Planning is the foundation or prerequisite for the effective management because it provides required bases to other managerial functions. It is a tool to modern business. In the absence of planning, business decisions would become random and useless because the managerial functions like organizing, coordinating, directing and controlling are based upon planning. Hence, the planning function is more important than that of other managerial activities.
The main benefits or advantages or importance of planning can be summarized in the following manner:
The main benefits or advantages or importance of planning can be summarized in the following manner:
1. To achieve goals
Planning helps the organization to accomplish and achieve the goals. If business activities are performed as directed in the plan and plan itself is based upon clear and specified objectives, then the stated objectives can be achieved very easily.
2. To reduce uncertainty
Planning helps to reduce the uncertainty in the business. Due to the dynamism of external environment, the future become more uncertain. Technology may changed, economy may be changed, customer's tastes and fashion may be changed and likely socio-political system and situation may also be changed. These all changes are predicted on the basis of planning. Planning foresees the future and helps the organization to reduce and minimize the risks of uncertainty.
3. To economize the business operation
Planning involves the selection of those alternatives which could be proved the best possible course of action for the future with which economic business activities could be guaranteed.
4. To maintain coordination
Planning is important for the better coordination. It coordinates between organizational purpose and managerial functions. All the managerial functions are combinedly oriented towards accomplishment of the objectives through the planning. Coordination between different levels and coordination between different departments can be established only through the help of planning because it gives and provides direction to different levels and departments of organization.
5. To maintain control
The business activities are to be planned, the planned activities are to be implemented and what are implemented are to be controlled. It clears that planning helps the organization to maintain control. Planning and controlling both are inseparable because control involves keeping activities on the predetermined course by rectifying deviations from the plan, whereas, planning helps control by setting standards.
6. To increase organizational effectiveness
It is only the planning which utilizes the resources properly, reduces the wastes, maintains the cost of production/operations and thus helps the organization to run the business profitably.
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7. To improve motivation
Planning encourages the sense of involvement, cooperation and team-spirit among the staff members. It signifies that the workers and staff members can be motivated towards the job and their duties through a good plan. Planning also helps the organization to improve the motivation system.
8. To implement future programs
Planning is also beneficial to the management to implement the future programs in a systematic manner. To maximize benefits and profit, effective implementation of program is necessary. Planning directs the management to do all the activities orderly and in coordinated way.
