What is Planning?
Planning is the process that is associated with setting goals and defining the actions that are required to achieve the goals. Planning begins with objectives. They are drawn from the vision and declarations of intent; however, these articulations define what the organization must accomplish but not the actual goals it will achieve.
The company is affected by its surroundings and environments, such as rules and regulations, the accessibility of assets, the skills and knowledge of its employees, equipment, and assets, as well as the capabilities of its management. The circumstances are analyzed using a procedure known as a SWOT exam. Together the vision, statements of purpose, and the outcomes of the situation examination determine the mission of the group.
Advantages of Planning-
(1) Reduces Uncertainty
A company must work in a world that changes constantly and is uncertain. Planning can allow managers to anticipate different uncertainties that could arise resulting from technological advancements and changes in the taste and style of people, for example.
It can help reduce uncertainties in the near future since it allows for anticipation of the future.
Effective planning comes from thoughtful thinking that is based on previous experiences and current situations.
(2) Focus on Objectives/Goals
The purpose of organizations is to accomplish certain goals or objectives. Planning is centered around these goals and directs actions to reach these goals.
Planning defines these goals more clearly while determining the best way to reach these goals. It helps to avoid wasting time on useless activities.
A plan acts as the basis for the action to be taken for the success of the goals. Therefore, good management is management that is based on goals.
(3) Economic Operations
The process of planning involves the selection of the best plan of action. It assists in eliminating any kind of waste and maximizing the use of resources available.
Planning is an intelligent process that results in cost-effective and efficient operations. It assists in reducing operating costs and boosts the competitiveness of an organization.
(4) Facilitates Control
Control and planning are interdependent. Control is the benchmark against which actual performance can be evaluated and measured.
Actual performance is evaluated against the standards set in the plan. Any deviation is recorded.
Control is the process of keeping things within the prescribed course and fixing any deviations from the plan. Therefore, planning aids in control by creating standards and comparing the actual results.
(5) Encourages Innovation and Creativity
Planning is basically the most important function of management. Planning can help in the development of creativity and innovation among managers when they are planning.
It is helpful to come up with new ideas and adapt to the requirements of the present situation. It helps to create a positive outlook within the management.
(6) Improves Motivation
A well-planned program will ensure the participation of all managers and will boost their motivation. It promotes a feeling of participation and team spirit.
It boosts satisfaction and the morale of employees since they are aware of what they are expected to do.
(7) Ensures Better Coordination
Planning forms the basis of a well-organized and coordinated effort by the company. It ensures that there is a common direction toward the organization's goals.
Every activity is focused on the same objectives. It is a coordinated effort across the entire organization. This can lead to better coordination throughout the company.
(8) Avoids Random Activity
Planning is the process of determining in advance which goals are to be accomplished and the way they will be accomplished.
It allows systematically organized and coordinated efforts feasible and eliminates random activities. It is a better alternative to making instant decisions based on impulsivity and intuition.
Planning brings order and rigor to the organization. It helps avoid duplication of work and efforts that are not in sync.
(9) Improves Competitive Strength
Effective planning improves the competitiveness of an organization. Planning is based on systematic and accurate forecasts.
It helps businesses identify new opportunities and define their own future. It is a way to ensure that the progress of the organization is in order.
Therefore, planning is crucial to the success of any business. It is a systematic, integrated, and organized effort.
In reality, it enhances the overall efficiency of a company and allows for the quick completion of tasks at the lowest cost. It helps avoid duplication of effort or random activities, as well as the overlapping of efforts.
(10) Concentrates attention on the goals and the results
The people who execute them remain focused on the expected outcomes because of planning. Additionally, keeping track of the objective also inspires employees.
(11) Creates a foundation for collaboration
Diverse groups can't effectively work together in joint projects without having an integrated plan. Examples include plumbers, carpenters, and electricians who are not able to build a home without blueprints. Additionally, military operations require coordination among Army, Navy, and Air Force units.
(12) Helps to anticipate issues and adapt to change
When managers plan, they will be able to forecast future challenges and make any needed changes in advance to prevent the occurrence. Of course, unexpected events like the quadruple of oil prices will always come up short, but some changes are more easily forecasted. Making plans for potential issues will help minimize errors and minimize the "surprises" that inevitably occur.
(13) Economic aspects of the operation
For planning, first, the goals of the company are established, and then the best method to be used to accomplish the goals is determined. The operations chosen to achieve the goals are the best options out of the other options that are out there and result in the operation being carried out in an economical manner.
It also lets you avoid the practice of using trial and error, and at the same time, it ensures that the funds of a business aren't wasted when making decisions. The same can be accomplished by all departments within the company, including sales, production, finance, and so on.
(14) Encourages creativity and innovation
A more efficient method of planning is one which can inspire managers to think of different ways of doing things. In this manner, it will inspire creativity and innovation in managers since they will be thinking about new approaches while participating in the planning process.
The process should provide an understanding of the individual's role as well as it should create an environment of transparency, which assists in achieving the objectives of the company.
(15) Improved coordination
Since the goals of the organization are the same, all individuals work together to reach these goals. However, the process of making plans also assists in avoiding the repetition of efforts. This can lead to better coordination, which ultimately leads to the attainment of higher-quality outcomes.
Disadvantages of Planning-
Planning plays a crucial function in controlling the organization's activities. It plays an essential and integral role. Thus, the need for planning is undisputed.
Despite the numerous benefits that planning brings, it is not without a few restrictions and limitations. Certain limitations are inherent to the process of planning, while others are related to planning techniques and the planners themselves.
The disadvantages or limitations of planning are as follows:
(1) Lack of Reliable Data
Planning is done by relying on certain assumptions regarding the near future. The future is uncertain and unforeseen. Hence, the future cannot be predicted accurately since reliable data and information aren't accessible.
If accurate information and data aren't available to plan, it is likely to be devalued. Planning can become inaccurate and unreliable because of mistakes in personal judgment and the ineffectiveness of planning techniques.
Incorrect assumptions or lack of necessary expertise on the part of planners also affects the efficiency of planning. So, planning for uncertain future events and risks can provide no 100% assurance.
Planning requires strict adherence to established policies, procedures, and guidelines. This limits an individual's freedom and the desire for innovation and creativity.
The nature of business is constantly changing, and the paperwork that is created by detailed planning can cause a lot of harm to an organization. But, this issue is overcome by implementing flexible plans.
(3) Time-Consuming Process
Planning can be a time-consuming process. Each step of planning can take a significant amount of time. It takes a lot of time to gather, analyze and interpret the data to make plans.
It's not appropriate in situations in which immediate or sudden actions are required to deal with unexpected events.
In some instances, advance planning can cause delays and result in the loss of profitable opportunities.
(4) Costly Process
Planning is expensive. It is necessary to spend money and time collecting data in the form of estimates, making forecasts, and evaluating options.
Experts' services are required in order to choose the most efficient and cost-effective course of action for an organization.
Costs for planning can continue rising if the plan becomes more complicated and detailed due to the need for time and appropriate work.
(5) Rapid Change
Rapidly changing technology, consumer trends, and fashions add additional challenges to the planning process. In a complicated and fast-changing environment, planning can be more difficult as it creates new challenges. With rapidly changing circumstances, the planning activities that are taken during a one-time frame may not be appropriate in a different time period.
(6) Internal Inflexibility
Inflexibility within the internal system could be due to mental policies and procedures as well as capital investment that can cause problems with making plans and implementing them.
Inflexibility in the psychological realm is in the shape of resistance to change. Any time a change is implemented, there are employees who resist change because they believe current conditions are more appealing and secure.
Similar to the way that when policies and procedures are set, they are difficult to alter. In the majority of cases, the moment the capital has been invested in the form of fixed assets, it is more difficult to alter processes in the very near future.
This inflexibility is present throughout the life span that fixed assets have.
(7) External Inflexibility
There is a certain degree of external inflexibility that managers don't have any control over. Technological changes, changes in the policies of the government, and Industrial unrest, for example, are all important external factors that affect the planning process.
They significantly hinder planning in management within an organization.
The previous limitations of planning expose the complexity and issues that arise in the process of planning. Understanding these limitations can assist managers in more thoughtful and well-organized planning.
It also should be noted that planning can be extremely costly. For instance, gathering information and testing various courses of action will require a substantial investment by companies.
The same is true for planning. Some of these costs are enough to make it very difficult for small companies to get involved in the planning process. Thus, especially the long-term plan is out of reach for many companies because of the high costs associated with planning.
It is vital that the value gained from planning must not be lower than the costs which have been incurred as a result of the planning.
(9) Resistance to Change
A majority of people typically don't like any changes. Their inertia to new ideas can be an obstacle to the planning process. McFarland writes. "The principal psychological barrier is that executives, like most people have more regard for the present than for the future."
The present isn't just more reliable than the future, but it is also more appealing. Resistance to change is commonly seen in the world of business. Planning usually implies changes that the business executive might prefer to ignore, hoping that they will not occur.
The belief that the things you plan for the future are not likely to occur cannot be based on logical thinking. The planning assists in reducing the risk of future uncertainty.