Step 1: Defining Objectives:
This establishes where we want to go. Ideally, objectives are specific enough so that we will know we have arrived when we get there or how far off the mark we are at various points along the way.
Step 2: Determining where we are vis’-a-vis’ the Objectives:
This step evaluates current status vis’-a-vis’ the desired future state. I: includes an analysis of current strengths and weaknesses in terms of being able to accomplish your objectives in future.
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Step 3: Developing our Premises Regarding Future Conditions:
This step involves analyzing the situation for external factors that may inhibit goal accomplishment and forecasting future trends as they relate to these same factors. This is called the generation of future scenarios.
Step 4: Identifying and Choosing from Alternative Courses of Action:
This step involves taking actual decision. Here one identifies and evaluates alternative courses of action for resolving any discrepancy between desired and actual conditions. Then one or more alternatives can be chosen to formulate a course of action appropriate to the achievement of one’s objectives. This course of action becomes the plan.
Step 5: Implementing the Plan and Evaluating Results:
This is the action stage where actual results are determined. To attain one’s objectives, one must establish a plan and implement it well. True implementation also involves evaluation of results to ensure achievement of objectives.
When actual results are less than planned objectives, corrective actions should be taken in terms of modifications to the original plan and/or the actions through which it is implemented.
If the top management sets the broad objectives and then allows the lower management levels to plan within those constraints, the approach is known as Top-Down planning but if the plans are developed at lower levels without constraints and then sequentially passed up the hierarchy to top management levels, the approach is known as Bottom-Up planning.