Merits and Demerits of Planning

 Merits

1. Planning facilitates management by objectives.

   1. Planning begins with determination of objectives.
   2. It highlights the purposes for which various activities are to be undertaken.
   3. In fact, it makes objectives more clear and specific.
   4. Planning helps in focusing the attention of employees on the objectives or goals of enterprise.
   5. Without planning an organization has no guide.
   6. Planning compels manager to prepare a Blue-print of the courses of action to be followed for accomplishment of objectives.
   7. Therefore, planning brings order and rationality into the organization.

2. Planning minimizes uncertainties.

   1. Business is full of uncertainties.
   2. There are risks of various types due to uncertainties.
   3. Planning helps in reducing uncertainties of future as it involves anticipation of future events.
   4. Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks by necessary provisions to meet unexpected turn of events.
   5. Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.

3. Planning facilitates co-ordination.

   1. Planning revolves around organizational goals.
   2. All activities are directed towards common goals.
   3. There is an integrated effort throughout the enterprise in various departments and groups.
   4. It avoids duplication of efforts. In other words, it leads to better co-ordination.
   5. It helps in finding out problems of work performance and aims at rectifying the same.

4. Planning improves employee’s moral.

   1. Planning creates an atmosphere of order and discipline in organization.
   2. Employees know in advance what is expected of them and therefore conformity can be achieved easily.
   3. This encourages employees to show their best and also earn reward for the same.
   4. Planning creates a healthy attitude towards work environment which helps in boosting employees moral and efficiency.

5. Planning helps in achieving economies.

   1. Effective planning secures economy since it leads to orderly allocation ofresources to various operations.
   2. It also facilitates optimum utilization of resources which brings economy in operations.
   3. It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise. For example, raw materials can be purchased in bulk and transportation cost can be minimized. At the same time it ensures regular supply for the production department, that is, overall efficiency.

6. Planning facilitates controlling.

   1. Planning facilitates existence of certain planned goals and standard of performance.
   2. It provides basis of controlling.
   3. We cannot think of an effective system of controlling without existence of well thought out plans.
   4. Planning provides pre-determined goals against which actual performance is compared.
   5. In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.

7. Planning provides competitive edge.

   1. Planning provides competitive edge to the enterprise over the others which do not have effective planning. This is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc.
   2. With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate the future motives of it’s competitor which helps in facing future challenges.
   3. Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the competitive strength of the enterprise is improved.

8. Planning encourages innovations.

   1. In the process of planning, managers have the opportunities of suggesting ways and means of improving performance.
   2. Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.

 Demerits

Internal Limitations

There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves.

1. Rigidity

   1. Planning has tendency to make administration inflexible.
   2. Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances.
   3. There is no scope for individual freedom.
   4. The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
   5. Planning therefore introduces inelasticity and discourages individual initiative and experimentation.

2. Misdirected Planning

   1. Planning may be used to serve individual interests rather than the interest of the enterprise.
   2. Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit ones own requirement rather than that of whole organization.
   3. Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning.

3. Time consuming

   1. Planning is a time consuming process because it involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
   2. Therefore planning is not suitable during emergency or crisis when quick decisions are required.

4. Probability in planning

   1. Planning is based on forecasts which are mere estimates about future.
   2. These estimates may prove to be inexact due to the uncertainty of future.
   3. Any change in the anticipated situation may render plans ineffective.
   4. Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is unpredictable.
   5. Thus, excessive reliance on plans may prove to be fatal.

5. False sense of security

   1. Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
   2. Managers assume that as long as they work as per plans, it is satisfactory.
   3. Therefore they fail to take up timely actions and an opportunity is lost.
   4. Employees are more concerned about fulfillment of plan performance rather than any kind of change.

6. Expensive

   1. Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
   2. According to Koontz and O’Donell, ’ Expenses on planning should never exceed the estimated benefits from planning. ’

External Limitations of Planning

1. Political Climate- Change of government from Congress to some other political party, etc.
2. Labour Union- Strikes, lockouts, agitations.
3. Technological changes- Modern techniques and equipments, computerization.
4. Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
5. Natural Calamities- Earthquakes and floods.
6. Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.

Importance of Planning

The importance of the planning function should have be clear to you.  We can outline the importance of planning function as follows:

Provides Direction: Planning provides a clear sense of direction to the activities of the organization and to the job behavior of managers and others.  It strengthens their confidence in understanding where the organization is heading and what for,  how best to make the organization move along the chosen path, and when should they take what measures to achieve the goals of the organization.

Provides opportunity to analyze alternative courses of action:  Another source of importance of planning is that it permits managers to examine and analyze alternative course of action with a better understanding of their likely consequences.  If managers have an enhanced awareness of the possible future effects of alternative courses of action, for making a decision or for taking any action, they will be able to exercise judgment and proceed cautiously to choose the most feasible and favorable course of action.

Reduces uncertainties: Planning forces managers to shake off their inertia and insular outlook; it induces them to look beyond those noses, beyond today and tomorrow, and beyond immediate concerns.  It encourages them to probe and cut through complexities and uncertainties of the environment and to gain control over the elements of change.

Minimizes impulsive and arbitrary decisions: Planning tends to minimize the incidence of impulsive and arbitrary decisions and ad hoc actions; it obviates exclusive dependence on the mercies of luck and chance elements; it reduces the probability of major errors and failures in managerial actions.  It injects a measure of discipline in managerial thinking and organizational action.  It improves the capability of the organization to assume calculated risks.  It increases the freedom and flexibility of managers withing well-defined limits.

King-pin  function: As stated earlier, planning is a prime managerial function which provides the basis for the other managerial functions.  The organizational structure of task and authority roles is built around organizational plans.  The functions of motivation, supervision, leadership and communication are addressed to implementation of plans and achievement of organizational objectives.  Managerial control is meaningless without managerial planning.  Thus, planning is the king-pin function around which other functions are designed.

Resource Allocation: Planning is means of judicious allocation of strategic and scarce resources of the organization in the best possible manner for achieving strategic goals of the organization.  The strategic resources include funds, highly competent executives, technological talent, good contacts with government, exclusive dealer network and so on.  If the organization enjoys a distinct advantage in possession of such resources, a careful planning is essential to allocate them into those lines which would strengthen the overall competitive position of the organization.

Resource use efficiency:  For an ongoing organization, planning contributes towards a more efficient functioning of the various work units.  There is better utilization of the organization's existing assets, resources and capabilities.  It prompts managers to close gaps, to plug loopholes, to rectify deficiencies, to reduce wastage and leakages of funds, materials, human efforts and skills so as to bring about an overall improvement in resource use efficiency.

Adaptive responses:  Planning tends to improve the ability of the organization to effectively adapt and adjust its activities and directions in response to the changes taking place in the external environment.  An adaptive behavior on the part of the organization is essential for its survival as an independent entity.  For a business organization, for example, adaptive behavior is critical in technology, markets, products and so on.

Anticipative action: While adaptation is a behavior in reaction and response to some changes in the outside world, it is not enough in some situations.  In recognition of this fact, planning stimulates management to act, to take hold initiatives, to anticipate crises and threats and to ward them off, to perceive and seize opportunities ahead of other competitions, and to gain a competitive lead over others.  For the purpose, some enterprises establish environmental scanning mechanism as part of their planning systems.  Thereby such enterprises are able to direct and control change, instead of being directed and controlled by the pervasive external forces of change.

Integration: Planning is an important process to bring about effective integration of the diverse decisions and activities of the managers not only at a point of time but also over a period of time.  It is by reference to the framework provided by planning that managers make major decisions on organizational activities, in an internally consistent manner.

Features of Planning

On the basis of the definition of planning, its following features can be identified:

1. Planning is a process rather than behaviour at a given point of time. This process determines the future course of action.

2. Planning is future oriented It is primarily concerned with looking into future. It requires forecasting of future situation in which the organization has to function. Therefore, correct forecasting of future situation leads to correct decisions about future course of actions.

3. Planning involves selection of suitable course of action. This means that there are several alternatives for achieving a particular objective or set of objectives. However, all of them are not equally feasible and suitable for the organization.

4. Planning is undertaken at all levels of the organization because all levels of management are concerned with the determination of future course of action. However, its role increases at successively higher levels of management. Moreover, planning at different levels may be different in the context that at the top management level, managers are concerned about the totality of the organization and tries to relate it with the environment white-managers at lower levels may be involved in internal planning.

5. Planning is flexible as commitment is based on future conditions, which are always dynamic. As such, an adjustment is needed between the various factors and planning.

6. Planning is a pervasive and continuous managerial function involving complex processes of perception, analysis, conceptual thought, communication, decision, and action. The very pervasiveness of these planning elements makes it difficult to identify and observe them in detail.

PLANNING MEANING & DEFINITION

Meaning

It means determining what is to be done, how, when and by whom it is to be done. It lays down and object to pursuit and chalks out a specific course of action to achieve it. It is the first step in the management process concerned with establishment of objectives and goals to be attained in the future in the light of an analysis of present limitations for attaining such goals with a views to their removal or reduction, anticipation and designing the course of action and programmes for attaining such pre-determined goals.

Definition

“Planning is the selecting  and relating of facts and the making and using of assumptions regarding the future in the visualization to achieve desire results.”

                                                                                                GEORGE TERRY

“Planning is deciding advance what to do, how to do it, when to do it, who is to do it. It bridges the gap form where we are, to where we want to go. It makes it possible for things to occur which would not otherwise happen.”

KOONTZ & O’DONNEL

“Planning is the thinking process, the organized, foresight, the vision based on facts and experience that is required for intelligent action.”

                                                                                                ALFORD & BEATTY

MANAGEMENT AS PROFESSION

Profession is defined as an occupation based upon the specialized  intellectual  study and training, the purpose of which is to supply skilled service or advice to others for the definite fee or salary.

Characteristics of profession 

1. Existence of knowledge :

Profession emerges from the establishment of fact that there is a body of knowledge which cannot started around but has to be studied for being a successful professional. 

2. Acquisition of knowledge :

An individual can enter profession only after acquiring knowledge and skills through formal training for example, only the law graduates can enter the profession of legal practice.

3. Professional association :

An occupation which claims to be profession should have an association. However manager do not have single unified professional group like Indian medical council for medical practitioners from this new management cannot be termed as trade profession.

4. Ethical code :

For every profession some ethical standards are provided and every individual of the profession is expected to maintain conformity with these standards. In management also, code of conduct has been formulated to suggest the behavioral pattern for professional managers.

 5. Service motive:

 It is essential because the monetary value of professional service cannot be measured easily in absence of market mechanism except the competition among the professionals themselves. The success of any profession is measured not in terms of money. It earns but by the amount of social service it provides. Similarly contributions of management cannot be measured in terms of money alone because without integrating effort of management, resources worth millions of rupees may be useless.

Once organization grows beyond certain size, changes in the nature of management process demands that ownership and management should be divorced. So management positions should be held by persons who have professional skill and adequate training.