The fundamental planning process consists of the following steps: team building, modeling, and consensus; evaluating the achievements of an organization and available resources; analyzing business, economic, political, and societal environments; anticipating and evaluating the impact of future developments; building a shared vision and deciding on what goals they want to achieve and deciding what actions to take to achieve their goals. The result of this process is what is termed a “plan” which is an action map to achieve goals.
A plan is mainly an action statement. Plans lead to actions, actions produce results, and part of planning is learning from results. In this context, the planning process is followed by implementation, which is monitored by control measures that provide feedback for planning. Thus, feedback leads to the first step in planning, and hence planning can be considered an iterative process where the action steps form a loop. Planning for competitive advantage is an important planning method in recent times.
Planning is generally an iterative process: both long-term and short-term planning. If an overall goal or object is set, the next step is to study what is required by each of the firm’s organizational elements. The strengths and weaknesses of each element must be studied in relation to the task. If properly executed, then it will be found that in many cases, the original objectives must be modified because some organizational element or person cannot meet the requirements.
This then becomes a reiterative process. For example, 7-Eleven Japan’s stores always have plenty of what their customers want: cold boxed meals of rice, pickles, and other foodstuffs on hot days and hot noodles on cold days. This is because the counselor works with the store manager or franchisee to improve the business by using data from the store’s information systems to manage and order more effectively. The scenario approach to planning and planning for competitive advantage are two approaches to planning.
Planning is a process that involves:
- setting goals or objectives;
- assessing and forecasting the external environment;
- designing and assessing alternative courses of action, including analyzing the potential risks and rewards;
- selecting the best course of action;
- and evaluating results as the course of action is implemented.
The ability to make decisions for the future depends on a clear knowledge of the available alternatives, a systematic assessment of the costs and benefits of each alternative, a consistent order among preferences, and clear rules for making decisions. The hallmark of strategic planning is that it should be able to connect all the organization’s decisions and activities. This is possible only when planning includes the vision of the organization.
The problem with traditional planning is that it starts in the past, with practices and formulas developed out of what worked before, and moves gradually forward from the present. Given the rising demands for services and the pressures to respond instantaneously to new problems, organizations need to include a technique called “visioning” into the planning process. Visioning involves these four key steps: Understanding the Mission of the organization; considering the core values; making the mission statement the framework for the plan.
First, there should be an extensive in-depth self-examination of the purpose for which an organization exists. Given that purpose, a philosophy that develops organizational values is established. Then, based on the purpose and philosophy, a functional statement of mission is created. Finally, a prioritized set of goals is developed. This package of purpose, philosophy, mission, and goals represents the vision of what top management wants the organization to become. Planning based on this kind of preparation will definitely be a success.