Importance :
The importance of planning is explained as follows:
(1) Helps to set clear objectives : Planning is the process of setting objectives, targets and formulating plans to achieve these objectives. With the help of proper planning, management can analyse the present condition of the organisation and can identify the ways of attaining the desired position in future.
(2) Provides path of action : Planning ensures that the goals or objectives are clearly set. It acts as a guide and provides direction for doing the right things at the right time and in a right way. It helps the employees to understand the organisational goals and what they must do to achieve the same.
(3) Planning improves performance : It helps manager to improve future performances of employees by setting clear objectives and selecting a right course of action. It leads to efficiency in working of the employees. Due to proper planning the employees can work according to guidelines which helps them to improve performance. This results into higher profitability of the organisation.
(4) Minimizes the risk : Planning is the process of looking into the future and anticipating the future changes. By deciding in advance the task to be performed, planning helps to deal with future changes and unforeseen events. Planning helps in anticipation of risk and decide preventive measures accordingly. Though changes or risks cannot be eliminated but proper planning minimizes them.
(5) Planning leads to optimum utilization of resources: Plans are made on the basis of availability of resources with proper allocation for various activities. Proper allocation of resources brings higher efficiency and desired results with minimum wastages.
