(A) Meaning : Planning is the fundamental and basic function of management. It is a process of setting goals and choosing the means to achieve these goals. Planning means deciding the future course of action which determines what is to be done, how to do it, when to do it, who is to do it and how results are to be evaluated. It is a detailed programme in which all activities to be performed in future are mentioned keeping in mind the objectives. Thus, it is an intellectual process of logical thinking and rational decision-making.
(B) Importance :
The importance of planning is explained as follows:
(1) Helps to set clear objectives : Planning is the process of setting objectives, targets and formulating plans to achieve these objectives. With the help of proper planning, management can analyse the present condition of the organisation and can identify the ways of attaining the desired position in future.
(2) Provides path of action : Planning ensures that the goals or objectives are clearly set. It acts as a guide and provides direction for doing the right things at the right time and in a right way. It helps the employees to understand the organisational goals and what they must do to achieve the same.
(3) Planning improves performance : It helps manager to improve future performances of employees by setting clear objectives and selecting a right course of action. It leads to efficiency in working of the employees. Due to proper planning the employees can work according to guidelines which helps them to improve performance. This results into higher profitability of the organisation.
(4) Minimizes the risk : Planning is the process of looking into the future and anticipating the future changes. By deciding in advance the task to be performed, planning helps to deal with future changes and unforeseen events.
Planning helps in anticipation of risk and decide preventive measures accordingly. Though changes or risks cannot be eliminated but proper planning minimizes them.
(5) Planning leads to optimum utilization of resources: Plans are made on the basis of availability of resources with proper allocation for various activities. Proper allocation of resources brings higher efficiency and desired results with minimum wastages.
(6) Helps in decision-making : Planning helps the management to achieve to take a rational decision and to select best alternatives by considering all positive and negative outcomes of all the alternatives the decisions are taken after selecting the best suitable alternatives a predefined goals.
(7) Useful is setting the standards for controlling: Planning sets the standards of performance to be achieved and which can be measured with the actual performance for find out about any deviation. Such deviation can be taken care by controlling steps. Thus, planning provides basis for maintaining discipline in an organisation.
(8) Facilitates co-ordination of all activities : Proper planning reduces the overlapping among all activities of business which are closely linked with each other. Planning interrelates such activities of all department work as per overall plan and thus management co-ordination is achieved.
(9) Facilitates other functions : Planning is the primary function of all the functions of management. Every organisational function is set to achieve the organisational goals at the planning stage. Other management functions such as organising, staffing, etc. cannot be undertaken till the plan is ready.
(10) Promotes innovative ideas : Planning is the basic function. The process of decisionmaking involves promotion of innovative ideas after critical thinking. It is the most challenging activity for the management as it guides all future activities and actions of an organisation. In the end, these innovative plans result in attainment of the organisation goals.
