Importance of Planning
Planning is concerned with both ends and means i.e., what is to be done and how it is to be done. Planning bridges the gap between where we are, to, where we want to go.
This is the first function in the process of management. Planning is certainly important as it tells us where to go, it provides direction and reduces the risk of uncertainty by preparing forecasts. The major benefits of planning are:
1. Provides directions.
Planning provides directions to actions by clearly stating the goals. If goals are well defined, employees are aware of what the organization has to do and what they must do to achieve those goals. Departments and individuals in the organization are able to work in coordination.
2. Reduces the risks of uncertainty.
By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events and thus minimizes the element of uncertainty. This helps in taking necessary actions in future.
3. Reduces overlapping and wasteful activities.
Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions caused due to confusion and misunderstanding. Useless and redundant activities are minimized or eliminated.
4. Promotes innovative ideas.
Since planning is the first function of management, new ideas can take the shape of concrete plans. Planning is concerned with making the choice of the best possible alternative to reach the goals.
5. Facilitates decision making.
Planning helps the manager to make a choice from amongst various alternative courses of action by evaluating each alternative and selecting the most possible course of action and helps in decision making.
6. Establishes standards for controlling.
Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals.