STEPS IN PLANNING
PROCESS
A presentation by
Jawahar K

CONCLUSION
DEFINITION
01
NEED & NATURE
02
STEPS IN PLANNING
PROCESS
03
04
TABLE OF
CONTENTS

"Planning is an
intellectual process, the
conscious determination
of courses of action, the
basing of decisions on
purpose, acts and
considered estimates".
- Koontz O'Donnel
Definition

WHY
PLANNING?
To manage by objectives
To offset uncertainty and change
To secure economy in operation
To help in co-ordination
To make control effective
To increase organizational effectiveness
NATURE?
goal-oriented in nature
first of the managerial functions
found at all levels of management
recognize the limiting factors
adaptable to changing conditions
co-ordinates the what, who, how, where and why

5) Comparing
Alternatives
4) Identifying
Alternatives
8)Quantifying
Plans
6) Selecting
Alternatives
7)Formulating
Supporting
plans
STEPS IN
PLANNING
PROCESS
1) Identifying
Opportunities
2) Setting
Objectives
3) Determining
Planning
premises

Step 1-
Identifying
opportunities
 Preliminary stage- look at possible future opportunities
 PURPOSE - Planning requires a realistic diagnosis of the
opportunity situation.
Leads to formulation of plans by providing insight as to
whether opportunities exist for taking up particular plans.
Setting realistic objectives depends on this awareness.
RESULT - Ascertain whether these opportunities could be
exploited by the organization to its advantage

Preliminary Look
01 02 03 04
External environment-
Understand its market and
prevailing competitions
Understand what
problems it has to solve
and why
Internal environment-
Know where the company
stands in light of its
strengths and weaknesses
Ascertain whether these
opportunities could be exploited
by the organisation to its
advantage

Step 2- Establishing objectives :
 PURPOSE –Provides sense of direction to activities
According to Koontz and O'Donnell, "an objective is a
term commonly used to indicate the end point of a
management programme."
past performance must be reviewed
assumptions underlying the objectives be clearly
identified
RESULT - indicate the end points of what is to be done,
where the primary emphasis is to be placed

Hierarchy
of Objectives
Board of Directors &
Top level managers
Middle level
managers
Lower
level
managers

Realistic ,
Attainable &
Verifiable
Interconnected
and mutually
supportive
Specific,
Clear &
Measurable
consistent
with one
and other
Essentials
of Objectives

Setting Objectives
1
2
3
4
establish objectives for the entire
enterprise and
then for each subordinate work unit.
done for the long term as well
as for the short range
For the successful accomplishment of the
objectives, there should be effective
communication
laid down in all key result areas of a business
like productivity, profitability

Step 3-
Planning
Premises
“Planning premises are identified as the
anticipated environment in which plans
are expected to operate.” - H. weihrich &
H.koontz
 Internal premises - internal variables that
affect the planning.
• organizational polices
• various resources
• the ability of the organization to withstand the
environmental pressure.
 External premises
• Political & social technological,
• competitors’ plans and actions,
• government policies,
• market conditions.

Process Of Planning Premises
1)Selection of the premises
•The probability of impact of factors:
Represents whether the factors under study
affect or do not affect the planning
premises.
•The degree of impact of factors: it
represents the degree to which these
factors affect the planning premises.
2) Development of alternative
premises
•Should be made for those factors which are
important for corporate decisions like competitors’
policies, consumers’ tastes in the order of priority
•They should be made on the basis of cost-
benefit analysis
4) Communication of premises:
•Planning premises are communicated to
managers concerned.
•The premises help to develop sound plans
followed by strategies, policies, etc. which
further help in effective implementation of
plans.
3) Verification of premises
•Planning staff at different levels of different
departments makes plans according to their
judgement.
• These premises are then sent to top
executives for their approval.

Step 4 -
Determining
Alternative Courses
 This step of planning is to identify alternative courses available to the manager.
 There is a multitude of choices.
 All of these courses should be identified
 The problem with this step is not finding the alternatives but narrowing them down
to a reasonable amount of choices so all of them can be thoroughly evaluated.
 The manager must make a preliminary examination to discover the most fruitful
possibilites.

Step 5 - Evaluating Alternative Courses:
 After seeking out alternative courses, the next step is to evaluate
and closely examine the alternatives.
 The alternative plans need to be evaluated in light of the goals
and premises.
 Detailed calculation and analysis are done to ensure that the plan
is capable of achieving the goal in the most efficient manner possible.

Step 6 -
Selecting
a Course :
• This is the "Decision Making" stage of the planning process.
Now the best and most feasible plan will be chosen to be
implemented.
• The ideal plan should have least amount of negative
consequences and should be adaptable to dynamic situations.
• The choice is obviously based on scientific analysis and
mathematical equations.
•A managers intuition and experience also plays a big part of
the decision.
.

Step 7- Formulation of
supporting plans:
 Derivative plans are supporting plans which help in the
achievement of main plan.
 Supporting plans will flow from the basic plan. These
are meant to support and expedite the achievement of
basic plan.
 These plan includes policies, procedure, rules,
programmes, budgets, schedule etc.
 Example: if profit maximization is the main aim of the
business, derivative plans include sales maximization,
production maximization and cost minimization

Step 8-
Qualifying
plans by
budgeting :
 After plans are set, the final step is converting them
into budget.
Overall budget of the company includes sum total of
income and expenses along with resultant profit.
Each department of the company or some other
business has its own budgets, usually expenses and
capital expenditure which is connected to the overall
budget.
 If done well, budgets becomes a means of adding
various plans and set important standards against normal
measuring of planning process.

Conclusion
Planning activities provide an opportunity for input from different functions,
departments and people. When people are involved in developing plans they will be
more committed to the plans.
THANK YOU…