The process of managerial planning and its benefits

Planning

Planning means deciding objectives for a period, working out the different ways of reaching them and choosing the best of those ways; it covers both ends and means, what is to be done and how.

The process of managerial planning

The steps below follow one another in a fixed logical order, each building on the one before. They are illustrated with a dairy cooperative in Anand that wants to raise its milk collection by a fifth next year.

1. Setting objectives. The organisation first states what it wants to achieve, for itself and for each department and unit; objectives must be clear and must reach every level, and managers should help to set them. The cooperative fixes its collection target and a share for each village centre.
2. Developing premises. Because the future is uncertain, managers make assumptions about it, called premises, drawn from forecasts, existing plans and past information. Everyone involved in planning should use the same premises and agree on them. The cooperative forecasts rainfall, fodder prices and urban demand.
3. Identifying alternative courses. All possible ways of reaching the objective, routine or innovative, are listed: enrolling new members, paying a quality bonus, or opening chilling centres.
4. Evaluating the alternatives. The positive and negative points of each are weighed against the objective, and each is judged by its feasibility and consequences.
5. Selecting an alternative. This is the point of decision: the most feasible and profitable course with the fewest ill effects is chosen, sometimes a combination of courses, and the manager's judgment plays its part.
6. Implementing the plan. The plan is put into action, and the other functions come in: if output is to rise, more labour and machines must be organised and bought.
7. Follow-up. Managers check that the plan is being carried out on schedule, because monitoring is needed to make sure the objectives are met.

Benefits of planning

• Better decisions. Planning makes the manager look ahead, evaluate the alternatives and pick the most viable one, which helps rational decision making.
• Clear direction. By stating in advance how work is to be done, planning tells employees what the organisation must achieve and what they must do, so that departments work together rather than in different directions.
• A basis for control. Plans set the goals against which actual performance is measured, so deviations can be found and corrected; without plans there would be nothing to control against, which is why planning comes before the other functions of management.
• Less risk from uncertainty. Change cannot be removed, but planning helps the manager anticipate it and prepare a response in advance.
• Room for new ideas. As the first function of management, planning is where fresh ideas can take the shape of concrete plans.
• Less waste and overlap. Planning coordinates the efforts of departments and individuals, so useless and repeated activities are cut down and inefficiencies are easier to spot.

Conclusion

Planning turns an aim into a sequence of considered decisions and then checks that they are carried out. Its benefits, from clear direction to a firm basis for control, make it the starting point of good management.