Planning and Decision Making Concept and Purpose
Planning is the process of thinking about the activities required to achieve a desired goal. It is the first and foremost activity to achieve desired results. It involves the creation and maintenance of a plan, such as psychological aspects that require conceptual skills. There are even a couple of tests to measure someone’s capability of planning well. As such, planning is a fundamental property of intelligent behavior. An important further meaning, often just called “planning” is the legal context of permitted building developments.
Also, planning has a specific process and is necessary for multiple occupations (particularly in fields such as management, business, etc.). In each field there are different types of plans that help companies achieve efficiency and effectiveness. An important, albeit often ignored aspect of planning, is the relationship it holds to forecasting. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like for multiple scenarios. Planning combines forecasting with preparation of scenarios and how to react to them. Planning is one of the most important project management and time management techniques. Planning is preparing a sequence of action steps to achieve some specific goal. If a person does it effectively, they can reduce much the necessary time and effort of achieving the goal. A plan is like a map. When following a plan, a person can see how much they have progressed towards their project goal and how far they are from their destination.
Purposes of Planning
(i) Facilitates Accomplishment of Objectives: The aim of planning is to facilitate the attainment of objectives. It focuses its attention on the objectives of the organization. It states the objectives of each department in the organization and of the enterprise as a whole. This helps personnel to see the enterprise in its entirety and see how their actions contribute to its ultimate goals. Planning forces the managers to consider the future and revise its plans if necessary for achieving the objectives.
(ii) Ensures Economy in Operations: Since planning emphasizes efficient operation and consistency, it minimizes costs and gains economical operation. Coordinated group effort, even flow of work and deliberate decisions are due to planning.
(iii) Precedes Control: Control involves those activities which are carried out to force events to conform to plans. Plans serves as standards of performance. Control seeks to compare actual performance with set standards. So control cannot be exercised without plans.
(iv) Provides for Future Contingency: Planning is required because future is uncertain. Planning enables the management to look into the future and discover suitable alternative course of action. Planning helps the management to have a clear-cut idea about the future and to frame a suitable programme for action. Even when the future is highly certain, planning is essential to decide the best course of action.
(v) Facilitates Optimum Utilization of Resources: Various resources that are relevant to an organization namely, funds, physical resources, manpower, technological know-how, etc., are by and large inadequate due to demand from competing organizations and have alternative uses. This necessitate the organization to make the best possible use of resources. Planning facilitates optimum use of available resources.
(vi) Pr-requisites for other Managerial Functions: The purposes of planning is to provide a conceptual and concrete basis for initiating and undertaking other managerial functions like staffing, organizing, directing and control. Planning is a primary function and it goes a long way to improve efficiency of other functions of management and makes the management tasks more effective.
(vii) All Pervasive Function: Planning is a function of managers at all levels though the scope, nature and extent of planning differs from one enterprise to another and from one level to another. Irrespective of the level and area of his operation, each and every manager has to perform this function. Planning at the top level will be fundamental, broad and far-reaching. Managers at other levels may plan about their departmental activities for a short period.
Decision making means – the process of deciding about something important, especially in a group of people or in an organization.
Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem.
As evidenced by the foregone definitions, decision making process is a consultative affair done by a comity of professionals to drive better functioning of any organization. Thereby, it is a continuous and dynamic activity that pervades all other activities pertaining to the organization. Since it is an ongoing activity, decision making process plays vital importance in the functioning of an organization. Since intellectual minds are involved in the process of decision making, it requires solid scientific knowledge coupled with skills and experience in addition to mental maturity.
Further, decision making process can be regarded as check and balance system that keeps the organisation growing both in vertical and linear directions. It means that decision making process seeks a goal. The goals are pre-set business objectives, company missions and its vision. To achieve these goals, company may face lot of obstacles in administrative, operational, marketing wings and operational domains. Such problems are sorted out through comprehensive decision making process. No decision comes as end in itself, since in may evolve new problems to solve. When one problem is solved another arises and so on, such that decision making process, as said earlier, is a continuous and dynamic.
Importance of Decision Making
Management is essentially a bundle of decision-making process. The managers of an enterprise are responsible for making decisions and ascertaining that the decisions made are carried out in accordance with defined objectives or goals.
Decision-making plays a vital role in management. Decision-making is perhaps the most important component of a manager’s activities. It plays the most important role in the planning process. When the managers plan, they decide on many matters as what goals their organisation will pursue, what resources they will use, and who will perform each required task.
When plans go wrong or out of track, the managers have to decide what to do to correct the deviation.
In fact, the whole planning process involves the managers constantly in a series of decision-making situations. The quality of managerial decisions largely affects the effectiveness of the plans made by them. In organising process, the manager is to decide upon the structure, division of work, nature of responsibility and relationships, the procedure of establishing such responsibility and relationship and so on.
In co-ordination, decision-making is essential for providing unity of action. In control, it will have to decide how the standard is to be laid down, how the deviations from the standard are to be rectified, how the principles are to be established how instructions are to be issued, and so on.
The ability to make good decisions is the key to successful managerial performance. The managers of most profit-seeking firms are always required to take a wide range of important decision in the areas of pricing, product choice, cost control, advertising, capital investments, dividend policy, personnel matters, etc. Similarly, the managers of non-profit seeking concerns and public enterprises also face the challenge of taking vital decisions on many important matters.
Decision-making is also a criterion to determine whether a person is in management or not. If he participates in decision-making, he is regarded as belonging to management staff. In the words of George Terry: “If there is one universal mark of a manager, it is decision-making.”