Planning is the most basic of all managerial functions. It is the process by which managers establish goals and define the methods by which these goals are to be attained.
Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making, which is choosing from among alternative future courses of action – Weihrich and Koontz
Planning is thus taken as the foundation for future activities. Newman has thus defined it as, “Planning is deciding in advance what is to be done; that is a plan is a projected course of action.”
So, planning can be thought of as deciding on a future course of action. It may also be treated as a process of thinking before doing.
Management has to plan for long-range and short-range future direction by looking ahead into the future, by estimating and evaluating the future behavior of the relevant environment and by determining the enterprise’s own desired role.
Planning involves determining various types and volumes of physical and other resources to be acquired from outside, to allocate these resources in an efficient manner among competing claims and to make arrangement for systematic conversion of these resources into useful outputs.
Nature of Planning
(i) Planning Focuses on Achieving Objectives
Management begins with planning and planning begins with the determining of objectives. In the absence of objectives no organisation can ever be thought about. With the determining of objective, the way to achieve the objective is decided in the planning.
For example, a company decides to achieve annual sales of? 12 crores. After deciding upon this objective, planning to achieve this objective shall immediately come into force. It was thought to achieve this objective by giving advertisement in the newspapers.
After some time it comes to be known that the medium of advertisement appeared to be incapable of achieving the target. In such a situation the medium of advertisement can be changed and it can be shifted from newspapers to television in this way, every possible change is made through the planned action for the purpose of achieving the objective.
(ii) Planning is Primary Function of Management
Planning is the first important function of management. The other functions, e.g., organising, staffing, directing and controlling come later. In the absence of planning no other function of management can be performed.
This is the base of other functions of management. For example, a company plans to achieve a sales target of 112 crores a year. In order to achieve this target the second function of management, i.e., organising comes into operation.
Under it the purchase, sales, production and financial activities are decided upon. In order to complete these activities, different departments and positions are decided upon. The authority and responsibility of every position are decided upon.
After the work of organising, information about the number of different people at different levels required to achieve the objective shall have to be provided. This job will be performed under staffing. Similarly, planning is the base of other functions like directing and controlling.
(iii) Planning is Pervasive
Since the job of planning is performed by the managers at different levels working in the enterprise, it is appropriate to call it all-pervasive. Planning is an important function of every manager; he may be a managing director of the organisation or a foreman in a factory.
The time spent by the higher-level managers in the process of planning is comparatively more than the time spent by the middle-level and lower-level managers. It is, therefore, clear that all the managers working in an enterprise have to plan their activities.
For example, the decision to expand business is taken by the higher-level managers. The decision to sell products is taken by the middle-level and lower-level managers.
(iv) Planning is Continuous
Planning is a continuous process for the following reasons:
(a) Plans are prepared for a particular period. Hence, there is need for a new plan after the expiry of that period.
(b) In case of any discrepancy plans are to be revised.
(c) In case of rapid changes in the business environment plans are to be revised.
(v) Planning is Futuristic
Planning decides the plan of action what is to be done, how is it to be done, when it to be done, by whom is it to be done all these questions are related to future. Under planning, answers to these questions are found out.
While an effort is made to find out these answers, the possibility of social, economic, technical and changes in legal framework are kept in mind. Since planning is concerned with future activities, it is called futuristic.
For example, a company is planning to market a new product. While doing so it shall have to keep in mind the customs and the interests/tastes of the people and also the possibility of any change in them.
(vi) Planning Involves Decision Making
Planning becomes a necessity when there are many alternatives to do a job. A planner chooses the most appropriate alternative. Therefore, it can be asserted that planning is a process of selecting the best and rejecting the inappropriate. It is, therefore, observed that planning involves decision making.
For example, Mr. Anthony lives in a town where only commerce stream is taught in schools. His daughter has passed matrix and wants to get admission in 10 + 1. It is evident that there is only one option for her, i.e., commerce.
She doesn’t have to think or plan anything. On the other hand, if all the three faculties’ art, science & commerce were available in the schools, she would have to definitely think and plan about the subject of study. It would have been be nothing but decision making in this case.
(vii) Planning is a Mental Exercise
Planning is known as a mental exercise as it is related to thinking before doing something. A planner has mainly to think about the following questions:
(i) What to do? (ii) How to do it? (iii) When to do it? (iv) Who is to do it?
Objectives of Planning
(a) An improvement in the standard of living of the people through a sizable increase in national income within a short period of time;
(b) A large expansion of employment opportunities for the removal of unemployment and for creating jobs and incomes;
(c) A reduction in all types of social, economic and regional inequalities;
(d) An efficient utilisation of the country’s resources for faster growth;
(e) Removal of mass poverty within a definite time limit through land reform, employment creation, and provision of educational and medical facilities;
(f) Attainment of self-reliance by reducing dependence on foreign capital and foreign aid.