What are the purpose of planning in an organization?

Purposes of planning in an organization

The following are some of the important purpose of planning in an organization.

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

In this connection, Theo Haimann says that

“the scope, extent and importance of the nature of planning tend to decrease as we descend toward the lower levels of management and approach the point of execution of the plan”.

8. Coordinates the Activities: Coordination is an important factor for the smooth functioning of an organization. As pointed out by H.G. Hicks,

“planning coordinates the activities of the organization toward defined and agreed upon objectives. The alternative is random behavior”.

If planning is absent, various divisions of the organization may pursue different objectives.

9. Provides for the Delegation of Authority: Planning provides for the delegation of authority to subordinates. Well-formulated plans serve as guides to subordinates and reduce risk involved in delegation of authority.