Planning refers to a
thinking process that determines in advance what to do. Importance of planning is the primary
function of every organization because without basic functions the objectives
cannot be fulfilled. It involves forward-looking and we can say that the
planning is futuristic in nature.
Meaning of Planning
Planning means is deciding
the way of doing the actual work. It helps in achieving the goals of the
organization very effectively. It provides the right path for executing the
activities in the right direction.
Definitions of Plannings
"Planning bridges the
gap between where we want to go. It makes things possible that wouldn't have
happened otherwise."
-
Koontz and O'Donnell
"The action plan, as
well as the envisaged outcome, the line of action to be followed, the steps to
be followed, and the methods to be used."
—
Henry Fiolo
“Planning is deciding in
advance what is to be done. When manager plans, he or she plans action for the
future, striving to achieve a coherent, coordinated structure of operations
aimed at desired results.
Importance of Planning
Importance of planning in management or financial planning, it is an intellectual task
and it is very important for organizations. So let's discuss some points:
1. Reduction of Uncertainty:
Organizations also face
certain uncertainties and planning helps in reducing the risks. It provides
solutions to problems because the manager sets certain assumptions about the
future at the time when he makes plans. So those assumptions help mitigate risk
in times of uncertainty.
2. Right Direction:
The plan provides the
precise direction to proceed. Every manager works on certain arrangements
regarding the activities of the organization, and good determination before
execution gives better results. It leads to unity of direction.
3. Planning to Raise Innovative Ideas:
The planning process
forces managers to think differently so that uncertainties can easily overlap.
There is a lot of scope for the managers to set and make a blueprint for the
future activities.
4. Planning Facilitates Fast Decision Making:
It helps the management to
take the right decisions in the right way. Managers in every organization are
setting future goals in advance; through these goals they can take decisions as
per the requirement of working conditions.
5. Reduction in Useless Activities:
Plans confirm the clarity
of thoughts and actions, through which all the people of the organization carry
out their activities very easily. This leads to less wastage and we can say
that managers and employees can achieve their objectives with better
utilization of resources at minimum cost due to doing things according to the
plans made by them.
Limitations:
We cannot say that
thinking in advance is a guarantee of success; there are some limitations which
are as follows:
1. Not working in changing environment:
Sometimes planning does
not work effectively due to change in economic policy, change in fashion,
change in legal environment etc as these are external factors and are not
directly controlled by the business units. Hence we can say that the manager
cannot predict these changes accurately and the planning may fail.
2. Hardness:
Once the manager makes a
plan, each employee has to follow it and execute it in activities. So the
determination that is already there may not allow for a new way of doing
things. It's difficult to change.
3. Takes a lot of time (time consuming):
The planning process takes
a long time as the manager has to evaluate the alternatives and select the best
option. This process takes a lot of time and there is delay in action. And he
has to avoid planning whenever there is a need to make quick decisions.
4. Heavy Cost:
Thinking is an
intellectual process and companies have to hire experts to do this process.
These experts spend a lot of time and companies pay them for their efforts. So
we can say that it is a cost consuming process.
5. Doesn't Give Guaranteed Success:
Sometimes forecasts can
give wrong results. It does not mean that advance planning always provides a
good solution and execution; it can lead to failure as the business entity has
an external environment which can affect the business in the opposite
direction.
In this article we told you about importance of planning, Meaning of planning and limitations of planning. if you would like this so please share it with friends also.
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