Planning is the process of
decision making because it involves selecting a definite course of action from
among established alternatives. Plans give the organization its objectives and
set up the best procedures for reaching them. Planning is looking ahead and
concerned with the future. When planning we have to follow the following steps.
Planning Steps in Management
1. Determine objectives
Planning starts with the
determination of objectives. Objectives are the goals which the management tries
to achieve. Planning has no utility if there is no objective. An example of an
objective is to raise profits by 25 percent over a 12-month period.
2. Communicate objectives
The success and failure are
belonging to the objective you defined. Once the objectives have been
determined it is essential that they should be properly formulated and
communicated to all members of the organization.
3. Developing premises
Premises are the assumptions
and predictions about the future. The assumptions are the basis of planning. It
helps in making realistic assumptions about sales, costs, prices, products,
wages, taxes, change in fashion and habits, standard of living etc. in
future.
4. Identify resources
As we start our planning, we
should know what is available to us. Setting of objectives depend on available
resources. If available resources such as labor, equipment and materials are
not identified, objectives will be sure to fail. Potential objectives should be
accomplished by the available resources.
5. Establish policies
A policy may
be defined as a guideline that helps in attaining the objectives of the
organization. A policy tells the members of the organization how to deal with
the particular situation. Policies should be flexible.
6. Choose alternatives
Usually, there are several
alternatives for any plan. One alternative may be impossible another may be
expensive or one may be less desirable than others. The manager must be aware
of all the alternatives. He should try to find out all the possible
alternatives.
7. Create procedures and rules
A procedure is a systematic
way of handling regular events. It involves a selection of a course of action
and tells how a particular action is to be carried. While rules are a course of
required action. They determined a course of action followed under a given
situation.
8. Establish budgets
A budget is a statement of
expected results expressed in numerical terms such as man-hours, machine-hours
production units or other measurable numerical terms. It relates to a future
period and is based on objectives to be accomplished. Examples of budgets are
revenue and expense budget, capital budget, cash budget and balance sheet
budget.
9. Programs
Programs are of arrangement of
objectives, policies, procedures, rules, assignment, schedules etc. Any
assignment given by managers to his subordinates must be carry out in time. They
are concerned with time schedule.
Examples of programs are building program, expansion program, development
of new product program, and advertising program.
10. Establish standards
Establishing standard is very
imperative. Standards are the plans which have to be achieved in the course of
business action. Generally there are two types of standards, measurable which
can be measured and non-measurable which cannot be measured. By establishment
of these standards controlling becomes easy.
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