Question

Explain the following steps in the process of planning: (i) Setting objectives, (ii) Developing premises, and (iii) Identifying alternative courses of action.

Hint:

Planning premises can be internal (capital, labor) or external (tax policies, technological disruptions). Accurate premises lead to more robust and realistic plans.

Answer 1

Concept: Planning is the primary function of management which involves deciding in advance what to do, how to do it, when to do it, and who is to do it. It is a systematic process comprising distinct sequential phases that direct the enterprise toward future action. Step 1: Explanation of (i) Setting objectives.
Objectives are the end points or goals toward which all organizational activities are directed. This is the first and most critical step in planning. Objectives must be stated clearly, precisely, and quantitatively wherever possible, for the entire organization as well as for each department, so that they act as a guide for managerial decisions.

Step 2: Explanation of (ii) Developing premises.
Planning is concerned with the future, which is inherently uncertain. Therefore, management must make certain assumptions about the future environment. These assumptions regarding future trends, government policies, market competition, and economic shifts are called planning premises. All plans are built on the foundation of these valid premises.

Step 3: Explanation of (iii) Identifying alternative courses of action.
Once the objectives are set and planning premises are established, the next step is to discover and identify all possible alternative paths or courses of action to achieve those goals. An objective can typically be reached through multiple strategies; hence, managers must brainstorm and list out the viable alternatives available.