Planning is both an organizational necessity and a managerial responsibility. Through planning, organizations choose goals based on estimates or forecasts of the future. Concern for the future is intensified by the fact of relentless, unremitting change. The purpose of planning is two-fold: to determine appropriate goals, and to prepare for adoptive and innovative change.
Definition and Characteristics – Planning is an intellectual process, the conscious determination of a course of action, basing of decisions on purpose, facts and considered estimates. The plan of action is, at one and the same time, the line of action to be followed, the stages to go through, and methods to use. It is a kind of future picture wherein approximate events are outlined with some distinctness, whilst remote. Planning is defined as the activity by which managers analyze present conditions to determine ways of reaching the desired future stage. It embodies the skills of anticipation, influencing, and controlling the nature and direction of change. Planning is that they operate that determines ahead what ought to be done. It consists of choosing the enterprise objectives, policies, programmes, procedures, and alternative suggests that of achieving the objectives. In planning, the manager must be able to manipulate abstract ideas and anticipate the impact of the many possible outcomes as they affect the enterprise as a whole. .
Characteristics or Features of Planning
(i) Planning is a primary function of management: When planning, the manager decides which of the alternatives should be followed, which policies, procedures, programmes, projects and so on would be set up.
(ii) Planning is goal oriented: Planning is aimed at defining the organizational goals and design appropriate action plans in order to achieve these goals.
(iii) Planning is an intellectual process: “Planning requires a mental predisposition to think before acting, to act in the light of facts rather than of guesses, and generally speaking to do things in an orderly way”.
(iv) Planning is pervasive: Planning is all pervasive and it embraces all segments and levels in the organization.
(v) Planning is a continuous function: To keep the organization as a going concern, it is essential that planning must be done continuously.
(vi) Planning involves a choice between alternatives: Planning involves a choice among alternatives courses of action. If there is only one course, objective, policy, programme or procedure, perhaps then there exists no need for planning.
(vii) Planning is concerned with the accomplishment of group objectives: Planning is thus aimed at setting group goals and organizational goals rather than concentrating on individual goals.
(viii) Planning is flexible: No plan is rigid. When a plan is adopted, it chalks out a definite course of action. But the future assumptions upon which the planning is based may force managers to change the original plan.
Utility of Planning
(i) Planning enables a manager or organization to affect rather than accept the future. Planning enables the managers to influence future productivity for the benefit of the enterprise, by setting objectives and adopting a course of action.
(ii) Planning makes way for orderly activities. Planning enables the coordination of the activities. In this process, unproductive work is minimized.
(iii) Planning results in a healthy organizational climate. Involvement of individuals in planning method enhances the behavioral climate as a result of it ends up in magnified understanding themselves and also the organization as an entire. Positive attitudes are developed.
(iv) Planning provides a unifying framework. Planning enables people within an enterprise to work effectively and harmoniously for the accomplishment of the common goals.
(v) Planning provides direction and a sense of purpose for the organization. Planning involves abstract thought, moreover as rational decision making. Planning helps in uncovering and recognizing opportunities and threats at the earliest.
(vi) Planning provides a basis for control in an organization. Planning channelized the behavior in the right direction and helps in evaluating the performance.
Limitations of Planning
(i) Inaccuracy: Formulation of future plans on the basis of wrong forecasts may not lead to the desired results.
(ii) Time-consuming: Planning involves the determination of the major goals to be achieved. It is time-consuming and it involves energy, time and mobilization of different kinds of resources.
(iii) Rigidity: Planning often gives some amount of rigidity to its policies, procedures, programmes, and methods. A balance between stability and flexibility in planning is to be maintained.
(iv) Costly: Planning is costly because it requires money, time and information.
(v) Attitudes of Management: Good planning is an agonizing process – it is an intellectual activity. It requires a tremendous amount of paperwork and time. Most managers would not like to undergo such a painful process and prefer to become doers rather than thinkers.
(vi) Faulty design of planning system: Some of the limitations due to the design of the planning system can be listed as under
• Lack of reward: Planning system may not have a reward mechanism and as such managers tend to address their attention to short-run results of their performance which carried a reward.
• Lack of participation: When planning is imposed from the authorities, it may lead to resentment and resistance among those who are forced to execute.
• Lack of specific activities: Planning cannot be effective unless the goals are specific and clear.
• Competence of the planner: A planner must possess not only skill, but intelligence and breadth of vision, and for long-range master planning must have the ability to forecast.
(vii) Planning prevents innovation: Planning demands a total commitment to written policies, procedures, rules, etc. It restricts a manager unnecessarily to defined areas.
(viii) Lack of orientation and training for managers: For most of the managers planning is easy to put off, as it is not at all exciting or action-oriented.
(ix) Uncertainty: Planning has to’ reckon with numerous uncertainties in the environment. Finally, planning is a mere ritual in a fast-changing environment. The sudden and dramatic changes in technology, competition, government regulations, political, legal, ethical and social changes reduce the effectiveness of the planning effort.