Introduction

Planning is essential in every walk of life. Each and every person has to frame a plan to proceed in his schemes. A person whether he is engaged in business or not, has framed a number of plans during his life. The plan period may be short or long. According to Arnold Toynbee, "One of the characteristics of being human is that he makes plan."

Planning is the first and foremost function of management. All eminent writers have said that the planning function precedes all other managerial functions. Effective planning facilitates early achievement of objectives, which depends upon the efficiency of the planner. A planner is a person who frames a plan to put his schemes into practice.

The planner can develop his efficiency by preparing himself to face the future developments.

Meaning

Planning is an intellectual process of thinking resorted to decide a course of action which helps achieve the pre-determined objectives of the organisation in future.

F.W. Taylor had pointed out in his report on Scientific Management, that planning is separated from execution. Separate plans are prepared for various departments; then, the top executive of the organisation takes steps to co-ordinate the various departmental plans.

Definition

Let us now study the definitions of various eminent writers in the field of management 

Koontz and O'Donnel, "Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. It bridges the gap from where we are to where we want to go.

According to Terry, "Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired results."

M.S. Hurley, "Planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programmes from among alternatives." Allen, "A plan is a trap laid to capture the future."

Haynes and Massie, "Planning is that function of the manager in which he decides in advance what he will do, It is a decision-making process of a special kind. It is an intellectual process in which creative thinking and imagination are essential."

Kast and Rosenzweig, "A plan is a determined course of action."

H.Fayol, "Planning is deciding the best alternatives among others to perform different managerial operations in order to achieve the pre-determined goals."

J.P. Barger, "Planning is an ability to visualize a future process and its results." W.H. Newman, "Generally speaking, planning is deciding in advance what is to be done, that is, a plan is a projected course of action."

L. Urwick, "Planning is fundamentally a mental pre-disposition to do things in an orderly way, to think before acting and to get in the light of facts rather than of guesses."

Theo Haimann, "Planning is deciding in advance what is to be done." Peter F. Drucker, "Planning is the continuous process of making present entrepreneurial (risk taking) decisions systematically and with best possible knowledge of their futurity, organizing, systematically the efforts needed to carry out these decisions and measuring the results e these decisions against the expectations through organized, systematic feedback."

Cyril L. Hudson, "To plan is to produce a scheme for future action; to bring about specified results, at specified cost, in a specified period of time. It is a deliberate attempt to influence, exploit, bring about and control the nature, direction, extent, speed and effect of change. It may even attempt deliberately to create change, remembering always that change (like decision) in anyone sector will in some way affect other sectors. Planning take place at each managerial and supervisory level. Therefore, the overall plan must be made at the top and subsidiary plan making must be relevant to and consonant with the major plan. In short, planning must be a carefully controlled and coordinated activity."

Hamilton Church, Planning is, in essence, the exercise of foresight." Hodge and Johnson, "Planning is an attempt to anticipate the future in order to achieve better performance."

Hart, Planning is the determination in advance of a line of action by which certain results are to be achieved."

Dalton E. Mc Farland defines planning as, "Planning may be broadly defined as a concept of executive action that embodies the skills of anticipating, influencing and controlling the nature and direction of change.

Billy E. Goetz, "Planning is fundamentally choosing and a planning that arises only when an alternative course of action is discovered." Alford and Beatty, "Planning is the thinking process, the organised foresight, the vision based on fact and experience that is required for intelligent action."

Characteristic Of Planning

The following are the characteristics of planning:

1. Planning is looking into the future.

2. Planning involves pre-determined line of action.

3. Planning discovers the best alternative out of available many alternatives. 

4. Planning requires considerable time for implementation. 

5. Planning is a continuous process.

6. Planning's object is to achieve pre-determined objectives in a better way. 

7. Planning integrates various activities of organisation.

8. Planning is done for a specific period.

9. Planning not only selects the objectives but also develops policies, programmes and procedures to achieve the objectives.

10. Planning is required at all levels of management.

11. Planning is an inter-dependent process which co-ordinates the various business activities.

12. Planning directs the members of the organisation.

13. Growth and prosperity of any organisation depends upon planning.

Objectives Of Planning

Planning in any organisation serves to realize the following objectives

1. Reduces uncertainty

Future is an uncertainty. Planning may convert the uncertainty into certainty. This is possible to some extent by, planning which is necessary to reduce uncertainty.

2. Brings co-operation and co-ordination

Planning can bring co-operation and co-ordination among various sections of the organisation. The rivalries and conflicts among departments could be avoided through planning. Besides, planning avoids duplication of work.

3. Economy in operation

As already pointed out, planning selects best alternatives among various available alternatives. This will lead to the best utilization of resources. The objectives of the organisation are achieved easily.

4. Anticipates unpredictable contingencies

Some events could not be predicted. These events are termed as contingencies. These events may affect the smooth functioning of an enterprise. The planning provides a provision to meet such contingencies and tackle them successfully.

5. Achieving the pre-determined goals

Planning activities are aimed at achieving the objectives of the enterprise. The timely achievement of objectives are possible only through effective planning.

6. Reduce competition

The existence of competition enables the enterprise to get a chance for growth. At the same time, stiff competition should be avoided. It is possible, to reduce competition through planning.

Nature of Planning

There are number of ways available to complete a certain job. Planning chooses any one of the best alternatives out of the available ones. Economy and certainty are considered while selecting the best alternative. Thus, the nature of planning is briefly discussed below:

1. Primary of planning 

The functions of management include planning, organizing, staffing, directing and controlling. Eminent writers may add other new ones to these functions or those which have not been included in these functions. Anyway, writers unanimously accept that planning is the primary function of all the other functions. The reason is that the manager wants to achieve the pre-determined objectives in a better way.

2. Planning contributes to objectives

There is a close connection between objectives and planning. Planning is based on the objectives. If there is no link between planning and objectives, the former will only be a mental exercise and of no use. Planning contributes to the attainment of objectives.

3. Planning an intellectual activity

Planning includes the selection of the best alternative available and thinking before selection of the best alternative. It involves the ability to foresee mishaps in future which might affect the smooth functioning of an organisation. So, planning is an intellectual activity.

4. Planning results in higher efficiency

Planning efficiency is measured in terms of input and output ratios. Planning leads to maximum output with minimum expenditure. This input and output relationship is not only determined by money, labor hours and production units but also by the degree of satisfaction available to the individual as well as the group. The high degree of human satisfaction motivates the workers to produce more within the specified time.

5. Planning is a continuous process

Planning does not come to an end with the establishment of a business concern. Planning in other functions is also required. After the establishment of a business concern, certain decisions are taken. Planning is necessary to implement the decisions. A number of decisions are taken during the lifetime of the business concern. So, planning is necessary throughout the running of the business concern as a continuous process.

6. Planning is flexible

As already pointed out, while planning, any one of the available alternatives is selected. Planning selects the best alternative based on certain assumptions. If the assumptions are proved wrong, the selected alternative tends to be an incorrect one. There is a possibility of a dead log in the functions of the management. Planning has one more alternative to suit future situations.

7. Unity and consistency

Every department manager resorts to planning at different times. The planning is related to the achievement of objectives. In other words, managerial actions of different managers are unified in order to achieve the objectives. Policies and procedures of the organisation provide a basis for the consistency of executive behavior and action in matters of planning.

8. Planning is common to all

Planning work is done by every person who is working in a business unit. He may be a managing director or a foreman.

Being of a higher place, the planning for a managing director is to frame the policies and procedures to be adopted. Being at a lower place, planning for a foreman is to allocate the work to his subordinates. So, planning is common to all.

9. Basis for all managerial functions

Planning is found at all levels of management. Top management looks after strategic planning. Middle management looks after administrative planning and the lower-level management looks after operational planning.

10. Getting co-ordination

Planning co-ordinates various business activities. Without planning, nothing can be coordinated.

11. Considering limiting factors

Every plan is formulated after considering the limiting factors. The limiting factors may be money, skilled labor, quality materials, plant and machinery.

Features of Planning

By analyzing the above meaning and definition, we can reveal the following features of planning:

1. Planning Focuses on Achieving Objectives

Planning is a goal-oriented work because its purpose is to achieve organizational objectives quickly and economically. These objectives are purposeful, as they provide basic guidelines for planning activities by identifying the actions which lead to desired results.

2. Planning is a Primary Function of Management

Planning is the primary function of management as it serves as a base for all other management functions because it provides the basic framework within which all other management functions are performed. We consider it to be a blueprint, as it provides the foundation for managerial actions.

3. Planning is Pervasive

It is pervasive as it is required at all levels of management and in all types of organizations. However, the scope of planning varies from one level to another, while supervisors at the lowest level formulate day-to-day operational programs and middle-level managers prepare departmental plans, and the top management plans for the organization as a whole.

4. Planning is a Continuous Process

Planning is an ongoing process. Plans are prepared for a specific period and at the end of that period, there is a need for a new plan based on the new situation. Since the future is uncertain, there are various assumptions about the future that may change. Therefore, the original plan may have to be revised in light of changing conditions.

5. Planning is Futuristic

Planning involves looking into the future, and it predicts the best advantage of an organization. Managers plan to manage future events to the best of their capacity. Planning also involves thinking about the future for doing in the present. It essentially involves scientific anticipation of future events; i.e., forecasting.

6. Planning involves Decision-Making

Planning is the process of making choices from various alternatives to achieve the specified objectives. The need for planning arises only when alternatives are available, and in actual practice, planning presupposes the existence of alternatives. Thus, decision-making is an integral part of planning, as it involves a choice from various alternative courses of action. But, if there is only one alternative, then there is no need for planning.

7. Planning is a Mental Exercise

Planning is an intellectual process that is related to thinking before doing involving imagination and creativity. It is an activity of thinking based on logical reasoning rather than guessing and doing work. The success of planning depends on the performance of a planner. So, a planner must have intelligent imagination and sound judgment capacity.

Importance Of Planning

1. Planning Provides Direction

Planning is involved in deciding the future course of action. Fixing goals and objectives is the priority of any organization. By stating the objective in advance, planning provides unity of direction. Proper planning makes goals clear and specific. It helps the manager to focus on the purpose for which various activities are to be undertaken. It means planning reduces aimless activity and makes actions more meaningful.

2. Planning Reduces the Risk of Uncertainty

Every business enterprise has to operate in an uncertain environment. Planning helps a firm to survive in this uncertain environment by eliminating unnecessary action. It also helps to anticipate the future, and prepare for the risk by making necessary provisions.

3. Planning Reduces Overlapping and Wasteful Activity

Plans are formulated after keeping in mind the objective of the organization. An effective plan integrates the activity of all the departments. In this way, planning reduces overlapping and wasteful activities.

4. Planning Promotes Creativity and Innovative Ideas 

Planning encourages creativity, and helps the organization in various ways. Managers develop new ideas and apply the same to create new products and services leading to overall growth and expansion of the business. Therefore, it is rightly said that a good planning process will promote more individual participation by throwing up various new ideas and encouraging managers to think differently.

5. Planning Facilitates Decision-Making

Decision-making means searching for various alternatives and selecting the best one. Planning helps the manager to look into the future, and choose among various alternative forces of action. Planning provides guidelines for sound and effective decision-making.

6. Planning Establishes a Standard for Controlling 

Planning lays down the standards against which actual performance can be evaluated and measured. Comparison between the actual performance and pre-determined standards help to point out the deviation, and take corrective actions to ensure that events confront plans. In case of any deviation, the management can take remedial measures to improve the results.

Limitations of Planning

1. Rigidity

Planning brings rigidity to work as employees are required to strictly follow pre-determined policies. There is a tendency that by strictly following these predetermined policies, people become more concerned about complying with these plans rather than achieving the goals. Sometimes planning discourages individual initiative and creativity. It restricts their freedom and new opportunities are ignored.

2. Planning may not Work in a Dynamic Environment

Planning has to operate in an external environment, such as government policies, technology, etc., which is beyond the control of the organization. In any situation, changes in the environment make the plan inoperative and ineffective. So planning does not provide a positive result when such changes are not accurately forecasted.

3. Planning Reduces Creativity

Planning involves the determination of policies and procedures in advance. Employees are required to strictly follow them, and deviations are considered to be highly undesirable. As a result, employees do not show their skills, and it reduces their initiative and creativity.

4. Planning Involves Huge Costs

Planning is an expensive process because a lot of money is spent on gathering and analyzing information. It also involves the cost of experts, as experts are paid for planning. Efforts should be made to benefit from the analysis and ensure that benefits derived from planning should be more than their cost. If the cost of planning does not justify the benefit, then planning should be avoided.

5. Planning is Time-Consuming

It takes a lot of time in collecting, analyzing, and interpreting information relevant to planning. This causes a delay in decision making. Therefore during crises and emergencies, which call for an immediate decision, planning does not work. Sometimes, advance planning may lead to a delay in actions making, which may result in the loss of profitable opportunities.

6. Planning does not Guarantee Success

Planning may create a false sense of security in the organization. Managers tend to adopt previously tested plans, but it is not necessary that a plan which has worked before will work again in this competitive environment. So, we cannot say that planning guarantees success.

7. Resistance to Change

The employee becomes familiar with the method of doing work. So they resist change and do not want to adopt a new method of doing work. Such unwillingness may lead to the failure of the plan.

One of the reasons why we need planning is again the 18/20 rule. It is well established that for unplanned activity, 80% of the effort is less than 20% of the outcomes. One should spend much time deciding what to do, when to do and how to do it. Otherwise, it may result in taking many unnecessary, unfocused and inefficient steps. Limitations of planning indicate the problems in the planning process, but with limited careful steps, these limitations of planning can be overcome. It is much easier to adjust a plan to avoid a coming rise rather than to deal with the crisis when it comes.