Importance Of Planning In Business

As it is clear from the above discussion, plans have two basic components: goals and action statements.Goals represent an end state — the targets and results that managers hope to achieve.Control without a plan is meaningless because the plan provides the basis or standard of control.

As it is clear from the above discussion, plans have two basic components: goals and action statements.

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Management has to plan for long-range and short-range future direction by looking ahead into the future, by estimating and evaluating the future behavior of the relevant environment and by determining the enterprise’s own desired role.

Planning involves determining various types and volumes of physical and other resources to be acquired from outside, to allocate these resources in an efficient manner among competing claims and to make arrangement for systematic conversion of these resources into useful outputs.

Decisions can be made without planning but planning cannot be done without making decisions.

The nature of planning can be understood by examining its four major aspects.

They are; Since plans are made to attain goals or objectives, every plan and all its support should contribute to the achievement of the organization’s purpose and objectives.

An organized enterprise exists to accomplish group objectives through willing and purposeful co-operation.It is, therefore, a rational approach to achieving pre-selected objectives.Planning is thus taken as the foundation for future activities.That planning is the prime managerial function is proved by the fact that all other functions such as organizing, staffing, leading and controlling are designed to support the accomplishment of the enterprise’s objectives.Planning quite logically, therefore, comes first before executing of all other managerial functions as it involves establishing the objectives necessary for all group efforts.We have already been introduced to five essential managerial functions, namely, planning, organizing, staffing, leading and controlling.This is also the widely accepted conceptual framework of management.Resource scarcity is a very important consideration for any organization today.There would be no need for planning if material, financial and human resources were unlimited and cheap.The efficiency of the plan, however, means its contribution to the purpose and objectives, offset by the costs and other factors required to formulate and operate it.Plans are efficient if they achieve their objective at a reasonable cost when such a cost is the measure not only in terms of time, money or production but also in terms of satisfaction of the individual or group.