THE #MANAGEMENT PLANNING PROCESS
We have heard of “Master Plans” being structured and engineered to give astounding results that is purely systematic in approach and masterly in execution. Planning facilitates to make use of the #opportunities that are available in the environment to make it to the top. #Opportunity Analysis is nothing but, an awareness of the factors in the external environment; understanding of the #strength and weaknesses of the organization. This is the first step of planning where we have to scrutinize the #market, #competition, customers’ preferences, tastes, our strengths and weaknesses. #Establishing Objectives is another criterion that ensures “Where we want to be, and what we want to accomplish and when”.
What are #Objectives?
Objectives are set for the organization and each subordinate is also entrusted with them. Objectives lay emphasis on goal setting which normally emanates from the top, but it may also originate from the bottom. Management by objectives is a great concept that involves all the employees working for the organization to be a part of goal setting and decision making.
Premises are “Assumptions” about the ‘environment.’ It involves identification of critical factors of the environment that affect the planning. Examples of critical factors are government policies, tax rates, business cycle development, economic indicators, economic forecasts etc. No body can precisely predict the environment factors precisely and make an accurate forecast. However one can fairly predict the critical factors required for the plan. Identifying Alternatives is very significant in a corporate business environment as every plan has got a set of alternative course of action. A reasonable number of alternatives can be developed for a plan.
#Evaluating Alternatives and Selecting the Best: A reasonable number of alternatives can be evaluated on the basis of the principle of limiting factor. The limiting factors may be costs, time, manpower and other resources. By applying techniques of operations research, every alternative can be evaluated. For e. g. alternative ‘A’ may benefit the organization in the short term but may be more expensive and alternative ‘B’ may benefit in the long run but may be less expensive. If one wants to earn immediate profits by spending more money he can choose alternative ‘A’. If the limiting factor is cost, he is forced to choose alternate plan ‘B’.
Planning is not complete with selecting the best alternative; a set of #derivative plans are developed to support the basic plan. For example an educational institution might like to own a fleet of buses, for which derivative plans for selection has to be made- training of drivers and maintenance staff are supportive plans for the main plan-procurement of buses. Developing budgets completes the planning course of action and budget is referred in financial terms and they are required to control the plans.
Planning is the prime function of all as it precedes all functions. The objectives must be clear, verifiable and attainable. Planning premises are vital to the success of planning as they supply information related to future like probable competitive behavior, general #economic conditions, capital and material availability, government control etc. All the critical factors are clearly and thoroughly analyzed and taken into consideration. One should be able to identify clearly the critical factors that limit the attainment of the goal. It could be costs, time, manpower or any other resources. In a practical business situation, one should be clearer in identifying these factors, only then the selection of the best alternative is possible. . Any decision taken in a plan is valid for a particular period i.e., the plan may be short term or long-term, the #commitment principle implies that long-range planning is not rally planning for future decisions but, rather, planning for the future impact of today’s decisions. For example, the impact of a decision connected with commencing a new product line may be for 20 years; where as a plan meant for promotion of people from within the company may have its future impact, for 2 years only.