Planning is the systematic process of determining the objectives of the organization and deciding the best course of action to take to achieve these objectives.

The need for planning has become critical in light of numerous challenges in the business environment and current technological advancements witness globally.

We will discuss the reasons for planning or the need for planning. Without any further ado, let's get started.

Reasons For Planning

1. Growing complexities of business environment: Planning has become very important in modern business due to the growing complexity of the business environment.

Technological advancements and increasing competition have made planning increasingly crucial

Organizations are today forced to plan not only for the current business climate but also for the future.

Thus, It has become imperative that every organization perform some form of planning so that future needs can be anticipated

2. Planning helps in anticipating problems: Because planning involves forecasting the future, the needs of the organisation can be anticipated in advance.

This allows for proper resource acquisition and allocation, eliminating waste and assuring optimal use of these resources.

3. Planning is necessary to facilitate control:  A good planning system is required for effective control, and a weak planning system will invariably result in poor control.

When plans are made to achieve an objective, A periodic evaluation of activities can help determine whether they are being implemented correctly.

Well-developed plans can aid the process of control in two ways:

  • Creating early warnings for any deviations from expected performance. Periodic assessments and corrective actions may reveal deviations in production, sales, and profits.
  • Quantitative data may be provided as part of plans to compare actual performance, in quantitative terms, in terms of production and sales, with industry statistics or market forecasts.

4. Helps in decision-making: Planning is helpful in decision-making because it specifies the actions and steps to be taken to accomplish the organizational objectives.

Planning helps managers make routine decisions about the current activities of the organization since the objectives, plans, and schedules are laid down in planning.

5. Planning put focus on objectives: The purpose of planning is to clarify and specify the organizational objectives.

Planning outlines the organization's objectives as well as the methods for achieving them.

Setting objectives gives managers a basic direction to follow, focusing their efforts on accomplishing organizational goals

Indeed, the effectiveness of planning is usually measured by how well the organizational objectives are achieved

Planning provides the most efficient use of managerial time and effort by putting every organizational member's focus on the objectives of the organization.

6. Planning affects performance: Planning affects performance in the sense that good planning always leads to high organizational performance, whereas bad planning leads to poor organizational performance.

The planning process assists the company in establishing objectives for each department and individual.

It has been observed that organizations that use a formal planning process perform better than those that do not.

Some of the parameters that can be used to measure performance include return on investment, earnings per share, and sales objectives.

Several studies have found that the planning process considerably aids in the improvement of an organization's performance.

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