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Definition : Planning is the fundamental management function, which involves deciding beforehand , what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an  organisation’s objectives and develops various courses of action , by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.

Planning is nothing but thinking before the action takes place . It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.

Characteristics of Planning

characteristics of planning

  • Managerial function : Planning is a first and foremost managerial function provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made.
  • Goal oriented : It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
  • Pervasive : It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
  • Continuous Process : Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering the organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.
  • Intellectual Process : It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc.
  • Futuristic : In the process of planning we take a sneak peek of the future. It encompasses looking into the future, to analyse and predict it so that the organisation can face future challenges effectively.
  • Decision making : Decisions are made regarding the choice of alternative courses of action that can be undertaken to reach the goal. The alternative chosen should be best among all, with the least number of the negative and highest number of positive outcomes.

Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the   present condition to identify the ways of attaining the desired position in future . It is both, the need of the organisation and the responsibility of managers.

Importance of Planning

  • It helps managers to improve future performance , by establishing objectives and selecting a course of action, for the benefit of the organisation.
  • It minimises risk and uncertainty , by looking ahead into the future.
  • It facilitates the coordination of activities . Thus, reduces overlapping among activities and eliminates unproductive work.
  • It states in advance, what should be done in future, so it provides direction for action.
  • It uncovers and identifies future opportunities and threats .
  • It sets out standards for controlling . It compares actual performance with the standard performance and efforts are made to correct the same.

Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.

Steps involved in Planning

Steps of Planning

By planning process, an organisation not only gets the insights of the future, but it also helps the organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should be clearly stated and easy to understand  because if the plan is too much complicated it will create chaos among the members of the organisation. Further, the plan should fulfil all the requirements of the organisation .

Related terms:

  • Strategic Planning
  • Human Resource Planning Process
  • Controlling
  • Succession Planning
  • Gap Analysis

Reader Interactions

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October 21, 2023 at 12:53 pm

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October 24, 2018 at 6:59 am

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March 3, 2021 at 6:25 pm

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February 6, 2019 at 2:34 pm

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November 23, 2019 at 1:00 pm

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October 19, 2019 at 2:37 pm

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The article was written by Surbhi S. on December 3, 2016

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It was created on Dec 3, 2016 by Surbhi S.

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What is Planning?

define planning and why we need planning in business management

Planning enables management to command the future rather than being swept away by future. In a fast changing environment the need for planning is all the more important because risk and uncertainty increase. In such an environment contingent plans can be prepared.

A plan may be defined as detailed course of action designed today to do something tomorrow. Thus, planning is an intellectual attempt by a manager to anticipate the future for better organisational performance.

Planning is a primary management function which every organisation has to undertake irrespective of its size, nature and origin.

Tlieo Haimann – “Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action, for the future, attempting to achieve a consistent, coordinated structure of operations aimed at the desired results.”

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Learn about:-

1. Introduction to Planning 2. Definitions of Planning 3. Nature 4. Importance 5. Types 6. Features 7. Levels 8. Approaches 9. Process 10. Principles 11. Advantages 12. Limitations 13. Measures.

What is Planning? – Definitions, Nature, Importance, Types, Features, Process, Approaches, Levels and Other Details

What is planning – introduction.

It is often remarked that ‘Planning is a mere ritual in a fast changing environment’. This statement implies that in a highly turbulent and competitive environment planning becomes an empty academic exercise. Rapid changes in the economic and non-economic environment of business reduce the effectiveness of plans.

It becomes difficult for the planners to accurately forecast future conditions. Planning premises or assumptions may have a low degree of accuracy. The reliability of plans is open to doubt when the environmental forces are not stable.

Uncertainty and unpredictability of environment reduce the usefulness of planning in a turbulent environment planning becomes a more time-consuming and expensive exercise. Even the best laid planning may become redundant when the assumptions and forecasts on which the plans are based turn out to be different. Plans have to be revised again and again in a highly volatile environment. The plans might fail to guide the destiny of the organization.

It is true that a last changing environment reduces the accuracy and reliability of planning. But planning in advance is better than reacting to the environmental crisis as and when they arise. When events are left to chance the organization has no guide and cannot survive environmental threats. Through planning, it can search for and prepare itself to meet the contingencies and challenges.

Koontz and O’Donnell have suggested the following measures for making planning more effective in a fast changing environment:

(a) Planning must not be left to chance. Rather a climate conducive to planning should he created.

(b) Planning must start at the top, initiative and support of top management is essential for effective planning.

(c) Planning must be organized for wider participation in the formulation and execution of plan.

(d) Goals, premises and policies must be properly communicated.

(e) Long-range planning must be integrated with short range planning.

(f) Planning must include awareness and acceptance of change.

(g) An open system approach involving continuous monitoring of environment should be adopted.

What is Planning – Definitions

Planning is the first as well as most crucial function of management and is considered as a foundation to all other functions of management. It is symbolic to ‘looking ahead’ as is a process of chalking out future plan of action to be followed. In simple sense, it is an act or process of making plans such as – objectives, policies, procedures and strategies.

A plan may be defined as detailed course of action designed today to do something tomorrow. Thus, planning is an intellectual attempt by a manager to anticipate the future for better organisational performance. Planning is a primary management function which every organisation has to undertake irrespective of its size, nature and origin.

To have organisational effectiveness, the first prerequisite is that people should know what and when things are expected from them. For this purpose, planning comes as a solution whereby managers define broad objectives of organisation which are broken into departmental plans and then finally operational plans and budgets. In a way, planning provides a blueprint of functioning of an organisation aiming at attainment of organisation objectives. Effective planning is a prelude for effective functioning of every other function of management.

Few Definitions of Planning:

Being the starting point in managerial functions, broadly speaking, planning is concerned with determining various courses of action in the light of organisational objectives and premises and then selecting the best possible alternative.

As a function of management, planning has been defined by various authors. Few of them are presented below:

Koontz and O’Donnell – “Planning is deciding in advance what to do, when to do, how to do and who is to do it. It is bridging the gap from where we are to where we want to go.”

Alford and Beatt – “Planning is the thinking process, the organised foresight, the vision based on fact and experience that is required for intelligent action.”

Louis A. Allen – “Management planning involves the development of forecasts, objectives, policies, programmes, procedures, schedules and budgets.”

Urwick – “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses.”

Weihrich and Koontz – “Planning is an intellectually demanding process; it requires that we consciously determine courses of action and base our decisions on purpose, knowledge and considered estimates.”

What is Planning – Nature

There are number of ways available to complete a certain job. Planning chooses any one of the best alternatives out of the available ones. Economy and certainty are considered while selecting the best alternative.

Thus, the nature of planning is briefly discussed below:

1. Primary of Planning:

The functions of management include planning, organising, staffing, directing and controlling. Eminent writers may add other new ones to these functions or those which have not been included in these functions. Anyway, writers unanimously accept that planning is the primary function of all the other functions. The reason is that the manager wants to achieve the pre-determined objectives in a better way.

2. Planning Contributes to Objectives:

There is a close connection between objectives and planning. Planning is based on the objectives. If there is no link between planning and objectives, the former will only be a mental exercise and of no use. Planning contributes to the attainment of objectives.

3. Planning an Intellectual Activity:

Planning includes the selection of the best alternative available and thinking before selection of the best alternative. It involves the ability to foresee mishaps in future which might affect the smooth functioning of an organisation. So, planning is an intellectual activity.

4. Planning Results in Higher Efficiency:

Planning efficiency is measured in terms of input and output ratios. Planning leads to maximum output with minimum expenditure. This input and output relationship is not only determined by money, labour hours and production units but also by the degree of satisfaction available to the individual as well as the group. The high degree of human satisfaction motivates the workers to produce more within the specified time.

5. Planning is a Continuous Process:

Planning does not come to an end with the establishment of a business concern. Planning in other functions is also required. After the establishment of a business concern, certain decisions are taken. Planning is necessary to implement the decisions. A number of decisions are taken during the life time of the business concern. So, planning is necessary throughout the running of the business concern as a continuous process.

6. Planning is Flexible:

While planning, any one of the available alternatives is selected. Planning selects the best alternative based on certain assumptions. If the assumptions are proved wrong, the selected alternative tends to be an incorrect one. There is a possibility of a dead log in the functions of the management. Planning has one more alternative to suit future situations.

7. Unity and Consistency:

Every department manager resorts to planning at different times. The planning is related to the achievement of objectives. In other words, managerial actions of different managers are unified in order to achieve the objectives. Policies and procedures of the organisation provide a basis for the consistency of executive behaviour and action in matters of planning.

8. Planning is Common to All:

Planning work is done by every person who is working in a business unit. He may be a managing director or a foreman.

Being of a higher place, the planning for a managing director is to frame the policies and procedures to be adopted. Being at a lower place, planning for a foreman is to allocate the work to his subordinates. So, planning is common to all.

9. Basis for All Managerial Functions:

Planning is found at all levels of management. Top management looks after strategic planning. Middle management looks after administrative planning and the lower level management looks after operational planning.

10. Getting Co-Ordination:

Planning co-ordinates various business activities. Without planning, nothing can be co-ordinated.

11. Considering Limiting Factors:

Every plan is formulated after considering the limiting factors. The limiting factors may be money, skilled labour, quality materials, plant and machinery.

What is Planning – Importance

Planning is the first and foremost essential activity in all organisation. It helps in determining and achieving the objectives of the organisation. The sound planning is important condition for effective management.

It helps the organization in the following ways:

1. Making Objectives Clear:

It makes objectives clean, clear, and specific, it also serves as guide for deciding what action should be taken in present and future conditions.

2. Planning Provides Direction:

Planning helps the organisation to keep on the right path. It provides definite direction to manager to decide what to do and when to do it.

3. It Reduces Risk and Uncertainty:

It helps organisation to predict future events and prepare to take necessary actions against unexpected events. It is helpful in assessing and meeting future challenges. As per view of Peter F. Drucker, “Planning enables a manager to affect rather than accept the future”.

4. Planning is Economical:

As per views of Koontz and O’ Donnell,” Planning substitutes jointly directed effort against uncoordinated, piecemeal activity, an even flow of work for an uneven flow, and deliberate decisions for snap judgments”. The effective plans coordinate organisational work and economical.

5. Planning Provides the Basis for Control:

Planning provides the standard against which the actual performance can be measured and evaluated. There is nothing to control without planning and without proper control. Plans serve as yardsticks for measuring performance.

6. Planning Facilitates Decision Making:

Planned targets serve as the criteria for the evaluation of different alternatives so that the best one may be chosen with the help of planning hasty decisions and random actions can be avoided.

7. Planning Improve Efficiency of Operations:

It is rational activity that leads to efficient and economical operations, planned action is always better than unplanned. Planning makes the task of managing more efficient and effective manner. It helps to minimize the cost of operations and improves the competitive strength of an organisation.

8. Planning Improves Morale:

If the role of employee is cleared and well defines goals, then the employee feels highly motivated and contribute his full potential towards accomplishment of objectives. Planning improves the behavioural climate in the organisation and reduces the friction between departments.

9. Effective Co-Ordination:

According to Koontz and O’ Donnell “Plans are selected courses along with the management desires to coordinate group action.” The effective coordination integrates the physical and human resources between departments.

10. Planning Encourages Innovation and Creativity:

Planning compels the managers to be creative and innovative all the time. It forces managers to find out new and improved ways of doing things in order to remain competitive and avoid the threats in the environment.

What is Planning – Classification of Plans : Based on Importance, Time, Level, Formality and Approach

Plans can be classified based on importance, period of planning, level, for­mality, and approach.

1. Based on Importance:

Plans can be strategic, tactical, or operational. Strategic plans are important, future-oriented plans that form the hub of fulfilling the vision. Usually, they concern the entire organisation. Tactical plans are required to implement strategic plans. Examples, are redesigning the shop floor layout or closing a few non-performing out­lets of a retail chain.

Operational plans are related to day-to-day func­tioning such as production, delivery, or purchase operation. Take for instance, the plan of Precision Connectors to deliver connectors to the two-wheeler manufacturer, which is an illustration of operational plans.

2. Based on Time:

Plans can be short, medium, or long term. Short term usually refers to plans of one year or less; medium term, to two to five years; and long term, to five to 10 or even 20 years. It depends on the nature of the project. Some projects such as building the Metro in Mumbai or Bengaluru may have a short-term plan that covers 50 km of Metro in five years; a medium- term plan that covers 200 km in 10-12 years, and a long-term plan that covers 300 or 400 km of rail that in 20 to 30 years.

3. Based on Level:

A plan can be called corporate level, business level, or functional level plan. The Tatas entering the airlines business is an example of corporate-level plan and Precision Connectors becoming an OEM is an example of a business-level plan. Functional-level plans are made by departments, for example, a plan on how the marketing department will achieve its goals.

4. Based on Formality:

A plan can be formal or informal. It is formal when planning is done as per the defined steps and documented, and informal when the documentation is not very rigorous.

5. Based on Approach:

A plan can be called proactive when it is meant to meet an anticipated situation. For instance, a compensation plan based on a three-year salary negotiation is a proactive plan to ensure industrial peace. If the same compensation plan came up as a result of a flash strike, it would be a reactive plan. The former leads to growth and the latter helps to regain balance and to ensure survival.

What is Planning – 11 Main Features

Feature # 1. main focus on objectives:.

While goals are the broad, long-term accomplishments an organisation wishes to attain, objectives are specific, short-term statements detailing how to achieve the organisation’s goals. Planning specifies the objectives to be attained by an organisation in the future. It also lays down the steps to be followed to achieve the objectives. By determining the objectives planning provides clear directions and guidelines to an organisation’s activities — both current and future.

Feature # 2. Basic (Key) Function:

Planning is typically the starting point in the management process. To be successful, organisations need a great deal of planning. People in organisations need goals and the plans to achieve them. Planning lays the foundation for the whole management process. It makes an organisation efficient.

It helps in manpower planning and human resource development. It serves as the yardstick which can be used by the managers to exercise control over resources and activities.

Feature # 3. Universal (Pervasive) Function:

Planning is the basic function of managers at various levels of an organisation. The exercise is carried out by all three levels of managers — the upper, middle and lower. However, the nature, type and scope of planning is not the same at each managerial level. In most organisations upper- level and some middle level managers spend more time developing strategic, broad/directional, long-range and single-use plans for the organisation.

Other middle-level and all low-level managers, in contrast, spend more time specifying how the strategic plans will be accomplished by developing operational, narrow/ specific, short-range plans and implementing standing plans (i.e., policies, procedures and rules).

Feature # 4. Continuous (On-Going) Process:

Planning is a continuous process. A plan which worked yesterday may not be successful in today’s market. Most planning also follows a pattern. Old plans are to be revised and modified and new ones to be introduced as demanded by the needs of the situation for achieving organisational objectives. In today’s rapidly changing environment planning is becoming more and more difficult because changes are occurring so fast that plans — even those for just few months into the future — may soon be obsolete.

Feature # 5. Forward-Looking Nature:

Any planning exercise at the business level is a forward- looking-one. It is carried out to achieve certain objectives in the future. It involves forecasts of future demand, market competition and government policies. And business managers try to cope with future uncertainty effectively through proper planning.

Feature # 6. Decision-Making Aspect:

Decision-making is essentially a choice of an appropriate course of action from among alternatives. The process of planning involves searching for alternatives and choice of the best alternative from those which are available for achieving certain specified and pre-determined organisational objectives.

Thus decision-making is an inherent part of the planning exercise. For example, financial planning involves choice between bond (debenture) financing and equity financing of investment projects. Proper decision-making techniques are crucial for selecting the organisational goals, plans and strategic options.

Feature # 7. Mental Exercise:

Planning involves some sort of intellectual (brain storming) exercise. It requires a lot of thinking in advance, foresight and proper judgment on the part of management.

Feature # 8. Flexibility:

In today’s era of rapid changes in technology, market conditions and government policies, the planning process has to be flexible enough in order to enable managers to face and meet newer and newer challenges. Due to rapidly changing environment, some companies are making shorter-term plans which allow for quick responses to customer needs and requests. The goal is to be flexible and responsive to the market.

Feature # 9. Shared Responsibility:

Planning means that a manager must involve his subordinates actively in order to determine resource requirement, fix goals and identify and exploit opportunities. During the process, the manager may need to go outside the work unit for information about products, competitors, markets, and the like.

Feature # 10. Choice:

Planning involves choice. Planning is essentially an act of choosing from alternative courses of action. And choice involves decision-making. In truth, in order to make a rational choice, it is necessary to evaluate and compare the possible alternatives.

Feature # 11. Efficiency:

Planning seeks to promote efficiency. By helping to economise the use of scarce resources, sound planning leads to accomplishment of desired objectives in the best possible may, i.e., at the minimum possible cost. And this implies efficient operation which is the primary objective of a business.

What is Planning – Top 3 Levels : Strategic, Tactical and Operational Planning

Planning is ubiquitous – that is, it exists in the entire organisation. All levels in the organisation carry out the planning function, but in varying degrees. In other words, the scope and timescale of planning varies. Planning commences at the strategic or top level of the management.

Strategic planning commences with defining the purpose or mission of the organisation, establishing strategic priorities and formulating major policies. Strategic planning becomes the basis for successive levels of planning namely, tactical planning (at the middle level) and operational planning (at the lower level).

These are discussed in detail here:

1. Strategic Planning:

Strategic planning includes plans made by the top management to pursue long term goals with the resources likely to be available.

It involves:

i. Formulating a mission for the entire organisation.

ii. Identifying the business that helps to meet a mission.

iii. Determination of financial requirements.

iv. Working out authority relationships in terms of organisation structure.

v. Allocating resources effectively.

It has a time horizon of five years or more. The chief executive or chairman, members of the board, managing directors, and divisional heads (these constitute the top level management) take part in strategic planning.

2. Tactical Planning:

Tactical planning specifies how the mission of an organisation can be accomplished.

It involves the decisions in respect of:

i. Products or services to be added or deleted

ii. Size of capital investments required

iii. Pricing the products and services to be provided

iv. Facilities, methods and systems necessary

v. Withdrawing investments from, or closing down operations of unprofitable departments or products or services.

Tactical planning has a time horizon of six months to two years. It is done by the middle-level management, which comprises functional managers, product line managers and department heads. Tactical planning is also called intermediate planning.

3. Operational Planning:

Operational planning works out the basic details of how the specific tasks can be accomplished with the available resources.

It involves decisions in respect of:

i. Best suitable production methods.

ii. Effective marketing plans.

iii. Organisation structure in terms of customer, product or region etc.

iv. Facilities required in the office, factory, sales outlets etc.

The time horizon for operational planning is between one week to one month. Operational planning is carried out by lower-level management comprising unit managers, foremen, line supervisors etc.

What is Planning – 4 Important Approaches: Top- Down Approach, Bottom-Up Approach, Composite Approach and Team Approach

Following are the approaches to planning:

Approach # 1. Top-Down:

Under this approach, only echelons of management frame objectives, policies, strategies procedures and so on. Those at the other levels have little to say in the planning exercise, even though they are consulted in plan formulation. The plans made by the top brass are implemented by managers at middle and lower levels.

The approach assumes that only those at the top level have requisite skill, knowledge and authority to plan. Thus plans made reflect the values and visions of the top management. This approach is practised in family-run organizations and centralized organizational structure.

Approach # 2. Bottom-Up:

This is virtual reversal of top-down approach. Under this approach, plan proposals originate from supervisory management level and travels upwards. The top management limits itself only to issuing guidelines for planning. The lower level management evolves planning taking into account the ground reality.

The implicit belief under this approach is that those who are concerned with implementation of plans are more informed, more practical and the plans formulated by them reflect realism. Top management unifies all sub-corporate plans. This approach is called participative approach.

Approach # 3. Composite:

This is the blend of top-down and bottom- up approach. This approach gives broad guidelines and parameters to the line executives at middle and lower level management. It gives support, resources and freedom to evolve plans to middle and lower level managements. But the plans evolved are thoroughly reviewed and adjusted in consultation with other levels of management. This is semi- participative approach. This approach is suited to many organizations.

Approach # 4. Team:

This approach envisages granting autonomy to teams in the matter of planning and execution thereof. It fixes accountability on those empowered with resources and authority in respect of the results expected of them. The team comprising functional specialists is led by a team leader. He, in turn, empowers the members to evolve plans suitable to their area and fixes accountability for the results.

The team leader coordinates the sub-plan, and directs them towards accomplishment of team objectives. The team leader frequently conducts review meetings to ensure that plans are put through smoothly. Contemporary organizations have restructured their vertical organizations into flat organizations.

What is Planning – Process

It is difficult to specify the steps in the planning process for all organisations because of their differences in size and complexity. Nevertheless, it is possible to suggest some important steps for effective planning.

The process which are applicable to the most types of plans are discussed below:

Process # 1. Establishing Objectives:

Planning is an intellectual process which an executive carries out before he does any job with the help of other people. But while planning, the question which must arise in the mind of the executive is “what is the objective of doing the job?” So, the first step in planning is the determination of objectives. Objectives provide direction to various activities in the enterprise. Planning has no utility if it is not related to objectives.

The establishment of objectives can, at times, be more important than the objectives themselves since their establishment emphasizes how various people and units fit into the overall organisation framework. The formalisation of this process can also be used to motivate individuals to achieve objectives which they have helped to establish. Objectives clarify the tasks to be accomplished. Overall objectives define what is to be accomplished in general terms. The derivative objectives focus on more details, that is, what is to be accomplished, where action is to take place, who is to perform it, how it is to be undertaken, and when it is to be accomplished.

Process # 2. Collection of Information and Forecasting:

Sufficient information must be collected in order to make the plans and sub plans. Necessary information includes the critical assessment of the current status of the organisation together with a forward look at the environment that is anticipated. The assessment of external environment may consider the strong and weak points of the organisation. Collection of information and making forecasts serve as an important basis of planning.

Process # 3. Development of Planning Premises:

This step involves making assumptions concerning the behaviour of internal and external factors mentioned in the second step. It is essential to identify the assumptions on which the plans will be based. Assumptions denote the expected environment in the future and are known as planning premises.

Again, forecasting is important in premising. It helps in making realistic assumptions about sales, costs, prices, products, technological developments, etc. in the future. The assumptions along with the future forecasts provide a basis for the plans.

Since future environment is so complex and uncertain, it would not be realistic to make assumptions in greater details about every environmental factor. It is advisable to limit premising to those factors which are critical or strategic to the planning process.

Process # 4. Search of Alternatives:

Usually, there are several alternatives for any plan. The planner must try to find out all the possible alternatives. Without resorting to such a search, he is likely to be guided by his limited imagination. At the time of finding or developing alternatives, the planner should try to screen out the most unviable alternatives so that there are only a limited number of alternative for detailed analysis. It may be noted that determination of alternative plans can be a time consuming task because objectives which have been established initially may be found to be inflexible. It is also possible that the assumptions need revision in the light of the changed circumstances.

Process # . Evaluation of Alternatives:

Once alternative action plans have been determined, they must be evaluated with reference to considerations like cost, long-range objectives, limited resources, expected payback, risk, and many intangible factors to select the satisfactory course of action. Many quantitative techniques are available to evaluate alternatives.

The manager may take the help of these techniques to reach the most objective result. The best possible alternative may be chosen by the manager after detailed analysis. Sometimes, evaluation of available alternatives may disclose that two or more courses are advisable and so the concerned manager may decide to choose two or more alternatives and combine them to suit the requirements of the situation.

Process # 6. Selection of Plan and Development of Derivative Plans:

The final step in the planning process is to select the most feasible plan and develop derivative plans. The plans must also include the feedback mechanism. The hierarchy of plans must be both integrated and flexible to meet the changing internal and external environment.

The derivative plans are required to support the basic or overall plans because the latter cannot be executed effectively unless they are supported by the derivative or sub-plans. The derivative plans are developed within the framework of the basic overall plan. For instance, if an airline decides to acquire a fleet of new planes, it will be followed by the development of a host of derivative plans dealing with the employment and training of various types of personnel, the acquisition of spare parts, the installation of maintenance facilities, scheduling, advertising, financing and insurance.

What is Planning – 9 Main Principles

The principles of planning are as follows:

1. Goal Orientation:

A plan should be absolutely goal focused and adhere to the scope and time frame set by the goal.

2. Specificity:

Plans must be specific and should avoid generalities and non-verifiable statements/propositions such as ‘complete as early as possible’, ‘resources will be mustered in due course’, ‘using least resources’, and so on. Rather one should use terms such as ‘complete the task by 30 th April 2016′, ‘complete the task with an expense not more than Rupees 20 lakhs’ and so on.

3. Accuracy:

Plans are like maps, and we all know that an inaccurate map can lead us to the wrong place. For example, if Rajendra makes a plan to produce 1,000 connectors a day, it must be based on the number of connectors a person/team can make per day and the number of peo­ple/teams available.

4. Comprehensiveness:

If plans leave some blanks, either there will be confusion due to different interpretation, or there will be delay for clarifications.

5. Flexibility:

As the execution of the plan progresses, there will be changes to the external environment, internal environment, and resources. Plans must envisage these possible changes and cater for them from the beginning. For example, if you are building a mall and the contracting economy decreases demand, then you should have away to build part of it and open the business leaving the completion for better days to come.

6. Objectivity:

While selecting from various options available, you should be objective. When quantitative parameters are used, the data should be fair and impartial, and when qualitative parameters are used, individual bias should not creep in.

7. Simplicity:

Plans are implemented by several people and more impor­tantly by people who may not be as smart as the planners. Therefore, each part of a plan must be simple, the parts of a plan must be easily connectible, and the overall plan should be simple for everyone to un­derstand and implement.

For example, if you have to set up a chain of coffee shops, the design of each shop should be simple, resources that would be shared such as purchase, promotion, and so on, should also be simple for everyone to understand and manage.

8. Communicability:

A plan needs approval from internal and external agencies. For example, Rajendra’s plan to make connectors as an OEM supplier for two wheelers would need acceptance by internal teams, funding approval from the bank, and approval related to production, quality assurance, and purchase from the two-wheeler company. Hence, it should not be vague, but should be in an easily communicable format.

9. Implementable:

This implies that there should not be any external envi­ronmental restrictions to implement the plan. Coca Cola had a bottling plant in Plachimada in Kerala, India. Most bottling plants need copious water, and ground water is a practical source. Plachimada had plenty of water and there is no national law against using it.

Coca Cola planned to establish a bottling plant at Plachimada. The problem they faced was that the use of ground water affects the neighbourhood and the socially aware neighbourhood brought the operations to a halt. Would the fact that there is no law to prevent the company from using ground water, and that it returned more water to the nature than it used, through various means make the plan implementable? The moot point is that what is permissible may not be implementable.

What is Planning – 18 Main Advantages

Planning helps the organisation achieve its objectives early. In this way, planning helps the organisation in many ways.

Some of the advantages of planning are briefly explained below:

1. Better utilisation of resources – Planning decides what to produce and how to produce. Then, there is the possibility of utilising the resources effectively.

2. Helps in achieving objectives – Planning sets goals or objectives of an organisation. This gives effective direction to the control of employees of the organisation. In this way, planning helps the organisation accomplish the pre-determined goals or objectives.

3. Economy in operation – Unnecessary production, ineffective utilisation of resources and unnecessary activities of an organisation are eliminated through planning. This results in the economy of operations.

4. Minimises future uncertainties – The uncertain future increases the importance of planning. Planning foresees the changes and uncertainties taking shape in future and devices methods to face them. Some future uncertainties are thus, minimised through planning.

5. Improves competitive strength – Competitive strength is improved by adding new line of products, changes in quality and size of the product, expansion of plant capacity and changes in methods of work. These are achieved through planning.

6. Effective control – Control without planning is an impossible one. Control is used only when there is a well-chalked out plan. So, planning provides a basis for controlling.

7. Motivation – A well-prepared plan encourages the employees of an organisation and gives them a sense of effective participation. Planning motivates the employees as to what the organisation wants to achieve and defines it to the employees.

8. Co-operation – Planning helps the management pulls the individual to achieve common objectives or goals. Planning provides well-defined objectives, unity of direction, well-published policies, procedures and programmes. All these facilitate to get co-ordination, which consequently avoids duplication of work and interdepartmental conflicts.

9. Promote growth and improvement – Planning sets a standard to control purpose. So, useless and aimless activities are avoided. It leads to the growth and improvement of an individual and the organisation.

10. Develops rationality among management executives – Disciplined thinking of management executives is geared up through formal planning. Management executives take action only after putting their thoughts in blueprint. In this way, planning brings rational thinking and approach among management executives.

11. Prevents hasty judgment – We can analyse a problem through a plan and consider the alternatives before taking a sound decision. It is possible to plan in advance as to what will be done and how it will be done. This process avoids hasty judgment.

12. Reduces red-tapism – junior most executive can act according to pre-planned decisions. There is no need for him to get any fresh permission for his action. It saves time, energy and cost and reduces red-tapism.

13. Encourages innovative thought – A good plan should provide a basis for new thinking in any individual. It seeks a way to encourage people to co-ordinate and to achieve common objectives. According to D.E. Hussey “A good planning process will provide avenues for individual participation, will throw up more ideas about the company and its environment, will encourage an atmosphere of frankness and corporate self-criticism and will stimulate managers to achieve more.”

14. Improves ability to cope with change – Planning helps managers improve their ability to cope with changes but it cannot prevent changes from happening. This creates an awareness among the managers regarding the incidence of change.

15. Creates forward looking attitude in management – Managers may lose their prosperity facing day to day problems. Planning helps a manager to become more prosperous and creates a forward looking attitude in him, thus such a planning ensures stability to management.

16. Development of efficient methods – Planning helps the management develop efficient methods and procedures of action.

17. Delegation of authority facilitated – A well-prepared plan will always facilitate the delegation of authority.

18. Anticipation of crisis – Careful planning will avoid the crisis which is likely to occur. In this way, management can reduce the internal organisational disturbances.

What is Planning – 9 Major Limitations

Planning has various limitations. This is why it becomes less effective in most cases, if not completely ineffective.

The following points are observed in this context:

1. Lack of Flexibility:

Plans lay down a specified course of action regarding the future, which cannot be changed even if situations so demand. This often proves to be costly for the organisation, particularly when there is need for a change in the actual course of action. And this is why some progressive firms now rely on contingency planning. The object is to overcome crisis situations as and when they arise.

2. Lack of Creativity and Initiative:

Due to inherent rigidity of the plans managers lack the initiative to do new things or to venture out in new directions to cope with changes in the environment. So even advance thinking by managers does not lead to the generation of new ideas. And creative thinking or creativity is out of question.

3. Environmental Uncertainty:

At times planning loses its practical relevance due to various uncertainties surrounding the environment. So managers cannot fully rely on existing plans. They have to revise or modify existing plans or change their strategies to get the desired results even in adverse situations. For instance, a company might be required to revise its advertisement budget to maintain competitive parity, i.e., to match the efforts of its major and nearest rivals.

4. Time Lag:

Planning which involves several steps such as – defining objectives, collecting and analysing data and choosing from alternatives is a time-consuming and lengthy exercise. It loses effectiveness due to delay in taking necessary action. In other words, planning loses its relevance in situations which demand quick decision(s) and immediate action(s).

5. Costly Process:

Planning is also a costly exercise. Since management is a valuable resource, the cost of planning varies directly and proportionately with the time managers devote to planning. If managers do not devote sufficient time to planning, their decisions may prove to be impractical or wrong.

6. No Guarantee for Action:

A plan is just a programme of action regarding the future, not a guarantee for action. The success of planning depends on its effective implementation. The effectiveness of planning depends on the outlook and the actual behaviour of the planners. Planning makes managers feel secured. So they just want to maintain the status quo. They just try to fulfill the requirements of existing plans rather than improving their performance or venturing out in new directions.

7. Inaccurate Forecast:

Planning is based on the timely availability of reliable and complete information and accuracy of forecasts of demand, price and technology. If forecasts are based on incomplete information or if the forecasting method is not reliable, then plans are bound to be ineffective or likely to fail.

8. Time Constraint:

Planning requires a manager to set aside necessary time to do it. Managers who have very busy schedules may react adversely when superiors order them to prepare a 5-year plan for their work unit. The reason is that they are expected to do this and still find time to meet the current year’s target. However, the time for planning has to be found. Otherwise, managers will just react to events.

9. Internal and External Constraints:

In spite of Internet connections and speedy access to computer databases, every manager cannot use available information to make an intelligent decision. The caliber of employees he needs may not be immediately available at the salary he is willing to pay. A competitor may quickly enter his market with a more attractive product. A change in buying habits of consumer may occur.

An important supplier may let him down. Rapid technological progress may make his machines and equipment obsolete overnight. And in any of these the manager will not have the time to plan a decision based on these internal and external constraints (over which he has not much control). Nevertheless a plan need not be perfect to be executable. Often a manager has to make a decision based on an incomplete plan.

What is Planning – 10 Measures to Overcome Limitations

The following measures help to overcome the limitations of planning:

1. Scientific Selection of Goals:

Unwillingness to give up alternative goals can be overcome through scientific selection of goals. Managers should carry out cost-benefit analysis for each alternative and accept goals whose returns are greater than the costs.

2. Use of Mathematical Methods:

Fear of failure to achieve the goals can be removed by applying mathematical models to the goal selection process. These models help in accurate predictions and practical implementation of plans. Besides, managers should make flexible plans which be changed according to changing situations.

3. Sound Communication System:

Lack of knowledge can be overcome through a well-connected communication system where managers at all levels remain informed of the organisational activities. A well-developed management information system can solve this problem.

4. Forecasting :

Managers remain informed of the external environment through an effective system of communication. Regular contact with outside parties, through seminars and conferences provides information about the environment. In fact, the need for planning arises because of uncertainties in the environment. If everything could be forecast, there would be no need for planning. The need is to predict the environmental changes through forecasting techniques like time series, forecasts, causal models and other statistical methods. They help to know the environmental factors and their effect on organisational goals.

5. Develop Managerial Confidence:

The above measures develop confidence to build rational and realistic goals which are challenging but attainable. Important, overall organisational goals are set at the top level and goals lower in priority are framed by lower-level managers in consultation with the superiors.

6. Help Organisational Members to Accept Change:

Organisational members should realise that change is the essence of life and reduce resistance to change through the following measures-

(a) Managers should explain the causes and effects of change to organisational members. Members should know the benefits that accrue to them and the organisation because of changes in the current system of working.

(b) The existing benefits should be compared with future benefits that will accrue as a result of change and unwillingness of members to give up existing benefits should be removed.

(c) If members feel that plans have deficiencies and weaknesses, management should involve organisational members in framing the plans. Thus, members become aware of the effects of changes and minimise the impact of their weaknesses, if any.

7. Top Management Support:

Planning process should initiate at the top-level. Managers should keep in mind the barriers to planning and set realistic and attainable goals.

8. Setting Responsibility:

If responsibility is fixed for framing and implementing the plans, plans will be more realistic. Strategic plans should be the responsibility of top management, tactical plans should be the responsibility of middle-level managers and operating plans should be the responsibility of lower-level managers.

9. Encourage Group Participation:

Rather than framing and communicating plans to organisational members for implementation, top managers should encourage group participation where people frame and implement plans collectively in the planning process.

10. Prepare Contingency Plans :

Organisations operating in the dynamic and complex environment should prepare contingency plans which can be adopted if unpredicted situations occur.

Related Articles:

  • Planning Process: 11 Major Steps of Planning (with diagram)
  • What is Economic Planning?
  • Features of Planning
  • Features of Human Resource Planning

How to Succeed with Planning in Management and Why it is Important

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Strategic planning has always been associated with improved efficiency and sustainable growth. However, the dynamic world and hectic market competition make planning in management essential. Thus, whether you like it or not, the familiar management saying holds true: If you fail to plan, plan to fail .   

In this article, you will find:  

  • the definition of planning in management, 
  • 10 compelling reasons why planning in management is so important
  • reasons why some managers fail and others succeed in planning effectively. 

By understanding the key benefits of planning in management, you will be more motivated to devote due time and effort to this part of your role. This will make you and your company enjoy the ultimate outcomes of good planning: efficiency and growth.  

Planning in Management 

To be effective and develop its potential, a company should work towards a desired goal or mission. But how can one know what is relevant to the goal and what’s not? 

This is what planning is about. 

Planning in management is about what steps you need to take to reach the goal, what changes and hurdles to anticipate, and how to utilise human resources and opportunities to reach the expected outcome. The planning process involves a careful analysis of the current resources and market trends and the prediction of emerging markets and future demand.   

In simple terms, a goal is where your company wants to be at a certain time and a plan provides directions for how you are going to get there.  

Planning is considered a basic function of management . It means that a plan is necessary for any other managerial function, be it organising, directing, staffing, or controlling:

  • Planning dictates how to effectively organise a business. It encompasses determining necessary future activities, assigning them to the right personnel, delegating authority, providing tools and raw material, etc.
  • Having a plan of action facilitates directing as it makes instructions, guidance, and motivation grounded in a brand strategy.
  • Planning informs staffing , as it shows what work-force a company will need.
  • Establishment of standards and measurement of actual performance – controlling – is done against the expectations that planning sets   

Informal planning gives a short term focus, which might be necessary for the business to operate. In an organisation, various units can have their own informal plans. However, if the company wants to grow and reach ambitious goals, the process of planning should be formal , written, specific, and involve common organisational goals. 

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10 Reasons that Make Planning in Management so Important

Planning is important both for small and medium-sized businesses and large enterprises with complex structures. Here are 10 compelling reasons that prove this: 

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1. It Helps to Set the Right Goals

While a plan is a course of action towards the realisation of the goal, it also supports SMART goal setting . In particular, planning helps to critically assess the goal to see if it’s realistic. It facilitates decision making and allows setting a time frame by predicting when the company can achieve its goal. It also defines how to measure performance against the set goals and whose responsibility it will be.     

2. It Sets Objectives and Standards for Controlling

A primary function of strategic formal planning is providing direction to lower-level managers, allowing the development of tactical goals. Planning shows objectives for each organisational department and helps managers to prioritise activities depending on their relevance to the goal. 

Planning also sets the standards for assessing performance. Without such standards, managers wouldn’t be able to intervene and take corrective actions to stay on track, which would also threaten the goal.     

3. It Reduces Uncertainty

The uncertainty of the future puts the great risk on business sustainability , for it is always difficult to manage through change. No organisation can control the economic and competitive environment; thus, the ability to anticipate challenges and have contingency plans in place is the best alternative.  

Planning involves an intentional critical evaluation of the available data and experts’ predictions. This makes planning in management very helpful in terms of reducing the uncertainty of the future and avoiding the risks.  

4. It Eliminates Overlapping of Wasteful Activities

Effective planning gives clarity about the responsibilities and expectations of each department, team, and even team member. This helps to make sure that the activities don’t overlap and improves co-ordination.

At the same time, it helps to determine which activity is wasteful and does not contribute to reaching the goal. Eliminating such activities will not only reduce wastage and save valuable time and resources but also improve productivity and motivation.        

5. It Ensures Efficient use of Resources

Planning makes the use of human and material resources as efficient as possible . By starting the management process with a good plan that focuses on the ultimate goal and considers available capabilities, you can see many opportunities to cut expenses. 

Without such a plan, it is easy to fall for appealing B2B offers. This can waste organisational resources on the raw materials that the employees cannot process in a due time, expensive robotics, or online software that speeds up only one aspect of the process not affecting the overall result. 

6. It Promotes Innovation

If the organisation has a challenging goal on the one hand, and the possibility of hurdles and market change on the other hand, it starts brainstorming creative ideas and solutions. Determining a future course of action is an important function of management. Keeping a focus on the need to reach the goal, employees or management can spot new opportunities for business development, suggest new products or services, or discover new target markets. This way, planning becomes a continuous process that encourages creative strategic thinking and innovation.  

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7. It Improves Decision Making 

Planning improves decision-making processes and time management in two ways. First, it helps managers to keep the focus on a goal and thus ask themselves how alternative courses of action might facilitate or delay reach it. Second, the plan allows managers to be more farsighted: having a clear road map, they can think what effect an adopted decision will have on some long-term tasks and activities. 

Without such a plan, managers’ decisions may not be strategic but based only on the available data and current situation.    

8. It Boosts Motivation and Team Spirit 

It is a common fact that people feel more engaged and motivated if they understand the relevance of their work. Planning shows the link between individual input and a larger goal, which it helps to achieve. 

It also shows that each person in the business environment is indispensable to reaching the common goal. This helps to reduce internal competition and nurture community and team spirit. You can use motivational quotes in your pep talks to help enthuse your team.

9. It Helps to Earn Credibility and Trust of Stakeholders

All managers understand that a solid plan is needed to persuade creditors and investors to help. However, sometimes they forget that the turbulent market environment can drive the need to engage them without planning to do so. Having a formal business plan readily available will have a great impact if you need to find and engage new investors in a short period of time. 

The availability of clear goals and a formal plan also shows your social responsibility and increases the trust of employees and clients.

10. It Gives a Competitive Edge and Allows Strategic Positioning  

Planning involves getting a realistic view of organisational strengths and weaknesses, as well as revealing the gaps and vulnerabilities of the competitors. Acting upon this data rather than inertly performing the same actions gives a great competitive edge. 

What’s more, planning helps to reveal the growing markets and enter them with new products or services earlier than any other competitor, enjoying the first-mover advantage .

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Why Some Managers Fail to Plan 

Although planning is a basic function of management, in practice, many managers neglect it. You may think that they don’t need formal types of planning, as they can use their strategic vision and gut instinct to keep the organisation on track even without it. However, this is not true. Here are the key reasons why managers fail to create a strategic plan: 

  • They underestimate the importance of planning .

Many managers hold a get-things-done attitude, failing to stop and analyse the right things they need to do. They don’t understand how planning can affect performance and are not willing to change anything. 

  • They lack time for planning .

Planning takes a lot of time and managers have too many responsibilities . As a result, it is common that managers only think about strategic plans at home or when commuting to work. This can result in a failure to plan. Managers should specifically schedule planning. If it is difficult to find time for this role, a manager should delegate more responsibilities and avoid micromanaging. 

  • They don’t have the necessary knowledge .

There are many tools used in planning such as SWOT analysis , PESTLE Analysis, VRIO Framework, environmental scanning, resource analysis, etc. If a manager didn’t get good training in management, he/she may fail to plan effectively and thus see no sense in it. It may also be that they lack experience in certain areas – creating a marketing plan is very different from operational planning.

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  • They have too much reliance on their experience .

Some managers might have succeeded with an absence of planning, leading them to think that planning is just a waste of time. They attribute success to their own abilities rather than favourable conditions.   

  • They lack self-discipline .

Setting and pursuing goals, either personal or organisational requires dedication and discipline. Often, managers need to develop their personal strengths and skills for effective planning in management.  

  • They lack meaningful objectives and goals .

Sometimes, managers avoid planning because there is no goal that will engage or motivate them to do so. This often happens with companies that operate without any mission statement.  

5 Factors to Successful Strategic Planning 

If you understand the importance of planning in management and want to grasp all the benefits of this function, consider the following 5 factors that determine the effectiveness of planning .   

1. Engagement 

Although planning is a managerial function, it should not be done by one person behind a closed door. On the contrary, it is the task of a manager to make planning a collaborative and inclusive process. Make your employees feel engaged in the process of planning, and they will be eager to commit to the plan and take on shared responsibility for its realisation. They might even have innovative ideas you would otherwise have missed.    

2. Data, not assumptions  

We all hold assumptions about businesses and markets, but they are not necessarily true. Basing your plan on assumptions is a grave mistake that overrides all the advantages of proper planning. It is important to do market research, host focus groups, talk to one’s own employees, consult market experts – gain any information that will help to base decisions on data rather than assumptions.    

3. Communication

It is important to clearly communicate the desired results and the strategic plan to the employees. Nurture open communication encouraging everyone to give feedback and suggest improvements to the plan. Note that some benefits of planning, such as innovation in particular, depend on how eager employees are to voice their ideas and whether they feel heard and appreciated for giving them.  

4. Culture of growth

A true focus on improving efficiency and growth can be maintained only in a culture that values efficiency and growth. Work to create such a culture in your organisation. If you help your employees to learn and develop their skills, appreciate and reward personal achievements, employees will be more willing to commit to ambitious goals and demanding plans.     

5. Commitment to change 

Effective planning requires letting go of outdated processes, revision of strategies, innovation, hiring and firing. All this means change, which is difficult to manage. Still, to truly benefit from the advantages of planning, a manager should be ready to go beyond the cosmetic changes and face the possible resentment of the team. In this respect, planning in management is a function that requires much courage and commitment.   

Concluding Thoughts 

Effective strategic planning will help to create a formal yet actionable document guiding priorities and day-to-day activities of your organisation. It requires much knowledge and effort, but the benefits of planning in business management make them fully justified and can eventually allow you to become a better manager . In particular, planning will help you set the right goals, reduce future uncertainties, achieve efficient use of human and material resources, engage employees, and much more.

If you understand the importance of planning, you should be ready to work on your personal qualities, professional skills, and organisational culture to succeed with effective planning. Last but not least, you should be ready to change: you cannot get different results unless you try different approaches.  

Author bio : Nataly Havrysh is a marketing manager at Chanty . Nataly is an editor and content writer thrilled about researching topics in sociology, psychology, personal growth, modern IT trends, management, and internet marketing. An active mom passionate about her work, Nataly is a pro in personal time management.

Originally published Nov 06, 2019, updated Jan 16, 2023

RingCentral Team

1 thought on “ How to Succeed with Planning in Management and Why it is Important ”

Training should be universal and well-suited to the requirements of both the employee as well as the company they are working for. This is where HR talent management software can be of great help to an organization. Offering training to all levels of employees will not only enhance their skills and capabilities for a particular role, it will also promote a culture of “non-stop learning” within a team. This further helps develop better thinkers and problem solvers with quality job performance.

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define planning and why we need planning in business management

  • 17.2 The Planning Process
  • Introduction
  • 1.1 What Do Managers Do?
  • 1.2 The Roles Managers Play
  • 1.3 Major Characteristics of the Manager's Job
  • Summary of Learning Outcomes
  • Chapter Review Questions
  • Management Skills Application Exercises
  • Managerial Decision Exercises
  • Critical Thinking Case
  • 2.1 Overview of Managerial Decision-Making
  • 2.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
  • 2.3 Programmed and Nonprogrammed Decisions
  • 2.4 Barriers to Effective Decision-Making
  • 2.5 Improving the Quality of Decision-Making
  • 2.6 Group Decision-Making
  • 3.1 The Early Origins of Management
  • 3.2 The Italian Renaissance
  • 3.3 The Industrial Revolution
  • 3.4 Taylor-Made Management
  • 3.5 Administrative and Bureaucratic Management
  • 3.6 Human Relations Movement
  • 3.7 Contingency and System Management
  • 4.1 The Organization's External Environment
  • 4.2 External Environments and Industries
  • 4.3 Organizational Designs and Structures
  • 4.4 The Internal Organization and External Environments
  • 4.5 Corporate Cultures
  • 4.6 Organizing for Change in the 21st Century
  • 5.1 Ethics and Business Ethics Defined
  • 5.2 Dimensions of Ethics: The Individual Level
  • 5.3 Ethical Principles and Responsible Decision-Making
  • 5.4 Leadership: Ethics at the Organizational Level
  • 5.5 Ethics, Corporate Culture, and Compliance
  • 5.6 Corporate Social Responsibility (CSR)
  • 5.7 Ethics around the Globe
  • 5.8 Emerging Trends in Ethics, CSR, and Compliance
  • 6.1 Importance of International Management
  • 6.2 Hofstede's Cultural Framework
  • 6.3 The GLOBE Framework
  • 6.4 Cultural Stereotyping and Social Institutions
  • 6.5 Cross-Cultural Assignments
  • 6.6 Strategies for Expanding Globally
  • 6.7 The Necessity of Global Markets
  • 7.1 Entrepreneurship
  • 7.2 Characteristics of Successful Entrepreneurs
  • 7.3 Small Business
  • 7.4 Start Your Own Business
  • 7.5 Managing a Small Business
  • 7.6 The Large Impact of Small Business
  • 7.7 The Small Business Administration
  • 7.8 Trends in Entrepreneurship and Small-Business Ownership
  • 8.1 Gaining Advantages by Understanding the Competitive Environment
  • 8.2 Using SWOT for Strategic Analysis
  • 8.3 A Firm's External Macro Environment: PESTEL
  • 8.4 A Firm's Micro Environment: Porter's Five Forces
  • 8.5 The Internal Environment
  • 8.6 Competition, Strategy, and Competitive Advantage
  • 8.7 Strategic Positioning
  • 9.1 Strategic Management
  • 9.2 Firm Vision and Mission
  • 9.3 The Role of Strategic Analysis in Formulating a Strategy
  • 9.4 Strategic Objectives and Levels of Strategy
  • 9.5 Planning Firm Actions to Implement Strategies
  • 9.6 Measuring and Evaluating Strategic Performance
  • 10.1 Organizational Structures and Design
  • 10.2 Organizational Change
  • 10.3 Managing Change
  • 11.1 An Introduction to Human Resource Management
  • 11.2 Human Resource Management and Compliance
  • 11.3 Performance Management
  • 11.4 Influencing Employee Performance and Motivation
  • 11.5 Building an Organization for the Future
  • 11.6 Talent Development and Succession Planning
  • 12.1 An Introduction to Workplace Diversity
  • 12.2 Diversity and the Workforce
  • 12.3 Diversity and Its Impact on Companies
  • 12.4 Challenges of Diversity
  • 12.5 Key Diversity Theories
  • 12.6 Benefits and Challenges of Workplace Diversity
  • 12.7 Recommendations for Managing Diversity
  • 13.1 The Nature of Leadership
  • 13.2 The Leadership Process
  • 13.3 Leader Emergence
  • 13.4 The Trait Approach to Leadership
  • 13.5 Behavioral Approaches to Leadership
  • 13.6 Situational (Contingency) Approaches to Leadership
  • 13.7 Substitutes for and Neutralizers of Leadership
  • 13.8 Transformational, Visionary, and Charismatic Leadership
  • 13.9 Leadership Needs in the 21st Century
  • 14.1 Motivation: Direction and Intensity
  • 14.2 Content Theories of Motivation
  • 14.3 Process Theories of Motivation
  • 14.4 Recent Research on Motivation Theories
  • 15.1 Teamwork in the Workplace
  • 15.2 Team Development Over Time
  • 15.3 Things to Consider When Managing Teams
  • 15.4 Opportunities and Challenges to Team Building
  • 15.5 Team Diversity
  • 15.6 Multicultural Teams
  • 16.1 The Process of Managerial Communication
  • 16.2 Types of Communications in Organizations
  • 16.3 Factors Affecting Communications and the Roles of Managers
  • 16.4 Managerial Communication and Corporate Reputation
  • 16.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
  • 17.1 Is Planning Important
  • 17.3 Types of Plans
  • 17.4 Goals or Outcome Statements
  • 17.5 Formal Organizational Planning in Practice
  • 17.6 Employees' Responses to Planning
  • 17.7 Management by Objectives: A Planning and Control Technique
  • 17.8 The Control- and Involvement-Oriented Approaches to Planning and Controlling
  • 18.1 MTI—Its Importance Now and In the Future
  • 18.2 Developing Technology and Innovation
  • 18.3 External Sources of Technology and Innovation
  • 18.4 Internal Sources of Technology and Innovation
  • 18.5 Management Entrepreneurship Skills for Technology and Innovation
  • 18.6 Skills Needed for MTI
  • 18.7 Managing Now for Future Technology and Innovation
  • Outline the planning and controlling processes.

Planning is a process. Ideally it is future oriented, comprehensive, systematic, integrated, and negotiated. 11 It involves an extensive search for alternatives and analyzes relevant information, is systematic in nature, and is commonly participative. 12 The planning model described in this section breaks the managerial function of planning into several steps, as shown in Exhibit 17.3 . Following this step-by-step procedure helps ensure that organizational planning meets these requirements.

Step 1: Developing an Awareness of the Present State

According to management scholars Harold Koontz and Cyril O’Donnell, the first step in the planning process is awareness. 13 It is at this step that managers build the foundation on which they will develop their plans. This foundation specifies an organization’s current status, pinpoints its commitments, recognizes its strengths and weaknesses, and sets forth a vision of the future. Because the past is instrumental in determining where an organization expects to go in the future, managers at this point must understand their organization and its history. It has been said—“The further you look back, the further you can see ahead.” 14

Step 2: Establishing Outcome Statements

The second step in the planning process consists of deciding “where the organization is headed, or is going to end up.” Ideally, this involves establishing goals. Just as your goal in this course might be to get a certain grade, managers at various levels in an organization’s hierarchy set goals. For example, plans established by a university’s marketing department curriculum committee must fit with and support the plans of the department, which contribute to the goals of the business school, whose plans must, in turn, support the goals of the university. Managers therefore develop an elaborate network of organizational plans, such as that shown in Exhibit 17.4 , to achieve the overall goals of their organization.

Goal vs. Domain Planning

Outcome statements can be constructed around specific goals or framed in terms of moving in a particular direction toward a viable set of outcomes. In goal planning , people set specific goals and then create action statements. 15 For example, freshman Kristin Rude decides that she wants a bachelor of science degree in biochemistry (the goal). She then constructs a four-year academic plan that will help her achieve this goal. Kristin is engaging in goal planning. She first identifies a goal and then develops a course of action to realize her goal.

Another approach to planning is domain/directional planning , in which managers develop a course of action that moves an organization toward one identified domain (and therefore away from other domains). 16 Within the chosen domain may lie a number of acceptable and specific goals. For example, high-school senior Neil Marquardt decides that he wants to major in a business-related discipline in college. During the next four years, he will select a variety of courses from the business school curriculum yet never select a major. After selecting courses based on availability and interest, he earns a sufficient number of credits within this chosen domain that enables him to graduate with a major in marketing. Neil never engaged in goal planning, but in the end he will realize one of many acceptable goals within an accepted domain.

The development of the Post-it® product by the 3M Corporation demonstrates how domain planning works. In the research laboratories at 3M, efforts were being made to develop new forms and strengths of cohesive substances. One result was cohesive material with no known value because of its extremely low cohesive level. A 3M division specialist, Arthur L. Fry, frustrated by page markers falling from his hymn book in church, realized that this material, recently developed by Spencer F. Silver, would stick to paper for long periods and could be removed without destroying the paper. Fry experimented with the material as page markers and note pads—out of this came the highly popular and extremely profitable 3M product Scotch Post-it®. Geoff Nicholson, the driving force behind the Post-it® product, comments that rather than get bogged down in the planning process, innovations must be fast-tracked and decisions made whether to continue or move on early during the product development process. 17

Situations in which managers are likely to engage in domain planning include (1) when there is a recognized need for flexibility, (2) when people cannot agree on goals, (3) when an organization’s external environment is unstable and highly uncertain, and (4) when an organization is starting up or is in a transitional period. In addition, domain planning is likely to prevail at upper levels in an organization, where managers are responsible for dealing with the external environment and when task uncertainty is high. Goal planning (formulating goals compatible with the chosen domain) is likely to prevail in the technical core, where there is less uncertainty.

Hybrid Planning

Occasionally, coupling of domain and goal planning occurs, creating a third approach, called hybrid planning . In this approach, managers begin with the more general domain planning and commit to moving in a particular direction. As time passes, learning occurs, uncertainty is reduced, preferences sharpen, and managers are able to make the transition to goal planning as they identify increasingly specific targets in the selected domain. Movement from domain planning to goal planning occurs as knowledge accumulates, preferences for a particular goal emerge, and action statements are created.

Consequences of Goal, Domain, and Hybrid Planning

Setting goals not only affects performance directly, but also encourages managers to plan more extensively. That is, once goals are set, people are more likely to think systematically about how they should proceed to realize the goals. 18 When people have vague goals, as in domain planning, they find it difficult to draw up detailed action plans and are therefore less likely to perform effectively. When studying the topic of motivation, you will learn about goal theory. Research suggests that goal planning results in higher levels of performance than does domain planning alone. 19

Step 3: Premising

In this step of the planning process, managers establish the premises, or assumptions, on which they will build their action statements. The quality and success of any plan depends on the quality of its underlying assumptions. Throughout the planning process, assumptions about future events must be brought to the surface, monitored, and updated. 20

Managers collect information by scanning their organization’s internal and external environments. They use this information to make assumptions about the likelihood of future events. As Kristin considers her four-year pursuit of her biochemistry major, she anticipates that in addition to her savings and funds supplied by her parents, she will need a full-time summer job for two summers in order to cover the cost of her undergraduate education. Thus, she includes finding full-time summer employment between her senior year of high school and her freshman year and between her freshman and sophomore years of college as part of her plan. The other two summers she will devote to an internship and finding postgraduate employment—much to mom and dad’s delight! Effective planning skills can be used throughout your life. The plan you develop to pay for and complete your education is an especially important one.

Step 4: Determining a Course of Action (Action Statements)

In this stage of the planning process, managers decide how to move from their current position toward their goal (or toward their domain). They develop an action statement that details what needs to be done, when, how, and by whom. The course of action determines how an organization will get from its current position to its desired future position. Choosing a course of action involves determining alternatives by drawing on research, experimentation, and experience; evaluating alternatives in light of how well each would help the organization reach its goals or approach its desired domain; and selecting a course of action after identifying and carefully considering the merits of each alternative.

Step 5: Formulating Supportive Plans

The planning process seldom stops with the adoption of a general plan. Managers often need to develop one or more supportive or derivative plans to bolster and explain their basic plan. Suppose an organization decides to switch from a 5-day, 40-hour workweek (5/40) to a 4-day, 40-hour workweek (4/40) in an attempt to reduce employee turnover. This major plan requires the creation of a number of supportive plans. Managers might need to develop personnel policies dealing with payment of daily overtime. New administrative plans will be needed for scheduling meetings, handling phone calls, and dealing with customers and suppliers.

Planning, Implementation, and Controlling

After managers have moved through the five steps of the planning process and have drawn up and implemented specific plans, they must monitor and maintain their plans. Through the controlling function (to be discussed in greater detail later in this chapter), managers observe ongoing human behavior and organizational activity, compare it to the outcome and action statements formulated during the planning process, and take corrective action if they observe unexpected and unwanted deviations. Thus, planning and controlling activities are closely interrelated (planning ➨ controlling ➨ planning . . .). Planning feeds controlling by establishing the standards against which behavior will be evaluated during the controlling process. Monitoring organizational behavior (the control activity) provides managers with input that helps them prepare for the upcoming planning period—it adds meaning to the awareness step of the planning process.

Influenced by total quality management (TQM) and the importance of achieving continuous improvement in the processes used, as well as the goods and services produced, organizations such as IBM-Rochester have linked their planning and controlling activities by adopting the Deming cycle (also known as the Shewhart cycle).

It has been noted on numerous occasions that many organizations that do plan fail to recognize the importance of continuous learning. Their plans are either placed on the shelf and collect dust or are created, implemented, and adhered to without a systematic review and modification process. Frequently, plans are implemented without first measuring where the organization currently stands so that future comparisons and evaluations of the plan’s effectiveness cannot be determined. The Deming cycle , shown in Exhibit 17.6 , helps managers assess the effects of planned action by integrating organizational learning into the planning process. The cycle consists of four key stages: (1) Plan—create the plan using the model discussed earlier. (2) Do—implement the plan. (3) Check—monitor the results of the planned course of action; organizational learning about the effectiveness of the plan occurs at this stage. (4) Act—act on what was learned, modify the plan, and return to the first stage in the cycle, and the cycle begins again as the organization strives for continuous learning and improvement.

Concept Check

  • What are the five steps in the planning process?
  • What is the difference between goal, domain, and hybrid planning?
  • How are planning, implementation, and controlling related?

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  • Authors: David S. Bright, Anastasia H. Cortes
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  • Book title: Principles of Management
  • Publication date: Mar 20, 2019
  • Location: Houston, Texas
  • Book URL: https://openstax.org/books/principles-management/pages/1-introduction
  • Section URL: https://openstax.org/books/principles-management/pages/17-2-the-planning-process

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define planning and why we need planning in business management

What Is Planning And Its Importance?

Do you ever think about high-performing CEOs and wonder where they get the time to do it all? Do you…

What Is Planning And Its Importance?

Do you ever think about high-performing CEOs and wonder where they get the time to do it all? Do you marvel at high-profile actors who juggle multiple projects with ease? Have you ever wanted to do more in the same 24 hours?

The secret to productivity is simple: planning. Read on to understand what is planning, its importance and its significance in management.

The Meaning And Significance Of Planning

Planning is a  basic component of project managemen t. It is the process of creating a roadmap to decide which actions need to be taken to achieve a specific goal. Planning is fact-based and it increases our chances of success.

To create a successful plan, one must apply logical reasoning to factually analyze the steps that need to be taken. One must also account for any unforeseen situations. One’s ability to make good plans increases with practice. Those who are in the habit of making plans are aware of previously experienced circumstances that are likely to be encountered during the execution of the plan.

Let’s take a detailed look at five key points that explain the importance of planning:

Importance Of Planning In Management

The importance of planning in management can hardly be overstated. It is a critical function of project management. The success of any business endeavor greatly depends on the effectiveness of the plan.

Let’s look at five major points on the importance of planning in management:

Resource Optimization:

Whether a company is an enterprise worth several billions of dollars or a bootstrapped start-up, it will always have finite resources. A business can’t spend beyond certain limits. Even corporate giants tend to utilize their resources carefully.

Hence, the management at most organizations emphasizes the importance of planning.

Ask yourself the following questions to understand how you can utilize resources better:

What are the resources that need to be allocated to different departments to enable them to achieve their target?

How can you maximize productivity and avoid wastage of resources?

All such questions are answered by planning.

Goal Setting:

Setting SMART goals is critical to an organization’s success. The goals should push everyone out of their comfort zones and inspire them to work hard. However, they should not be impossible to reach or else they will lead to failure.

Organizations grow by setting higher targets and planning how they will meet them. A well-made plan can enable a team to improve its productivity tremendously.

Risk Management:

One of the most important functions of planning is that it helps in managing risk. The ability to predict, prevent, or manage risks and contingencies is an essential need of any business.  For instance, the government could bring regulatory changes during the current pandemic to mitigate damage. Or the financial markets could be unpredictable as a result of disruptions due to the pandemic.

Planning empowers businesses to overcome such unforeseen challenges.  While you can’t predict when the next such disruption will happen, you can plan how the business will run in each eventuality and which processes, technology,  or investments will be needed in such scenarios.

Fostering Corporate Culture And Team Spirit:

Organizations that understand the importance of planning take steps to improve their human resource management and work culture as well.

An organization’s work culture is a key factor in determining employee performance. By planning work efficiently and thoughtfully managers can create well-knit and self-sufficient teams that have the necessary resources and knowledge to carry out their responsibilities. Such workforce planning leads to the success of the team and the organization as a whole.

Gaining An Edge Over Competitors:

Strategic planning helps companies identify their core competencies as well as the areas they need to do better to hold on to their market position. Research-based planning can be used by organizations to spot competitor weaknesses and turn them into opportunities for growth.

The importance of planning in management is evident from these various functions that are instrumental in driving an organization’s growth and success. 

Successful Implementation Strategies

What is planning without successful implementation? If you want to manage the performance of your organization, you need to be able to execute your strategy as well. There is a lot of work that goes into it, such as: 

  • Having an implementation schedule that considers both short-term as well as long-term goals. Having a plan also means that you are prepared for what’s to come. Sometimes, it even helps you make adjustments if and when the action items need changes. You can roll out your plan successfully by creating a calendar. 
  • After you’ve devised a schedule, your priority should be to track your goals and action items. Weekly or monthly strategy meetings are necessary for bringing everyone on the same page and making sure that they are headed in the right direction. Having a checklist helps in such situations. 
  • While tracking is essential for your plan, it’s equally important to keep revisiting and making necessary revisions and changes. Getting feedback from your team is instrumental in ensuring that every need is met and the plan has been reviewed from multiple perspectives. For example, long-term plans often meet unanticipated changes (can be internal or external). By being flexible and willing to adapt you can make adjustments on the go and keep pace with changing trends.

The significance of planning can be gauged by the fact that it is considered the nucleus of management activities. You can now learn about the importance of planning in Harappa’s Leading Self course. This personal leadership course helps you learn how to plan and execute your work optimally.

The tools and concepts in the course will help you face challenges and plan your professional growth. The course teaches you the balcony and dance floor framework which helps increase awareness and understand the significance of planning. Enroll in the course today to improve your overall performance and empower yourself to become a great manager!

Explore topics such as  Career Development ,  Career Planning , the  Iceberg Model ,  Career Pathing ,  Taking Ownership at Work  from our Harappa Diaries section and lead on a path of self-development.

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  • Building Your Business
  • Becoming an Owner
  • Business Plans

What Is Business Planning?

Why Business Planning Isn't Just for Startups

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

define planning and why we need planning in business management

Morsa Images / Getty Images

Business planning takes place when the key stakeholders in a business sit down and flesh out all the goals , strategies, and actions that they envision taking to ensure the business’s survival, prosperity, and growth.

Here are some strategies for business planning and the ways it can benefit your business.

Business planning can play out in many different ways. Anytime upper management comes together to plan for the success of a business, it is a form of business planning. Business planning commonly involves collecting ideas in a formal business plan that outlines a summary of the business's current state, as well as the state of the broader market, along with detailed steps the business will take to improve performance in the coming period.

Business plans aren't just about money. The business plan outlines the general planning needed to start and run a successful business, and that includes profits, but it also goes beyond that. A plan should account for everything from scoping out the competition and figuring out how your new business will fit into the industry to assessing employee morale and planning for how to retain talent.

How Does Business Planning Work?

Every new business needs a business plan —a blueprint of how you will develop your new business, backed by research, that demonstrates how the business idea is viable. If your new business idea requires investment capital, you will have a better chance of obtaining debt or equity financing from financial institutions, angel investors , or venture capitalists if you have a solid business plan to back up your ideas.

Businesses should prepare a business plan, even if they don't need to attract investors or secure loans.

Post-Startup Business Planning

The business plan isn’t a set-it-and-forget-it planning exercise. It should be a living document that is updated throughout the life cycle of your business.

Once the business has officially started, business planning will shift to setting and meeting goals and targets. Business planning is most effective when it’s done on a consistent schedule that revisits existing goals and projects throughout the year, perhaps even monthly. In addition to reviewing short-term goals throughout the year, it's also important to establish a clear vision and lay the path for your long-term success.

Daily business planning is an incredibly effective way for individuals to focus on achieving both their own goals and the goals of the organization.

Sales Forecasting

The sales forecast is a key section of the business plan that needs to be constantly tracked and updated. The sales forecast is an estimate of the sales of goods and services your business is likely to achieve over the forecasted period, along with the estimated profit from those sales. The forecast should take into account trends in your industry, the general economy, and the projected needs of your primary customers.

Cash Flow Analysis

Another crucial component of business planning is cash flow analysis. Avoiding extended cash flow shortages is vital for businesses, and many business failures can be blamed on cash flow problems.

Your business may have a large, lucrative order on the books, but if it can't be invoiced until the job is completed, then you may run into cash flow problems. That scenario can get even worse if you have to hire staff, purchase inventory, and make other expenditures in the meantime to complete the project.

Performing regular cash flow projections is an important part of business planning. If managed properly, cash flow shortages can be covered by additional financing or equity investment.

Business Contingency Planning

In addition to business planning for profit and growth, your business should have a contingency plan. Contingency business planning (also known as business continuity planning or disaster planning) is the type of business planning that deals with crises and worst-case scenarios. A business contingency plan helps businesses deal with sudden emergencies, unexpected events, and new information that could disrupt your business.

The goals of a contingency plan are to:

  • Provide for the safety and security of yourself, your employees, and your customers in the event of a fire, flood, robbery, data breach, illness, or some other disaster
  • Ensure that your business can resume operations after an emergency as quickly as possible

Business Succession Planning

If your business is a family enterprise or you have specific plans for who you want to take over in the event of your retirement or illness, then you should have a plan in place to hand over control of the business . The issues of management, ownership, and taxes can cause a great deal of discord within families unless a succession plan is in place that clearly outlines the process.

Key Takeaways

  • Business planning is when key stakeholders review the state of their business and plan for how they will improve the business in the future.
  • Business planning isn't a one-off event—it should be an ongoing practice of self-assessment and planning.
  • Business planning isn't just about improving sales; it can also address safety during natural disasters or the transfer of power after an owner retires.

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1.5 Planning, Organizing, Leading, and Controlling

Learning objectives.

  • Know the dimensions of the planning-organizing-leading-controlling (P-O-L-C) framework.
  • Know the general inputs into each P-O-L-C dimension.

A manager’s primary challenge is to solve problems creatively. While drawing from a variety of academic disciplines, and to help managers respond to the challenge of creative problem solving, principles of management have long been categorized into the four major functions of planning, organizing, leading, and controlling (the P-O-L-C framework). The four functions, summarized in the P-O-L-C figure, are actually highly integrated when carried out in the day-to-day realities of running an organization. Therefore, you should not get caught up in trying to analyze and understand a complete, clear rationale for categorizing skills and practices that compose the whole of the P-O-L-C framework.

It is important to note that this framework is not without criticism. Specifically, these criticisms stem from the observation that the P-O-L-C functions might be ideal but that they do not accurately depict the day-to-day actions of actual managers (Mintzberg, 1973; Lamond, 2004). The typical day in the life of a manager at any level can be fragmented and hectic, with the constant threat of having priorities dictated by the law of the trivial many and important few (i.e., the 80/20 rule). However, the general conclusion seems to be that the P-O-L-C functions of management still provide a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals (Lamond, 2004).

Figure 1.7 The P-O-L-C Framework

image

Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.

Planning is a process consisting of several steps. The process begins with environmental scanning which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.

Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.

There are many different types of plans and planning.

Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization’s mission, which is its fundamental reason for existence. An organization’s top management most often conducts strategic planning.

Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning.

Operational planning generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans.

Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the chain of command within an organization. Decisions made about the structure of an organization are generally referred to as organizational design decisions.

Organizing also involves the design of individual jobs within the organization. Decisions must be made about the duties and responsibilities of individual jobs, as well as the manner in which the duties should be carried out. Decisions made about the nature of jobs within the organization are generally called “job design” decisions.

Organizing at the level of the organization involves deciding how best to departmentalize, or cluster, jobs into departments to coordinate effort effectively. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations use multiple methods of departmentalization.

Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources. Traditionally, job design was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. However, experience has shown that it is possible for jobs to become too narrow and specialized. For example, how would you like to screw lids on jars one day after another, as you might have done many decades ago if you worked in company that made and sold jellies and jams? When this happens, negative outcomes result, including decreased job satisfaction and organizational commitment, increased absenteeism, and turnover.

Recently, many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs are now designed based on such principles as empowerment, job enrichment and teamwork . For example, HUI Manufacturing, a custom sheet metal fabricator, has done away with traditional “departments” to focus on listening and responding to customer needs. From company-wide meetings to team huddles, HUI employees know and understand their customers and how HUI might service them best (Huimfg, 2008).

Leading involves the social and informal sources of influence that you use to inspire action taken by others. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort to attain organizational objectives.

The behavioral sciences have made many contributions to understanding this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates. For example, this research tells us that to become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions.

Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. Studies of communication provide direction as to how managers can effectively and persuasively communicate. Studies of leadership and leadership style provide information regarding questions, such as, “What makes a manager a good leader?” and “In what situations are certain leadership styles most appropriate and effective?”

1.5

Quality control ensures that the organization delivers on its promises.

International Maize and Wheat Improvement Center – Maize seed quality control at small seed company Bidasem – CC BY-NC-SA 2.0.

Controlling

Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. Performance standards are often stated in monetary terms such as revenue, costs, or profits but may also be stated in other terms, such as units produced, number of defective products, or levels of quality or customer service.

The measurement of performance can be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree.

The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. This function does not imply that managers should attempt to control or to manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the manager’s role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives.

Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. Two traditional control techniques are budget and performance audits. An audit involves an examination and verification of records and supporting documents. A budget audit provides information about where the organization is with respect to what was planned or budgeted for, whereas a performance audit might try to determine whether the figures reported are a reflection of actual performance. Although controlling is often thought of in terms of financial criteria, managers must also control production and operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization.

The management functions of planning, organizing, leading, and controlling are widely considered to be the best means of describing the manager’s job, as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions.

Key Takeaway

The principles of management can be distilled down to four critical functions. These functions are planning, organizing, leading, and controlling. This P-O-L-C framework provides useful guidance into what the ideal job of a manager should look like.

  • What are the management functions that comprise the P-O-L-C framework?
  • Are there any criticisms of this framework?
  • What function does planning serve?
  • What function does organizing serve?
  • What function does leading serve?
  • What function does controlling serve?

Huimfg.com, http://www.huimfg.com/abouthui-yourteams.aspx (accessed October 15, 2008).

Lamond, D, “A Matter of Style: Reconciling Henri and Henry,” Management Decision 42, no. 2 (2004): 330–56.

Mintzberg, H. The Nature of Managerial Work (New York: Harper & Row, 1973); D. Lamond, “A Matter of Style: Reconciling Henri and Henry,” Management Decision 42 , no. 2 (2004): 330–56.

Principles of Management Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

Table of Contents

What is a business plan, the advantages of having a business plan, the types of business plans, the key elements of a business plan, best business plan software, common challenges of writing a business plan, become an expert business planner, business planning: it’s importance, types and key elements.

Business Planning: It’s Importance, Types and Key Elements

Every year, thousands of new businesses see the light of the day. One look at the  World Bank's Entrepreneurship Survey and database  shows the mind-boggling rate of new business registrations. However, sadly, only a tiny percentage of them have a chance of survival.   

According to the Bureau of Labor Statistics, about 20% of small businesses fail in their first year, about 50% in their fifth year.

Research from the University of Tennessee found that 44% of businesses fail within the first three years. Among those that operate within specific sectors, like information (which includes most tech firms), 63% shut shop within three years.

Several  other statistics  expose the abysmal rates of business failure. But why are so many businesses bound to fail? Most studies mention "lack of business planning" as one of the reasons.

This isn’t surprising at all. 

Running a business without a plan is like riding a motorcycle up a craggy cliff blindfolded. Yet, way too many firms ( a whopping 67%)  don't have a formal business plan in place. 

It doesn't matter if you're a startup with a great idea or a business with an excellent product. You can only go so far without a roadmap — a business plan. Only, a business plan is so much more than just a roadmap. A solid plan allows a business to weather market challenges and pivot quickly in the face of crisis, like the one global businesses are struggling with right now, in the post-pandemic world.  

But before you can go ahead and develop a great business plan, you need to know the basics. In this article, we'll discuss the fundamentals of business planning to help you plan effectively for 2021.  

Now before we begin with the details of business planning, let us understand what it is.

No two businesses have an identical business plan, even if they operate within the same industry. So one business plan can look entirely different from another one. Still, for the sake of simplicity, a business plan can be defined as a guide for a company to operate and achieve its goals.  

More specifically, it's a document in writing that outlines the goals, objectives, and purpose of a business while laying out the blueprint for its day-to-day operations and key functions such as marketing, finance, and expansion.

A good business plan can be a game-changer for startups that are looking to raise funds to grow and scale. It convinces prospective investors that the venture will be profitable and provides a realistic outlook on how much profit is on the cards and by when it will be attained. 

However, it's not only new businesses that greatly benefit from a business plan. Well-established companies and large conglomerates also need to tweak their business plans to adapt to new business environments and unpredictable market changes. 

Before getting into learning more about business planning, let us learn the advantages of having one.

Since a detailed business plan offers a birds-eye view of the entire framework of an establishment, it has several benefits that make it an important part of any organization. Here are few ways a business plan can offer significant competitive edge.

  • Sets objectives and benchmarks: Proper planning helps a business set realistic objectives and assign stipulated time for those goals to be met. This results in long-term profitability. It also lets a company set benchmarks and Key Performance Indicators (KPIs) necessary to reach its goals. 
  • Maximizes resource allocation: A good business plan helps to effectively organize and allocate the company’s resources. It provides an understanding of the result of actions, such as, opening new offices, recruiting fresh staff, change in production, and so on. It also helps the business estimate the financial impact of such actions.
  • Enhances viability: A plan greatly contributes towards turning concepts into reality. Though business plans vary from company to company, the blueprints of successful companies often serve as an excellent guide for nascent-stage start-ups and new entrepreneurs. It also helps existing firms to market, advertise, and promote new products and services into the market.
  • Aids in decision making: Running a business involves a lot of decision making: where to pitch, where to locate, what to sell, what to charge — the list goes on. A well thought-out business plan provides an organization the ability to anticipate the curveballs that the future could throw at them. It allows them to come up with answers and solutions to these issues well in advance.
  • Fix past mistakes: When businesses create plans keeping in mind the flaws and failures of the past and what worked for them and what didn’t, it can help them save time, money, and resources. Such plans that reflects the lessons learnt from the past offers businesses an opportunity to avoid future pitfalls.
  • Attracts investors: A business plan gives investors an in-depth idea about the objectives, structure, and validity of a firm. It helps to secure their confidence and encourages them to invest. 

Now let's look at the various types involved in business planning.

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Business plans are formulated according to the needs of a business. It can be a simple one-page document or an elaborate 40-page affair, or anything in between. While there’s no rule set in stone as to what exactly a business plan can or can’t contain, there are a few common types of business plan that nearly all businesses in existence use.  

Here’s an overview of a few fundamental types of business plans. 

  • Start-up plan: As the name suggests, this is a documentation of the plans, structure, and objections of a new business establishments. It describes the products and services that are to be produced by the firm, the staff management, and market analysis of their production. Often, a detailed finance spreadsheet is also attached to this document for investors to determine the viability of the new business set-up.
  • Feasibility plan: A feasibility plan evaluates the prospective customers of the products or services that are to be produced by a company. It also estimates the possibility of a profit or a loss of a venture. It helps to forecast how well a product will sell at the market, the duration it will require to yield results, and the profit margin that it will secure on investments. 
  • Expansion Plan: This kind of plan is primarily framed when a company decided to expand in terms of production or structure. It lays down the fundamental steps and guidelines with regards to internal or external growth. It helps the firm to analyze the activities like resource allocation for increased production, financial investments, employment of extra staff, and much more.
  • Operations Plan: An operational plan is also called an annual plan. This details the day-to-day activities and strategies that a business needs to follow in order to materialize its targets. It outlines the roles and responsibilities of the managing body, the various departments, and the company’s employees for the holistic success of the firm.
  • Strategic Plan: This document caters to the internal strategies of the company and is a part of the foundational grounds of the establishments. It can be accurately drafted with the help of a SWOT analysis through which the strengths, weaknesses, opportunities, and threats can be categorized and evaluated so that to develop means for optimizing profits.

There is some preliminary work that’s required before you actually sit down to write a plan for your business. Knowing what goes into a business plan is one of them. 

Here are the key elements of a good business plan:

  • Executive Summary: An executive summary gives a clear picture of the strategies and goals of your business right at the outset. Though its value is often understated, it can be extremely helpful in creating the readers’ first impression of your business. As such, it could define the opinions of customers and investors from the get-go.  
  • Business Description: A thorough business description removes room for any ambiguity from your processes. An excellent business description will explain the size and structure of the firm as well as its position in the market. It also describes the kind of products and services that the company offers. It even states as to whether the company is old and established or new and aspiring. Most importantly, it highlights the USP of the products or services as compared to your competitors in the market.
  • Market Analysis: A systematic market analysis helps to determine the current position of a business and analyzes its scope for future expansions. This can help in evaluating investments, promotions, marketing, and distribution of products. In-depth market understanding also helps a business combat competition and make plans for long-term success.
  • Operations and Management: Much like a statement of purpose, this allows an enterprise to explain its uniqueness to its readers and customers. It showcases the ways in which the firm can deliver greater and superior products at cheaper rates and in relatively less time. 
  • Financial Plan: This is the most important element of a business plan and is primarily addressed to investors and sponsors. It requires a firm to reveal its financial policies and market analysis. At times, a 5-year financial report is also required to be included to show past performances and profits. The financial plan draws out the current business strategies, future projections, and the total estimated worth of the firm.

The importance of business planning is it simplifies the planning of your company's finances to present this information to a bank or investors. Here are the best business plan software providers available right now:

  • Business Sorter

The importance of business planning cannot be emphasized enough, but it can be challenging to write a business plan. Here are a few issues to consider before you start your business planning:

  • Create a business plan to determine your company's direction, obtain financing, and attract investors.
  • Identifying financial, demographic, and achievable goals is a common challenge when writing a business plan.
  • Some entrepreneurs struggle to write a business plan that is concise, interesting, and informative enough to demonstrate the viability of their business idea.
  • You can streamline your business planning process by conducting research, speaking with experts and peers, and working with a business consultant.

Whether you’re running your own business or in-charge of ensuring strategic performance and growth for your employer or clients, knowing the ins and outs of business planning can set you up for success. 

Be it the launch of a new and exciting product or an expansion of operations, business planning is the necessity of all large and small companies. Which is why the need for professionals with superior business planning skills will never die out. In fact, their demand is on the rise with global firms putting emphasis on business analysis and planning to cope with cut-throat competition and market uncertainties.

While some are natural-born planners, most people have to work to develop this important skill. Plus, business planning requires you to understand the fundamentals of business management and be familiar with business analysis techniques . It also requires you to have a working knowledge of data visualization, project management, and monitoring tools commonly used by businesses today.   

Simpliearn’s Executive Certificate Program in General Management will help you develop and hone the required skills to become an extraordinary business planner. This comprehensive general management program by IIM Indore can serve as a career catalyst, equipping professionals with a competitive edge in the ever-evolving business environment.

What Is Meant by Business Planning?

Business planning is developing a company's mission or goals and defining the strategies you will use to achieve those goals or tasks. The process can be extensive, encompassing all aspects of the operation, or it can be concrete, focusing on specific functions within the overall corporate structure.

What Are the 4 Types of Business Plans?

The following are the four types of business plans:

Operational Planning

This type of planning typically describes the company's day-to-day operations. Single-use plans are developed for events and activities that occur only once (such as a single marketing campaign). Ongoing plans include problem-solving policies, rules for specific regulations, and procedures for a step-by-step process for achieving particular goals.

Strategic Planning

Strategic plans are all about why things must occur. A high-level overview of the entire business is included in strategic planning. It is the organization's foundation and will dictate long-term decisions.

Tactical Planning

Tactical plans are about what will happen. Strategic planning is aided by tactical planning. It outlines the tactics the organization intends to employ to achieve the goals outlined in the strategic plan.

Contingency Planning

When something unexpected occurs or something needs to be changed, contingency plans are created. In situations where a change is required, contingency planning can be beneficial.

What Are the 7 Steps of a Business Plan?

The following are the seven steps required for a business plan:

Conduct Research

If your company is to run a viable business plan and attract investors, your information must be of the highest quality.

Have a Goal

The goal must be unambiguous. You will waste your time if you don't know why you're writing a business plan. Knowing also implies having a target audience for when the plan is expected to get completed.

Create a Company Profile

Some refer to it as a company profile, while others refer to it as a snapshot. It's designed to be mentally quick and digestible because it needs to stick in the reader's mind quickly since more information is provided later in the plan.

Describe the Company in Detail

Explain the company's current situation, both good and bad. Details should also include patents, licenses, copyrights, and unique strengths that no one else has.

Create a marketing plan ahead of time.

A strategic marketing plan is required because it outlines how your product or service will be communicated, delivered, and sold to customers.

Be Willing to Change Your Plan for the Sake of Your Audience

Another standard error is that people only write one business plan. Startups have several versions, just as candidates have numerous resumes for various potential employers.

Incorporate Your Motivation

Your motivation must be a compelling reason for people to believe your company will succeed in all circumstances. A mission should drive a business, not just selling, to make money. That mission is defined by your motivation as specified in your business plan.

What Are the Basic Steps in Business Planning?

These are the basic steps in business planning:

Summary and Objectives

Briefly describe your company, its objectives, and your plan to keep it running.

Services and Products

Add specifics to your detailed description of the product or service you intend to offer. Where, why, and how much you plan to sell your product or service and any special offers.

Conduct research on your industry and the ideal customers to whom you want to sell. Identify the issues you want to solve for your customers.

Operations are the process of running your business, including the people, skills, and experience required to make it successful.

How are you going to reach your target audience? How you intend to sell to them may include positioning, pricing, promotion, and distribution.

Consider funding costs, operating expenses, and projected income. Include your financial objectives and a breakdown of what it takes to make your company profitable. With proper business planning through the help of support, system, and mentorship, it is easy to start a business.

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Planning in Management: Definitions, Importance, Characteristics, Process

  • Post last modified: 10 August 2023
  • Reading time: 35 mins read
  • Post category: Management

What is Planning?

Planning is the primary function of management that involves formulating a future course of action for accomplishing a specific purpose. Planning enables managers to decide what task to do, how to do the task, when to do the task and by whom the task has to be done.

Table of Content

  • 1 What is Planning?
  • 2 Definitions of Planning
  • 3.1 Forms Goals
  • 3.2 Remains as a Continuous Process
  • 3.3 Gives Direction
  • 3.4 Tackles Uncertainty
  • 3.5 Minimises Duplication and Wasteful Activities
  • 3.6 Supports and Promotes Innovative Ideas
  • 3.7 Facilitates Decision Making
  • 3.8 Sets Standards for Controlling Function
  • 3.9 Facilitates Coordination
  • 4.1 Continuous Process
  • 4.2 Intellectual Process
  • 4.3 Futuristic Approach
  • 4.4 Flexible process
  • 4.5 Primary Function of Management
  • 4.6 Assists Decision Making
  • 4.7 Goal-oriented Approach
  • 4.8 Pervasive
  • 5.1 Setting Organisational Objectives
  • 5.2 Examining Business Environment
  • 5.3 Assessing Available Alternatives and Selecting the Most Appropriate Alternative
  • 5.4 Formulating secondary plans
  • 5.5 Ensuring cooperation and participation
  • 5.6 Following up
  • 6.1 Time-consuming
  • 6.2 Expensive
  • 6.3 Gap Between Targets and Results
  • 6.4 Resistance Towards Change
  • 6.5 Paperwork
  • 6.6 Reason of Frustration
  • 6.7 Problem of Over-target
  • 7.1 Strategic plans
  • 7.2 Tactical plans
  • 7.3 Operational plans
  • 7.4 Contingency plans
  • 8.1 What is Planning?
  • 8.2 What are the Features of Planning?
  • 8.3 What is the Process of Planning?
  • 8.4 What is the Importance of Planning in Management?
  • 9 Management Topics

To be more precise planning lays a foundation for establishing a mission statement, defining organisational goals and determining resources needed to achieve organisational goals. On the other hand, in a narrow sense, planning is the tactic to complete a specific task.

Definitions of Planning

By going through the definitions of planning we will be able to understand its concept therefore some definitions are as follows:

Planning is the continuous process of making present entrepreneurial decisions systematically and with best possible knowledge their futurity, organising systematically the ef- forts needed to carry out these decisions and measuring the results of these decisions against the expectation through organised systematic feedback. Peter Drucker
Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are, where we want to go. It makes possible things to occur, which would not otherwise occur. Koontz and O’Donnell

Importance of Planning in Management

The importance of planning in management is explained in the following points:

Forms Goals

Remains as a continuous process, gives direction, tackles uncertainty, minimises duplication and wasteful activities, supports and promotes innovative ideas, facilitates decision making, sets standards for controlling function, facilitates coordination.

Planning is a goal-oriented process that helps in determining what each individual in an organisation has to achieve at the end and executing work accordingly. In addition, the planning function enhances the efficiency of other managerial functions.

Planning in any organisation is a never-ending function. This is because every organisation operates in a dynamic business environment which is subject to frequent changes. As new changes become known, revisions and amendments are made to plans.

Planning channelises the efforts of people in an organisation in the best possible manner to attain the desired results. For example, during the planning process, plans are laid for each department of the organisation, which helps people at all levels to know exactly what work they have to perform so that organisational goals can be achieved without any hindrances.

Planning is helpful in making predictions with the available amount of information. This helps organisations/businesses tackle an uncertain future. Planning assists in finding a better way to achieve goals by anticipating a future risk or chances of occurrence of future risks.

As mentioned earlier, planning helps individuals at all levels to know what they exactly need to do. This helps in preventing the duplication of work, authority, responsibility, etc. As a result, wastage of resources and efforts is minimised.

Nowadays, organisations operate in an environment of cut-throat competition. Customers always demand something new or unique. If an organisation fails to fulfil customers’ demands, customers can easily switch to competitors.

Planning enables managers to think out of the box, generate new ideas and provide something unique to customers with less cost and more efficiency, thereby satisfying customers.

Planning as a guide plays an important role in making efficient and accurate decisions. For instance, the production department of an organisation needs to choose between two vendors who supply raw materials at the same cost and of the same quality level.

However, the two vendors differ in delivery time. In this case, the decision of choosing the vendor will be made as per the planned number of days.

Planning and controlling are inter-related functions of management. Planning sets goals for the organisation and controlling ensures their accomplishment within the decided time period. In addition, controlling direct the course of planning by highlighting the areas where planning is required.

The planning function helps management in aligning department-wise activities of the organisation. The plans made by one department are understood and supported by another department.

Overall planning that is done by top management facilitates departments to coordinate and plan accordingly to achieve organisational goals.

Characteristics of Planning

The characteristics of the planning function are explained as follows:

Continuous Process

Intellectual process, futuristic approach, flexible process, primary function of management, assists decision making, goal-oriented approach.

Planning is done for a specific period of time and plans are reformed at the end of that specific period as per the new requirements and changing conditions. Planning goes on, till the existence of an organisation, as issues and problems keep cropping up, and plans are needed to tackle the problems effectively.

Planning requires creative thinking to visualise the future situation and frame plans accordingly. It is the outcome of managers’ thinking process based on their experience and knowledge.

Planning is conducted to achieve future organisational goals while efficiently utilising organisational re- sources. This is done by predicting future situations and making forecasts.

Planning involves a flexible approach. Since the future is uncertain and unpredictable, changes in the business environment take place in the form of competition, government policies, customer demand, etc. Thus, there is always room for flexibility in planning to incorporate future changes.

Planning is done prior to all other functions of management, i.e., organising, staffing, directing, controlling, coordinating, reporting and budgeting. It is the first, foremost and base managerial function of any organisation. The effectiveness of a management’s plan determines the competence of the management’s activity for the planned time period.

Planning comprises decision making because it is an activity of making choices from the available alternatives for performing tasks. Hence, planning comprehends decision making as its indispensable part.

Planning emphasises defining the aims, objectives and goals of the organisation. It also involves the identification of alternative courses of action to decide on a suitable action plan, which should be undertaken for the attainment of goals.

Planning is regarded as pervasive because it is present in all the segments of an organisation. It is required at all levels of management. The scope of planning differs at different levels of management and departments.

Process of Planning

The process of planning involves a number of steps in chronological order which are given below:

Setting Organisational Objectives

Examining business environment, assessing available alternatives and selecting the most appropriate alternative, formulating secondary plans, ensuring cooperation and participation, following up.

The planning process begins with the first step of establishing organisational objectives. It involves identifying organisational goals to be achieved by examining internal and external business conditions. For this, the answers to be given for the following questions:

  • What is to be achieved?
  • What actions are to be taken?
  • Who is to perform it?
  • How is it to be undertaken?
  • What should be the time frame?

The next step in the planning process is to examine internal and external factors that influence the business environment.

The internal factors include strengths and weaknesses (for example, the efficiency of available resources) of the organisation, while external factors involve threats and opportunities (for example, overall economic and industrial environment and competitive position of the organisation).

The next step in the planning process is to evaluate all available alternatives and then select the best alternative. Generally, an alternative is evaluated against risks associated, costs involved, upcoming benefits, etc.

The successful accomplishment of organisational objectives is confirmed by formulating secondary or alternative plans. These plans are derived for various activities, units, departments, etc., and indicate a sequence in which various tasks are to be performed and the time schedule for per- forming those tasks.

In this step, employees at middle and lower levels of management are encouraged to participate in the successful accomplishment of organisational goals. Suggestions were given by operating personnel to help the management rectify shortcomings in plans and set things right at the start of the planning process and at the time of its implementation.

The last step in the planning process is to provide the scope of follow-up for determining the value of plans made and implemented. This step involves a continuous review of plans for ensuring their relevance and effectiveness.

Reviewing plans on a continuous basis helps the organisation develop sound plans for the future and avoid mistakes that took place while implementing the previous plans.

Limitations of Planning

In spite of several advantages, the planning function also has certain limitations. We have here listed the key limitations of planning :

Time-consuming

Gap between targets and results, resistance towards change, reason of frustration, problem of over-target.

Planning turns out to be a time-consuming activity as it requires data collection, data analysis, forecasting, etc., for selecting the best future course of action.

Planning requires expertise and the collection of authentic data, which incurs a lot of costs for the organisation. For instance, companies like IBM need to do a lot of planning prior to starting any new venture. For this, such companies also spend a lot on research and pay highly to experts to get their advice.

Planning is done by top-level management and implemented by middle and lower-level management. This creates a gap between the plan set and actual results achieved as different employees may have different perceptions of accomplishing plans.

Planning often requires changes due to the dynamic business environment. However, as a natural human tendency, employees are always reluctant to accept changes and may not provide their full cooperation.

Planning involves paperwork as plans cannot be finalised in one go. The plans are reworked again and again and after getting a final plan, subordinates give the copies of the plan to the top-level management in the form of a report or a proposal to get the plans finalised for implementation.

Sometimes, planned targets are not achieved by managers and employees irrespective of their best efforts. Such failures frustrate them and cause a low level of motivation in them.

Planning sometimes makes the top-level management fix targets that are unachievable and causes problems of over-expectation from employees.

Types of Plans

Plans bind individuals, resources, departments and organisations to achieve specific goals in the future. Plans help design organisational goals effectively which fits into the hierarchy from top to lower level of management. In an organisation, there are different types of plans made.

Some important types of plans are explained as follows:

Strategic plans

Tactical plans, operational plans, contingency plans.

Strategic plans are a framework for an organisation. These plans contain the mission of an organisation and outline goals to be achieved. Strategic plans aim to turn the vision of an organisation into reality. Thus, strategic plans are long-term and forward-looking in nature and accommodate future growth and expansion of an organisation. These plans are generally developed by top management and are implemented by middle and lower management.

For instance, Varun works as a top-level manager for Dino’s PizzaSizz. As a top-level manager, he has to make use of strategic planning to ensure that the long-term goals of the organisation are attained. Varun in consultation with other top-level managers developed strategic plans for achieving growth, increasing productivity and profitability and boosting return on investments, as all these are parts of the desired future of the pizzeria.

Varun and other top-level managers developed organisational objectives through strategic plans so that middle- and lower-level managers can create compatible plans aligned with those objectives. Varun also involved other level personnels because strategic plans require multilevel involvement.

Tactical plans are developed by middle-level management for a span of generally less than three years. These plans contain instructions for lower-level management on what should be done, how should be done and by whom should be done. In addition, tactical plans define tactics which managers adopt for achieving objectives mentioned in the strategic plan. Tactical plans also provide information on resources to be employed and work distribution among the sublevels within each department.

For instance, when Mira, the middle-level manager at Dino’s PizzaSizz, learns about Varun’s strategic plan for improving productivity, Mira im- mediately began to think about possible tactical plans. Tactical planning for Mira included things like testing a new process in making pizzas in a shorter amount of time or perhaps looking into purchasing a better oven that can speed up cooking pizza or even exploring ways to better map out the delivery routes and drivers.

As a tactical planner, Mira required to form a set of calculated actions that takes a shorter amount of time and is narrower in scope than the strategic plan but still help to bring the organisation closer to its long-term goal.

An operational plan is developed by the supervisors, team leaders and facilitators for supporting tactical plans. It governs the day-to-day operations of an organisation/business. Operational plans can be of two types, namely single use plans (for example, budget) and ongoing plans.

For instance, Ravi, the frontline manager at Dino’s PizzaSizz, has the responsibility of operational planning. Scheduling employees each week, creating a monthly budget, developing a promotional advertisement for the quarter to increase the sales of a certain product or outlining an employee’s performance goals for the year and doing an assessment, ordering and stocking inventory are the operation plans Ravi need to make and get executed.

A continuing or ongoing plan is the one which is made once and its value is retained over a period of years. The plan undergoes periodic revisions and updates. Following are examples of on-going plans:

  • Policy : A policy is a broad guideline followed by managers to deal with the important aspects and areas of decision making. Policies are referred to as those general statements which explain how managers should handle their routine management responsibilities. For example, a typical human resources policy of an organisation addresses the matters related to the hiring of employees, terminations of non-performing employees, performance appraisals as an important culture, pay increases and discipline of employees.
  • Procedure : A procedure is a standard set of directions that provides stepwise instructions of carrying out activities or tasks for achieving and attaining the organisational objectives. For example, typically, organisations have procedures/processes to purchase supplies and equipment. The procedure of purchasing supplies and equipment generally starts with a supervisor who completes the purchase requisition. After that, the requisition is then sent for approval to the next level of management. As the requisition gets approved, it is forwarded to the purchasing department. The amount of the purchase requisition is considered by the purchasing department either to place an order or to secure quotations bids from several vendors before placing the order.
  • Rule : A rule is a statement that explicitly guides employees for what they can and cannot do. Rules promote the safety of employees by placing the ‘do’ and ‘don’t’ statements. It also directs for the uniform treatment and the behaviour of employees in an organisation/business. For example, the rules of absenteeism and unpunctuality allow supervisors to make discipline related to fair decisions quickly.

A successful organisation depends upon the fact that how intelligently, flexibly and constantly its management chases, adapts and masters the changing conditions. A strong management entails to ‘keep all options open’ approach at all times. This is where contingency planning comes into the organisation.

In contingency planning, an alternate plan is identified, analysed and implemented so that in case the original plan proves insufficient, the backup is ready to be used. The factors which are beyond managers’ control are kept in mind and the alternative future scenarios are prepared carefully.

When unanticipated problems and events occur, managers may need to change their plans. It is best to anticipate the changes during the planning process as things don’t always go as expected. Management should develop alternatives to the existing plan and keep them ready for use when unexpected circumstances occur.

Planning is the primary function of management that involves formulating a future course of action for accomplishing a specific purpose.

What are the Features of Planning?

The Features of the planning function are as follows: 1. Planning is a Continuous Process 2. Planning is Intellectual Process 3. Planning is a Futuristic Approach 4. Planning is a Flexible process 5. Planning is the Primary Function of Management 6. Planning Assists in Decision Making 7. Planning is Goal-oriented Approach 8. Planning is Pervasive

What is the Process of Planning?

The process of planning involves a number of steps in chronological order which are given below: 1. Setting Organisational Objectives 2. Examining the Business Environment 3. Assessing Available Alternatives and Selecting the Most Appropriate Alternative 4. Formulating secondary plans 5. Ensuring cooperation and participation 6. Following up

What is the Importance of Planning in Management?

The importance of planning in management is explained in the following points: 1. Planning Forms Goals in Management 2. Planning Gives Directions in Management towards Achieving Organisational Goals 3. Planning Tackles Uncertainties of future 4. Planning assists in finding a better way to achieve goals 5. Planning Minimises Duplication and Wasteful Activities 6. Planning Supports and Promotes Innovative Ideas in Management 7. Planning Facilitates Decision Making 8. Planning Sets Standards for Controlling Function 9. Planning helps management to Build Coordination

Management Topics

  • What is Management ?
  • Who Is a Manager ?
  • Marketing CIs Management an Art or Science
  • Classical Management Approach
  • Planning in Management
  • Decision Making in Management
  • Organising in Management
  • What is Organisation Structure ?
  • What is Departmentation ?
  • What is Span of Control ?
  • What is Authority ?
  • What is Staffing ?
  • What is Human Resource Planning ?
  • What is Job Analysis ?
  • What is Recruitment ?

Modern and Others Schools of Management Thought

  • What is Selection ?
  • What is Coordination ?
  • What is Controlling ?
  • What is Leadership ?
  • What is Organisational Change ?
  • Motivation in Management
  • Motivation Theories
  • Maslow’s Hierarchy of Needs
  • Herzberg Two Factor Theory
  • Mcclelland’s Needs Theory of Motivation

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Importance of Planning: Process, Objectives

  • Post author: Disha Singh
  • Post published: 15 December 2022
  • Post category: Management
  • Post comments: 0 Comments

Table of Contents

  • 1 What is the Meaning of Planning?
  • 2.1 Increase Efficiency
  • 2.2 Reduces Business Related Risks
  • 2.3 Provides Direction
  • 2.4 Encourages Creativity and Innovation
  • 2.5 Helps in Motivation
  • 2.6 Helps in Decision Making
  • 2.7 Helps to Achieve Objectives
  • 2.8 Provides Basis of Control
  • 3.1 Establishing Verifiable Goals
  • 3.2 Establishing Planning Premises
  • 3.3 Deciding Planning Period
  • 3.4 Finding Alternative Course of Action
  • 3.5 Evaluating and Selecting a Course of Action
  • 3.6 Implementing Plan
  • 3.7 Measuring and Controlling the Programme
  • 4.1 Objectives
  • 4.2 Strategies
  • 4.3 Policies
  • 4.4 Procedure
  • 4.5 Programmes
  • 4.7 Budgets
  • 5.1 What is the importance of planning?
  • 5.2 What are the steps in planning process?
  • 5.3 What are the objectives of organisation?

What is the Meaning of Planning?

Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action for the future, attempting to achieve a consistent, coordinated structure of operation aimed at the desired result. Below this, we will be learning about the importance of planning .

Importance of Planning

Importance of Planning

Planning increases the efficiency of an organisation. All business organisations would like to be successful, have goodwill in the market, and have higher profits. For attaining these attributes the thinking process has to be very effective.

These are the various importance of planning explained below:

Increase Efficiency

Reduces business related risks, provides direction, encourages creativity and innovation, helps in motivation, helps in decision making, helps to achieve objectives, provides basis of control.

Importance of Planning

Planning makes optimum utilization of all available resources. It helps to reduce wastage and avoids duplication of work.

Planning helps to forecast business-related risks and also helps to take necessary precautions to avoid these risks and prepare for future uncertainties.

Direction means to give proper information, accurate instructions and guidance to the subordinates. Planning tells us what to do, how to do and when to do it. It helps the organization to achieve its goals through systematic coordination of the employees.

Planning helps managers to express their creativity and innovation. It brings satisfaction to the managers and eventually succeeded in the organization.

A good plan provides various financial and non-financial incentives to both managers and employees. These incentives motivate them to work hard and achieve the objectives of the organization.

A manager makes many different plans. Then they evaluate every course of action and choose the best strategy. So decision-making is facilitated by planning.

Without Planning each and every activity will be based on trial and error which will give rise to confusion. Every organization has certain targets. Planning helps an organization achieve its aims by avoiding overlapping, confusion and misunderstanding.

Planning is the first function of management. The other functions like organizing , staffing, directing and controlling etc. are organized for implementing plans. Controlling records the actual performance and compares it with the standards set.

In case the performance is less than the standards set then deviations are ascertained and proper corrective measures are taken to improve the performance in future.

Planning and controlling both are dependent on each other. Planning establishes standards for controlling. Therefore, Planning is necessary for the effective and efficient functioning of every organization irrespective of its size, type and objectives.

Steps in Planning Process

These are the steps in planning process each step is explained well and in easy language which help to understand:

Establishing Verifiable Goals

Establishing planning premises, deciding planning period, finding alternative course of action, evaluating and selecting a course of action, implementing plan, measuring and controlling the programme.

Steps in Planning Process

The first step in planning is to determine the enterprise’s objectives. These are more often set by upper-level managers. The objective may vary from a desired sales volume or growth rate to the development of a new product .

Plans are made to operate in the future. The second step in planning is to establish planning premises i.e. assumption on the basis of which plans will be ultimately formulated.

Planning premises are vital to the success of planning as they supply important facts and information related to the future like population trends, economic conditions, production costs, government control etc.

The next task is to decide the period of the plan whether it’s a yearly plan or a plan which is spread over a longer span of time. The choice of planning period is decided based on the time required in the development of the new product, the time required to recover capital investment and the length of commitments already made.

The next in planning is to search for and examine an alternative course of action. For Ex-Products may be sold directly to the consumers by the company’s salesman or through exclusive agencies.

Having searched for alternative courses, the next step is to evaluate and analyze them in the light of premises and goals and select the best alternative. This is done with the help of quantitative techniques and operations research.

The best possible course of action has now to be implemented in other words, putting the plan into action. For this, the managers have to develop derivative plans for each department. A draft version of the action plan should be communicated to inform those directly affected and gain their cooperation.

The process of control is a critical part of any plan. Managers need to check the progress of their plans i.e. follow up so that they can take remedial action if the plan is not working as per schedule or change the original plan if it is unrealistic.

Objectives of Organisation

These are the related terms of the objectives of organisation :

Objectives of Organisation

Objectives may be defined as the goals which an organization tries to achieve. Objectives are the ends towards which the activities of the enterprise are aimed. Objectives provide direction to various activities and serve as a benchmark for measuring the efficiency and effectiveness of the organization.

A strategy is a special kind of plan formulated to meet the challenge of the policies of the competitors. Strategy can be shaped by the general forces operating in an industry and the economy. The strategy must be consistent with the external environment.

Policies may be described as plans which are meant to serve as broad guidelines for decision-making in a firm. Policies exist at various levels of the enterprise. A policy should be definite, positive and clear.

A policy is a standing plan which assists decision-making and should be referred to as a general statement of the established rule.

For example, A firm has a policy of promotion from within the organization. If a vacancy arises; the first preference is given to existing employees.

Procedure lays down the manner or method by which work is to be performed in a standard and uniform way. A procedure is a standing plan acting as a means of implementing a policy.

For Example, The sales department lays down a policy to execute all orders within 48 hours. So a procedure has to be followed in a chronological and systematic order to fulfil the orders.

Programmes are precise plans which need to be made to discharge a non –repetitive task. The essential ingredients of every programme are time phasing and budgeting . Specific dates should be laid down for the completion of each successive stage of a programme.

For Example, An enterprise has a programme of opening 5 branches in different parts of a country so they have to allocate funds and time period for:

  • Securing the necessary accommodation.
  • Recruiting personnel to manage the business.
  • Arrange the supply of goods that are to be sold through the branches Often a single step in a programme is set up as a project .

Rules are explicit statement that tells the members of the organization what they can or cannot do. Rules do not allow any room for interpretation because it clearly specifies the action needed to be done in a particular situation. Rules enforce discipline.

For example, The use of Mobile Phones at the workplace during office hours is restricted.

Budgets are plans for future periods of time containing statements of expected results in numerical terms. Budgets are very useful for an enterprise.

Being expressed in numerical terms, they facilitate the comparison of actual results with planned ones and serve as a control device. The important budgets are sales budget, production budget, cash budget, Revenue, and Expense Budget.

FAQ Related to the Importance of Planning

What is the importance of planning.

Following are the importance of planning given below: 1. Increase Efficiency 2. Reduces Business-Related Risks 3. Provides Direction 4. Encourages Creativity and Innovation 5. Helps in Motivation 6. Helps in Decision Making 7. Helps to Achieve Objectives 8. Provides Basis of Control

What are the steps in planning process?

The following are the steps in planning process: 1. Establishing Verifiable Goals 2. Establishing Planning Premises 3. Deciding Planning Period 4. Finding an Alternative Course of Action 5. Evaluating and Selecting a Course of Action 6. Implementing Plan 7. Measuring and Controlling the Programme.

What are the objectives of organisation?

The following are the objectives of organisation: 4.1 Objectives 4.2 Strategies 4.3 Policies 4.4 Procedure 4.5 Programmes 4.6 Rules 4.7 Budgets .

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  • What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

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Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

[inline illustration] Strategic plan elements (infographic)

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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Why Is Strategic Planning Important?

Above view of team creating a strategic plan

  • 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

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What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

  • The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
  • Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
  • Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Which HBS Online Strategy Course is Right for You? | Download Your Free Flowchart

Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

define planning and why we need planning in business management

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Why Planning is Important in Management – 15 Reasons

September 10, 2023 by Yusuf Ali

Planning is an essential element of successful management . Without it, managers can easily get overwhelmed and find themselves unable to effectively navigate their team through the challenges of a competitive business environment .

Planning helps managers anticipate potential problems, set goals, create strategies for achieving them, and allocate resources accordingly.

In this article, we’ll look at 15 reasons why planning is important in management—and how it can help you become a more effective leader.

Table of Contents

15 Benefits of Planning in Management

Planning in management is a crucial factor in ensuring success, and these are the reasons why:

1. Planning in Management Helps in Setting Goals

In management, goal setting is a critical component of success. Without goals, there’s no way to know if the team is making progress or where it needs to improve.

Planning helps managers set realistic and achievable goals for their team. It helps them identify the resources necessary to reach those goals, as well as how long it will take to achieve them. It also helps managers prioritize tasks and focus on what’s most important.

planning in management - why planning in management is important

2. Planning in Management Improves Productivity

Planning can help managers ensure their team is working efficiently and effectively, which increases productivity and reduces waste.

Planning helps managers identify and eliminate inefficiencies. It enables managers to allocate resources more effectively. It also encourages delegation, which spreads out responsibilities among team members.

Planning enables managers to set timelines for tasks and projects, ensuring everything is completed on time .

3. Planning in Management Helps in Making Decisions

Planning in management helps managers think through different options available to them, as well as the potential consequences of their decisions. This allows them to determine which option is the most beneficial for the company and its goals.

By considering multiple scenarios, planning also helps managers anticipate obstacles or challenges they may face along the way. Planning helps managers come up with solutions to any potential problems before they arise.

4. It helps Improving Communication

Planning in management improves communication by providing a common language and framework for team members to communicate within.

When goals, processes, and responsibilities are all laid out in a clear plan, team members know exactly what needs to be done and how best to do it. This makes collaboration easier and more efficient, as well as reduces misunderstandings that can lead to conflicts.

5. Planning in Management Aids in Maintaining Focus

Planning in management helps managers stay focused on their goals and objectives. By setting specific, measurable goals and tracking progress towards them, managers can ensure that the team is staying on track.

Planning also helps manage time more effectively, avoiding distractions that can lead to time-wasting activities or other problems.

By having a plan, managers can easily track progress and identify areas of improvement. They can compare their actual performance with the goals they set out to achieve in order to measure

6. Planning in Management Reduces Stress

Planning in management helps to reduce stress by allowing managers to anticipate potential challenges, develop strategies to address them, and allocate resources accordingly. This allows managers to be prepared for any changes or problems that may arise rather than being caught off guard and having to react quickly.

Having a plan also creates more clarity around goals, objectives, and expectations, which helps reduce stress by creating certainty.

Planning - why planning in management is important

7. It Aids in Improving Efficiency

Planning in management aids in improving efficiency by helping managers identify areas where processes can be improved or streamlined. Through planning, managers are better able to allocate resources and prioritize tasks, ensuring that all tasks are being completed efficiently and effectively.

Planning provides managers with a framework to track progress and identify areas where further improvement may be needed.

For example , managers may be able to identify bottlenecks or inefficiencies in the process that can be eliminated to improve efficiency.

8. Planning in Management Enhances Morale

When a manager has a plan in place, it helps motivate their team to achieve the desired goals. This can lead to higher morale and job satisfaction.

When goals, processes, and responsibilities are all laid out in a clear plan, team members know what needs to be done and how best to do it. This helps reduce misunderstandings that can lead to conflicts and allows for greater collaboration among team members.

By having a plan, team members can also easily track their progress and see how their efforts are contributing to the overall success of the organization . This can help boost morale and create a sense of purpose among team members.

9. It Enhances Problem-Solving

Planning can help managers identify potential problems before they arise and develop strategies for solving them quickly and effectively.

It can also help managers come up with creative solutions to any issues that may arise. By considering multiple scenarios and options, managers can develop a plan of action that will best serve the organization.

This helps reduce the amount of time and resources spent on problem-solving , as well as helps to ensure that any potential problems are addressed quickly and effectively.

10. It helps in Managing Resources

Planning enables managers to determine the resources they need to achieve their objectives and allocate them accordingly.

It can help managers determine the most effective way to use their available resources, such as personnel , funds , and technology . This ensures that the organization is getting the most out of its investments and that resources are being used in the most efficient way possible.

Additionally, planning helps managers identify areas where additional resources may be needed to complete tasks or meet objectives.

Manage resources in planning

11. It Enhances Collaboration

Planning helps managers identify areas where different team members can collaborate in order to get the job done more efficiently.

Planning in management helps to enhance collaboration by providing a framework for teams to work together efficiently and effectively.

By having a plan, team members can better understand the goals, objectives, and expectations of the project or task at hand. This provides clarity around what needs to be done and how best to do it.

By creating clear action plans and assigning roles and responsibilities to team members, managers can ensure that collaboration is taking place in a productive manner. This can help save time and reduce stress, as well as improve overall productivity.

12. Planning in Management Improves Creativity

Giving team members a clear direction and plan of action allows them to focus their creativity in a positive direction and produce better results.

By having a plan, team members can focus their creative efforts towards achieving the desired goals and objectives. This allows them to come up with innovative solutions to any potential problems that may arise.

Additionally, planning provides team members with a framework to brainstorm and come up with creative ideas that can be used to further the organization’s mission.

13. Planning in Management Increases Accountability

Through planning , managers can hold team members accountable for achieving their goals and objectives.

Planning provides team members with a clear understanding of what needs to be done and how best to do it. This allows managers to easily track the progress of their team members and hold them accountable for any issues that arise or objectives that are not met.

14. It Helps in Preparing for the Future

Planning helps managers anticipate potential problems and prepare strategies to address them in advance . This can give them a competitive edge in the future.

It also helps managers identify future opportunities for growth and development . By having a plan in place, managers can take advantage of new opportunities quickly and effectively.

Overall, planning in management is essential for any successful organization. It helps to ensure that resources are being used efficiently, objectives are being met, and teams are working together collaboratively towards achieving their goals

Planning in business for future

15. Planning in Management Improves Organization

Planning helps managers organize their team and workflow more effectively, which leads to better results in the long run .

It helps managers develop a system to coordinate tasks, prioritize objectives, and allocate resources. This ensures that the team is working in an organized manner and that tasks are being completed on time and within budget.

15 Reasons Why Planning is Important for Producing Effective Document

Good planning can help produce effective documents that accurately convey a message . A well-planned document will have clear objectives, use the appropriate level of detail, and be formatted for easy reading .

Planning also helps ensure that the document is comprehensive and organized in a logical manner. This makes it easier for readers to understand and remember the main points of the document. Here are 15 reasons why planning is important for producing effective documents.

1. Establish Clear Objectives

Planning helps document writers identify their goals for the document and create an outline that will help them achieve those goals effectively. This allows them to brainstorm ideas and organize them in a way that supports the message they’re trying to convey.

It also helps them set realistic expectations for their document and make sure it is tailored to the desired audience.

2. Use the Appropriate Level of Detail

Planning helps document writers determine the most appropriate level of detail for their audience. This ensures that the document contains enough information to be useful without being overwhelming or too lengthy.

Planning also helps document writers select the most relevant information to include in their documents. This allows them to create a concise, well-organized document that is easy to understand.

planning is important in business

3. Format for Easy Reading

Planning helps document writers format their documents in a way that makes them easy to read and understand. This includes using images , charts, and other visuals to break up text and make the document easier to follow.

It also helps document writers create a hierarchy of information, which makes it easier for readers to identify the main points and keeps them from getting overwhelmed by too much detail.

4. Ensure Comprehensive Coverage

Planning helps document writers ensure that all relevant topics are covered in the document. This makes it easier for readers to find the information they need without having to search for it.

Through this process, document writers can also identify any gaps in their coverage and make sure that all topics are discussed in the document.

5. Organize Logically

Planning also helps document writers organize their information in a logical manner. This makes it easier for readers to understand the main points of the document and remember them later.

It can also help document writers anticipate the questions their readers may have and provide clear answers. This ensures that the document is comprehensive and meets the needs of its intended audience.

6. Define Appropriate Terminology

Planning allows document writers to define terms that are specific to their industry, ensuring that readers have an accurate understanding of key concepts.

This helps ensure that readers are not confused by terminology that is unfamiliar to them and makes sure that the document conveys its message accurately.

7. Set a Deadline

Planning helps document writers set a realistic deadline for themselves and their team, which allows them to get the document finished on time.

Deadlines can also help ensure that the document is thoroughly reviewed and proofread before it is published. This helps guarantee that the document is free of errors and conveys its message accurately.

8. Establish Writing Style

Planning helps document writers decide on an appropriate writing style for the document, such as formal or informal. This ensures that the document meets the needs of its intended audience.

It also helps document writers determine the most effective tone for the document, such as friendly or professional. This ensures that readers are engaged and can understand the points being made in the document.

9. Brainstorm Ideas

Planning allows document writers to brainstorm ideas and create an outline that will help them develop the content in a clear and structured way.

Brainstorming ideas can also help document writers determine the best way to approach a particular topic or issue and identify any potential challenges that may arise. This helps them create a well-rounded document with comprehensive coverage.

10. Track Progress

Planning helps document writers keep track of their progress and ensures that they stay on schedule . This prevents them from getting overwhelmed and helps them stay focused on their task.

Tracking progress also allows document writers to monitor the quality of their work and make necessary changes as needed. This helps ensure that the final document is accurate and meets the standards set by the organization.

11. Make Adjustments as Needed

Planning allows document writers to make adjustments to the document as needed, ensuring that it is accurate and up-to-date.

Therefore, document writers can ensure that the document is edited and updated regularly, which helps maintain its relevance for readers. This also allows them to make any necessary changes quickly and efficiently.

12. Monitor Quality

Planning helps document writers monitor the quality of their work and ensure that the document meets their standards.

It can also help them identify any areas that need further improvement, which helps ensure the final document is accurate and meets the organization’s standards. This allows document writers to produce high-quality document that satisfies their readers.

13. Anticipate Potential Problems

Planning helps document writers anticipate potential problems and take steps to avoid them. This helps them produce a document that is free of errors and delivers the correct message to its intended audience.

It can also help document writers identify any potential risks and address them before they become an issue. This ensures that the document is of a high-quality and meets the organization’s standards.

14. Get Feedback from Others

Planning allows document writers to get feedback from others before the document is finalized. This ensures that any issues or concerns are addressed before the document is published.

It can also help document writers identify any areas that need further improvement, which helps ensure the final document is accurate and meets the organization’s standards. This allows them to produce a high-quality document that satisfies their readers.

15. Keep Track of Expenses

Planning helps document writers keep track of expenses related to producing the document, such as printing costs, graphic design fees, and other associated costs. Knowing how much the document costs can help them plan future projects more effectively.

By taking the time to plan a document, document writers can ensure that their work is effective and on target.

In conclusion, planning is an essential part of the management and any document-writing project. In management, it can help ensure that a document is well-written, organized, and meets the needs of its intended audience.

Document writers also benefit from planning as it helps them stay on schedule and anticipate potential problems. Planning allows them to create a document that is accurate, comprehensive, and easy to read. With careful planning, document writers can produce documents that get their message across effectively.

define planning and why we need planning in business management

Yusuf is interested in exploring the world around him and making meaningful connections with it. He then express these ideas with words for the world to enjoy. In his free time, Yusuf loves to spend time with books, nature & his family.

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Planning in Management: Nature, Importance, Types

Planning is the first of essential managerial functions. Planning is important as by nature it enquirers about organizational goals and involves decision making about desired ways and means to achieve goals.

Planning is the process by which managers establish goals and define the methods by which these goals are to be attained. Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making, which is choosing from among alternative future courses of action.

It is, therefore, a rational approach to achieving pre-selected objectives.

What Is Planning And Its Nature, Importance And Types

Planning is thus taken as the foundation for future activities. Newman has thus defined it as, “Planning is deciding in advance what is to be done; that is a plan is a projected course of action.”

So, planning can be thought of as deciding on a future course of action. It may also be treated as a process of thinking before doing it.

Management has to plan for long-range and short-range future direction by looking ahead into the future, by estimating and evaluating the future behavior of the relevant environment and by determining the enterprise’s own desired role.

Planning involves determining various types and volumes of physical and other resources to be acquired from outside, to allocate these resources in an efficient manner among competing claims and to make arrangements for the systematic conversion of these resources into useful outputs.

As it is clear from the above discussion, plans have two basic components: goals and action statements.

Goals represent an end state — the targets and results that managers hope to achieve.

Action statements represent the means by which an organization goes ahead to attain its goals. Planning is a deliberate and conscious act by means of which managers determine a course of action for pursuing a specific goal.

Planning to a manager means thinking about what is to be done, who is going to do it, and how and when he will do it. It also involves thinking about past events (retrospectively) and about future opportunities and impending threats (prospectively).

Planning enquirers about organizational strengths and weaknesses and involves decision making about desired ways and means to achieve them.

There are, however, differences between decision making and planning. Decisions can be made without planning but planning cannot be done without making decisions.

Nature of Planning

The nature of planning can be understood by examining its four major aspects. They are;

  • It is a contribution to objectives,
  • It is primacy among the manager’s tasks.
  • It is pervasiveness, and
  • The efficiency of resulting plans.

The contribution of Planning to the Attainment of Objectives

Since plans are made to attain goals or objectives, every plan and all its support should contribute to the achievement of the organization’s purpose and objectives.

An organized enterprise exists to accomplish group objectives through willing and purposeful co-operation.

Primacy of Planning

That planning is the prime managerial function is proved by the fact that all other functions such as organizing, staffing, leading and controlling are designed to support the accomplishment of the enterprise’s objectives.

Planning quite logically, therefore, comes first before executing all other managerial functions as it involves establishing the objectives necessary for all group efforts. Also, all the other managerial functions must be planned if they are to be effective.

Likewise, planning and controlling are inextricably bound up. Control without a plan is meaningless because the plan provides the basis or standard of control.

Pervasiveness of Planning

Planning is a unique and universal function of all managers.

The character and scope of planning may vary with each manager’s authority and with the nature of the policies and plans outlined by superiors, but all managers must have some function of planning.

Because of one’s authority or position in the managerial hierarchy, one may do more or less planning, but some kind or amount of planning a manager must do.

According to Weihrich and Koontz; “All managers, from presidents to first-level supervisors – plan.”

The Efficiency of Plans

Plans should not only be effective, but also efficient. The effectiveness of a plan relates to the extent to which it accomplishes the objectives.

The efficiency of the plan, however, means its contribution to the purpose and objectives, offset by the costs and other factors required to formulate and operate it.

Plans are efficient if they achieve their objective at a reasonable cost when such a cost is the measure not only in terms of time, money or production but also in terms of satisfaction of the individual or group.

Both conceptual and practical reasons are put forward in support of planning. Two conceptual reasons supporting systematic planning by managers are limited resources and an uncertain environment.

Meeting the Challenge of Resource Scarcity

Resource scarcity is a very important consideration for any organization today. There would be no need for planning if material, financial and human resources were unlimited and cheap.

Planners in both private business and public agencies are challenged to stretch their limited resources through intelligent planning.

Otherwise, wasteful inefficiencies would give rise to higher prices, severe shortages, and great public dissatisfaction.

Facing Environmental Uncertainty

The second most important conceptual reason is that organizations continually face environmental uncertainty in the course of accomplishing the tasks.

Organizations meet this challenge largely through planning safeguards.

Some organizations do this job better than others partly because of their different patterns of response to environmental factors beyond the organization’s immediate control.

Besides, managers have several practical reasons for formulating plans for themselves, their employees, and various organizational units, viz.,

  • to offset uncertainty and change;
  • to focus organizational activity on a set of consciously created objectives;
  • to provide a coordinated, systematic roadmap for future activities;
  • to increase, economic efficiency via efficient operation; and
  • to facilitate control by establishing a standard for subsequent activities.

Planning and Performance

Although organizations that use formal planning do not always outperform those that do not plan, most studies show positive relationships between planning and performance.

Effective planning and implementation play a greater part in high performance than does the amount of planning done.

Studies have shown that when formal planning has not led to higher performance, the external environment is often the reason.

The Role of Goals and Plans in Planning

Planning is often called the primary management function because it establishes the basis for all other functions.

Planning involves two important elements: goals and plans. Goals (often called objectives) are desired outcomes for individuals, groups, or entire organizations.

4 Types of Plan

There are main 4 types of plan ;

  • Strategic plan .
  • Administrative or Intermediate plan.
  • Operational plans can also be categorized according to frequency or repetitiveness of use. They are broadly classified as;
  • Mission or purpose
  • Objectives or Goals
  • Contingency Plans: Contingency plans are made to deal with situations that might crop up if these assumptions turn out to be wrong. Thus contingency planning is the development of alternative courses of action to be taken if events disrupt a planned course of action.

Following our discussion on planning in management; you should explore our guide on fundamentals of management .

  • Management: Definition, Features, Concept, & Basics
  • McKinsey 7S Framework: Improve Management Effectiveness
  • Decentralization: Meaning, Importance, Advantages, Disadvantages
  • 4 Steps In Control Process in Business Management
  • 9 Principles of an Effective Control System
  • Mintzberg’s 10 Managerial Roles
  • Planning Process: 8 Steps To Create an Effective Plan
  • Departmentalization of Organization by Customer Group
  • Hierarchy of Objectives: How it work in Organizations
  • 16 Qualities of a Great Leader
  • Controlling: Essential Guide to Controlling in Management
  • Motivation: Definition, Features, Objectives
  • McClelland’s Acquired Needs Theory [Explained]
  • Maslow’s Hierarchy of Needs
  • Organizational Goals – Definition, Types, Importance

Why Is Planning Important? (25 Reasons)

There’s a familiar wisdom: “Failing to plan is planning to fail.” I’ve always held this thought close because it captures the essence of why planning matters.

It’s the feeling of crossing off that last item on your to-do list that rewards a well-made plan. It’s about facing the busyness of life with intention, not just action.

Planning goes beyond simple lists; it’s about setting realistic goals for what we can accomplish. It helps all of us, regardless of how swamped we feel.

Keep reading, and find out why planning isn’t just a task — it’s an essential life skill.

Table of Contents

Planning Sets Clear Goals and Objectives

Planning aids in making informed decisions, planning identifies potential obstacles and trials, planning outlines steps to achieve these goals, planning ensures adaptability and flexibility, planning enables the setting of priorities, planning promotes financial stability and control, planning minimizes risks and uncertainties, planning improves time management, planning allows for better resource allocation, planning helps in tracking progress and performance, planning fosters a proactive approach to tasks, planning encourages long-term vision and foresight, planning boosts confidence and peace of mind, planning facilitates efficient workflow coordination, planning optimizes productivity, planning enhances team communication and collaboration, planning minimizes crisis management needs, planning allows for better quality control, planning spurs personal and professional growth, planning establishes a sense of direction and purpose, planning enhances strategic thinking, planning maximizes available opportunities, planning enables consistency in actions and results, planning cultivates discipline and responsibility, what are some common misconceptions about planning, what is the difference between planning and goal setting, does planning take away spontaneity, what should i do if my plan isn’t working, final thoughts.

Clear goals and objectives give direction to our efforts. When we plan, we establish what we want to achieve and how we’ll get there, creating a roadmap for success. This guides our daily actions and ensures all tasks contribute to an overarching purpose.

Having precise goals and objectives deters us from distractions and keeps our energy channeled toward productive activities. This prevents wasting effort on unrelated tasks and maintains everyone’s focus on what’s important.

Goals and objectives are the motivators that keep us focused and striving forward. They rally a team around a common cause and can create a shared sense of accomplishment.

With everyone working towards the same aims, the collective effort can achieve greater results and foster unity within the group.

Informed decisions are the product of careful planning and groundwork. When we plan, we collect data, explore various scenarios, and decide how to utilize resources best.

This preparation enables us to choose actions that advance our goals in the most effective way.

Here’s why preparation is crucial for informed decision-making:

  • It gives us insight into our current situation through thorough data analysis.
  • We can predict and evaluate risks, preparing us for different eventualities.
  • By understanding our resources, we can allocate them where they’ll make the most impact.

Armed with comprehensive information, our choices are more strategic and less about guesswork. When the unexpected happens, a solid plan provides us with a framework to adapt our decisions swiftly while keeping our goals in sight.

Planning thus equips us with the framework for consistently making good choices and staying agile.

Every journey toward a goal can encounter roadblocks. Planning helps us foresee these potential obstacles, allowing us to strategize ways to either avoid or overcome them.

Recognizing such hurdles in advance prevents them from derailing our plans and allows us to progress smoothly toward our objectives.

Identifying challenges ahead of time is advantageous:

  • It prompts the creation of contingency plans.
  • We can minimize the impact of challenges on our progress.
  • We are better equipped to stay the course even in the face of adversity.

Awareness of potential obstacles optimizes our use of time and resources — key factors in maintaining a steady pace toward our goal.

Moreover, this aspect of planning strengthens our problem-solving skills. It makes us question assumptions, plan for contingencies, and increase our overall strategic acumen.

Planning creates a step-by-step guide towards your goals. It’s like following a recipe; you have all the necessary steps laid out for you.

Each step is a clear action that moves you closer to your goal. This way, you can avoid feeling overwhelmed and focus on one task at a time. Completing each step also builds momentum, giving you small wins and boosting your motivation as you progress.

Having a plan with outlined steps provides structure to your efforts. It prevents confusion about what needs to be done next and keeps you aligned with your final goal.

This structure is essential for making consistent progress and actually achieving what you set out to do.

When you plan, you’re not just deciding what to do; you’re also preparing to adjust when needed.

Changes can come from anywhere — new trends, unexpected events, or new information. Planning ensures you can adapt to these changes without straying from your main goals.

  • New information : When you learn something new that could impact your goals, you can adjust your plan to include it.
  • Unexpected events : If something happens that you didn’t see coming, you’ve got a framework to figure out the next steps.
  • Changing trends : Trends can shift quickly; with a plan, your goals can evolve as needed.

Flexibility in planning is all about staying relevant and effective. This adaptability is essential for long-term success in a world that’s constantly changing.

Having a plan helps you figure out what needs your attention the most. When multiple tasks are competing for your time and resources, it’s important to know which ones are crucial for your goals.

Planning helps you see the big picture and identify which pieces of the puzzle are key:

  • You know what is urgent and needs to be done right away.
  • You understand what is important and can contribute significantly to your goals.
  • You find out what tasks can wait or be delegated to others.

This way, you can focus your time and effort on where they will have the most impact.

Prioritizing stops you from spreading yourself too thin and ensures that important tasks are not overlooked. It helps you stay productive and effective, making the best use of your time and resources.

When you have a plan, you’re better able to handle your money and keep your finances steady. Planning means you keep track of how much money you have, how much you’re spending, and how much you need for the future.

It’s like planning a trip; you make sure you have enough fuel in the tank to get to your destination without running out.

By planning, you budget for expenses , save for emergencies , and invest for growth . This way, you’re not caught by surprise with bills you can’t pay. It’s about control — making sure you’re in charge of your money instead of money worries controlling you.

Financial stability comes from this kind of careful planning. Whether for your own life or a business, being stable with your money means less stress and more space to focus on reaching your goals. Stability and control go hand in hand, and planning is the key to both.

Life is full of things we can’t predict, but planning helps you deal with them better. By thinking ahead, you can figure out what might go wrong and have a plan to handle it. This doesn’t mean you can avoid all risks, but it does mean you’re ready for them.

  • Spotting trouble : When you plan, you look for things that could cause problems.
  • Getting ready : You make plans for how you will deal with these troubles if they happen.
  • Staying calm : Knowing you have a plan in place helps you stay calm when faced with risks.

Reducing risks and being less uncertain makes it easier to move forward toward your goals. It’s about being smart before problems happen instead of just reacting to them after they occur.

Good planning is like a recipe for managing your time well. It helps you see how much time you have, what you need to do, and when you should do it. With a plan, you’re less likely to waste time because you know exactly what your tasks are for the day.

Planning ahead means you set aside time for the important things and cut out what’s unnecessary. This allows you to focus on what’s really needed and get things done more effectively.

With a plan, you can balance work, rest, and fun, making sure no part of your life takes over completely.

When you manage your time through planning, your days feel less rushed and more productive. You’re able to work smarter , not harder, because you’ve laid out a clear timeline for your tasks.

Having a plan means you understand where to best use your resources, which include time, people, and money. It ensures you are not wasting any of these valuable resources on things that do not help you reach your goals. Think of it like packing for a trip; you need to decide what’s essential to take with you to have a successful journey.

When you plan, you:

  • Assign resources where they’re needed most.
  • Avoid spending on things that aren’t important.
  • Make sure you have enough resources to finish what you start.

By doing this, you make the most out of what you have. You put every part of your resources to good use, which means less waste and more efficiency. Better resource allocation helps you reach your goals faster and more smoothly.

Keeping track of how well you’re doing is a big part of reaching your goals. Planning lets you set up ways to measure this progress. It’s like having milestones on a road trip — each one you pass shows you’re getting closer to where you want to go.

Through planning, you:

  • Set benchmarks that show you how far you’ve come.
  • Can see if you need to work faster or slower.
  • Get to celebrate small successes on the way to your big goal.

These measures help you understand if you’re on the right track or if you need to change how you’re working. It’s an important part of making sure you’re moving towards your end goal and lets you feel a sense of achievement as you see the progress you’re making.

Planning makes you proactive, which means you take charge of what needs to be done instead of just reacting to things as they happen. It’s about being ready and taking the initiative.

When you’re proactive, you’re not waiting for problems to appear — you’re already working to prevent them or get a head start on solving them.

With a proactive approach, you are:

  • Staying ahead of problems.
  • Preparing for opportunities.
  • Always thinking about the next step.

This method of dealing with tasks makes you more efficient and less stressed because you’re not constantly putting out fires. Instead, you’re setting things up so that problems are less likely to happen.

Being proactive gives you a sense of control over your work and your life, making you more confident in your ability to handle whatever comes your way.

Putting together a plan encourages you to look ahead and think about the future. This isn’t just about guessing what might happen; it’s about preparing yourself to meet and even shape the future you want.

Having a long-term vision means you have a clear idea of where you want to be down the road, and foresight is about understanding the steps you need to get there.

With foresight, you create a roadmap for the coming years, not just for the immediate time. It helps you to:

  • Stay focused on the bigger picture, even when smaller, day-to-day tasks compete for your attention.
  • Anticipate changes and possible trends in your field, so you’re never caught off guard.
  • Align your short-term efforts with your long-term goals to make sure everything you do contributes to where you want to end up.

Long-term vision and foresight mean that you are working today with tomorrow in mind. It keeps you moving in the right direction, making sure that each step takes you closer to your ultimate goals.

Knowing that you have a plan in place can really help with your confidence. It’s like having a map when you’re in unfamiliar territory — you feel more secure and ready to face what’s ahead.

When you plan, you know that you have thought things through and are prepared for different possibilities.

Peace of mind comes with this confidence. You’re less anxious about the unknown because you’ve laid out a path to follow. This makes it easier to focus on the here and now, knowing you’re set for the future.

Workflow coordination is all about making the work process smooth and efficient. Planning plays a key role in this because it helps organize tasks and ensures everyone knows what they’re supposed to do.

If your team is like a machine, then planning is like the oil that keeps all the parts moving without friction.

Planning helps to ensure that:

  • Every task is assigned to the right person.
  • Work is done in the right order to avoid backtracking or delays.
  • Everyone knows what to do and when so they can prepare and act quickly.

Good workflow coordination means the work gets done faster and with fewer mistakes. It saves time and helps everyone stay on track. When people work well together, more can be done, and the whole team or project moves forward more effectively.

Planning can help you do more in less time. It’s like having a clear map when you’re on a road trip — you know the best route to take and avoid getting lost. With a detailed plan, you spend less time figuring out what to do next and more time actually doing it.

Good planning means you’re:

  • Clear on what tasks are most important.
  • Ready to start working right away.
  • Not wasting time on things that don’t help you reach your goal.

By focusing on the right tasks, your work is more effective. You get more done because you’re not sidetracked by unimportant tasks. Planning sets you up for a productive day, every day.

When you plan with a team, everyone knows what’s going on. It’s like having everyone in sync, each person playing their part at the right time. Planning helps people work together better because they know what’s expected and when.

Here’s how it helps teams communicate and work together:

  • Clear roles : Everyone knows what their job is.
  • Shared goals : The team is united and moving in the same direction.
  • Updates and feedback : It’s easier to share progress and talk about what’s next.

When teams have good communication and work well together, they can achieve much more. Problems get solved faster, and everyone feels part of the success. This is how great teamwork happens, and it all starts with a solid plan.

Dealing with emergencies can be stressful. However, if you plan ahead, you’re less likely to face a crisis.

Planning lets you see problems before they become big issues. It’s like putting a safety net under a tightrope walker — if something goes wrong, you’re prepared to catch the fall.

Good planning means:

  • You’re not always “putting out fires”.
  • You can stay calm because you have a plan for when things get tough.
  • You can focus on moving forward instead of always fixing things.

By reducing the need for last-minute solutions, planning saves you stress and trouble. Instead of reacting to problems, you’re ahead of them. This helps keep everything running smoothly, and when surprises do happen, you’re ready to handle them.

Quality control is making sure that everything you do meets a certain standard. Planning helps with this because it sets out what those standards are and how to reach them. It’s like a chef tasting a dish at different stages to make sure it’s turning out right.

With a plan in place, you can check your work as you go. You can fix small mistakes before they turn into big problems. This way, the final result — whether it’s a product, a service, or any project — is the best it can be.

Good planning sets up checkpoints where you can review what’s been done. This helps you stay on track and maintain the quality of your work.

Better quality control leads to better outcomes and happier people, whether they’re customers or those using what you’ve created.

Growing as a person or in your career doesn’t just happen — it comes with trying new things and learning from experiences.

Planning gives you a structure to follow as you aim to get better in different areas. It’s like having a workout routine; by following it, you get stronger and fitter over time.

Here’s how planning helps you grow:

  • Setting goals : You know what you want to improve on.
  • Learning new skills : You make time for training and practice.
  • Reflecting on progress : You look back at what you’ve done and see how far you’ve come.

By making plans for growth, you push yourself to keep learning and improving. You’re not stuck in one place because you’re actively working to get better. This not only helps in your personal life but also boosts your career.

Feeling like you know where you’re going gives your actions meaning. Planning creates a sense of direction and purpose, like having a personal mission statement. It keeps you moving forward with intention instead of just going through the motions.

When you have direction and purpose:

  • You’re more motivated to achieve your goals.
  • You make choices that align with what’s important to you.
  • You have a reason for doing what you do every day.

Having this direction helps steer all of your actions. You know why you’re working hard and what you’re aiming for. This sense of purpose drives you to keep moving toward your goals, even when it gets tough.

Strategic thinking is all about making plans that will help you in the long run. It’s like playing chess; you need to think about your moves and how they will affect your future game.

Planning encourages you to develop this kind of thinking because you have to make decisions that are not just good for now, but for the future too.

With planning, you learn to look ahead, think about trends, and anticipate what might happen. This helps you make smarter choices and plan better strategies. Strategic thinking is a skill you can get better at over time, and planning is a great way to practice.

Developing strategic thinking through planning means you are better prepared for the future. You can set goals and figure out the best way to achieve them. This kind of thinking is valuable in all areas of life and can lead to better decisions and more success.

When you have a plan, you’re ready to grab opportunities as they come. It’s because you have a clear idea of what you need and what you can do. Planning helps you make the most of chances that could help you move forward with your goals.

Planning lets you:

  • Identify opportunities : You can spot chances to improve or grow.
  • Prepare to act : You’re ready to go when a good opportunity shows up.
  • Match opportunities to goals : You can tell if an opportunity will actually help you with your goals or not.

Being ready and able to take advantage of opportunities is important. It can mean the difference between making a big leap forward or missing out. Planning helps you be in the right place at the right time with the right tools.

Consistency means doing things in a steady and reliable way. When you plan, you create routines and habits that make sure you keep doing what works. It’s like a daily workout routine that helps you stay in shape.

Here’s how planning helps you stay consistent:

  • Daily tasks : You know what you need to do each day.
  • Expectations : Others know what they can expect from you.
  • Results : Keeping up consistent actions leads to consistent results.

A plan helps you stick to a successful formula without getting distracted by new, unproven ideas. This kind of consistency can build trust if you’re working with others and help you make steady progress toward your goals.

Discipline is about making yourself do the things you need to do, even when you might not feel like it. Responsibility means that you are the one in charge of your actions and their outcomes. Planning helps develop both of these qualities.

With a plan, you have a schedule to stick to, which helps you build discipline.

You are also the one making the plan, which means you’re taking responsibility for what needs to be done. It’s like deciding to save money by cooking at home instead of eating out — you’re choosing a plan that requires discipline but is better for you in the long run.

A good plan helps you take control of your life and your goals. This can lead to better habits and more success, personally and professionally.

Frequently Asked Questions

There are some common misconceptions about planning that may hinder its effectiveness or value. Here are some examples:

• Planning is only for big or complex projects : This is a misconception that planning is not necessary or useful for small or simple projects. However, planning can help any project by providing clarity, direction, and structure, regardless of its size or complexity.

Planning can also help avoid potential problems or risks during the project execution.

• Planning is a one-time activity : This is a misconception that planning is done only at the beginning of a project and then forgotten. However, planning is an ongoing process that requires constant monitoring and updating to reflect changes or feedback in the environment.

Planning can also be flexible and adaptable to accommodate new opportunities or challenges that may emerge during the project execution.

• Planning is the same as strategy : This is a misconception that planning and strategy are interchangeable terms. However, planning and strategy are different but related concepts that serve different purposes:

– Strategy is a long-term and comprehensive plan that defines the overall direction and goals of the organization. – Planning is a short-term and specific plan that outlines the activities and tasks to implement the strategy.

Planning and goal setting are two related but distinct concepts.

Goal setting involves the process of defining specific objectives or desired outcomes that you want to achieve. This could be anything from a personal goal like running a marathon to a professional goal like achieving a specific sales target.

The key characteristic of goal setting is that it focuses on specific outcomes you want to achieve.

Planning , on the other hand, involves determining the strategies and tactics necessary to achieve those objectives. In other words, planning is identifying the steps you need to take to achieve your goals.

While goal setting and planning are distinct concepts, they are closely related and essential to achieving success.

Goal setting helps ensure you have a clear idea of what you want to achieve, while planning provides a roadmap for how to get there. Even the most well-defined goals can be difficult or impossible to achieve without effective planning.

Not necessarily. While planning organizes your time and tasks, it also allows you to set aside time for spontaneity and flexibility. Good planning accounts for the unexpected and adapts to changes.

If your plan isn’t working, assess what is going wrong. Do you need more time? Are the steps not clear? Adjust your plan based on your assessment. Sometimes, consulting with others or taking a break can provide fresh insight.

As we end, let’s remember why planning stands out as a smart move. It’s the key that starts the engine of our daily actions. With a solid plan, we make clear decisions, save time, and dodge troubles.

You know the feeling when things just work out? That’s planning, doing its magic!

Let’s keep it in mind — the time we spend making plans today is our investment in a smoother tomorrow. Simple planning can make the big things and the small daily tasks easier to handle.

This applies to all of us, no matter where we come from. Let’s all plan a bit better and watch how it helps us build strong and happy lives.

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Jessa Claire

Jessa Claire is a registered healthcare provider. Music lover. Daydreamer. Thalassophile. Foodie. A hardworking Capricorn. Most days, an incurable empath. An old soul. Down-to-earth. Vibrant.

When she's not writing, she can be seen relaxing with headphones on or engrossed in her favorite fan fiction book.

Module 3: Planning and Mission

Why it matters: planning and mission, why does a business need to define its mission and engage in planning.

Dani Alvarez is a management consultant with the firm Business Advisors. She’s sitting in his office one day when the telephone rings. She picks it up and hears the voice of Tom Wilson, an old high school friend. “Hi Dani. This is Tom Wilson from Southside High. Remember me?” They discuss old times for a few minutes, and then Tom gets down to business.

“Dani, I need your help. I started a business several years ago, and we’re in trouble.”

A woman walking on the beach at sunset holding a surfboard

Defining the organization’s mission and creating a plan to achieve it is the roadmap to success.

Dani quickly searches her memory and recalls that Tom started a business called Sun City Boards several years ago selling high-end surfboards on the West Coast. Last Dani had heard, the business was doing well. “Yeah Tom. I remember when you started your shop, but I thought the business was growing successfully.”

Tom replies, “We did well the first couple of years, but things haven’t been good for a while now. We’re losing money, and I’m not sure how much longer I can keep the doors open.”

Dani assures Tom that she is happy to help and asks him to send a few items over to prepare for a trip to visit his operations. “Just send me a copy of your current business plan, financial forecasts, and annual operating budget.”

There’s a pause on the other end of the line, and then Tom says, “Well, I can send you our bank statements and invoices. We don’t have any of the other documents you’re asking about.”

Based on that response, Dani already has a good idea of the organization’s problem: an obvious lack of planning that never bodes well for a business.

In this module, you’re going to learn about the importance of an organization establishing a clear vision and mission and how they guide the business planning cycle. The business plan is the roadmap that guides the organization to success.

  • Why It Matters: Planning and Mission.. Authored by : Jeff Heflin and Lumen Learning.. License : CC BY: Attribution
  • Image: Woman Holding Surf Board Standing on Shoreline during Sunset. Authored by : Bradley Hook. Located at : https://www.pexels.com/photo/sunset-beach-%20woman-water-%20111085/ . License : CC0: No Rights Reserved

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IMAGES

  1. What is Planning? definition, characteristics, steps and importance

    define planning and why we need planning in business management

  2. Creating a Business Plan: Why it Matters and Where to Start

    define planning and why we need planning in business management

  3. Steps in Planning Process in Management: Business Strategic Plans

    define planning and why we need planning in business management

  4. Strategic Planning Process in 5 Simple Steps

    define planning and why we need planning in business management

  5. What is Planning? Definition, Importance and Features

    define planning and why we need planning in business management

  6. Management Planning Examples

    define planning and why we need planning in business management

VIDEO

  1. Business planning

  2. Planning as a Function of Management (Business Process Management)

  3. Business Plan Implementation

  4. Strategic Planning: Business Plan in 1 Minute

  5. Corporate planning process

  6. Business plan project

COMMENTS

  1. What Is Planning In Management and Why Is It Important?

    Planning is the process of setting goals and creating steps you can follow to achieve those goals. Doing so helps guide you and makes it more likely that you reach success, which can be especially helpful if you're part of a company's management team. This means learning how to plan efficiently can help you achieve your management goals.

  2. 17.1 Is Planning Important

    Planning is the process by which managers establish goals and specify how these goals are to be attained. Plans have two basic components: outcome or goal statements and action statements. Outcome or goal statements represent the end state—the targets and outcomes managers hope to attain. Action statements reflect the means by which ...

  3. What is Planning? definition, characteristics, steps and importance

    Definition: Planning is the fundamental management function, which involves deciding beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do it.

  4. What is Planning?

    Alford and Beatt - "Planning is the thinking process, the organised foresight, the vision based on fact and experience that is required for intelligent action.". Louis A. Allen - "Management planning involves the development of forecasts, objectives, policies, programmes, procedures, schedules and budgets.".

  5. How to Succeed with Planning in Management and Why it is Important

    This makes planning in management very helpful in terms of reducing the uncertainty of the future and avoiding the risks. 4. It Eliminates Overlapping of Wasteful Activities. Effective planning gives clarity about the responsibilities and expectations of each department, team, and even team member.

  6. 17.2 The Planning Process

    The planning process seldom stops with the adoption of a general plan. Managers often need to develop one or more supportive or derivative plans to bolster and explain their basic plan. Suppose an organization decides to switch from a 5-day, 40-hour workweek (5/40) to a 4-day, 40-hour workweek (4/40) in an attempt to reduce employee turnover.

  7. What Is Planning And Its Importance?

    The ability to predict, prevent, or manage risks and contingencies is an essential need of any business.

  8. The Planning Cycle

    Learning Outcomes Explain the stages of the planning cycle. Explain why the planning cycle is an essential part of running a business. Organizations have goals they want to achieve, so they must consider the best way of reaching their goals and must decide the specific steps to be taken. However, this is not a linear, step-by-step process.

  9. Definition & Examples of Business Planning

    Business planning commonly involves collecting ideas in a formal business plan that outlines a summary of the business's current state, as well as the state of the broader market, along with detailed steps the business will take to improve performance in the coming period. Business plans aren't just about money.

  10. Pros and Cons of Planning

    Planning leads to complacency. Having a good plan can lead managers to believe they know where the organization is going and how it will get there. This may cause them to fail to monitor the progress of the plan or to detect changes in the environment. As we discussed earlier, planning is not a one-time process.

  11. 1.5 Planning, Organizing, Leading, and Controlling

    A manager's primary challenge is to solve problems creatively. While drawing from a variety of academic disciplines, and to help managers respond to the challenge of creative problem solving, principles of management have long been categorized into the four major functions of planning, organizing, leading, and controlling (the P-O-L-C framework).

  12. Business Planning: It's Importance, Types and Key Elements

    More specifically, it's a document in writing that outlines the goals, objectives, and purpose of a business while laying out the blueprint for its day-to-day operations and key functions such as marketing, finance, and expansion. A good business plan can be a game-changer for startups that are looking to raise funds to grow and scale.

  13. Why Your Business-Planning Process Is More Important Than The ...

    Planning shouldn't happen once a year; it should happen all year long. The questions one attempts to answer in strategic planning should be asked and answered as often as you have new information.

  14. What Is Planning? Definitions, Importance, Characteristics, Process

    Planning is the primary function of management that involves formulating a future course of action for accomplishing a specific purpose. Planning enables managers to decide what task to do, how to do the task, when to do the task and by whom the task has to be done. Table of Content 1 What is Planning? 2 Definitions of Planning

  15. What is the Importance of Planning? 8 Importance, Process

    Planning helps to forecast business-related risks and also helps to take necessary precautions to avoid these risks and prepare for future uncertainties. Provides Direction Direction means to give proper information, accurate instructions and guidance to the subordinates. Planning tells us what to do, how to do and when to do it.

  16. Why It Matters: Planning and Mission

    Why does a business need to define its mission and engage in planning? Defining the organization's mission and creating a plan to achieve it is the roadmap to success. Dan Smith is a management consultant with the firm Business Advisors.

  17. What is Strategic Planning? A 5-Step Guide [2024] • Asana

    Strategic planning is a process through which business leaders map out their vision for their organization's growth and how they're going to get there. The strategic planning process informs your organization's decisions, growth, and goals. Strategic planning helps you clearly define your company's long-term objectives—and maps how ...

  18. Why Is Strategic Planning Important?

    Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization's goals, and ensure those goals are backed by data and sound reasoning.

  19. The Significance of Planning in Organizational Success

    1. About Planning 2. Importance of Planning in an Organization 3. 1. It helps set different key elements for the organization 4. 2. It allows the organization to understand their current position and goal position View more

  20. Why Planning is Important in Management

    Planning in management is a crucial factor in ensuring success, and these are the reasons why: 1. Planning in Management Helps in Setting Goals. In management, goal setting is a critical component of success. Without goals, there's no way to know if the team is making progress or where it needs to improve. Planning helps managers set ...

  21. Planning in Management: Nature, Importance, Types

    Planning is important as by nature it enquirers about organizational goals and involves decision making about desired ways and means to achieve goals. Planning is the process by which managers establish goals and define the methods by which these goals are to be attained. Planning involves selecting missions and objectives and the actions to ...

  22. Why Is Planning Important? (25 Reasons)

    A well-executed business plan can help to maximize profits, reduce costs, and improve customer satisfaction. Event Planning Planning is essential in organizing events such as weddings, conferences, and parties. It involves coordinating vendors, selecting a venue, and creating a schedule of activities.

  23. Why It Matters: Planning and Mission

    They discuss old times for a few minutes, and then Tom gets down to business. "Dani, I need your help. I started a business several years ago, and we're in trouble.". Defining the organization's mission and creating a plan to achieve it is the roadmap to success. Dani quickly searches her memory and recalls that Tom started a business ...