Planning is the fundamental management function, which involves deciding beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an organization’s objectives and develops various courses of action, by which the organization can achieve those objectives. It chalks out exactly, how to attain a specific goal.
Planning is nothing but thinking before the action takes place. It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.
Planning is the first primary function of management that precedes all other functions. The planning function involves the decision of what to do and how it is to be done? So managers focus a lot of their attention on planning and the planning process.
Objectives of Planning
The objectives of planning are many and varied. These aims are not the same for all countries, not are they same for the same country at all times.
Some major objectives of economic planning are:
(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.
Nature of Planning
- Planning is primary function of management
The functions of management are broadly classified as planning, organisation, direction and control. It is thus the first function of management at all levels. Since planning is involved at all managerial functions, it is rightly called as an essence of management.
- Planning focuses on objectives
Planning is a process to determine the objectives or goals of an enterprise. It lays down the means to achieve these objectives. The purpose of every plan is to contribute in the achievement of objectives of an enterprise.
- Planning is a function of all managers
Every manager must plan. A manager at a higher level has to devote more time to planning as compared to persons at the lower level. So the President or Managing director in a company devotes more time to planning than the supervisor.
- Planning as an intellectual process
Planning is a mental work basically concerned with thinking before doing. It is an intellectual process and involves creative thinking and imagination. Wherever planning is done, all activities are orderly undertaken as per plans rather than on the basis of guess work. Planning lays down a course of action to be followed on the basis of facts and considered estimates, keeping in view the objectives, goals and purpose of an enterprise.
- Planning as a continuous process
Planning is a continuous and permanent process and has no end. A manager makes new plans and also modifies the old plans in the light of information received from the persons who are concerned with the execution of plans. It is a never ending process.
- Planning is dynamic (flexible)
Planning is a dynamic function in the sense that the changes and modifications are continuously done in the planned course of action on account of changes in business environment.
As factors affecting the business are not within the control of management, necessary changes are made as and when they take place. If modifications cannot be included in plans it is said to be bad planning.
- Planning secures efficiency, economy and accuracy
A pre- requisite of planning is that it should lead to the attainment of objectives at the least cost. It should also help in the optimum utilisation of available human and physical resources by securing efficiency, economy and accuracy in the business enterprises. Planning is also economical because it brings down the cost to the minimum.
- Planning involves forecasting
Planning largely depends upon accurate business forecasting. The scientific techniques of forecasting help in projecting the present trends into future. ‘It is a kind of future picture wherein proximate events are outlined with some distinctness while remote events appear progressively less distinct.”
- Planning and linking factors
A plan should be formulated in the light of limiting factors which may be any one of five M’s viz., men, money, machines, materials and management.
- Planning is realistic
A plan always outlines the results to be attained and as such it is realistic in nature.