The Basic Steps in the Management Planning

Process
An effective management planning process includes
evaluating long-term corporate objectives.
Management planning is the process of assessing an
organization's goals and creating a realistic, detailed plan of
action for meeting those goals. Much like writing a business
plan, a management plan takes into consideration short- and longterm corporate strategies. The basic steps in the management
planning process involve creating a road map that outlines each task
the company must accomplish to meet its overall objectives.

1. Recognizing Need for Action:

The first step in planning process is the awareness of business opportunity
and the need for taking action.
Present and future opportunities must be found so that planning may be
undertaken for them.
The trend of economic situation should also be visualized. For example, if
thinking of the government is to develop rural areas as industrial centres, a
farsighted businessman will think of setting up units suitable to that
environment and will avail the facilities offered for this purpose.
Before venturing into new areas the pros and cons of such projects should
be evaluated. A beginning should be made only after going through a
detailed analysis of the new opportunity.

2. Gathering Necessary Information:

Before actual planning is initiated relevant facts and figures are collected.
All information relating to operations of the business should be collected in
detail.
The type of customers to be dealt with, the circumstances under which
goods are to be provided, value of products to the customers, etc. should
be studied in detail. The facts and figures collected will help in framing
realistic plans.
Establish Goals
The first step of the management planning process is to identify specific company
goals.
This portion of the planning process should include a detailed overview of each
goal, including the reason for its selection and the anticipated outcomes of goalrelated projects.
Where possible, objectives should be described in quantitative or qualitative terms.
An example of a goal is to raise profits by 25 percent over a 12-month period.
Identify Resources
Each goal should have financial and human resources projections associated with
its completion. For example, a management plan may identify how many sales
people it will require and how much it will cost to meet the goal of increasing sales
by 25 percent.

Establish Goal-Related Tasks

Each goal should have tasks or projects associated with its achievement. For
example, if a goal is to raise profits by 25 percent, a manager will need to outline
the tasks required to meet that objective. Examples of tasks might include
increasing the sales staff or developing advanced sales training techniques
Prioritize Goals and Tasks
Prioritizing goals and tasks is about ordering objectives in terms of their
importance. The tasks deemed most important will theoretically be approached and
completed first. The prioritizing process may also reflect steps necessary in
completing a task or achieving a goal. For example, if a goal is to increase sales by
25 percent and an associated task is to increase sales staff, the company will need
to complete the steps toward achieving that objective in chronological order.
Create Assignments and Timelines
As the company prioritizes projects, it must establish timelines for completing
associated tasks and assign individuals to complete them. This portion of the
management planning process should consider the abilities of staff members and
the time necessary to realistically complete assignments. For example, the sales
manager in this scenario may be given monthly earning quotas to stay on track for
the goal of increasing sales by 25 percent.
Establish Evaluation Methods
A management planning process should include a strategy for evaluating the
progress toward goal completion throughout an established time period. One way
to do this is through requesting a monthly progress report from department heads.

Identify Alternative Courses of Action

Even the best-laid plans can sometimes be thrown off track by unanticipated
events. A management plan should include a contingency plan if certain aspects of
the master plan prove to be unattainable. Alternative courses of action can be
incorporated into each segment of the planning process, or for the plan in its
entirety.
Planning (also called forethought) is the process of thinking about and organizing
the activities required to achieve a desired goal. It involves the creation and
maintenance of a plan, such as psychological aspects that require conceptual skills.
There are even a couple of tests to measure someones capability of planning well.
As such, planning is a fundamental property of intelligent behavior.

4. Determining Planning Premises:

Planning is always for uncertain future. Though nothing may be certain in the
coming period but still certain assumptions will have to be made for formulating
plans. Forecasts are essential for planning even if all may not prove correct. A
forecast means the assumption of future events. The behaviour of certain variables
is forecasted for constituting planning premises.
Forecasts will generally be made for the following:

(a) The expectation of demand for the products.

(b) The likely volume of production.
(c) The anticipation of costs and the likely prices at which products will be
marketed.
(d) The supply of labour raw materials etc.
(e) The economic policies of the government.
(f) The changing pattern of consumer preferences.
(g) The impact of technological changes on production processes.
(h) The sources for supply of funds.
It is on the basis of these forecasts that planning is undertaken. The success or
failure of planning will depend upon the forecasts for various factors mentioned
above. If the forecasts are accurate then planning will also be reliable. The effect of
various factors should be carefully weighed.
5. Examining Alternative Course of Action:
The next step in planning will be choosing the best course of action. There are a
number of ways of doing a thing. The planner should study all the alternatives and
then a final selection should be made. Best results will be achieved only when best
way of doing a work is selected. According to Koontz and ODonnell, There is
seldom a plan made for which reasonable alternatives do not exist. All the pros
and cons of methods should be weighed before a final selection.

7. 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. All secondary plans will be a part of the main plan.
8. Implementation of Plans:
The last step in planning process is the implementation part. 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. These
tools will enable a better implementation of plans.