The Planning Process comprises of seven (7) steps which may differ from one organization to another or from one situation to another.
These steps are:
- Identification of Opportunities: This involves a thorough analysis of the business environment in relation to customer wants, market, identifying organization’ strength, weakness, opportunities and threats (SWOT). It’s very important that the current position of the business is evaluated before establishing objectives.
- Establishment of Objectives: Long term and short term objectives are formulated for the entire organization and for each department. Objectives describe what is important to an organization and various sub-units. Objectives specify the expected end results to be achieved.
- Establishment of Course of Action: This step when taken, identifies promising alternative action plans to achieve the stated objectives. The success or failure in achieving objectives depends on appropriate action plans.
- Evaluation and Selection of Alternative Course of Action: These activities involve the examination and comparison of all action plans in line with established objectives.
- Allocation of Resources: Resources here refer to the popular 4Ms( money, machine, material, man). Managers should allocate resources to action plans selected to meet objectives. The amount of resources to utilize is controlled by the use of budget.
- Implementation of the Course of Action: Without proper implementation of a chosen course of action, the whole planning process is useless. For proper implementation, managers must delegate responsibility, give adequate authority, persuade and motivate subordinates, and guide their actions by formulating policies.
- Evaluation of Result: Where there is a plan, there must be control. Controlling involves measuring action results, comparing them with performance standards and making necessary adjustments where there is variation.