importance of planning

Why Planning is Important? Guide To 8 Importance of Planning

Importance of Planning

Planning is a primary and inseparable function of management. It ensures smooth performance and the best utilization of resources including manpower. It defines a clear line of action so that wastage of resources can be minimized. Good planning is the foundation of an organization and a sign of efficient management. It contributes to bringing smoothness in the future course of action. Following are the importance of planning:

  • Focus on goal
  • Minimize uncertainty
  • Effective control
  • Innovation and creativity
  • Organizational effectiveness
  • Economy in operation
  • Facilitates coordination
  • Avoids business failure

Let’s understand these importance of planning,

Focus on Goal

Every organization is established with a definite objective and all the activities of the organization concentrate to achieve defined objectives. Plans help to draw the attention of the manager and other employees to the same objectives.

It defines a clear line of action and responsibility at all levels of management. It eliminates confusion and haphazard activities. It facilitates bringing unity in action and coordination among all the units of the works. Thus, good planning is a sign of management by objectives.

Minimize Uncertainty

Planning is a must to minimize future risk and uncertainty. It involves forecasting and anticipating future uncertainty and changes. It is well known that the future is uncertain and changeable. So every organization has to perform its activities within the changing environment of society. The importance of planning is to anticipate future changes and makes necessary provisions to overcome such changes.

Effective Control

Planning is the basis of control. It determines the standard of work to be performed. Management provides instruction and guidance to do work on the basis of the plan. It helps to compare actual performance with that of planned performance. It also helps to identify the deviation between planned and actual performance. Control without planning is not possible. However, planning makes control effective and meaningful.

Innovation and Creativity

As an intellectual exercise, planning encourages innovative thought and creative action among the managers. An effective plan forces managers to think about the best objective and best alternative course of action. This is a must to grow and expand business activities. It contributes to developing motivation and morale among the employees.

Also, it is essential to maintain an up-to-date position in business operation and face business complexity. Thus, a sound plan contributes to developing innovative ideas and creative action.

Organizational Effectiveness

Planning helps to eliminate wastage and utilize available resources in the best possible way. It leads to maximize productivity and minimize the cost of output. Planning is the foundation of the successful completion of organizational activities. It makes all the organizational activities more effective and efficient. Thus, sound planning contributes to minimizing the cost of production and developing organizational effectiveness.

Economy in Operation

Planning avoids the concept of trial and error concept. It selects a course of action, which is beneficial from the organizational point of view. It defines a clear line of action for all levels of management. It helps to bring a system in the organization which ultimately contributes to developing the working efficiency of all the members.

Facilitates Coordination

Planning is a primary function, which maintains coordination with other functions of management. It clearly defines objectives and strategies to be achieved and brings other functions of management into action.

Planning also plays an important role to maintain close relations among all the departments. This is necessary to develop a feeling of team spirit among all the members of the organization.

Avoids Business Failure

Last but not least one importance of planning is to reduce business failures. The basic motive of planning is to overcome the probability of business failure. The primary task of the planning process is to select the best course of action among the available alternatives.

Besides, it defines a clear line of action for every member. It helps to maintain unity in action, better coordination among all the members of the organization. It minimizes uncertainty and risk in performance and also wastage of organizational resources. Ultimately, it contributes to maximize productivity and minimize the cost of output.

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