Question

State the Importance of Planning ?

Planning is important as it provides directions for action, reduces the risks of uncertainty and facilitates decision making.’ Explain.

Explain the following as importance of planning function of management.

1. planning reduces overlapping and wasteful activities.
2. Planning reduces the risk of uncertainty.

Explain how planning:

1. Reduces overlapping and wasteful activities
2. Establishes standards for controlling
3. Facilitates decision making

Explain the importance of planning.

Explain any five points of importance of planning.

Answer 1

Importance/Significance of Planning:

1. Planning provides Direction: Planning is concerned with a predetermined course of action. It provides directions for the efforts of employees. Planning makes clear what employees have to do, how to do it, etc. By stating in advance how work has to be done, planning provides direction for action. Employees know in advance in which direction they have to work. This leads to Unity of Direction also. If there were no planning, employees would be working in different directions, and the organization would not be able to achieve its desired goal.
2. Planning reduces the risk of uncertainties: Organisations have to face many uncertainties and unexpected situations every day. Planning helps the manager to face the uncertainty because planners try to foresee the future by making some assumptions regarding the future, keeping in mind their past experiences and scanning of business environments. The plans are made to overcome such uncertainties. The plans also include unexpected risks such as fire or some other calamities in the organisation. The resources are kept aside in the plan to meet such uncertainties.
3. Planning reduces overlapping and wasteful activities: The organisational plans are made keeping in mind the requirements of all the departments. The departmental plans are derived from the main organisational plan. As a result, there will be coordination in different departments. On the other hand, if the managers, non-managers and all the employees are following the course of action according to plan, then there will be integration in the activities. Plans ensure clarity of thoughts and action and work can be carried out smoothly.
4. Planning promotes innovative ideas: Planning requires high thinking and it is an intellectual process. So, there is a great scope for finding better ideas, better methods and better procedures to perform a particular job. The planning process forces managers to think differently and assume future conditions. So, it makes the managers innovative and creative.
5. Planning Facilitates Decision Making: Planning helps the managers to take various decisions. As in planning, goals are set in advance and predictions are made for the future. These predictions and goals help the manager to take fast decisions.
6. Planning establishes standards for controlling: Controlling means comparison between planned and actual output and if there is variation between both, then find out the reasons for such deviations and take measures to match the actual output with the planned. But in case there is no planned output, then the controlling manager will have no basis to compare whether the actual output is adequate or not. For example, if the planned output for a week is 100 units and the actual output produced by the employee is 80 units then the controlling manager must take measures to bring the 80 unit production up to 100 units but if the planned output, i.e., 100 units is not given by the planners, then finding out whether 80 unit production is sufficient or not will be difficult to know. So, the basis for comparison in controlling is given by the planning function only.
7. Focuses attention on objectives of the company: The planning function begins with the setting up of the objectives, policies, procedures, methods, rules, etc. which are made in planning to achieve these objectives only. When employees follow the plan, they are leading towards the achievement of objectives. Through planning, the efforts of all the employees are directed towards the achievement of organisational goals and objectives.

Answer 2

Importance of Planning:

It is the fundamental function that gives an outline about where to go, how to go, and reduces the risk of an uncertain future with the help of forecasting. The importance of planning is as follows:

1. Helps to set clear objectives: Planning is concerned with setting objectives, targets, and formulating plans to achieve them. It helps managers to analyze the present condition of the organization and on that basis to identify the ways of attaining the desired position in the future.
2. Provides path of action: Planning ensures that the goals or objectives are clearly stated. They act as a guide and they provide direction for doing the right things at the right time with the right way. It helps employees to know what the organization has to do and what they must do to achieve the goals.
3. Planning improves performance: It helps managers to improve future performances of employees by establishing objectives and selecting a course of action. It is beneficial for the organization. Planning leads to the efficient working of the employees. Due to proper planning, the employees can work according to time guidelines. This improvement in performance results in higher profitability for the organization.
4. Minimizes the risk: Planning is based on forecasting techniques. It is the process of looking into the future and anticipating future changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or risks cannot be eliminated totally but they can be anticipated and can be tackled with preventive measures. It minimizes the risk of future or uncertainties of the future.
5. Planning leads to optimum utilization of resources: Organizational plans are prepared by taking into consideration the availability of resources and the proper allocation of resources for various activities. It also facilitates optimum utilization of resources which brings higher efficiency and better results. One can avoid wastage of resources by proper planning.
6. Helps in decision making: There are various alternatives in front of management. Achieving goals planning helps the management to select the best alternative by considering all the positive and negative outcomes of all the alternatives. Decisions are taken after selecting alternative courses of action to achieve a predefined goal. It helps the manager to make rational decisions.
7. Useful in setting the standards for controlling: Planning sets out standards for controlling. So, the actual performance can be compared with the standards and managers can find out the deviation, if any between the actual and the standard performance. Such deviation can be bridged by taking controlling steps. Therefore, planning provides a basis for control. It is also important for maintaining discipline at the working place of the organization.
8. Facilitates Coordination of all activities: Planning facilitates the coordination of activities. It reduces overlapping among activities. All activities of business organizations are closely linked with each other which is considered in the process of planning. Sound planning inter-relates with all the activities and resources of an organization. Thus, various departments work as per the overall plan, and coordination is achieved.
9. Facilitates other management functions: Every organization functions towards achieving goal and goal is set at the planning stage. Unless the plan is ready, other management functions such as organizing, staffing, etc. cannot be undertaken thus, planning facilitates all other functions of management.
10. Promotes innovative ideas: Planning is the basic function of management. It is a process of decision making that involves the promotion of innovative ideas after critical thinking. Ultimately, these innovative plans result in the attainment of the goals of the organization. It is the most challenging activity for the management as it guides all future actions leading to the growth and prosperity of the organization. In short, planning plays a vital role in every walk of life of an organization as well as of an individual. The future is highly uncertain and the business environment is changing. With the help of proper planning, the risks and uncertainties can be minimized definitely. Hence, planning is the basic requirement of any organization for survival, growth, and success.