Importance of Planning

Planning can be characterised as a blueprint that bridges future organisational goals and the organisation’s present situation. It analyses and facilitates determining how an organisation’s objectives can be fulfilled.

It consists of two parts:

(1) Establishing the organisation’s goals and objectives

(2) Selecting and developing a strategy to achieve them.

According to Fayol, “planning is the process of developing a plan of action, which includes determining the desired outcome in the course of action to be taken, the steps to be completed, and the methods to use.”

What are the features of planning?

(i) The primary focus of planning is achieving the goal

Planning has a specific objective. It is meaningless unless it helps achieve predetermined organisational goals.

(ii) Management’s primary function is planning

Operational planning is the first thing that every manager should do. The management can perform no other role without planning.

(iii) Planning is prevalent

Every business activity requires planning. Whether purchasing, accounts payable, auditing or marketing, each department requires systematic planning.

(iv) Planning is a systematic process

Planning is a never-ending process since it requires constant supervision of the changing environment and the best strategy.

(v) Planning is future-oriented

Planning is always about looking ahead. So all the managers try to create predictions and assumptions about the future.

(vi) Planning requires making decisions

It involves choosing the most outstanding decision from a selection of various alternatives.

Importance of planning

1. Planning provides guidance

Planning is important as it gives you guidance for what to do. Without planning, individuals would work in multiple directions, limiting the organisation’s capacity to fulfil its goals.

2. Planned action minimises the risk of unexpected results

Operational planning is the process that enables management to anticipate change, analyse the consequences of change and develop effective responses.

3. Planning reduces inefficient activities

Planning serves as the foundation for coordinating the actions and efforts of various departments and individuals and thereby eliminates unnecessary and repetitive actions.

4. Planning encourages new ideas

Management begins with the importance of planning. Managers can build new ideas into plans.

5. Planning creates control standards

Planning sets the benchmarks for measuring and evaluating actual performance. Without planning, control is meaningless. So, planning serves as the foundation for control.

Types of planning

Depending on the purpose and duration 

• Singular-use plans (also known as one-time plans) are developed to deal with unique or non-repetitive situations that may happen in an organisation from time to time. 
• Standing plans can be used continuously in equivalent or repeating situations within an organisation.

Based on a plan’s vision and mission

• Objectives are the desired outcomes of an organisation’s activities.
• A strategy is a detailed plan for meeting the goals of an organisation.
• A policy is a set of wide-ranging principles that assist managers in making decisions and taking action.
• The method is the set of rules and procedures that must be completed to get the desired result.
• A procedure is a series of defined actions that must be completed in a sequential order to complete a task.
• A budget is a quantitatively expressed financial plan.
• A rule is a precise statement that refers to the basic standards of Do’s and Don’ts that regulate people’s behaviour.
• A programme is a thorough plan that includes comprehensive statements about a project’s objectives, policies, processes, rules and methods for implementing any course of action.

What are the steps in the process of planning?

(i) Identifying and developing objectives

Because all policies, processes and methods are structured to achieve objectives, the planning function manager sets them.

(ii) Preparing the premises

The term “premises” refers to making predictions. Forecasting is used to make predictions. 

(iii) Developing alternative action plans

After setting goals, managers create a list of ways to achieve them.

(iv) Assessing alternative courses of action

After listing the different options and assumptions that go with them, the manager examines every option.

(v) Making a decision on an alternative

The best option is chosen, although there is no systematic algorithm. Instead of choosing one option, a combination of various alternatives might be chosen.

(vi) Making the plan into action

At this point in the process, additional managerial roles come into play. The step involves executing the plan, i.e., accomplishing what is required.

(vii) Follow-up

The manager’s job does not end with the implementation of the plan. While the plan is being implemented, the management will closely monitor it.

Drawbacks of planning

(i) Planning develops rigidity

Once plans are formed, the management may not change them.

(ii) Planning in a dynamic world may be ineffective

The business environment is highly dynamic, as it is constantly changing. Therefore, predicting these future shifts becomes increasingly challenging.

(iii) Planning makes you less innovative

With the operational planning, the organisation’s management may blindly follow the plan.

(iv) Planning is expensive

Because planning is an important intellectual activity, organisations must hire specialists to carry it out.

(v) Successful planning takes time

Planning premises requires a significant amount of time.

(vi) Successful planning does not ensure success

Operational planning merely serves as the foundation for future analysis. Therefore, this is not a realistic course of action in the future.

Conclusion

Planning is the most crucial role in management in terms of business. Whether starting a business, launching a new product or service or designing and implementing marketing plans, planning is important in every aspect. So, business operational planning is essential to achieving organisational goals. Furthermore, a systematic strategy may make it easier for an organisation to follow various modes of operation.