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Importance of planning:

(i) Provides directions.

(ii) Reduces the risk of uncertainty.

(iii) Facilitates decision making.

(iv) Reduces overlapping and wasteful activities. 

(v) Promotes innovative ideas.

(vi) Establishes standards for controlling.

Importance of Planning:

(i) Planning provides directions: By stating in advance how work is to be done planning provides direction for action. Planning ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals.

(ii) Planning reduces the risks of uncertainty: Planning is an activity which enables a manager to look ahead and anticipate changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed.

(iii) Planning reduces overlapping and wasteful activities: Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions.

(iv) Planning promotes innovative ideas: Since planning is the first function of management, new ideas can take the shape of concrete plans. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business.

(v) Planning facilitates decision making: Planning helps the manager to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternative and select the most viable proposition. Planning involves setting targets and predicting future conditions, thus helping in taking rational decisions.

(vi) Planning establishes standards for controlling: Planning involves setting of goals. The entire managerial process is concerned with accomplishing predetermined goals through planning, organising, staffing, directing and controlling. Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals.

Limitations of planning:

(i) Leads to rigidity

(ii) May not work in a dynamic environment.

(iii) Reduces creativity.

(iv) Involves huge costs.

(v) Time consuming.

(vi) Does not guarantee successs.

Detailed Answer:

Limitations of Planning:

(i) Planning leads to rigidity: In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This kind of rigidity in plans may create difficulty. Managers need to be given some flexibility to be able to cope with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest.

(ii) Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity.

(iii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.

(iv) Planning involves huge costs: When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money. For example, Checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan.

(v) Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.

(vi) Planning does not guarantee success: The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.

Although the quality of flexibility is inherent in planning, but it must be admitted that only small changes are possible. Big changes are neither possible nor in the interest of the organisation. Since it is not possible to introduce desired changes according to the changed situations, the organisation loses many chances of earning profits.

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.

Policy is a general statement which provides guidance in decision making to implement a strategy for the accomplishment of organisational objectives.

For example, Leave Policy, Sales Policy etc.

Policy is the 'type of plan' which is in the form of general statements and channelise energy towards a particular direction.

Following are the types of plans:

i. Objectives: Objectives are those end points for the attainment of which all the activities are undertaken. It is a special target to be achieved by an organisation, e.g., it can be the objective of a school to impart education in the subject of commerce to 100 students during an year.

ii. Strategy: It refers to a plan which takes into account the environmental opportunities and threats and the organisational strengths and weaknesses and provides an optimal match between the organisation and the environment.

iii. Policies: Policies are those general statements which are decided for the guidance of the employees while taking decision. Like Personnel Policy: Under this policy it can be decided that the basis for the promotion of employees will be their age. Once this is decided, no departmental manager will need the permission of the General Manager regarding the promotion of the employees.

iv. Procedures: Procedures are those plans which determine the sequence of any work performance. For example, the recovery of money from the debtors can be done in the following order:

a. Writing letters

b. Contacting on telephone

c. Meeting personally

d. Taking legal action.

v. Methods: Method is that plan which determines how different activities of the procedure are completed. A method is not related to all steps but only to one step of the procedure. It is more detailed than procedure. There may be many methods to do a particular work. After extensive study, a method has to be selected from which a worker feels minimum fatigue, increase in productivity and there is reduction in costs.

The prescribed way or manner of doing each planned task for accomplishing the objectives is known as method

1. support the argument of Suresh 

2.Planning function is required to be performed by the managers at all levels. Board of Directors plan at top level, Functional managers at departmental level and foreman at lower level. The degree and importance of planning depend on the level at which it is undertaken.

Remunerating sales personnel under commission method.

1. If there was no planning employees would be working in different directions.

2. The management would not be able to achieve.

Divide and rule

Consequences:

(i)Employees would be working in different directions.

(ii) The management would not be able to achieve the desired results/goals efficiently.

Planning refers to thinking before hand. Under this it is decided — what is to be done, how it is to be done, when it is to be done and by whom it is to be done.

Features:

i. It focuses on achieving objectives.

ii. It is primary function of management.

No  smoking.

Standing plan or repeated use plan is a type of plan.

Planning is the function which determines the objective of an organization.

Procedure for the admission of student in the college

Correct option is (b) Primary function of management

It implies that planning is required at all levels of management as well as in all departments of the organisation.

Correct option is (b) extends throughout the organization.

The prescribed way of doing planned task for achieving objectives is known as method under plan.

Sales budget is an example for budget.

A programme is a precise plan laying down the operations to be carried out to complete a given task within a specified period of time.

A programme is a precise plan which lays down the operations to be carried out to accomplish a given task within a specified period of time.

Planning of management.

Pricing Policy.

No, I do not agree because planning is futuristic and future is full of uncertainties.

Planning acts as a guide.

They are specific programs of action for achieving the objectives of an organization by using resources efficiently and economically. Strategies are formulated by the top management. Examples: Divide & Rule, Strike while iron is hot, Time is a great healer.

No, planning does not always lead to success. Because planning is time consuming and it delays action.

(i) Planning reduces overlapping and wasteful activities: Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions.

(ii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.

Correct option is (a) Importance of planning

Planning is a Goal – oriented.

Policies are the general statements which serve as a guideline to the decision making in the organization. It is a frame work with in which the decision makers are expected to act while making decisions.

Planning provides directions: By stating in advance how work is to be done planning provides direction for action. Planning ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals. 

Through planning.

Plans are formulated with certain assumptions about the future condition and events like changes in political and economic environment, government and legal regulations, variation in prices etc. these assumptions are known as planning premises.

• Setting objectives or goals, the organization wants to achieve. 
• Developing planning premises which are the assumption of the future conditions of the business.

Rules are the established principles for carrying out the activities in a systematic manner.

At top level of management.