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Importance of Planning

The document outlines several key aspects and benefits of planning: (1) Planning focuses on achieving objectives by determining goals and deciding courses of action to meet those goals. (2) Planning is the primary function of management that other functions like organizing, staffing, directing, and controlling are based on. (3) Planning is pervasive as it is carried out by managers at all levels of an organization, from top-level to front-line managers. Planning helps determine activities at both strategic and operational levels.

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492 views6 pages

Importance of Planning

The document outlines several key aspects and benefits of planning: (1) Planning focuses on achieving objectives by determining goals and deciding courses of action to meet those goals. (2) Planning is the primary function of management that other functions like organizing, staffing, directing, and controlling are based on. (3) Planning is pervasive as it is carried out by managers at all levels of an organization, from top-level to front-line managers. Planning helps determine activities at both strategic and operational levels.

Uploaded by

uday
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Increases efficiency: Planning makes optimum utilization of all available resources.

It helps to reduce
wastage of valuable resources and avoids their duplication. It aims to give the highest returns at the
lowest possible cost. It thus increases the overall efficiency.

Reduces business-related risks: There are many risks involved in any modern business. Planning helps to
forecast these business-related risks. It also helps to take the necessary precautions to avoid these risks
and prepare for future uncertainties in advance. Thus, it reduces business risks.

Facilitates proper coordination: Often, the plans of all departments of an organization are well
coordinated with each other. Similarly, the short-term, medium-term and long-term plans of an
organization are also coordinated with each other. Such proper coordination is possible only because of
efficient planning.

Aids in Organizing: Organizing means to bring together all available resources, i.e. 6 Ms. Organizing is
not possible without planning. It is so, since, planning tells us the amount of resources required and
when are they needed. It means that planning aids in organizing in an efficient way.

Gives right direction: Direction means to give proper information, accurate instructions and useful
guidance to the subordinates. It is impossible without planning. It is because planning tells us what to
do, how to do it and when to do it. Therefore, planning helps to give a right direction.

Keeps good control: With control, the actual performance of an employee is compared with the plans,
and deviations (if any) are found out and corrected. It is impossible to achieve such a control without
right planning. Therefore, planning becomes necessary to keep a good control.

Helps to achieve objectives: Every organization has certain objectives or targets. It keeps working hard
to fulfill these goals. Planning helps an organization to achieve these aims, but with some ease and
promptness. Planning also helps an organization to avoid doing some random (done by chance)
activities.

Motivates personnel: A good plan provides various financial and non-financial incentives to both
managers and employees. These incentives motivate them to work hard and achieve the objectives of
the organization. Thus, planning through various incentives helps to motivate the personnel of an
organization.

Encourages creativity and innovation: Planning helps managers to express their creativity and
innovation. It brings satisfaction to the managers and eventually success to the organization.

Helps in decision-making: A manager makes many different plans. Then the manager selects or chooses
the best of all available strategies. Making a selection or choosing something means to take a decision.
So, decision-making is facilitated by planning
The following facts come to light about its nature and features:

(1) Planning Focuses on Achieving Objectives:


Management begins with planning and planning begins with the
determining of objectives. In the absence of objectives no organisation
can ever be thought about. With the determining of objective, the way
to achieve the objective is decided in the planning.

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In case, it is necessary to change the previously decided course of


action for the attainment of objectives, there is no hesitation to do so.
It is thus clear that planning is helpful in the attainment of objectives.

For example, a company decides to achieve annual sales of? 12 crores.


After deciding upon this objective, planning to achieve this objective
shall immediately come into force. It was thought to achieve this
objective by giving advertisement in the newspapers.

After some time it comes to be known that the medium of


advertisement appeared to be incapable of achieving the target. In
such a situation the medium of advertisement can be changed and it
can be shifted from newspapers to television in this way, every
possible change is made through the planned action for the purpose of
achieving the objective.

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(2) Planning is Primary Function of Management:


Planning is the first important function of management. The other
functions, e.g., organising, staffing, directing and controlling come
later. In the absence of planning no other function of management can
be performed.

This is the base of other functions of management. For example, a


company plans to achieve a sales target of 112 crores a year. In order to
achieve this target the second function of management, i.e., organising
comes into operation.

Under it the purchase, sales, production and financial activities are


decided upon. In order to complete these activities, different
departments and positions are decided upon. The authority and
responsibility of every position are decided upon.

After the work of organising, information about the number of


different people at different levels required to achieve the objective
shall have to be provided. This job will be performed under staffing.
Similarly, planning is the base of other functions like directing and
controlling.

(3) Planning is Pervasive:


Since the job of planning is performed by the managers at different
levels working in the enterprise, it is appropriate to call it all-
pervasive. Planning is an important function of every manager; he
may be a managing director of the organisation or a foreman in a
factory.
The time spent by the higher-level managers in the process of
planning is comparatively more than the time spent by the middle-
level and lower-level managers. It is, therefore, clear that all the
managers working in an enterprise have to plan their activities.

For example, the decision to expand business is taken by the higher-


level managers. The decision to sell products is taken by the middle-
level and lower-level managers.

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(4) Planning is Continuous:


Planning is a continuous process for the following reasons:

(a) Plans are prepared for a particular period. Hence, there is need for
a new plan after the expiry of that period.

(b) In case of any discrepancy plans are to be revised.

(c) In case of rapid changes in the business environment plans are to


be revised.

(5) Planning is Futuristic:


Planning decides the plan of action what is to be done, how is it to be
done, when it to be done, by whom is it to be done all these questions
are related to future. Under planning, answers to these questions are
found out.

While an effort is made to find out these answers, the possibility of


social, economic, technical and changes in legal framework are kept in
mind. Since planning is concerned with future activities, it is called
futuristic.

For example, a company is planning to market a new product. While


doing so it shall have to keep in mind the customs and the
interests/tastes of the people and also the possibility of any change in
them.

(6) Planning Involves Decision Making:


Planning becomes a necessity when there are many alternatives to do
a job. A planner chooses the most appropriate alternative. Therefore,
it can be asserted that planning is a process of selecting the best and
rejecting the inappropriate. It is, therefore, observed that planning
involves decision making.

For example, Mr. Anthony lives in a town where only commerce


stream is taught in schools. His daughter has passed matrix and wants
to get admission in 10 + 1. It is evident that there is only one option for
her, i.e., commerce.

She doesn’t have to think or plan anything. On the other hand, if all
the three faculties’ art, science & commerce were available in the
schools, she would have to definitely think and plan about the subject
of study. It would have been be nothing but decision making in this
case.

(7) Planning is a Mental Exercise:


Planning is known as a mental exercise as it is related to thinking
before doing something. A planner has mainly to think about the
following questions:

(i) What to do? (ii) How to do it? (iii) When to do it? (iv) Who is to do
it?

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