The Nature and Purpose of Planning

The most basic of management functions is planning, the selection from among alternatives of future courses of action for the enterprise as a whole and each department within it. Every manager plans and his other functions depend upon his planning. Plans involve selecting enterprise objectives and departments goals and programs, and determining ways of reaching them. Plans thus provide a rational approach to preselected objectives.

As Billy E. Goetz has said, “a planning problem arises only when an alternative course of action is discovered.” In this, range, it is essentially decision making, although, it is also more than this. Indeed, choosing between alternatives may be the easiest part of planning. Planning depends on the existence of alternatives, and there are few business decisions for which some kind of alternative does not exist – even when it comes to meeting legal or other requirements imposed by forces beyond the manager’s control.

Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it. Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen. Although the exact future can seldom be predicted and factors beyond control may interfere with the best-laid plans, without planning events are left to chance. Planning is an intellectual process, the conscious determination of courses of action, the basing of decisions on purpose, facts, and considered estimates.

Production managers found early that, without planning, their mistakes showed up within days as production lines came to a halt through a misfit part or absence of a needed component. Also, well-managed companies have long planned to meet cash needs before their checks bounced.

Now, everyone plans. Enterprises of all kinds plan further into the future, plan more aspects of their operations, plan less by intuition or hunch, and lean more heavily on forecasts and studies.

Change and economic growth bring opportunities, but they also bring risk, particularly in an era of world-wide rivalry for markets, resources, and influence. It is exactly the task of planning to minimize risk while taking advantage of opportunities.

Every plan and its derivatives must contribute in some positive way to the accomplishment of group objectives. Plans alone cannot make an enterprise successful. Action is required; the enterprise must operate. Plans can, however, focus action on purposes. They can forecast which actions will tend toward the ultimate objective, which tend away, which will likely offset one another, and which are merely irrelevant. Managerial planning seeks to achieve a consistent, coordinated structure of operations focused on desired ends. Without plans, action must become merely random activity, producing nothing but chaos.

Topic #3

Date: 2015-02-16; view: 883