Role of Planning in Management


Role of Planning in Management

Planning is the primary and most important function of management and occupies a very high position in the management process. It is the starting point of the whole management process and involves the determination of future course of action. Why an action is required, how to take an action, and when to take action are main subjects of planning for the management. Planning is a determined course of action for achieving a specific objective.  It is deciding in advance what to do and how to do. It is needed at every level of management. In the absence of planning all the business activities of the organization become meaningless. The importance of planning has increased all the more in view of the increasing size of organizations and their complexities and because of uncertain and constantly changing business environment. In the absence of planning, it may not be impossible but certainly difficult to guess the uncertain events of future.

Planning is one of the basic management functions. In fact it occupies the top position in the management process. It is the starting point of the management process as other management function can take place only through this function. Before doing a thing, it is necessary that the management formulates an idea of how to work on a particular task. Thus, planning is closely connected with creativity and innovation. It involves setting objectives and developing appropriate courses of action to achieve these objectives. Objectives are achieved by fixing time based goals

For achieving its goals management of an organization usually works with several management plans such as business plan, production plan, maintenance plan, or marketing plan etc. Further management plans can be either short term or long term or both.

Definition of planning 

Planning is an organization process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. The definition of planning as given by various scholars has been given below.

Koontz and O’Donnel have defined planning as ‘Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it. Planning bridges the gap between where we are and where we want to go. It makes it possible for things to occur which would not otherwise happen’.

McFarland has defined planning as ‘Planning may be broadly defined as a concept of executive action that embodies the skill of anticipating, influencing, and controlling the nature and direction of change’.

George R Terry has defined planning as ‘ Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of purposed activities believed necessary to achieve desired results’.

Philip Kotler has defined planning as ‘Planning is deciding in the present what to do in future. It is the process whereby companies reconcile their resources with their objectives and opportunities’.

Process of planning

Planning is the process of thinking, mapping out and organizing the activities required to achieve a desired goal. Planning involves the creation and maintenance of a plan. As such, planning is a fundamental property of intelligent behaviour. This thought process is essential not only for the creation and refinement of a plan but also for its integration with other plans. It combines forecasting of developments with the preparation of scenarios of how to react to them. An important, albeit often ignored aspect of planning, is the relationship it holds with forecasting. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like.

In organizations, planning is also a management process, concerned with defining goals for the organization’s future direction and determining on the missions and resources to achieve those targets. To meet the goals, managers may develop plans, such as a business plan or a marketing plan. Planning always has a purpose. The purpose may be achievement of certain goals or targets. The planning helps to achieve these goals or target by using the available time and resources.

Basic steps in the management planning process

Management planning is the process of assessing an organization’s goals in an area of operation and creating a realistic, detailed plan of action for meeting those goals. The management planning process involves a cycle of activities. It takes into consideration short and long term strategies of the organization. The planning process ensures that important concerns and issues are not overlooked, that a range of perspectives is considered, that decisions are well informed, and that there is a real opportunity for participation for all the concerned personnel.

Steps in management planning

Fig 1 Basic steps in the management planning process

The following are the basic steps (Fig 1) in the management planning process which involve creating a road map that outlines each task the organization must accomplish to meet its overall objectives.

  • Pre planning stage – This stage consists of information gathering and getting the knowledge of earlier performance of the organization in the area for which management plan need to be prepared. With these informations the issues and opportunities are identified and analyzed.
  • Establish goals – The next step of the management planning process is to identify goals of the organization in the specific area of operation for which plan is being prepared. This portion of the planning process includes a detailed overview of all the organizational objectives to arrive at the plan goals.  The goals are to be described in quantitative or qualitative terms. An example of a goal is to raise production by 10 percent over a 12 month period.
  • Identify resources – For achieving each goal, the financial, human and other resources needed are to be projected in the management plan.  The plan is to indicate how these resources are to be made available for the fulfillment of the plan.
  • Establish goal related tasks – Tasks and actions needed for achievements of each goal are to be clearly identified in the plan for the achievement are to be clearly fixed in the plan.
  • Prioritizing of the related tasks – Prioritizing of the goal related tasks is about identifying priority of the tasks based on their importance. The tasks deemed most important will theoretically be approached and completed first. The prioritizing process may also reflect steps necessary in completing a task or achieving a goal. The organization need to complete these steps in chronological order for achieving the goals.
  • Create assignments and timelines – As the organization prioritizes the tasks, it must establish timelines for completing the tasks and assign individuals/groups to complete them. This portion of the management planning process is to consider the abilities of individuals/groups members and the time necessary to realistically complete assignments.
  • Review and the refinement of the draft plan – After the draft plan has been made it is reviewed and refined after considering the view points of those who are connected with the plan for its implementation.
  • Approval and implementation of plan – Once the management plan is made, it need to be approved by the management for its implementation. After its approval the plan serves as a guide for management decisions and as a reference document for everyone during its implementation.
  • Establish evaluation methods – A management planning process should include a strategy for evaluating the progress toward goal completion throughout an established time period. One way to do this is through a periodic progress report from the individuals/groups handling the assignment.
  • Progress review – Once the progress report is available then the progress review is done by analyzing the fulfillment of plan against the targets. Progress review is an essential part of the management planning process.
  • Identify alternative courses of action – Even the best-laid plans can sometimes be thrown off track by unanticipated events. A management plan should include a contingency plan if certain aspects of the master plan prove to be unattainable. Alternative courses of action can be incorporated into each segment of the planning process, or for the plan in its entirety.

Advantages of management planning process

 The following are the advantages of the management planning process and its importance for an organization in conducting its business.

  • The objectives and goals of the organization gets defined in simple and clear words by the management planning process and this provides clear direction to the employees and their efforts get focused towards a desired end.
  • Through management planning process activities are planned for the future in a planned way. This helps in minimizing the risks of uncertainties in future.
  • Through management planning process, the working in the organization become orderly and coordinated which eliminates the overlapping activities between the departments of the organization. It avoids inconsistency in efforts and also avoids possible friction between the departments. It also reduces the wasteful activities of the organization to a negligible level.
  • Management planning process creates an environment of thinking in the organization which promotes innovative ideas within the organization.
  • Management planning process facilitates the decision making process since the decision making gets focused within the criteria laid down in the plan. Hasty and haphazard decisions are avoided. Increased uniformity is achieved in decision making process.
  • Management planning process helps in judicious utilization of the available resources.
  • Management planning process helps in standardized working in the organization which in turn helps in controlling the activities of the organization.
  • Management planning process secures wide and willing participation of the employees in the direction towards achievement of organizational goals.
  • Management planning process helps towards systematic working within the organization.
  • Management planning process improves the confidence level of the employees of the organization.
  • Management planning process helps in improving the competitive capacity and the strength of the organization.
  • Management planning process facilitates team working and delegation of authority. It removes communication gaps and raises overall efficiency in the organization.