Importance of Planning Why Should Managers Plan?

Both conceptual and practical reasons are put forward in support of planning. Two conceptual reasons supporting systematic planning by manager’s are- limited resources and an uncertain environment. (a) Meeting the challenge of resource scarcity: Resource scarcity is a very important consideration for any organization today. There would be no need for planning if material, financial and human resources were unlimited and cheap. Planners in both private business and public agencies are challenged to stretch their limited resources through intelligent planning. Otherwise. Wasteful inefficiencies would give rise to higher prices, severe shortages and great public dissatisfaction. (b) Facing environmental uncertainty: The second most important conceptual reason is that organizations continually face environmental uncertainty in the course of accomplishing the tasks. Organizations meet this challenge largely through planning safeguard. Some organizations do this job better than others partly because of their differing patterns of response to environmental factors beyond the organization’s immediate control.

Besides, managers have several practical reasons for formulating plans for themselves, their employees, and various organizational units, viz., (i) to offset uncertainty and change; (ii) to focus organizational activity on a set of consciously created objectives; (iii) to provide a co-ordinate, systematic road map for future activities; (iv) to increase economic efficiency via efficient operation; and (v) to facilitate control by establishing a standard for subsequent activities.