Planning

Planning is the basic managerial function. It is the first function of management. It is the process of
deciding in advance what to do and how to do. Planning function is performed by managers at all levels.
Planning involves setting the objectives, targets and formulating an action plan to achieve them. The
objective provides direction for all managerial decisions and actions. Planning has utmost importance in
management.

Characteristics and Importance of Planning in Management

 It reduces the risk of uncertainty by preparing forecasts. It enables a manager to look ahead and
anticipate changes. Thus it helps to design ways to deal with changes and uncertainty.
 It ensures that goals or objectives are clearly stated.
 It helps avoiding confusion and misunderstanding by ensuring clarity in action and thoughts. The
useless and redundant activities are minimized or eliminated.
 It promotes innovative ideas. The new ideas can be take the shape of concrete plans.
 It facilitates the decision making by taking rational decision.
 It provides goals or standards against which actual performance is measured. Thus planning is
pre-requisite for controlling.
 It is a continuous process

Limitations of planning
 Plan once formulated cannot be changed at later stages.
 It is a time-consuming process.

Steps in planning process

1. The first and foremost step in planning process is setting objectives. The objective specifies what
organisation wants to achieve.
2. Once the objectives are set, the managers are required to make some assumption about the
future. These assumptions are known as premises.
3. The next step is to identify alternative courses of action.
4. Once alternative courses of action are identified, the subsequent step is to evaluate the each
identified course of action. Alternatives are evaluated in the light of their feasibility and
consequences.

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 5. The next step is to select the best possible alternative. The best plan has to be adopted and
implemented. The ideal alternative would be most feasible, profitable and with least negative
consequences.
6. The last step is follow up. It involves monitoring the plan to see whether the plan is being
implemented according to the schedule.

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