But a managers intuition and experience should also play a big part in this decision. The choice is obviously based on scientific analysis and mathematical equations. The ideal plan is the most profitable one with the least amount of negative consequences and is also adaptable to dynamic situations. Now the best and most feasible plan will be chosen to be implemented. 6] Selecting the Alternativeįinally, we reach the decision making stage of the planning process. Detailed calculation and analysis are done to ensure that the plan is capable of achieving the objectives in the best and most efficient manner possible. Then it that case its risk-return evaluation will be done. The alternative plans need to be evaluated in light of the organizational objectives.įor example, if it is a financial plan. Every option will go through an examination where all there pros and cons will be weighed. The next step of the planning process is to evaluate and closely examine each of the alternative plans. 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. If he does not want to experiment he will stick to the more routine course of action. Maybe he chooses an innovative alternative hoping for more efficient results. There must be options available to the manager. All of these alternative courses should be identified. There is no one way to achieve the objectives of the firm, there is a multitude of choices. The fourth step of the planning process is to identify the alternatives available to the managers. All managers should be aware of these premises and should agree with them. These assumptions being made should be uniform across the organization. Internal assumptions deal with policies, availability of resources, quality of management, etc. External assumptions deal with factors such as political environment, social environment, the advancement of technology, competition, government policies, etc. These planning premises are also of two types – internal and external. Such assumptions are made in the form of forecasts, existing plans, past policies, etc. So in the function of management certain assumptions will have to be made. Planning is always done keeping the future in mind, however, the future is always uncertain. Importance, Features, and Limitation of Planning here in detail. So objectives will percolate down from the managers and will also guide and push the employees in the correct direction. They indicate the end result the company wishes to achieve. Objectives can be long term and short term as well. Organizational objectives provide a general direction, objectives of departments will be more planned and detailed. Here we establish the objectives for the whole organization and also individual departments. This is the second and perhaps the most important step of the planning process. What are the Types of Plan? 2] Setting Objectives A firm can look to explore this opportunity. Say for example the government plans on promoting cottage industries in semi-urban areas. A realistic look must be taken at the prospect of these new opportunities and SWOT analysis should be done. Once such opportunities get recognized the managers can recognize the actions that need to be taken to realize them. Let us take a look at the planning process.Īn important part of the planning process is to be aware of the business opportunities in the firm’s external environment as well as within the firm. As you can imagine it is a systematic process involving eight well thought out steps. It involves setting the goals of the company and then managing the resources to achieve such goals. The planning function of management is one of the most crucial ones.
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