NATURE OF PLANNING AND IMPORTANCE OF PLANNING

NATURE OF PLANNING   

   

Planning proceeds all other managerial function. It establishes the objectives necessary for the group efforts. All other functions are performed to achieve the objectives set by the planning process.

1.       Rational approach-

planning is a rational approach for defining where one stands at the present and where one wants to go in the future and how to reach there. It involves the choice of appropriate means to fill the gap between present status and future status. The present and future status is usually expressed in terms of objectives and actions to be taken to achieve these objectives.

1.       Open system approach- planning adopts an open system approach which indicates that the future course of actions is influenced by the environment in which an organization operates. Therefore managers have to take into account various feature of environment.

2.       focus on objectives –

This is done in two forms-

a)      planning specifies the objectives which are to be achieved within specific time frames.

b)      Planning also specifies how these objectives are to be achieved.

 

3.       Decision making – it involves choosing the most appropriate alternative out of the several alternatives available, thus planning involves choosing the most appropriate alternative.

 

4.       Forward looking- planning is concerned with looking into future. It requires forecasting the future behavior of environment.

 

5.       Pervasiveness – planning is pervasive and extends throughout the organization. Thus every manager at any level of management performs planning function. This is why organization has plans at different level.

 

6.       Continuous process-  Planning is a continuous process. Even if a plan is decided to be executed over a period of time, the planning process does not come to an end. This is because business environment is dynamic in nature and any change in it requires adjustments in the plan through the planning process.

 

7.       Flexibility- Planning has flexibility as this process works in a dynamic environment business environment. It assumes that actual results if environmental conditions changes during plan execution period ,to ensure this , there is need for realizing the plan with changed environment .

 

8.       Mental exercise- planning is a thinking process rather than doing process. It works in environment which is abstract and not physical and requires considerable thinking. Therefore it requires conceptual skills to succeed in planning.

IMPORTANCE OF PLANNING

It is said that “if you have planned well, half of your work is done”. The most important difference between successful and unsuccessful organization is planning. This is why top management devotes maximum time in planning.

1.       Direction of action- “a good plan is like a road map, it shows the final destination and usually the best way to get there.” A good plan is a result of good planning action. Planning provides direction for action, by prescribing what is to be achieved and how it can be achieved.

 

2.       Reducing the risk of uncertainty-  Planning does not reduce uncertainty of environment but reduces the risk.

 

3.       Reduces overlapping and wasteful activities- By prescribing what is to be done and how it can be done. By this only necessary activities are performed, and there is no duplication of activities.

 

4.       Promoting creativity and innovation- Creativity is generation of new ideas for solving problems and innovation is introduction of any product or service or ideas that is considered as new, which helps an organization to increase its market standing.

 

5.       Facilitating decision making- Planning facilitates decision making throughout an organization by providing standing plans. Decisions are made on the basis of guidelines provided by these standing plans. Example- planning set policies, procedures, rules etc. this quickens decision making process.

 

6.       Helps in coordination – all managerial functions leads to coordination in the organization , real beginning is made at the planning stage. Various department work in accordance with the overall plan and the harmony is achieved.

 

7.       Providing basis for controlling-  In controlling, actual performance results are compared with standards and standards and standard are decided in planning process. If there is any deviation between the two, necessary corrective actions are taken to ensure that no deviation emerges in future.