Importance of planning: Planning is deciding in advance what is to be done and how it is to be done.
The benefits of planning are:
1. Planning provides direction: Planning provides direction for action by stating in advance how a work is to be done. Planning ensures that the goals or objectives are clearly stated so that the employees of the organization are aware of what the organization has to do and what they must do to achieve these goals.
2. Planning reduces the risk of uncertainty: Planning helps business enterprise to predict (i.e., foresee) its future uncertain events and enables the organization to face these uncertainties in the best possible manner. Thus, planning helps to develop a remedial action against future uncertainties and reduce the risk of business.
3. Planning reduces overlapping and wasteful activities: Planning facilitates the co-ordination of the activities and efforts of different divisions, departments and individuals and avoids duplication of activities. Thus, useless and wasteful activities are minimized or eliminated.
4. Planning promotes innovative ideas: Planning is basically thinking and decision making process. During the process of planning, many new ideas come to the minds of managers. These innovative ideas can take the shape of concrete plans leading to growth and prosperity of the business.
