How is planning important

This will make the achievement of sales target a certainty. Thus, in the absence of objectives an organisation gets disabled and the objectives are laid down under planning. Planning is always done for future and future is uncertain. With the help of planning possible changes in future are anticipated and various activities are planned in the best possible way.

In this way, the risk of future uncertainties can be minimised. For example, in order to fix a sales target a survey can be undertaken to find out the number of new companies likely to enter the market.

By keeping these facts in mind and planning the future activities, the possible difficulties can be avoided. Under planning, future activities are planned in order to achieve objectives. Consequently, the problems of when, where, what and why are almost decided. This puts an end to disorder and suspicion.

In such a situation coordination is established among different activities and departments. It puts an end to overlapping and wasteful activities.

Consequently, wastages moves towards nil, efficiency increases and costs get to the lowest level. For example, if it is decided that a particular amount of money will be required in a particular month, the finance manager will arrange for it in time. In the absence of this information, the amount of money can be more or less than the requirement in that particular month.

Both these situations are undesirable. In case, the money is less than the requirement, the work will not be completed and in case it is more than the requirement, the amount will remain unused and thus cause a loss of interest. It is clear that planning selects the best alternative out of the many available. All these alternatives do not come to the manager on their own, but they have to be discovered. While making such an effort of discovery, many new ideas emerge and they are studied intensively in order to determine the best out of them.

In this way, planning imparts a real power of thinking in the managers. It leads to the birth of innovative and creative ideas. For example, a company wants to expand its business. This idea leads to the beginning of the planning activity in the mind of the manager. He will think like this:. In this way, many new ideas will emerge one after the other. By doing so, he will become habituated to them. He will always be thinking about doing something new and creative.

Thus, it is a happy situation for a company which is born through the medium of planning. From there, planning involves envisioning the results the organization wants to achieve, and determining the steps necessary to arrive at the intended destination — success, whether that is measured in financial terms, or goals that include being the highest-rated organization in customer satisfaction.

All organizations, large and small, have limited resources. The planning process provides the information top management needs to make effective decisions about how to allocate the resources in a way that will enable the organization to reach its objectives.

Productivity is maximized and resources are not wasted on projects with little chance of success. Setting goals that challenge everyone in the organization to strive for better performance is one of the key aspects of the planning process.

Goals must be aggressive, but realistic. Organizations cannot allow themselves to become too satisfied with how they are currently doing — or they are likely to lose ground to competitors. 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? 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.

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

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.

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.

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:. The significance of planning can be gauged by the fact that it is considered the nucleus of management activities.