Question

Explain the first five steps involved in the process of Planning, as a function of Management.

Answer 1

Planning requires thoughtful and systematic thinking. Steps generally involved in planning are given as follows:

1. Establishing goals to be achieved: The first and most important phase in planning is determining the organization’s objectives, often defined by senior management after careful consideration of a range of options.
2. Establishing planning premises: The second phase in planning is to decide on the planning premises, which are the ideas about the future that the plan will be founded on. Planning premises is essential to work planning, as it provides key information on the economy, production costs and pricing, likely competitive behavior, the availability of capital and materials, and government control.
3. Deciding the planning period: After top management has set the basic long-term goals and the planning premises, the next step is to determine the planning period. The planning timeframes vary widely across businesses. Sometimes plans are set for a single year, while at other times they are set for a longer period. But in each scenario, there is always a reason to choose a certain time range for planning. Companies usually plan for the future that they may realistically expect.
4. Finding alternative courses of action: The fourth phase is to find and evaluate options for reaching the goals. All feasible options are identified, and information for each is gathered. For example, you can get technical know-how by hiring a foreign technician or sending your employees to train abroad.
5. Evaluating and selecting a course of action: The fifth stage is to review the alternatives you identified and assess how they align with the goals and assumptions, then choose the best option. Quantitative methods and operations research are used to do this. It means judging them based on their level of involvement, their target revenue, and how well they meet their goals.