12 Main Reasons Why Planning is Important in Organization

Planning is the primary and important function of business management. Planning is the base for other functions of management, like organizing, providing Momentum and controlling. So the importance of planning in entrepreneurship is very big.

reasons why planning is important in organization
reasons why planning is important in an organization

No activity may be organized, provided Momentum, and controlled, without determining the activities through planning.” Work without planning will lead only to confusion, doubts, and anarchy.

Reasons Why Planning is Important in Organization

Briefly, the reasons why planning is important in the organization may be explained with the help of the following points:

1. Attention To Goals

Planning is a well-concerned base for achieving the goals of various departments or sub-departments of an institution or enterprise.

Hence, managers at all levels remain attentive towards achieving the goals.

Besides, business planning goes on attracting the attention of the managers of all levels towards achievements of Goals.

2. Safeguard Against Uncertainty

Planning is on the basis of forecasts, which also provides guidance during the uncertainties of the future.

Planning is required to safeguard the dangers of uncertainties.

This uncertainty may be in respect of any element of the business, like competition, demand, costs, expenditure, government policy, etc.

Similarly, uncertainty may be due to various natural reasons, like the flood, drought, storms, tsunamis, fire, epidemics, etc.

Plans are formulated for safeguarding against these uncertainties, to the maximum possible extent, on the basis of well-conceived estimates.

Related: 22 Types of Planning – Explained (Business Management).

3. Maximum Utilisation of Available Resources

Planning gives emphasis on the maximum utilization of human and physical resources available with the enterprise or the institution.

Duplication is also stopped by planning wastage are avoiding, organizational power is scientifically used.

Natural resources are adequately utilized.

Besides, coordination between various resources is also established through planning in business.

4. To Gain Economy of Operation

The financial economy in various activities may be achieved through planning.

By planning, unproductive, irrelevant and unnecessary activities may be abolished.

As a result, the maximum utilization of limited resources becomes possible and costs get reduced.

Similarly, wastage in the field of production, distribution, finances, and personnel may be avoided and the financial economy may be gained in operation of all the activities.

5. Improvement in Competitive Strength

Planning is helpful in improving the competitive strength of the institution, through which an institution may strongly face the competition of other Institutions.

Planning in business is helpful in working out such a strategy, which may result in achieving success in the competitive economy.

Through planning, new products may be produced, plans capacity may be enhanced, modalities may be changed, quality of the product improved, style of the product may be changed, by which, the competitive strength of the institution may be improved.

6. Basis of Managerial Control

Planning has a quality of pervasiveness. Planning is necessary for each function of management.

Hence, the managers carry out the function of planning, by taking the result of planning for each managerial function.

If planning is found to be inconsistent, its review is also provided for, and it is revised also.

On the contrary, in the absence of planning, the managers will not be able to properly test the consistencies and inconsistencies.

7. Check on Hasty Decisions

Planning puts a check on Hasty decisions.

reasons why planning is important
reasons why planning is important


In Planning, the best alternative is selected from the available alternative and efforts are made to execute it by the best possible method.

Since this function involves both the time and the thoughts, the decisions are not Hasty.

Hasty decisions and gases work are put to end through planning.

8. Establishment of Unity and Coordination

Various activities are carried out by an institution to achieve the objectives and goals.

It is necessary to establish unity and coordination between them to achieve the objectives.

Besides, it is also particularly kept in view that in the total organization system of the enterprise, the same function is repeated and various activities may not contradict. Planning is used to avoiding this situation.

Hence, Planning in business coordinates all the activities of the organization in the direction of predetermined objectives.

Related: 12 Main Characteristics of Decision Making (With Examples).

9. Importance in Motivation and Morale

The moral of the employees and managers of the institution is improved through planning, because they know, what they have to do and how, when and why, it is to be done? At every stage of the organization, they are provided participation.

A good planning process also provides a good base for effective communication, the delegation of powers and training for the managers, for the total organization.

10. Encouragement to Innovation and Creativity

Since planning is future-oriented, it provides new ideas and creativity.

New ideas and creativity and highly essential for today’s competitive business, because nowadays, technical and other changes are happening quite fast.

For efficient and effective management, planning is necessary, because it provides self-assessment and environment as well as an opportunity to generate new ideas and creativity.

Planning incorporates managerial novelty. Top Management and Key Personnel Positions in a Business.

11. To Make Organisation More Effective

Planning makes the organization more effective and speeds up managerial functions, by removing undue delays in the achievement of desired results and red-tapism.

Planning in business also curbs the wastage in the organization by putting an end to duplication of activities.

Besides, it also gives birth to systematic, meaningful and necessary activities, by replacing unsystematic, meaningless and unnecessary activities.

12. National Prosperity

Planning Broadens the path of national prosperity. Optimum utilization of limited resources of the nation is possible by planning.

The nation may be made prosperous by enhancing the employment sources, controlling the trade cycles, establishing coordination between production and consumption and balanced development of all areas.

For all these, planning in business is very necessary and important.

Thus, now you know the reasons why planning is important in an organization.

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