, and what is to be accomplished by the various types of plans.
Planning premises: after determination of the organization goals, the next step is establishing planning premises that is the conditions under which the planning activities will be undertaken. Planning premises are planning assumptions the expected environmental and internal conditions. Thus planning premises are internal and external. External premises include total factors in the task environment like political, social, technological, competitions plans and actions, government policies, etc. internal factors include organization's policies, resources of various types, and the ability of the organization to withstand the environmental pressure.
Identification of alternatives: based on the organization objectives and planning premises, various alternatives can be identified. The concept of the various alternatives suggests that a particular objective can be achieved through various actions. For example, if an organization has set its objective to grow further, it can be achieved in the several ways like expanding in the same field of business of product line, diversifying in the other areas, joining hands with other organizations, or taking over another organization, and so on.
Evaluation of the alternatives: various alternatives which are considered feasible in the terms of preliminary criteria may be taken for the detailed evaluation. At this stage, an attempt is made to evaluate how each alternative contributes to the organizational objectives in the light of its resources and constraints.
Choice of the alternative: after the evaluation of the various alternatives, the fit one is selected. Sometimes evaluation shows that more than one alternative is equally good. In such a case, a planner may choose more than one alternative. There is another reason for choosing more than one alternative. Alternative course of action is to be undertaken in future which is not constant. A course of action chosen keeping in view that the various planning process premises may not be the best one if there is a change in the planning premises. Therefore, planner must be ready with alternative, normally known as contingency plan, which can be implemented in the changed situations.
Formulation of supporting plans: after formulating the basic plan, various plans are derived so as to support the main plan. In an organization there can be various plans like planning for the buying equipments, buying new materials, recruiting and training personal, developing new product, etc. these derivative plans are formulated out of the main plan, and therefore, they support it.
Establishing sequence of activities: after formulating basic and derivative plans, the sequence of the activities is determined so that plans are put into the action. Based on plans at various levels, it can be decided who will do what and at what time. Budgets for various periods can be prepared to give more plans concentrate meaning for the implementation.