Fundamentals of Planning

Fundamentals of planning :-

• Definitions of Planning

• Nature of Planning

• Significance of Planning

• Types of Plans

• Steps in the Planning Process

• Prerequisites for Effective Planning

INTRODUCTION

Planning is the process of bridging the gap between where we are and where we want to be in the future. In other words, planning is “looking ahead, relating today’s events with tomorrow’s possibilities.” It is the process of deciding in advance what to do, how to do, when to do it, and who does what. Proper planning minimizes risk and ensures that resources are efficiently and effectively utilized.

Planning and controlling are inseparable. Planning involves determining organizational objectives and developing strategies to achieve the objectives, while controlling involves establishing standards of performance and comparing actual results with the planned results. Controlling without planning is meaningless. Unless one knows where to go, one cannot tell whether one is going in the right direction or not. Planning gives an organization the required focus and direction. Thus planning is a prerequisite of the control function.

DEFINITIONS OF PLANNING

In simple words, planning is deciding in advance what action to take, how and when to take a particular action, and who are the people to be involved in it. It involves anticipating the future and consciously choosing the future course of action.

According to Peter Drucker, “Planning is a continuous process of making present entrepreneurial decisions (risk taking) systematically and with best possible knowledge of their futurity, organizing systematically the efforts needed to carry out these decisions and measuring the result of those decisions against the expectations through an organized systematic feedback.”

In the words of George R. Terry, “Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired results.” Thus, while planning, a manager makes use of facts and reasonable premises and also considers the relevant constraints. The manager then decides what activities are needed, how they are to be carried out and how they would contribute to the achievement of the desired results.

Dalton E. McFarland’s definition of planning takes into account the dynamic nature of the environment. He defines planning as follows:

“Planning is a concept of executive function that embodies the skills of anticipating, influencing and controlling the nature and direction of change.”

According to Heinz Weihrich and Harold Koontz, “Planning involves selecting mission and objectives and the actions to achieve them; it requires decision-making that is, choosing from alternative future courses of action.” Thus, planning involves determining organizational objectives and deciding how best to achieve them. It involves looking ahead and relating today’s events with tomorrow’s possibilities.

NATURE OF PLANNING

• Planning is Goal-oriented

• Planning is an Intellectual or Rational Process

• Planning is a Primary Function

• Planning is All-pervasive

• Planning is Forward-looking

• Planning is a Perpetual Process

• Planning is an Integrated Process

• Planning Involves Choice

SIGNIFICANCE OF PLANNING

In a complex business situation, planning helps managers meet the challenges posed by the environment, while at the same time minimizing the risks associated with them. Planning is a prerequisite not only for achieving success but also for surviving in a complex and competitive world.

Planning is very important in all types of organizations. It forces organizations to look ahead and decide their future course of action so as to improve their profitability. Organizations that plan in advance are more likely to succeed than those which fail to plan for the future.

Planning is the first step in the management process. It ensures that the employees of an organization carry out their work in a systematic and methodical manner. It also helps coordinate and control various tasks and makes sure that resources are used optimally.

1. Focuses Attention on Objectives

2. Offsets Uncertainty and Risk

3. Provides Sense of Direction

4. Provides Guidelines for Decision-making

5. Increases Organizational Effectiveness

6. Provides Efficiency in Operations

7. Ensures Better Coordination

8. Facilitates Control

9. Encourages Innovation and Creativity

10. Facilitates Delegation