ADVANTAGES OF PLANNING IN BUSINESS
Planning helps the organization in achieving its objectives early. The planning helps the organization in many ways. Some of the advantages of planning in business are as follows:
- BETTER UTILISATION OF RESOURCES
Planning is deciding in advance regarding what to do, how to do, who is to do it, when to do. This leads to effective utilization of resources as all regarding the job is pre-decided. A person who is pre informed about his duties will perform all his tasks on time in the best way advised which will bring economy for the whole organization.
- HELPS IN ACHIEVING OBJECTIVES
Planning lays down the goals and also makes the plans to achieve the laid goals. On the basis of plan made, the direction is provided to the employees to do their jobs. Overall it can be well said that planning helps in achieving the targets or objectives set.
- ECONOMY IN OPERATION
Planning helps in eliminating under-utilization or over-utilization of resources, unnecessary activities or movements, wastages which helps in minimizing the cost of the operations.
- MINIMISES FUTURE UNCERTAINITIES
The uncertain future increases the importance of planning. Planning foresees the changes and uncertainties taking shape in future and device methods to face them. Some future uncertainties are thus minimized by planning.
- IMPROVES COMPETITIVE STRENGTH
Competitive strength is improved by adding line of products, changes in quality and size of the product, expansion of plant capacity, and change in methods of work. Among these opportunities or alternatives available, which one is the best to implement is decided by following the process of planning. So, planning helps to improve the competitive strength of the company.
- EFFECTIVE CONTROL
Planning lays down the goals or targets. The management controls the performance of the organization in respect of the targets set. Actual performance is compared with the standard performance and deviations are found out. These deviations are again considered while formulating future plans. Thus, it can be said that planning leads to effective control.
A well prepared plan encourages the employees of the organization and gives them a sense of effective participation. Planning motivates the employees as to what the organization wants to achieve and defines it to the employees.
Planning helps the management to motivate the individual employees to achieve the common objectives or goals. Planning provides well defined objectives, unity of direction, well published policies, procedures and programmes. All this facilitate to get coordination, which consequently avoids duplication of work and inter-departmental conflicts.
- PROMOTE GROWTH AND IMPROVEMENT
Planning sets a standard to control purpose. So useless and aimless activities are avoided. It leads to the growth and improvement of an individual and the organsitaion.
- DEVELOPS RATIONALITY AMONG MANAGEMENT EXECUTIVES
Disciplined thinking of management executives is geared up through formal planning. Management executives take action only after putting their thoughts in blueprint. In this way, planning brings rational thinking and approach among management executives.
- PREVENTS HASTY JUDGMENTS
We can analyze a problem through a plan and consider the alternatives before taking a sound decision. It is possible to plan in advance as to what will be done and how it will be done. This avoids hasty judgment.
- REDUCES RED-TAPISM
Junior most executive can act according to the pre-planned decisions. There is no need for him to get any fresh permission for his action. It saves time, energy and cost and reduces red-tapism.
- ENCOURAGES INNOVATIVE THOUGHTS
A good plan should provide a basis for new thinking in any individual. It seeks the way to encourage the people to coordinate and to achieve common objectives. According to DE HUSSEY “A good planning process will provide avenues for individual participation, will throw up more ideas about the company and its environment, will encourage an atmosphere of frankness and corporate self-criticism and will stimulate managers to achieve more.
- IMPROVES ABILITY TO COPE UP WITH THE CHANGE
Planning helps the managers to cope up with the changes but it cannot prevent changes from happening. This creates awareness among the managers regarding the incidence of change.
- ANTICIPATION OF CRISIS
Careful planning will avoid the crisis which is likely to occur. In this way, management can reduce the organizational disturbances.