Managerial Planning Process: Definition, Types And Steps

Roshni is the CEO of a digital media organization with a reputation for being one of the finest managers in the industry. During a recruitment drive, Roshni interacts with eight of the top applicants aspiring for a management role at her organization.

“In management, the process is sometimes more important than the result. If you take care of the process, the result takes care of itself,” says Roshni before inviting the applicants to share their ideas about the managerial process.

At the end of the interaction, Roshni picks two candidates for full-time managerial positions at her organization. Neither of the candidates has the most impressive CV of the eight in contention. Still, they have something Roshni values far more – an instinct for grasping how managerial planning and processes work.

What Is The Managerial Planning Process?
Importance Of Managerial Planning
Steps In Managerial Planning
Types Of Managerial Planning
Excel At Managerial Planning With Empathy

What Is The Managerial Planning Process?

The managerial planning definition or the managerial planning process consists of a step-by-step guide for creating a feasible organizational plan that establishes fixed goals using the resources at an organization’s disposal.

Managerial planning considers both long-term and short-term corporate strategies and is responsible for providing an organizational mission statement. The mission statement provided by the managerial planning process clarifies the vision of an organization and the direction in which it’s headed.

The managerial planning definition is fundamental to reduce uncertainty and engage in calculated risk management besides ensuring proper resource allocation and utilization. Indeed, organizations don’t always follow the blueprint laid out in the managerial planning definition as contingencies and transitions can call for a change at any time.

However, the managerial planning process is still an invaluable component of any corporate strategy as it provides the foundation upon which organizations can consolidate and expand.

Importance Of Managerial Planning

With the managerial planning definition already outlined, it’s time to look at the importance of managerial planning, which can be understood as follows:

The managerial planning process improves coordination by providing clarity and smoothness on key areas of corporate decision-making. It also prevents misunderstandings among employees and is a proven way to eliminate inefficient strategies.
The managerial planning process sets out the goals that an organization must strive to achieve and, in doing so, gives employees a specific idea of what’s expected of them in their respective roles. Different departments in an organization can focus on different elements of a goal, and the entire organization can start operating like a well-oiled machine.
Managerial planning ensures that the organizational leadership is in control of the daily flow of work and the long-term standards that an organization is supposed to maintain. While too much control isn’t desirable as there must be room for minimal adaptation and flexibility, managerial planning maintains a healthy balance between control and chaos to keep organizations functioning stably.
Managerial planning makes quantitative and qualitative assessment easier for organizations by allowing them to compare planned or expected outcomes with actual outcomes. It also means that organizations can create a growth trajectory and forecast where and how they want to position themselves in the industry.

Steps In Managerial Planning

According to the managerial planning definition, there are nine steps in managerial planning. These steps are explained below in the same order in which they are expected to be executed:

Venture Awareness And Allocation Of Resources

The first step in managerial planning is to build an awareness of what an organization is supposed to achieve. Ideally, this awareness should have a quantitative component or a clear qualitative vision that an entire organization can understand. For example, increasing profits by 20% over a 12-year period constitutes reasonable venture awareness. Once the venture awareness is in place, organizations must decide how to distribute their available resources so that no department is understaffed and the development of their products and/or projects can proceed optimally.
Acquiring Information

This step is all about doing extensive market and industry research to find out what trends are performing well, which customers to target first, how to keep growing and expanding, which products to launch and just about any information that can bring precision to an organization’s aims. When conducting this research, care should be taken that sources are double-checked for authenticity and there’s a clear chain of responsibility concerning information management.
Establishing Objectives

The third step in managerial planning involves establishing the objectives that an organization should aim for as clearly as possible. Organizations usually opt for two sets of objectives – one for the short-term and one for the long-term. Besides listing these objectives, it’s smart to create a hierarchy of objectives so that the most critical ones are given due importance.
Anticipation

For an organization to stand a reasonable chance of success, it’s not enough to merely establish objectives. There must also be an attempt to anticipate how things can pan out in the future based on past records, current trends and an instinct for reading consumer habits and the market. Anticipation, which is only meant for subject experts, generally involves estimations regarding demand and supply fluctuations, the potential rise in product pricing, availability of raw materials, technology, labor and the government’s economic policies.
Putting A Definite Path In Place

Arguably the most crucial step in managerial planning comes midway through when an organization’s core management is supposed to weigh up the pros and the cons and choose a path of action that will be definite, barring an emergency or crisis. This path of action charts out the exact details of how an organization is supposed to go about its aims, the time in which they should be achieved and the resources and personnel assigned to work on each part of the plan.
Evaluating The Course Of Action

In any industry, evaluation is the bedrock of sustained excellence. Once a path or course of action is in place, it needs to be evaluated regularly to check for shortcomings or lacunae preventing optimal performance.
Creating Contingencies

Back-up plans are crucial to any organization’s projects, and this step is all about having alternatives in place if an original plan goes haywire. But creating contingencies isn’t just about abstract thinking; it’s about resource adjustment and concrete mechanisms that can be switched to and carried out swiftly should the first plan fail to work out.
Implementation Of The Plan

The penultimate step in the managerial planning process is what organizations look forward to the most, the point where everything is set in motion. Implementation of plans must be systematic and structured, with necessary supervision at every stage. All units and departments must be in harmony during implementation, and there should be no confusion over individual or collective roles.
Monitoring And Re-evaluation

If a managerial plan isn’t well monitored, there’s always the possibility that complacency or inefficiency may set in. The monitoring team should be equipped with the relevant changes in the economic climate and must be in a position to make quick calls in case something needs to be fixed. On the whole, monitoring and re-evaluation generally require minute adjustments and not a full-scale revamp.

Types Of Managerial Planning

The managerial planning process generally divides itself into four primary types of managerial planning, each of which is detailed below:

Strategic Planning

This involves high-level planning regarding the most important organizational decisions. Conceived and executed by the core leadership or management group, strategic planning is about thinking for the long-term, ensuring a basic level of acceptance and understanding of strategic goals at every level of the organization.
Tactical Planning

Tactical planning is to do with short-term decision-making, opting for mechanisms that will expedite processes and ensure that an organization’s subunits have complete clarity on their specific roles and responsibilities.
Operational Planning

This involves formulating a step-by-step process that takes care of the daily routine of tasks performed by an organization. Operational planning may be more mechanical and mundane than strategic or tactical planning, but the attention to detail and precision required for it is often the highest.
Contingency Planning

Whenever an original plan goes astray or some unforeseen crisis emerges, organizations must be able to switch to contingencies that have been carefully planned over time. Contingency planning includes alternative strategies and tactics that enable an organization to quickly change operations without losing productivity or profits.

Excel At Managerial Planning With Empathy

There’s no point mastering the theory of the managerial planning process if you can’t connect with your associates or understand them. The best way to maximize workplace engagement is to empathize with those who work alongside you, something you can hone and shape through Harappa’s Lead With Empathy program. Brought to you by a world-class faculty with the help of frameworks like the ABC of Empathy and The Two Lenses of Trust, this pathway will train you to build a great team culture, create and foster trust and boost collective outcomes.

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