10 Importance of planning in Business and Management

“A man who does not plan long ahead will find trouble at his door.”- Confucius.

Planning helps a business chart a course for the accomplishment of its goals. It is the first and foremost function of management. It is needed at every level of management. In the deficiency of planning all the business activities of the organization will become meaningless. The importance of planning has increased all the more in view of the increasing size of organizations and their complexities. All the activities of an organization is solely related with planning. Starting from the top to bottom of anything that has been successful, it requires a certain amount of planning and monitoring. Thus, the necessity of planning for any means whether business or nonprofit is beyond our day to day considerations. So, here are the most notable importance that planning holds in any aspect.

Efficiency

All organizations have inadequate resources. Planning process delivers the information top management needs to make effective decisions about allocating the resources in a way that will enable the organization to reach its objectives. Planning maximizes productivity and resources are now wasted on schemes with little chance of return. Planning provides the management a way to bring maximum return from something at a minimum cost.Instituting

Organizational Goals

An organization needs a goal to achieve and this goal needs to be realistic and aggressive. Setting goals contests everyone and gives everyone a target to achieve. Also this process of goal setting is a good thing for those managers or employees who have been unworried and contended for some time without any more development, because it gives them a boost and drive to achieve something more. But, all of these are done when the planning is done properly. The planning process lets the organization set their organizational goals.

Instituting Organizational Goals

An organization needs a goal to achieve and this goal needs to be realistic and aggressive. Setting goals contests everyone and gives everyone a target to achieve. Also this process of goal setting is a good thing for those managers or employees who have been unworried and contended for some time without any more development, because it gives them a boost and drive to achieve something more. But, all of these are done when the planning is done properly. The planning process lets the organization set their organizational goals.

Risk Reduction

There is risk a minimum in any business or venture. By the help of planning these risk factors can be avoided and the risk can be brought to minimum. Business related risks can be forecasted by the planning process. Managing risk is very important point for any organization. Even the largest corporation cannot reduce the economic and competitive risk completely. Unexpected events occur and they are to be dealt with proper response. By planning, you can find out the contingency approaches, for any occur able or predictable ‘what if’ situation. Planning provides businesses the scope to adjust and keep up with the pace of changes that take place constantly.

Helps in Decision Making

Whenever a project is taken it is first analyzed that what are the alternatives to it. After selecting the project the alternative ways to get it done and then the best way is selected. But all these is dependent on planning. Because, planning provides the organization with its own goal and vision. Thus, the organization keeps their goal and values unchanged and effective by the process of planning.

Controlling the Organization Standard

It is not possible to control the standard of an organization without regular monitoring. In control, the actual performance of an employee is compared with the planned ones and hence the deviations if occur are found out. This gives the business the scope to compare their going activities with the planned standards and correct the deviations.

Inspires Vision and Novelty

Planning gives a business the scope to find out the strengths and weaknesses of its competitors. It also allows the management and related decision making positions the scope to see the real picture and bring in innovative ideas to gain success. By the process of planning and discussions businesses can come up with better and more effective marketing plans to beat the competing organizations.

Esprit de corps

It is the capacity of a group’s members to sustain trust in an organization or goal, particularly in the face of opposition or hardship. In businesses it refers to the team spirit of the people in an organization. Planning encourages the spirit of cooperation. On the completion of planning and communicating it to the members of the organization, everyone knows about their duties and responsibilities and know how each and every one of them can put an impact on the organization by working together as a team. They see how their work subsidizes to the success of the organization as a whole and can take pride in their contributions. Possible conflict can be avoided when top management plans these things with the teammates and they get their regular input from each departments. Individuals are less likely to resent budgetary targets when they had a say in their creation.

Motivates the personnel

Besides team spirit the individual workers or employees also get the drive they need to improve their performance. The appraisal system of employees’ performance is also related with planning. Hence, planning also plays a role in giving insights on their activities and the correction and drive they need to thrive in the organization. A good plan provides both financial and non-financial incentives to both the managers and employees of an organization.

Gives Right Directions

Even after the company has planned its goals and ways to achieve their goals, they sit for a periodical discussion or analysis of how they are performing as an organization. Here, if the organization needs to correct their some sort of activities then they can plan for that. Hence, even after all these things are done, planning is still needed on a need basis to go in the right direction and reach success.

Crafting Competitive Lead

Besides all of these importance of planning, there is another vital need of planning which is creating a competitive advantage. By the process of planning, the organization can find what their competitors lack and hence get an advantage out of this. They can do SWOT analysis of themselves and their prime competitors and find out the points which will enable them to beat their contestants.

Planning is the initial step to success. It involves most of the important processes for an organization which includes steps like goal setting, marketing and appraisal. It’s not the plan that is important, it’s the planning which makes it work. In the end, finish this write up with a quote of famous Management Guru Peter Drucker- “Plans are only good intentions unless they immediately degenerate into hard work.”