Characteristics of Planning

Planning unlike the other functions of management is more of an intellectual process. All other processes draw their intellectual backing or logical backing from the plans formulated. Planning is a process that has to necessarily adapt to changing times. Plans are formulated by taking to factors of change and may require the business to drastically change its course.

What is Planning?

Planning refers to a process of looking into the future or presuming what will happen in the future under the existing circumstances and being prepared for it. For instance, consider there is a government regulation for buying a particular kind of machine because it is not eco-friendly. Then there is a good chance a machine similar to the banned one in emissions and posing the same kind of danger will become down upon too unless that machine is indispensable. Hence a business can make plans accordingly and not invest there. Planning thus essentially involves deciding what to do and how to do something by making rational studied presumptions about the future. It is a creative process that intends to bridge the gap between where the business currently is and where it desires to be.

Some of the Aspects of Planning in Management are:-

1. Creation of Goals

Planning involves the process of creating realistic goals to be achieved. Thus it makes a business goal-oriented. The importance of being goal-oriented is the fact that everyone knows what their end is and can work towards it. Planning thus becomes the basis of all other functions of management.

Planning is the first and foremost function of any management. It is the most basic and is the primary function, that has to be efficiently carried out no matter what. The efficiency of a management’s plan determines the efficiency of the management’s activity for the planned time period.

All other functions revolve around the plan formulated through this process. Controlling especially is dependent on planning because it is invariably treated as an extension of the planning process and cannot exist without it. Planning develops the goals which guide the entire organization and this makes it the most important of all management functions.

2. Planning is an Intellectual Process

Planning unlike the other functions of management is more of an intellectual process. All other processes draw their intellectual backing or logical backing from the plans formulated. That is to say, when staffing is done, the logic employed is whether the new recruit will fit into the plan. Hence as evident from the illustration, the other functions on the logic of planning and requires only the application of the logic behind the plan.

Planning which lays down this logic is thus the intellectual mental process. It involves many functions like weighing risks, analyzing trade-offs, predicting business environment changes, etc. This thus requires a great degree of mental prowess and ability.

3. Planning is a Continuous Process

Planning is a continuous function that never ceases. Even after a plan is formulated for a time period, the function of planning still persists to make new plans for another period but primarily also for creating contingency plans if something goes wrong. This is required because businesses subsist in a dynamic ever-changing environment and hence flexibility with such changes is required which can only be facilitated by sub-plans, contingency plans, etc.

4. Planning is Pervasiveness

Planning even though predominantly understood to be a function of the top-level management is a pervasive function. The top-level management develops plans for the organization as a whole, whereas the department manager makes plans for his department and a supervisor makes plans for the set of employees under him. In this manner planning is done at all levels, making it pervasive.

5. Planning is Dynamic (Flexible)

Planning is a process that has to necessarily adapt to changing times. Plans are formulated by taking to factors of change and may require the business to drastically change its course. However businesses because of their various rigid and embedded policies and procedures, along with their employees, because of their beliefs, philosophies, and mentality, are more often than not resistant to these proposed changes.

6. Planning Involves Forecasting

Planning is a broader function that involves the process of forecasting. That is to say, planning includes forecasting whereas forecasting is not planning.

According to George. R. Terry- “Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired results“.

7. Planning and Linking Factors

Planning is, quite simply put, a process that involves the collection and analysis of facts to make assumptions and premises for the future, based on which an action plan intended to achieve desired results is duly formulated.

Limitations of Planning

1. The futility of Predictions

It is an admitted fact that the future is not predictable. Only assumptions can be made about the future and these assumptions more often than not do prove to be sufficiently accurate. But in some cases, these predictions can prove completely futile because of a sudden change in a factor or because of a wrong analysis of a fact, etc. This makes planning a process limited to the efficiency of assumptions and predictions.

2. Time and Cost

Planning can be a process that can be severely limited by time and cost. Planning as a process cannot take forever to be discharged, it has to be discharged within a set time period. When the process to be planned is complex and multi-faceted than the shortage of time or a particular contingency facilitating the need to change directions of the plan within a short time, can severely hamper the efficiency of the process.

Besides, planning being an extensive process adds to the cost immensely. It is an extensive process that starts with the collection of relevant data to employing specialized efficient managers to utilize this data. These costs associated with efficient planning acts as a dissuading factor to firms with limited resources.

3. Resistance to Change

Planning is a process that has to necessarily adapt to changing times. Plans are formulated by taking to factors of change and may require the business to drastically change its course. However businesses because of their various rigid and embedded policies and procedures, along with their employees, because of their beliefs, philosophies, and mentality, are more often than not resistant to these proposed changes.

Being resistant severely limits the scope of the proposed plan and its functioning. Reforming these policies and making behavioral changes thus has to become a factor in planning itself and requires considerable commitment drawing away attention from the external actions that have to be planned.

4. Limited Capital

The capital of a firm determines the scope of planning. If the capital available is limited, then the planning process also becomes restricted because there is no point in making elaborate plans.

5. External Constraints

Planning as is implicit from the account given here depends on both external and internal environments. The external environment which is equally important to the planning process may put forth multiple constraints such as a sudden change in labor law or tax rates or a strike by a labor union etc. Thus planning for this and also all the above-cited reasons is not a perfect process.