planning process steps
They indicate the end result the company wishes to achieve. Prices and wage rates can also be forecast. Management, Functions, Planning, Planning Process. Human Resource Planning Process – 3 Main Steps: Human Resource Demand Forecasting, Human Resource Supply Forecasting and Initiating Human Resource Actions Human resource planning (HRP) involves developing strategies for acquisition, utilization, improvement and retention of human resources. Budgeting is telling money where to go rather than asking it where it went. In some instances, plans are made for a year only while in others they span decades. Such base and anticipation is the information pertaining to past, present and future. Recognizing Need for Action: The first step in planning process is the awareness of business opportunity and the need for taking action. The following type of questions will help in ascertaining clearly the opportunities and problems: (a) What business opportunities or problems are likely to arise in future? With this, the plan can be considered to have been adopted. iii. v. What would be the tax policy and economic policy of the Government? TOS4. The preparation of a secondary plan is necessary to expedite the achievement of the basic plan. How to improve the processes should be also planned continuously. According to Koontz and O’Donnell, “There is seldom a plan made for which reasonable alternatives do not exist. Our product planning methodology uses six steps to guide you through the entire process. Disclaimer Copyright, Share Your Knowledge Operational research can be used to evaluate the alternative sources of action. Below, you can find the steps to take to create a … According to Koontz and O’Donnell, “There is seldom a plan made for which reasonable alternatives do not exist.” All the pros and cons of methods should be weighed before a final selection. Moreover, before weighing alternatives and reaching a decision, one is wise to search for alternatives that may not be immediately apparent. Budgets provide meaning to plans. The assumptions along with the future forecasts provide a basis for the plans. Future in form at in is nothing but logical anticipation of near as well as distant future. Sometimes, the manager may decide to follow many viable, feasible or sufficient realistic courses rather than the one best course. The process of forecasting generally involves- (i) calculation of probable future events; (ii) analysing changes in consumer attitude, technology, competitive forces, government policies etc. iv. Objectives are always at the center of plan because every planned action is directed to the objectives. iv. The objectives fixed must clearly indicate what is to be achieved, where action should take place, who is to perform it, how it is to be undertaken and when it is to be accomplished. 5. These answers will facilitate formulation of practical and realistic plans. Plans provide the course of action to reach predetermined goals, by departments and ultimately by the organisation. No partiality is shown while selecting the best alternative. Therefore, planning is based on forecasting. what exactly is to be accomplished? Demand for commodity can be forecast. But gap analysis quite often tends to show that some changes in strategy are required. From the basic plans as selected above, other plans will have to be developed, to support the basic plan. Selection of the Best Alternative Course of Action: The selection of the best alternative is based on the weighing of various alternatives. Analysis of such information to the benefits of organisation only, must be made and thereby ‘Plus’ and ‘Minus’ or ‘strong’ and ‘weak’ points are assessed and identified. Planning involves a number of steps ranging from determining the objectives to follow-up action as detailed below. The document should include an overview of the decision-making process and the plan for the program. (c) The anticipation of costs and the likely prices at which products will be marketed. vii. A beginning should be made only after going through a detailed analysis of the new opportunity. Due consideration is made on the availability of resources, profitability, plant capacity, available manpower, communication effectiveness and the like. Koontz and O’Donnell state: “There is seldom a plan made for which reasonable alternatives do not exist.” Therefore, managers should search for and examine alternative courses of action. Plans should reflect the enterprise’s objectives. After finding out the available alternatives and having made an analysis of their strong and weak points, the planner must evaluate the alternatives in the light of premises and goals. For example, if an aviation company decides to buy aeroplanes, then it also prepares subsidiary plans like manpower supply, training, purchasing of ancillary etc. The second step in the planning process is to establish objectives for the entire organisation and then for each subordinate work unit. (5) Finding Out the Alternative Courses of Action: The next step is to find out the various alternative courses of action. After having decided the chief plan and the subsidiary plans, they are to be implemented. Determining Alternative Courses 5. Thus, forecasting is an important step in planning. Planning will be reliable when the forecast methods are accurate. Present and future opportunities must be found so that planning may be undertaken for them. Therefore determination of objectives of business starts the planning process. For example, once production plan is decided then a number of plans for procurement of raw materials, purchase of plant and equipment, recruitment of personnel will be required. The basis of planning are those factors/assumptions which influence the possible results of different alternatives. The last step in the planning process should be to pull all of the notes together into one formal document. (g) The impact of technological changes on production processes. Planning is a combination of information handling and decision making systems. (iii) Will the organisation be benefited if such a plan is prepared and put into operation? Plans and subsidiary plans are first used on trial basis to the possibility of their success. The planning process is different from one plan to another and varies from company to company. Objectives are the guides of employees. This further includes identification of problems to which solutions are to be provided and the opportunities that can be grabbed to make use of. Evaluation makes comparison of different plans possible in terms of results. This process can also be used as motivation to individuals in achieving the objectives because they have helped in establishing them along with tasks to be performed for their achievement. (6) Evaluation of Alternatives and Selection: The next step is to evaluate all possible alternatives with reference to cost, speed, quality etc., and select the best course of action. Important premises include- (a) forecasts, (b) basic policies and (c) existing company plans. 1. After deciding the main plan, subsidiary plans are prepared to implement the main plan successfully. After selecting the best course of action, the management has to formulate the secondary plans to support the basic plan. The evaluation of various alternatives will help in knowing which of them offers the greatest chance of success in reaching the desired objectives. Goal setting: Plans are the means to achieve certain ends or objectives. Through the monitoring function, managers can take corrective action if they observe unexpected and unwanted deviations. Make or Buy Decision 3. Financial Planning Process Step 1: Establish the Goal / Relationship Establishing the goal or relationship is where the adviser introduces himself or herself a client or prospective client and explains the financial planning process. The moment there appears to be changes in the assumptions on which the plans are based; there should be corresponding changes in the plans also. Keeping the general economic conditions in mind, a study of the industry is made. These objectives are based on the number of factors like mission of the organization, abilities of the organization. Establishing the objectives is the first step in planning. For instance a basic marketing plan may result in other derivative plans such as the advertising plan, recruiting personnel plan, training plan etc. Managers need to check the progress of their plans so that they can (a) take whatever remedial action is necessary to make the plan work, or (b) change the original plan if it is unrealistic. Implementation means that resources are committed and employees act. After having evaluated the various alternatives, the most suitable alternative is selected. There are many types of objectives managers may select- a desired sales volume or growth rate, the development of a new product or service, or even a more abstract goal such as becoming more active in the community. It is an intellectual exercise and a conscious determination of courses of action. Planning Premises 4. Objectives specify the results expected. Good managers assume changes and plan for them. Market force refers to demand, supply, buying capacity and the like. The term external environment includes socio-economic conditions and political conditions prevailing in a country. They analyze current state and have a preliminary look at possible future opportunities. At this step of the strategic planning process, managers are faced with the question of whether a new strategy is required and, if so, what kind of strategy it will be. The fifth and most important step in planning process is evaluation and selection of the optimum plan. Once upper-level managers have selected the basic long-term goals and the planning premises, the next task is to decide the period of the plan. Cost benefit analysis of each alternative must be made. After the overall plan has been adopted, it is necessary to develop other derived plans for each segment of the enterprise to support the major plan. To get co-operation in implementation, subordinates should be associated in the planning process. Establishing goals or objectives:The initial phase of planning process is to establish the business objectives. Other factors, which influence the choice of a period, are as follows: (a) Lead time in development and commercialization of a new product; (b) Time required to recover capital investments or the payback period; and. What will be the market force? Forecasting generates planning premises which are three types – (i) Beyond control (Population explosion and price level) (ii) Partially controllable (efficiency of work force) (iii) Fully controllable (development plan for future) qualitative and quantitative methods are used to make these forecasts. Ascertained and examined programmes, projects, methods, budget, rules,,! Be undertaken for them and perhaps the most promising ones or competitions on plans making, as planning.! All of the basic steps of project management planning process are as follows 1... 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