Planning Process
Recognizing Need for Action-
The first step is the awareness of business opportunity and the need for taking action.
Present and future opportunities must be found.
Visualized the trend of economic situation.
Exm- New sites establishment
Gathering necessary information-
Before actual planning is initiated relevant facts and figures are collected.
Information such as the type of customers to be dealt with, the circumstances under which goods are to be provided, value of products to the customers. Etc.
Laying Down Objectives
The objectives are the end products and all energies are diverted to achieve these goals.
Goals are a thread which bind the whole company.
The tie between planning and objectives helps employees to understand their duties.
Objectives are the guides of employees. It is essential that objectives should be properly formulated and communicated to all members of the organization.
Determining planning premises-
Planning is always for uncertain future. A forecast means the assumption of future events.
Forecasts will generally be made for the following-
The expectation of demand for the products
The likely volume of production
The anticipation of costs and the likely prices at which products will be marketed
The supply of labor raw materials etc.
The economic policies of the government
The changing pattern of consumer preferences
The impact of technological changes on production processes.
The sources for supply of funds.
Examining Alternative course of action
Best results will be achieved only when best way of doing a work is selected.
According to Koontz and O’ Donnell, “ There is seldom a plan made for which reasonable alternatives do not exist.”
Evaluation of Action Patterns
Evaluation will involve the study of performance of various action.
Determining secondary plans
Once a main plan is formulated then a number of supportive plans are required.
In fact secondary plans are meant for the implementation of principal plan
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.
Implementation of plans
The planning should be put into action so that business objectives may be achieved.
The implementation will require establishment of policies, procedures, standards and budgets.
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