3.2 Planning process

The planning process consists of the following six (6) steps. It is important to note, though, that the planning process is dynamic, in other words, effective planners will continuously revisit the planning process.

State organizational objectives (Goals):

			Because planning focuses on how the management system will reach organizational objectives, a clear statement of those objectives is necessary before planning can begin.
			Often planners examine important elements of the environment of their organizations, such as the overall economy or competitors, when forming objectives.

List alternative ways of reaching objectives (Goals):

Once organizational objectives have been clearly stated, a manager should list as many available alternatives as possible for reaching those objectives.

Develop premises on which to base each alternative:

			To a large extent, the feasibility of using any one alternative to reach organizational objectives is determined by the premises, or assumptions, on which the alternative is based.
			For example, two alternatives a manager could generate to reach the organizational objective of increasing profit might to be: (a) Increase the sale of products presently being produced or (b) Produce and sell a completely new product.

3.2 Planning process

			Alternative (a) is based on the premise that the organization can gain a larger share of the existing market.
			Alternative (b) is based on the premise that a new product would capture a significant portion of a new market. Manager should list all of the premises for each alternative.

Choose the best alternative for reaching objectives (Goals):

			An evaluation of alternatives must include an evaluation of the premises on which the alternatives are based. A manager usually finds that some premises are unreasonable and can therefore be excluded from further consideration.
			The elimination process helps the manager determine which alternative would best accomplish organizational objectives.

Develop plans to pursue the chosen alternative:

After an alternative has been chosen, a manager begins to develop strategic (long-range) and tactical (short-range) plans.

3.2 Planning process

Put the plans into action:

			Once plans that furnish the organization with both long-range and short-range direction have been developed, they must be implemented.
			Obviously, the organization cannot directly benefit from the planning process until this step is performed. Figure 3.1 shows the sequencing of the six steps of the planning process.

3.2 Planning process

Figure 3.1: Elements of the planning process.