ADVANTAGES / IMPORTANCE OF PLANNING :
1. PLANNING PROVIDES DIRECTION :
All efforts are pointed toward the desired result and an effective sequence of efforts is accomplished. Unproductive work is minimized. The usefulness of the achievement is given importance. Planning distinguishes between action and accomplishment.
2. FACILITATES DECISION MAKING:
Planning helps the manager to visualize future possibilities and to evaluate key fields for possible change . Thus it helps to make decisions by analyzing future and selecting the most viable preposition alternative .
3. BASIS FOR CONTROL:
The twin of planning is controlling, which is performed to make sure the planning is bringing about result sought .
Planning facilitates existence of certain planned goals and standard of performance.It provides basis of controlling .
We cannot think of an effective system of controlling without existence of well thought out plans.
Planning provides pre-determined goals against which actual performance is compared.In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.
4.GOAL ORIENTED:
The act of putting thoughts down on the paper provides the planner guidance and a drive to achieve. Planning reduces random activity overlapping efforts and irrelevant action.
5.BETTER UTILIZATION :
Many managers point out that planning provides for a greater utilization of the available facilities and resources of an enterprise.
It leads to elimination of wasteful activities.
Reduces overlapping of activities .
6.ENCOURAGES INNOVATION :
In the process of planning, managers have the opportunities of suggesting ways and means of improving performance.
Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.
7.REDUCES UNCERTAINTIES :
Business is full of uncertainties.There are risks of various types due to uncertainties.
Planning helps in reducing uncertainties of future as it involves anticipation of future events.
Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks by necessary provisions to meet unexpected turn of events.
Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.
8. COORDINATION :
Planning revolves around organizational goals. All activities are directed towards common goals.
There is an integrated effort throughout the enterprise in various departments and groups and leads to better co-ordination .
It helps in finding out problems of work performance and aims at rectifying the same.
LIMITATIONS OF PLANNING :
(1) RIGIDITY :
Planning has tendency to make administration inflexible.
Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances.There is no scope for individual freedom.
The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
Planning therefore introduces in elasticity and discourages individual initiative and experimentation.
(2) TIME CONSUMING :
Planning is a time consuming process because it involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
Therefore planning is not suitable during emergency or crisis when quick decisions are required.
(3) PLANNING REDUCES CREATIVITY :
Under planning all the activities connected with the attainment of
objectives of the organisation are pre-determined. Consequently,
everybody works as they have been directed to do and as it has been made
clear in the plans.
Therefore, it checks their incisiveness. It means that they do not
think about appropriate ways of discovering new alternatives.
According
to Terry, “Planning strangulates the initiative of the employees and
compels them to work in an inflexible manner.”
(4) PLANNING INVOLVES HUGE COSTS:
Planning is a small work but its process is really big. Planning
becomes meaningful only after traversing a long path. It takes a lot of
time to cover this path.
During this entire period the managers remain busy in collecting a
lot of information and analysing it. In this way, when so many people
remain busy in the same activity, the organisation is bound to face huge
costs.
(5) LACK OF ACCURACY :
There is lack of proper accuracy in planning. Because planning is based on future & future is always uncertain & unpredictable. In the absence of reliable data & accurate prediction, there is chance of business loss and failure. Thus planning may be inaccurate .
(6) PLANNING DOES NOT GUARANTEE SUCCESS:
Sometimes the managers think that planning solves all their problems.
Such thinking makes them neglect their real work and the adverse effect
of such an attitude has to be faced by the organisation .
In this way, planning offers the managers a false sense of security
and makes them careless. Hence, we can say that mere planning does not
ensure success; rather efforts have to be made for it.
(7) PSYCHOLOGICAL BARRIERS:
Psychological Barriers are also creating great difficulties in course of
making business plans. In every organization upper level managers give
the priority to present events in comparison to future events because
present is more certain & beneficial to organization rather than
future.
But on the other hand we know that planning relates to
forecasting of future events in advance manner. Hence, how can it
possible that managers will give important to present. On the whole we
can say that there is conflict in manager’s mind about planning due to
psychological differences.
