Planning: Concept & Importance

Planning concept, characteristics and steps involved in the planning process.

In organizations, planning is a management process, concerned with defining goals for company’s future direction and determining 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 is goal-oriented

• Planning is made to achieve the desired objective of the business.
• The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.
• Planning identifies the action that would lead to desired goals quickly & economically.
• It provides a sense of direction to various activities. E.g. Maruti Udhyog trying to capture Indian Car Market by launching diesel models.

Planning is looking ahead

• Planning is done for future.
• It requires peeping in future, analyzing it and predicting it.
• Thus planning Is based on forecasting.
• A plan Is a synthesis of forecast.
• It is a mental predisposition for things to happen in future.

Planning is an intellectual process

• Planning is a mental exercise involving creative thinking, sound judgment and imagination.
• It is not mere guesswork but rotational thinking.
• A manager can prepare sound plans only if he has sound judgment, foresight and Imagination.
• Planning is always based on goals, facts and considered estimates.

Planning involves choice & decision making

• Planning essentially involves a choice among various alternatives.
• Therefore, if there is only one possible course of action, there is no need for planning because there is no choice.
• Thus, decision making is an integral part of planning.
• A manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.

Planning is the primary function of management

• Planning lays foundation for other functions of management.
• It serves as a guide for organizing, staffing, directing and controlling.
• All the functions of management are performed within the framework of plans laid out.
• Therefore planning is the basic or fundamental function of management.

Planning is a Continuous Process

• Planning is a never-ending function due to the dynamic business environment.
• Plans are also prepared for a specific period of time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions.

Basic Steps in Management Planning Process

Establish Goals

The first step of the management planning process is to identify specific company goals.

Identify Resources

Each goal should have financial and human resources projections associated with its completion.

Establish Goal-Related Tasks

Each goal should have tasks or projects associated with its achievement.

Prioritize Goals and Tasks

Prioritizing goals and tasks is about ordering objectives in terms of their importance.

Create Assignments and Timelines

As the company prioritizes projects, it must establish timelines for completing associated tasks and assign individuals to complete them.

Establish Evaluation Methods

A management planning process should include a strategy for evaluating the progress toward goal completion throughout an established time period.