Planning makes it clear to all the employees the ‘what’, ‘how’, and ‘when’ of each work. Importance of Planning It helps managers to improve future performance, by establishing objectives and selecting a course of action, for the benefit of the organisation. Since all the activities are planned only on the availability of resources, the shortage of resources is never felt and the work moves on unhindered. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people. It involves the selection of most profit­able course of action that would lead to the best result at the minimum costs. This is because planning may involve expansion of capacity, changes in work methods, changes in quality anticipation of tastes and fashion of the people and technical changes, etc. While planning does not guarantee success in organizational objectives, there is evidence that companies that engaged in formal planning consistently performed better than those with none or limited formal planning and improved their own performance over a period of time. In the end by comparing the actual work performance with the standards laid down, an effort is made to find out deviations and in case the work performance is not as desired the person concerned is held responsible. Planning is a pre-requisite not only for achieving success but also as for surviving in a complex and competitive world. The basic aim of the article is to preset the importance of the planning process in project management. Plans focus on the achievement of objective they prevent the manager form being distracted by less significant activities. Break up the project into smaller tasks for the team to perform and achieve. It facilitates decision-making by selecting the most feasible course of action and resources that could lead a business achieve their final goals. So plans can be as good as the forecasts on which plans are based. Planning enables identifying the best alternatives out of many options and encourages businesses to put efforts into discovering new ideas that support their goals and objectives. Planning minimiz­es costs because of the emphasis on efficient operation and consistency. All round, effective planning at the beginning of a project is … Planning plays a important role in facilitating the functions of controlling and coordination. “In 5 years’ time I need to get a job”. It forces organizations to look ahead and decide their future course of action so as to improve their profitability. Plans decide the priority so that right work is performed at right time. Planning is required at all levels of the management. And when you have plans you tend to succeed more. These standards are set in the light of objectives to be achieved. The resources with a firm are limited and can be spent on a number of purposes. In a fast changing environment the need for planning is all the more important because risk and uncertainty increase. Planning plays a pivotal role in effective time management. It is required practically at all levels of management. Planning is important in management because it allows managers to use resources efficiently and prepare for the unexpected. Therefore, it is said that planning makes management by exception possible as a result of which managers get enough time to think more about good plans. By determine the objectives of the organisation with the help of planning everybody working in the organisation is told about the ‘what’, ‘why’, and ‘how’, of everything. Effective planning would always prevent any overlapping and duplication of efforts and resources. No work specifically laid down by planning can be organised, activated and controlled.”. The first step of planning is setting goal and objectives for the organization. The effectiveness of formal planning is primarily based upon clarity of objectives. This thinking leads to innovations and creativity. Without proper planning, we see the usual symptoms of sliding back into our normal and mundane schedule of life. Copyright 10. The importance of planning is stated as under: Any planning starts with making the statement of its objectives as enterprise as a whole and that for each department in the organization. Planning is often called the primary management function because it establishes the basis for all other functions. For example, if your company is planning to purchase cars for office and forecast is that government is supposed to increase taxes on cars in the coming budget ad you decide to purchase cars in the month of February itself. In such an environment contingent plans can be prepared. Sometimes the tastes of the consumers undergo a change and sometimes the techniques of production experience changes. A firm may have a large number of options to exercise. An important part of the planning process is to be aware of the business opportunities in the firm’s external environment as well as within the firm. Hence Planning is a necessary prerequisite for control and control cannot exist without planning. Proper planning helps employees at a company know what they should be trying to accomplish. Its result is that the attention of all the employees is directed towards a particular goal. Planning being an all-pervasive function improves effectiveness of all other functions of management and ensures co-ordinated efforts throughout the orga­nization. But planning enables an organization to cope with uncertainty and change. Since the future needs of the organization are anticipated in advance, the proper acquisition and allocation of resources can be planned, thus minimizing wastage and ensuring optimal utility of these resources. Besides plans act as standards against which performance is measured to provide feedback and control. Planning is important so, it can be said there isn’t control without planning. From the start of a small business, to managing a large business, from starting your own career, to the last stages of your working life, planning will be the most important tool that you use in marketing. Like every human being a business also needs plans to materialize its objectives and succeed. Plans elaborate the actions necessary for achieving organizational objectives and thus, help in deciding the activities to be taken up in the future. It is better to prepare for the uncertain future in some certain terms than to not prepare at all. Koontz and O’Donnell observe, “Unless a manager has some planning responsibility, it is doubtful that he is truly a manager.” They also write, “Without planning, business becomes random in nature, and decisions become mean­ingless adhoc choices.” Terry has rightly stated that “Planning is the foundation of most successful actions of any enterprise.” Robert Fulmer has very aptly remarked. Planning is with­out doubt the keystone management functions because all other functions are required to carry out the decisions of planning. It is simply a blueprint for the future course of action to be taken and involves resource allocations, schedules, and actions necessary for attaining goals. Planning is valuable to managers due to the following reasons: Planning is the foundation of successful operations of any organisation. Importance of Planning in Business, Management and Organizations, Importance of Planning – Reasons as to Why Planning is Considered a Vital Managerial Function. Well-developed plans can aid the process of control in two ways. This formulation becomes important when it is brought to the notice of the employees, who will then work t… David Holt says: “Plan­ning provides objectives and articulates those objectives for everyone in the organisation.”. It also helps managers determine the right goals to seek. In this way the managers do not have to interfere in the daily work. Through proper planning, management can place itself to face future contingen­cies boldly, confidently and effectively. An investigation of firms in various industrial products as machinery, steel, oil, chemicals and drugs revealed that companies that engaged in formal planning consistently performed better than those with no formal planning. Planning is essential in modern business: 4. Effective planning also provides a basis for other managerial activities. But its importance in a business cannot be overstated. How to Get a Full-Ride Scholarship? Thus planning acts as a guide to make efficient and accurate decisions. It reduces (not eliminates) overall risk of future uncertainties. You may also like: Seven Core Functions of Management. Moreover, planning also serves as a good training device for future managers. 7 Key Tips, What Is an Average GPA in America? In this article we will discuss about the importance of planning in business, management and organizations. Georg R. Terry has supported this view by observing, “Planning is the main foundation of other functions of management like organising, motivating and controlling. Planning is an important function of management, it tells the manager where the organization should be headed. The objective of the project plan is to describe, in the most detailed manner, the potential of the project, prior to its organization and implementation. Organizations that plan in advance are more likely to succeed than those which fail to plan for the future. Direction is the process of giving instructions as to what to do. Standards are prescribed in context with their work, time and cost. It facilitates innovative and creative thinking among managers. Without a solid objective created by virtue of plans a business will not be able to scrutinize where it went wrong and thus will not be able to take corrective action to ensure success. Planning is a process which involves the determination of future course of action, i.e. A number of empirical studies provide evidence of organizational success being a function of formal planning, the success being measured by such factors as return on investment, sales volume, growth in earnings per share, and so on. Disclaimer 8. satyendra; August 1, 2015; 0 Comments ; controls, management function, planning, plans, risks, systems,; Planning – A Management Function . Periodic reviews of operations can determine whether the plans are being implemented correctly. If there is any difference among various departments of company to launch new products then this yardstick of customer orientation can be used to sort differences and to arrive at a decision that gets the cooperation of everybody in the organization. Planning is related to performance: There is ample empirical evidence regarding the importance of planning in organisational success. 1. Keywords: essay on planning, essay about planning in management. Management, Functions, Planning, Importance, Importance of Planning in Management. Planning gives an individual a sense of direction in the organization and motivates him to complete assignments on time. As planning involves the -selection of best objectives, unity of action, co-ordination of activities, economy in operation and off-setting of future uncertainty and change there is a great possibility of avoiding business failures. Uploader Agreement. Plans continuously reinforce the importance of these objectives by focusing on them. significance of planning in the management and development of an organization. Planning is the process of making a plan. Then there is a good chance a machine similar to the banned one in emissions and posing the same kind of danger will be come down upon too unless that machine is indispensable. Objectives represent the ultimate points of planning, so management should try to visualize future possibilities and revise its plans so that objectives are achieved effectively. It improves the motivation of workers also because they know clearly what is expected of them. Subsequently, wastage reduces, efficiency increases and costs decline. Studies have shown that when formal planning has not led to higher performance, the external environment is often the reason. Because of the increasing size and complexities of the organisations planning has come to assume more importance. Any attempt to control without plans is meaningless as they are no gauges for performance. Planning plays a very crucial role in all other functions. Practice Management > Business Planning The Importance of Planning Discipline in Business and Life What good is it to have annual goals if you only compare yourself against them once a … Planning by anticipating the possible changes plans various activities in the best possible way. The following points emphasise the importance and benefits of planning: A business concern has to work in an environment which is uncertain and ever changing. Since planning takes a future outlook, it takes into account the possible future developments. When the business anticipates a risk or a chance of loss in the future it can avoid such risk and make a better route to achieve its goals. Planning means deciding, which further implies determining in advance, the actions and resources (human and physical) required to reach a goal. Planning is a procedure which comes from your thinking, actually from organized thinking. ” In 10 years I need to save enough to retire”. Importance of Planning in Management. Planning does not only mean thinking about the future but also acting upon it. Seeks to achieve a co-ordinate structure of operations. The important advantage of planning is that it makes it possible to utilise the available resources in an organisation in a better way. Formulation of Concrete Goals: Formulating concrete goals is the primary objective of planning.Planning by collecting and analyzing factsdetermines goals that have to be met to earn profits and to develop and expand the business. The purpose or functions or importance of planning become clear on the basis of the following facts: With the help of planning the objectives of the organisation are clearly defined in simple words. For example, a coffee business decides to expand across the country in different states. When a manager doesn’t know what is to be done, then he cannot ask an employee to do the work essential to achieving the end result. But what some of us don’t have are Plans. Say for example the government plans on promoting cottage in… Prohibited Content 3. Plans ensure that best outputs are attained with the given input by putting the resources at the proper place. Montgomery sums up that “Successful planning-i.e., a clear definition of goals, determination of methods to move towards them and a review of progress—is the keynote of success in an organisation.”. Thus, planning helps in exercising effective control. Planning is the crucial function of management. So, why do we plan? Planning thus becomes the basis of all other functions of management. This leads to a situation where there is total havoc in the business with no one knowing what exactly to do and thereby compromising the stability and growth along with the success of the business. 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