Plannings: Characteristics, importances and drawbacks

Planning is the important and primary function of management. It sets all other functions into action. It is the beginning of process of management. A manager must plan before coming in action. It is concerned deciding in advance what to do? How to do? When to do? Why to do? Where to do? And who to do? And answering all these questions depends upon intelligence. Planning is a fully mental work.

Planning is the conscious process selecting and developing the best course of action to accomplish an objective. It is the process of deciding in advance what is to be done. It also involves the selection of objectives, policies, procedures and programs from among alternatives. It also includes selecting purposes and objectives of the actions to achieve them.  Planning requires decision-making that is choosing from among alternative future course of action.

  •  Planning is concerned with future and it helps the management to look ahead.
  • It involves thinking about organization’s prosperity and helps analysis of information.
  • It involves a predetermined course of action.
  • It specifies the objectives to be attained in the future.
  • It is basically a problem of choosing from the alternative courses of action.
  • It relates with thinking before doing.
  • It involves both decision-making and problem solving.
  • Its objective is to achieve better results.

Characteristics of Planning

  1. Planning is a Primary Function of Management: Planning is a Primary Function of Management. Setting of goals and lines of action precedes the organization, direction, supervision and control. Planning precedes other functions of management. It is primary requisite but all functions are inter-connected.
  2. Thinking and intellectual process: Planning is intellectual process of predetermined thinking. It is a process of deciding about future actions. It includes the process where a number of steps are to be taken to decide the future course of action. Managers consider various courses of action which is necessary to achieve the desired goals and learn about the merits and demerits of every course of action and then finally decide what course of action may suit them best.
  3. Planning is a continuous process: Planning is a continuous process of a manager upon some assumptions. Therefore, the manager has to revise and adjust plans in the changing circumstances. Planning is a continuous process It involves continuous collection, evaluation and selection of data, and scientific investigation and analysis of the possible alternative courses of action and the selection of the best alternative.
  4. Pervasiveness of planning: Planning follows pervasiveness of planning. It is the function of every managerial personnel. The character, nature and scope of planning may change from personnel to personnel. It is universal activity. It is important to all managers in all levels as planning is required in all levels.
  5. Based on facts: Planning is not guess work but highly based on facts, realities, objectives and forecasting.
  6. Goal oriented: Planning is requires achieving objectives because any formulated objectives are meaningless without plans. It identifies actions that would lead to the desired objectives quickly and economically.
  7. Coordination: Planning helps to coordinate various levels of activities .it provides guidelines to do work to all managers and staffs of all levels.
  8. Others: Planning is a selective process. It helps in increasing the efficiency.

Types of Planning

  1. Corporate or Strategic plan: This plan is prepared by the top level management by considering the long term objectives of the organization and strategies to achieve the defined objectives. The strategic plan may concern with product or service, market competition, social responsibility , introduction of technology, goodwill etc. It is based on analysis of future opportunities and threats.
  2. Tactical or division plan: Tactical plan is prepared by the middle level management by considering short term objectives of the organization. It is the sub division of corporate plan. It is prepared to allocate divisional activities like production, finance, marketing, personnel and others. These plays a mediator between corporate or operational rule.
  3. Operational or unit plan: This plan is prepared by the lower level management by considering day to day function of the organization. It is consistent with tactical plan. It prepares schedule of each unit of work. It is concentrated in the best use of organizational resources consisting of manpower materials, money, methods and machine.

Steps on Planning

  1. Setting objectives: Objectives are the main part of plan. Setting objectives is the first step of formulating plans, the success or failure of plan depends upon the objectives of the organization. To determine the objectives is the first step and most important procedure of making plan.
  2. Developing planning premises: After setting the objectives of the organization planning premises is necessary. It is the second step of formulating plans. Premises are the assumptions of internal and external environment of the organization in which plans are to be implemented. It is related to collect and make analysis of information concerning internal and external environment.
  3. Determining alternatives: After developing planning premises the third step of formulating plan is to determine the alternatives. The process of searching and identifying alternatives is known as determining alternatives. There may be so many alternatives. Reasonable alternatives should be selected among them.
  4. Evaluating alternatives: After determining alternatives, each and every alternatives must b evaluated separately. After that, it is determined that which alternative has how much advantage and disadvantages. In other words, plans are evaluated in so many factors like cost factors, risk , benefits, facilities etc.
  5. Choosing one course of action: After evaluating alternatives one best alternative must be selected. When all the alternatives are evaluated then all the weaknesses and strength of the alternatives are known. After this, the best alternative must be selected. It is the most important step of planning.
  6. Formulating detail plan of action: After choosing one course of action, detailed plan must be formulated. Selecting one course of action is the organized plan. After choosing organizational plan, other departmental plan must be formulated. In other words, basic plan must be expanded into functional areas.
  7. Implementation of plan: Without this step, other procedures of plan remains as a paper work. This step brings all procedures of plan into action.
  8. Reviewing the panning process: The planning procedures is a continuous function up to the attainment of defined objectives. For this purposed, the evaluation of achievement of work according to time is necessary to know about actual performance.

Importance of planning

  1. Focus on objectives: Planning is related to the organizational objectives. All the operations are planned to achieve the organizational objectives. Planning facilitates the achievement of objectives It requires the clear definition of objectives so that most appropriate alternative courses of action are chosen.
  2. Reduction of Uncertainties/ change: Future is full of uncertainties. A business organization can operate successfully if it is able to predict the uncertainties. Some uncertainties can be predicted by undertaking systematic analysis and systematic forecasting.  Thus, planning helps in reduction of uncertainties which may be caused by changes in all micro and macro level of environment.
  3. Economical: Planning assists in reducing the cost of performance by the selection of only one course of action amongst the different courses of. It removes hesitancy, avoids crises, eliminates false steps and protects against improper deviations.
  4. Utilization of Resources: Planning makes effective and proper utilization of all available resources and makes optimum use of all these resources (men , money , machine and material).
  5. Effectiveness: Planning promotes organizational effectiveness which ensures that the organization is in a position to achieve its objective due to increased efficiency.
  6. Co-ordination: Plans unify the activities for development of various sub-plans. Various departments work in accordance with the overall plans of the organization. There is harmony in the organization and duplication of efforts are avoided.
  7. Innovation: Planning helps innovative and creative thinking amongst the managers because many new ideas come to the mind of a manager when he is planning. It creates a forward-looking attitude amongst the managers.

Limitations of planning

  1. Costly process:  Planning involves too much expenditure. Money and effort both are required in planning. Planning includes collecting information, data forecasting and evaluation of alternatives. It requires salary and allowances to the experts in the process of providing services. So, planning has been accepted as costly process by small and medium size organization.
  2. Time consuming:  Planning is the time-consuming process. It delays the business activity to come in action. In the process of planning following the procedures of planning takes a lot of time which may create problem to the organization where immediate action has to be made. So in such situation planning is not suitable.
  3. Unsuitable in emergency situation: As planning is time-consuming, it is not suitable in emergency situation because quick decisions is desirable in emergency situation buts planning delays the emergency demand in organization.
  4. Lack of reliable data and problem of accurate premises: For planning assumptions have to be developed for future action but future is uncertain and unpredictable. To make reliable data and accurate premises is necessary., in the lack of reliable data and accurate premises, there is chance of business loss and failure.
  5. Problem of rapid change: Planning is the game of prediction. Rapid changes may occur in macro and micro level environment of business. planning is to be made in a flexible way to compress the plans in the future.
  6. Internal rigidity:  Internal rigidity may be related to organizational and human psychology policy, procedure and capital investment which create problem in the process of implementation. Staff may not like the changes that may occur frequently in the working procedure. So rigidity may create problem in planning.
  7. Encourage false sense of security: Planning encourages false sense of security against future risk and uncertainty. As future is uncertain, it is unpredictable. Therefore, planning cannot give accurate and reliable results.

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