Planning – Process, Importance, Characteristics, Limitation


Meaning of Planning

Planning is the most important managerial function of deciding in advance what do in future for attaining target goals. It is a process which involves deciding in advance the blueprint of future activities to be undertaken. Planning is concerned with decisions such as what to do, when to do, how to do and who will do it.

It is a systematic process which is concerned with the achievement of organizational goals which are pre-planned. It explains clearly and simply how the particular goals are to be achieved. Function of planning mainly revolves around deciding the following activities such as resource allocations, schedules and actions necessary for attaining goals.

Planning is termed as a fundamental function of management because it helps in determining new opportunities, anticipate and avoid future problems, develop an effective course of action, comprehend the uncertainties and risk in various options and set standards.

Process of Planning

Setting Objectives

Planning process initiates with the identification of goals to be achieved by the organization. It is a fundamental step of planning as it determines what the organization needs to achieve as an end result by carrying out its operations. Such objectives are decided by properly evaluating both internal and external environment of business.

Developing Planning Premises

Planning is concerned with the future which is uncertain. For the implementation of plans, certain assumptions regarding future need to be taken. These assumptions are termed as planning premises within which plans and policies are implemented. These assumptions are in terms of material cost, market demand, government policy, technological changes etc.

Identifying Alternative Courses of Action

This is the third step in the planning process. It is concerned with identifying and studying various ways of achieving the objectives. There are numerous alternative courses available for achieving the established goals and objectives.

Evaluating Alternative Courses

Once alternative courses for attaining goals are identified, the next step is concerned with evaluating them. This step enables in finding out the weak and strong points of different alternatives available for choosing the best one.

Choosing the Best Alternative

After examining all alternative courses, the most suitable one is chosen for the achievement of desired goals. It is the one which is the most profitable one with lowest negative consequences. 

Formulating Derivative Plans

Derivative plans are secondary plans which are formulated for supporting the basic plans. These plants assist in implementing the main plan. Derivative plans clearly describe the sequence and schedule of carrying out various operations in an organization. Such plans are related with training personnel, hiring peoples, growth and expansion of organizations.

Implementation of Plans

This is the final step in the planning process. Implementation of the plan is a step where plans are put into action for attaining organizational goals. Here plans are communicated to employees by managers for converting them into action. Tools like procedures, standards, policies, rules and budgets are needed for implementing these plans.

Process and Importance of Planning
Process and Importance of Planning

Importance of Planning

Importance of planning process is described in points given below:-

Provides Direction

Planning is a process which provides clear directions for carrying out operations of the organization. It tells what to do, when to do, how and who will do it. This is the one which explains in clear terms the objectives of organization and instructs how to achieve them.

Increases Efficiency

It has an efficient role in increasing the overall efficiency and profitability of the organization. Planning aims at efficient allocation and optimum utilization of all resources. Proper planning helps in avoiding wastages and earning higher returns.

Facilitates Decision Making

Planning facilitates the whole decision-making process of the organization. It is one which evaluates different alternative courses available for attaining goals and selects the best one. This process assists in taking the right decision at the right time.

Reduces risk of Uncertainty

Planning plays an efficient in reducing the business risk. It enables in minimizing the risk of future uncertainties by doing properly anticipating and forecasting future events. All plans and decisions are made in accordance with the various future forecasts done. 

Help in Controlling

Controlling the performance of business operations is another major role played by planning. It helps in finding out deviations by comparing the performance of employees with plans. Planning monitors and ensures that all activities are going as per the pre-planned plans.

Motivates Personnel

Planning helps in motivating the personnel working with the organization for better performance. It provides various financial and non-financial benefits to people according to their performance level. These benefits motivate peoples for working with full dedication and attention.

Brings Innovation and Creativity

Planning enables in exploring various creative and innovative ideas. It evaluates and discovers the most suitable ideas for achievement of desired goals. Managers also express their ideas as per this creativity and thinking ability to organization. This way, planning leads to a lot of innovative and creative ideas.

Characteristics or Features of Planning

Planning is a primary function of management

When planning, the manager decides which of the alternatives should be followed which policies, procedures, programmes, projects and so on would be set up. Planning is a primary function. Every -manager must plan before he can intelligently perform any of the other management functions. Only having performed the planning function properly, the manager can organize, staff, direct and control.

Planning is an intellectual activity

Planning involves vision and foresightedness to decide the things to be done in future. It bridges the gap between where we are and where we want to go. It is not a simple process. It involves use of mental skills for the achievement of group objectives.

Planing is forward-looking

Planning means looking ahead. It is carried out to achieve some objectives in future. It may involve forecasting of future events such as customers’ demand, competition, government policies, etc. In other words, the manager attempts to handle future events effectively through the process of planning Thus, planning is futuristic in nature.

planning is continuous function

To keep the organisation as a going concern, it is essential that planning must be done continuously, Planning is not just one-shot deal. Planning additional planning, planning of details, and the revision of plans will have to take place continuously in order that organisation achieves its objectives effectively. In the wake of fast changing environment, plan get used up quickly and changes warrant redrawing, rechecking and re-planning the existing ones so that organisation passes the test of time successfully. In essence, managers never reach a point at which they stop planning.

Planning is goal oriented

Planning is aimed at defining the organisational goals and design appropriate action plans in order to achieve these goals. The major goals of enterprise include the objectives, purposes, targets, quotas, deadlines, profits, etc. The action plan are basically designed to facilitate the achievement of goals. Planning would be meaningless if it is not discussed in the context of well defined and preset goals. Planning is always goal oriented.

Limitation of Planning

Lack of reliable data

There may be lack of reliable facts and figures over which plans may be based. Planning loses its value if reliable information is not available or if the planner fails to utilize the reliable information. In order to make planning successful, the planner must determine the reliability of facts and figures and must base his plans only.

Non-acceptability of change

Resistance to change is another factor which puts limits on planning. It is a commonly experienced phenomenon in the business world. Sometimes, planners themselves do not like change and on other occasions they do not think it desirable to bring change as it makes the planning process ineffective.

Psychological barriers

Psychological factors also limit the scope of planning. Some people consider present more important than future because present is certain. Such persons are psychologically opposed to planning. But it should not be forgotten that dynamic managers always look ahead. Long-range well-being of the enterprise cannot be achieved unless proper planning is done for future.

Time consuming

Planning involves determination of the major goals to be achieved. The allocation of resources and identification of the people who are required to perform the tasks. Such decision making cannot be done overnight. Planning is time consuming and it involves energy, time and mobilization of different kinds of resources. A planner should investigate all aspects of a situation, develop alternative solutions, evaluate each alternative arid select the best alternative under the present circumstances. All this is time-consuming.

Lack of orientation and training for managers

For most of the managers planning is easy to put off. It is.not at all exciting or action-oriented and perhaps this explains why most often we are bombarded with plans that are never implemented. Further, some managers are strongly oriented toward short term results having high regard for the present rather than for the future.