Planning in organizations and public policy is both the organizational process of creating and

maintaining a plan; and the psychological process of thinking about the activities required to
create a desired goal on some scale. As such, it is a fundamental property of intelligent behavior.
This thought process is essential to the creation and refinement of a plan, or integration of it with
other plans, that is, it combines forecasting of developments with the preparation of scenarios of
how to react to them. An important, albeit often ignored aspect of planning, is the relationship it
holds with forecasting. Forecasting can be described as predicting what the future will look like,
whereas planning predicts what the future should look like.[1]

The term is also used to describe the formal procedures used in such an endeavor, such as the
creation of documents, diagrams, or meetings to discuss the important issues to be addressed, the
objectives to be met, and the strategy to be followed. Beyond this, planning has a different
meaning depending on the political or economic context in which it is used.

Two attitudes to planning need to be held in tension: on the one hand we need to be prepared for
what may lie ahead, which may mean contingencies and flexible processes. On the other hand,
our future is shaped by consequences of our own planning and actions.
Definition

The process of setting goals, developing strategies, and outlining tasks and
schedules to accomplish the goals.

In preparing for battle I have always found that plans are useless, but planning is
indispensable.
Dwight D. Eisenhower

The Strategic Planning Process

In today's highly competitive business environment, budget-oriented planning or

forecast-based planning methods are insufficient for a large corporation to survive and
prosper. The firm must engage in strategic planning that clearly defines objectives and
assesses both the internal and external situation to formulate strategy, implement the
strategy, evaluate the progress, and make adjustments as necessary to stay on track.

A simplified view of the strategic planning process is shown by the following diagram:

The Strategic Planning Process

Mission &
 Objectives

Environmental
Scanning

Strategy
Formulation

Strategy
Implementation

Evaluation
& Control

Mission and Objectives

The mission statement describes the company's business vision, including the
unchanging values and purpose of the firm and forward-looking visionary goals that
guide the pursuit of future opportunities.

Guided by the business vision, the firm's leaders can define measurable financial and
strategic objectives. Financial objectives involve measures such as sales targets and
earnings growth. Strategic objectives are related to the firm's business position, and
may include measures such as market share and reputation.

Environmental Scan

The environmental scan includes the following components:

 • Internal analysis of the firm
• Analysis of the firm's industry (task environment)
• External macroenvironment (PEST analysis)

The internal analysis can identify the firm's strengths and weaknesses and the external
analysis reveals opportunities and threats. A profile of the strengths, weaknesses,
opportunities, and threats is generated by means of a SWOT analysis

An industry analysis can be performed using a framework developed by Michael Porter

known as Porter's five forces. This framework evaluates entry barriers, suppliers,
customers, substitute products, and industry rivalry.

Strategy Formulation

Given the information from the environmental scan, the firm should match its strengths
to the opportunities that it has identified, while addressing its weaknesses and external
threats.

To attain superior profitability, the firm seeks to develop a competitive advantage over
its rivals. A competitive advantage can be based on cost or differentiation. Michael
Porter identified three industry-independent generic strategies from which the firm can
choose.

Strategy Implementation

The selected strategy is implemented by means of programs, budgets, and procedures.

Implementation involves organization of the firm's resources and motivation of the staff
to achieve objectives.

The way in which the strategy is implemented can have a significant impact on whether
it will be successful. In a large company, those who implement the strategy likely will be
different people from those who formulated it. For this reason, care must be taken to
communicate the strategy and the reasoning behind it. Otherwise, the implementation
might not succeed if the strategy is misunderstood or if lower-level managers resist its
implementation because they do not understand why the particular strategy was
selected.

Evaluation & Control

The implementation of the strategy must be monitored and adjustments made as
needed.

Evaluation and control consists of the following steps:

1. Define parameters to be measured

2. Define target values for those parameters
3. Perform measurements
4. Compare measured results to the pre-defined standard
5. Make necessary changes

Purpose of planning
◆ Reducing risk
◆ Reducing uncertainty
◆ Supporting better decision making
◆ Establishing trust
◆ Conveying information

Nature of Planning :-
I think the planning has the following inherent characteristics:
1. Planning is an intellectual process :- Planning as an intellectual process, the
conscious determination of course of action. Thus, it is an intellectual stimulation. It
possesses an element of day-dreaming. In the initial stage it may involve what
might be called vision. It involves foreseeing future developement, making forecasts
or predictions and then taking decisions. Thus, it becomes an important mental
exercise.
2. Planning contributes to the objective :- A plan starts with the setting of
objectives and in order to realize it develops policies, procedures, and strategies,
etc. Obviously, without setting the goals to be reached and lines of action to be
followed, there is a continuous and never-ending activity of a manager to keep the
enterprise going.
3. Planning is a selecting process :- Planning is a selective process. It involves
the study and a careful analysis of various alternatives and then selecting the best
one. It not only pertains to defining a problem which immediately confronts the
manager, but often it mentally searches the possibilities for problems that might
appear in the future.
4. Planning forms the premises for the decision of the future :- Plans
become premises, for the decisions of the future. Detailed planning may include
several plans, which are mutually exclusive. It provides series or sets of decision
that can be made under various possible circumstances. Thus, planning aids in
making specific decisions, since it includes all of the important alternatives, which
5. Planning pervades all managerial activities :- Planning is a pervasive
activity convering the entire enterprise with all its segments and its every level of
management. It is not the exclusive responsibility of top management but it
extends to middle and lower management as well. It is a primary function of the
management and its level and extent, etc. Will depend upon the level of
management.
6. Planning is directed towards efficiency :- The main purpose of planning is to
increase the efficiency of the enterprise. It is an attempt on the part of a manager
to anticipate the future in order to achieve better performance. It has become an
important function due to uncertain and ever changing environmental of business.
7. Planning is a continuous and flexible process :- Because of uncertainties of
the future the planner must be ever alert and should form his plans in such a way
as to adopt them to changing circumstances without inconvenience and undue
costs.