Importance of Planning as a Management Function

By Prapanna Lahiri

Planning is the first managerial function. In exercising this function the manager will create a detailed action plan aimed at achieving some organisational goals. Planning is an ongoing function and can be highly specialised based on organisational goals, division goals, departmental goals, and team goals.


Based on the above statements Planning can be defined as a – systematic activity of thinking in advance to determine when, how and who is going to perform a specific job. Planning entails setting objectives and deciding in advance the appropriate course of action to achieve these objectives.  Accordingly, one can also define Planning as setting up of objectives and targets and backing it up with an action plan to achieve them. Simply put, Planning is a detailed programme regarding future courses of action.

Importance of Planning:

It is a systematic and specialised organisational activity in view of its following distinctive characteristics:

  1. Planning follows objectives: Planning begins with determination of objectives which provide the nucleus to the planning process. After the objectives are set, planning decides the methods, procedures and steps to be followed to achieve these objectives. Objectives should be practical, acceptable, workable and achievable.
  2. Planning is pervasive: Planning is not restricted to the top level of management only but is also done by managers at every level. Depending on goals set at every level – be it a department, a division or a team assigned a specific job, a planning blueprint has to be drawn up.
  3. Planning is futuristic/ forward looking: Since Planning is essentially looking ahead, it is a futuristic function. Planning cannot be done for the past. Based on past experiences managers attempt to make predictions and assumptions called ‘Planning Premises’ about the likely shape of events in future. Planning premises may be internal or external. Internal premises that may include capital investment policy, management labour relations, philosophy of management etc. are controllable whereas external premises that include socio- economic and political changes are non- controllable. The premises are established for determining where one tends to deviate from the actual plans and causes of such deviations.
  4. Planning is ongoing/ continuous: Planning is a never ending process. When forecasts are available and premises established, a number of alternative courses of action are taken for consideration. Alternatives are scientifically and objectively evaluated by employing quantitative techniques, weighing their pros and cons in the light of resources available and requirements of the organisation. The best alternative is chosen, basis its stability to attain the desired objective. There is scope for course correction midway depending on the prevailing environment.
  5. Planning is a mental exercise: Planning is an intellectual process requiring higher level of thinking and mental exercise. F.W. Taylor, the proponent of the theory of Scientific Management wrote about applying scientific (quantitative) techniques to planning. He separated planning from operational activities. In planning, assumptions and predictions regarding future are made by scanning the environment properly. Planning requires higher level of intelligence to select the most suitable alternative after evaluating various alternatives.
  6. Planning provides Direction: Planning being a predetermined course of action provides the directions to the efforts of employees. After the plans are formulated the subordinates who have to implement these plans are taken into confidence telling them in advance about the direction they have to tread. This ensures ‘Unity of Direction.’ Without planning, employees would be working in different directions making it impossible for the organisation to achieve its desired goals.
  7. Derivative/ secondary plans formulated: Secondary and Sub plans are derived from the basic plan detailing policies, procedures, rules, programmes, budgets, schedules, etc. for each department. All employees, supervisors and managers will integrate their activities based on these plans.
  8. Planning Reduces uncertainties: Planning premises being assumptions regarding future uncertainties based on past experiences uncertainties are sought to be minimised.
  9. Planning facilitates Management by Exception: Controlling means comparison between planned standards and actual output. Variances are calculated and analysed to their causes to find what went wrong and where.
The purpose of planning becomes meaningless unless its efficacy is evaluated. The appraisal of plans enables the planners to correct deviations or modify future plans to make them more realistic.



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