IMPORTANCE OF PLANNING IN MANAGEMENT

Table of Contents

OBJECTIVES/ IMPORTANCE OF PLANNING IN MANAGEMENT

Planning is an essential function of the management. It aims at making the realistic plans with a view to utilize the resources optimally and contribute to the efficiency and effectiveness of the economy. The following point will clearly illustrate the Importance of Planning in management:

1.ESSENTIAL FOR MODERN BUSINESS

Planning is thinking before doing function. In present times, business houses are facing various complexities or changes in the tastes, fashions, markets, trends in consumption, modification in the laws, new challenges, new opportunities, changes in technological environment, new challenges emerging from corporate social responsibility. All this necessitates the formulation of plans to meet the rapid changes of the business environment. So to achieve the heights of success and to capture the largest market share, planning is essential for the business.

2.FOCUS ON OBJECTIVES

An action without direction is meaningless. So to provide the direction to the employees, various targets or objectives or goals are set. Planning helps in setting up the objectives. The objectives set should be concrete and tangible. Planning is a function that helps to channelize the efforts of the employees of the concern towards a direction by providing them the objectives to be achieved.  It does not allow the management to be deviated from the action to do.

3.PROPER ALLOCATION OF RESOURCES

Resources are always scarce. Planning aims at optimum allocation of resources to the whole concern to avoid wastages and attain economy. To ensure this, the suggestions, requirements and opinions of all the departments are invited and then proper plans are made.

4.FACILITATES CONTROL

Planning and controlling are inter-related. These two functions are inter-dependent also. Planning set the targets which provide the base for controlling the activities of the concern. While devising the control, the deviations are found out which are considered while formulating future plans. So it can be rightly said that planning and controlling are indispensable.

5.HELPFUL IN DECISION MAKING

Planning involves setting up of objectives and budgets, laying down policies, strategies and programmes, formulating plans and procedures. All this acts as guidelines in day to day decision making. The whole process of planning is a process of decision making.

6.AVOID BUSINESS FAILURES

Business failures arise due to wrong and unscientific planning. A bad planning may result into wastage of human and physical resources. Good planning is always based on previous experience and realistic assumptions, facts and figures. All this helps in avoiding the business failures.

7.INSTRUMENT TO IMPROVE PERFORMANCE

Planning helps in setting goals for each function and for each employee. The concerns having formal planning have performed as compared to those where planning is not taken up as a regular activity. The variables for assessing performance may be return on investment, sales target, earnings per share etc. studies have proved that planning has been an instrument in improved performance.

8.REDUCE COMPETITION

The existence of competition enables the enterprise to get chance for growth. At the same time, stiff competition should be avoided. It is possible to reduce competition through planning.

9.BRINGS COOPERATION AND COORDINATION

Planning can bring cooperation and coordination among various sections of the organization. The rivalries and conflicts among departments could be avoided through planning. Besides, planning aavoids duplication of work.

10.TO MINIMIZE RISK AND UNCERTAINTY

Business environment keeps on changing. The changes are tangible or intangible in nature. Tangible changes are changes in technology, market forces, governmental regulations etc. Intangible changes are changes in attitudes, values, culture etc. Because of these diverse changes, organizations are required to work in a more prepared manner and look ahead for their future course of action which is basically determined by the planning process. Planning does not aim at stopping these environmental changes but prepares the organization in more scientific and realistic manner to minimize the risks and uncertainty arising out of them.

ALSO STUDY:ALSO STUDY:ALSO STUDY:ALSO STUDY:
ManagementObjectives of managementFunctions of managementProcess of management
Management as an artManagement as a scienceManagement as a professionCompany
Incentive plans14 principles of management by Henry FayolPrinciples of scientific managementScientific management
Work studyTime studyMotion studyMethod study
PlanningImportance of planning in managementAdvantages of planning in businessProcess of planning
Types of planning in businessSetting objectives in managementObjectivesSMART test
Management by objectivesPolicies in BusinessManagement and business administrationFunctional areas of management
Limited Liability partnershipLLP Vs companyLLP vs Partnership
IMPORTANCE OF PLANNING IN MANAGEMENT
IMPORTANCE OF PLANNING IN MANAGEMENT

Leave a Reply