Planning substitutes order for chaos and introduces rationality into the decision-making process of management. It provides the framework within which organizing, staffing, direction, and controlling are undertaken. The importance of planning in any organized enterprise needs no exaggeration. To be more specific, planning makes the following contributions:
(i) Planning makes Personnel Conscious of Enterprise Objectives: The first stage in any type of planning is the deliberate statement of objectives of each department in the organization and the enterprise as a whole. It helps personnel to see the enterprise in its entirety and see how their actions may contribute to its ultimate goals. Since objectives represent endpoints of planning, management should be aware of the future and revise its plans in the light of possible changes so that goals are accomplished more effectively.
(ii) Planning Leads to Economy in Operations: Planning is always done with an eye on economy and efficiency in operations. As an all-pervasive function, planning improves the effectiveness of all other functions of management and also helps to secure coordinated efforts throughout the organization. Since it involves choosing, planning facilitates the choice of the best method and helps to identify alternatives expected to produce desired results with minimum unsought consequences. Planning for repetitive or routine matters reduces the need for thinking over the whole problem once again. Moreover, planning for the change, arms the management to face future contingencies very boldly, confidently, and effectively.
(iii) Planning Precedes Control: Control consists of those activities that are undertaken to force events to conform to plans. Planning is then the necessary prerequisite for control. The management function of control seeks to check the performance against some predetermined standard or projected course of action established through the planning process. Though planning affects all other functions of management, the unique feature of control is that it cannot exist without planning.
(iv) Planning is a Precious Managerial Instrument to Provide for Future: Though forecasting is its essential characteristic, the task of planning does not end merely with assessing the future. Providing for future contingencies is an equally important part of planning. It is through a planning process that management is made to look at the future and discover suitable alternative courses of action. If future changes can be correctly predicted, planning helps the management to have a clear view of the future and chalk out a suitable program of action. There is no doubt that even the best plans cannot anticipate all the future changes. But this does not mean that planning is a futile exercise that can be dispensed with. As a matter of fact, it is during changing conditions and difficult situations that planning becomes all the more necessary and assumes greater importance. As a rational approach to the future, planning provides for unexpected events and arms the management against undesirable changes.
(v) Planning Influences Efficacy of Other Managerial Functions: Planning, organizing, staffing, direction, and control – all account for and have their due contribution to the accomplishment of the group’s goals. The importance of each in the success of the management job cannot be overlooked. However, planning as a primary function goes a long way in improving the efficiency of all other functions of management and makes the tasks of managing more effective.