What is Planning? What are the importance of Planning?

What is Planning? What are the importance of Planning?

What is Planning?

Planning is the primary function of management, which involves thinking in advance, what is to be done, when is it to be done, how it is to be done and by whom it should be done. Planning involves setting objectives and determining a course of action for achieving those objectives.

Importance of Planning:

The importance of planning are:

Planning provides directions: By deciding in advance what work is to be done, how work is to be done planning provides supervision for action. Planning provides the directions to the employees. Planning makes clear what employees need to do, when to do, how to do ect. By deciding in advance what work is to be done and how it has to done, planning provides direction for action. If there were no planning, employees would be working in different directions and organisation will not be able to achieve its goal.

Planning reduces the risks of uncertainty: Planning is an activity which allows a manager to look in future and anticipate changes. By deciding in advance the tasks to be performed, planning shows the methods/process to deal with uncertain events. Changes or events cannot be eliminated however they can be anticipated and managerial responses to them can be developed. 

Planning reduces overlapping and wasteful activities: By stating in advance what is to be done, how is to be done, when it is to be done and who will do it, planning reduces overlapping and wasteful activities.

Planning promotes innovative ideas: Since planning is the primary function of management, new ideas/concept can take the shape of concrete plans. Planning is the most arduous activity for the management as well as for manager because it guides all future actions resulting in growth and prosperity of the business.

Planning facilitates decision making: Planning helps the manager to predict about the future and make a choice from various alternative courses of action. The manager has to evaluate from various alternative and select the most viable proposition. Planning involves setting targets and foretell future conditions, thus planning help manager to take decision rationally.

Limitations of Planning:

The limitation of planning are:

Planning leads to rigidity:

Once plans are made by the manager to the future course of action then it becomes difficult for the manager to change them. Following pre-decided plan when the circumstances are changed may not bring good result for the organisation.

Planning is the time consuming process:

Planning is the time consuming method as a result of it takes very long time to judge the alternatives and choose the simplest one. Lot of time is consumed at the time of developing planning premises. So due to this reason the action get delayed. And whenever there is a requirement for prompt and immediate decision then we have to avoid planning.

Lack of accuracy:

Planning is always done for future not for past. In planning many assumptions are made by the manager to decide about future course of action. But these assumptions aren't 100% correct and if these assumptions don't hold true in present scenario or in future condition then whole planning will fail. For example, if in the plan it is assumed that there will be 4.5% inflation rate and in future condition the inflation rate becomes 15% then the plan will fail and adjustments will be required to be made.