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1.2.3 The Importance of Planning

The planning function has four important goals:

a) To offset uncertainty and change.

b) To focus attention on objectives,

c) To gain economical operation, and

d) To facilitate control.

a) To Offset Uncertainty and Change

Organizational planning has two purposes: protective and affirmative. The protective purpose of planning is to minimize risk by reducing the uncertainties surrounding business conditions and clarifying the consequences of related management actions. The affirmative purpose is to increase the degree of organizational success.

Future uncertainty and change make planning a necessity. Just as the navigator cannot set a course once and forget about it, so the business manager cannot establish a goal and let the matter rest. The future is seldom very certain, and the further in the future the results of a decision must be considered, the less the certainty.

Even when the future is highly certain, some planning is usually necessary. In the first place, there is the necessity of selecting the best way to accomplish an objective with conditions of certainty; this becomes primarily a mathematical problem of calculating on the basis of known facts, which course will field the desired result at the least cost. In the second place, after the course has been decided, it is necessary to lay out plans so that each part of the organization will contribute toward the job to be done.

Even when trends indicating changes are easily discernible, difficult planning problems arise.

Ex: The manufacture of television sets is a case in point. The change away from black and white to color television did not take place overnight. The manufacturer had to determine what percentage of production should be assigned to color sets and what to black and white and how to retain efficient production of both lines

b) To Focus Attention on Objectives

Because all planning is directed toward achieving enterprise objectives, the very act of planning focuses attention on these objectives. Considered overall plans unify interdepartmental activities. Managers, being typically immersed in immediate problems, are forced through planning to consider the future and even consider the periodic need to revise and extend plans in the interest of achieving their objectives.

c) To Gain Economical Operation

Planning minimizes costs because of the emphasis on efficient operation and consistency. It substitutes joint directed effort for uncoordinated piecemeal activity, even flow of work for uneven flow, and deliberate decisions for snap judgments.

The economy of planning is plainly seen at the production level. No one who has watched the assembly of automobiles in one of the larger factories can fail to be impressed with the way that the parts and subassemblies come together. This implies extensive detailed planning without which the manufacture of automobiles would be chaotic and impossible costly.

Although every manager sees the imperative economy of importance in other areas, it is occasionally left to chance and too great individual discretion.

d) To Facilitate Control

Managers can not check on their subordinate accomplishments without having planned goals against which to measure. There is no way to measure control without plans to use as standards.

Read and think about this statement

“After I leave my office at five O’clock in the evening, I will not care what happen today, for I can not do anything about it; I will only care about what will happen tomorrow or the next day or next year, because I can do something about it.”