Effective Business Planning: Objectives and Stages
Planning Stages in Business
Planning involves studying and setting objectives for a company in the short, medium, and long term, considering the entire system and its subsystems. It’s about deciding in advance what to do and the necessary steps. Effective planning should:
- Contribute to Objectives: Positively contribute to achieving company aims, developing sub-goals applicable to various subsystems.
- Ensure Efficiency: Minimize unintended consequences and yield results exceeding costs.
- Promote Generalization: Ensure all business units understand and have the means to achieve goals.
- Maximize Efficiency: Select plans that achieve objectives with the fewest resources.
The 7 Key Management Planning Stages
- Awareness of Opportunities: Understand the surrounding environment.
- Establish Objectives: Decompose objectives into sub-goals based on the organizational structure.
- Develop Premises: Establish, communicate, and build consensus on forecasts, plans, and applicable policies.
- Determine Alternative Courses of Action: Examine all possible alternatives using analytical methods.
- Evaluate Alternative Courses: Analyze strengths and weaknesses, then evaluate options based on specific criteria and techniques.
- Select a Course of Action: Make a decision on the most advisable plan.
- Formulate Derivative Plans: Express plans in numerical schemes, including an annual general budget and budgets for organizational units, broken down temporarily for regular follow-up and control.
The Planning Process and Objectives
The planning system extends throughout the organization, linking it with its goal setting environment. The main task is setting objectives, which should be:
- Desirable: Someone must want to achieve the purpose.
- Feasible: Achievable.
- Quantifiable: Measurable to track progress.
- Comprehensible: Understood by those performing, evaluating, and controlling the plan.
- Motivating: Encouraging for those involved.
- Consensual: Agreed upon by the group to avoid conflict.
Satisfactory conditions for success include:
- Defining each objective correctly.
- Understanding the economic potential of each organizational unit.
- Knowing the origins and characteristics of restrictions that impede objective fulfillment.
Key Objectives in Planning
- Efficiency: Degree of competitiveness, measured in terms of productivity and performance.
- Growth: Achieving an adequate level of organizational development.
- Control: Ensuring regulatory domain over economic activity, both internally and externally.
- Survival: Primary goal achieved through innovation and adaptability.
- Aspiration: Prestige, security, and autonomy of individuals.
- Concern: Image, work, and social concerns.