Process of planning
All organizations engage in planning activities, but not all organizations plan exactly in the same manner. This planning process consists of the following steps.
1. Environmental Concepts (PEST):
Planning occurs within the environmental context. Key components of an organization’s environment include the political-legal, economic, socio-cultural, and technological environment. Under planning occurs in, an environmental context, the organization must assess those environments from achieving opportunities among threats.
2. Mission Formulation:
After assessing the environment managers first establish the organization’s mission. The organizational mission is a long-term vision of what the organization is trying to become. It provides the reason for existence. It also outlines the premises values and directions of the organization.
3. Strategy goals and strategic plan:
After establishing the mission strategic goals are set by the top-level management. Strategic goals one achieved through Strategic plans. Stråtegic plans are general plans for allocation of resources, priorities, and necessary action to reach strategic goals.
4. Tactical goals and tactical plans:
Strategic goals and plans serve as input for developing tactical, goals and tactical plans. Tactical goals are set by middle managers. Tactical goals are targets for departments. Tactical plans identify priorities for departmental activities.
5. Operational goals and operational plan:
Tactical goals and plans serve as inputs for developing operational goals and operational plans. They are set by lower-level managers. Operational goals are targets for units in the departments. Operational plans identify specific actions for the units in the short-term Budget.
Importance of planning
Planning is a primary function of management. It is the up continuous process up to the attainment of organizational objectives. Managers must plan before organizing, leading, and controlling. Planning helps improves pérformance and achieve goals.
1. Uncertainty Reduction:
Planning reduces uncertainty. An organization has to work in an environment, which s full of uncertainties. Well-designed plans only help the organization meet its challenges. Planning forces managers to think ahead, anticipate change, consider the impact of change, and develop appropriate quick responses.
2. Focus on Goal:
Planning helps managers to focus on goals. It defines goals and determines courses of action to achieve them. Goals guide future activities. It eliminates confusion and haphazard activities. Å plan serves as the blueprint of the action to be followed for the achievement of goals. It facilities management by objectives(MBO).
3. Integrates management functions:
planning is the basic function of all managers at all levels in the organization. It facilitates better allocation and coordination of resources. Planning is a fundamental function because it integrates all other organizational functions. I.e. organizing, leading, and controlling. Without planning no managers can perform functions effectively.
4. Maintain effective control:
Planning is the basis of control. It determines the standard of work to be performed. Actual performance is compared with planned targets to find deviations and make corrections. Control without planning is not possible. Hence, planning makes control meaningful and effective.
5. Encourages innovation and creativity:
Planning encourages innovative and creative thinking among managers when they are planning. It helps to think out new ideas and adjust to the realities of the existing situation. It creates a forward-looking attitude among the managers.
Good planning ensures the participation of all managers, which will improve their motivation. It encourages a sense of involvement and team spirit. It improves the commitment and morale of workers because they know clearly what is expected of them.
7. Better utilization of resources:
Planning primary ensures the availability of resources as and when needed. It is a rational approach to goal achievement. It reduces cost by eliminating waste and avoiding duplication in efforts. It helps do the job correctly.
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