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Planning – Concept, Importance and Limitations

Princy Vij
40 mins
Self-awareness, Critical thinking, Decision making, Problem Solving
Remember, Understand, Application, Analysis

Planning – Concept, Importance and Limitations
* Understand the concept and Importance of planning
Planning is important both at micro (Individual) and macro level (Organisational) but still after detailed planning failures happen, students will understand why it happens and how they need to continuously reassess the planning strategy to make it effective at every leve

What is Planning?

Begin the class by explaining the importance of planning in your daily lives.

Let’s take for example: You have to catch an international flight at 2 AM in the morning and you have meetings lined up the whole day. Inorder to not miss the meetings and catch up a flight on time, here are the simple things you need to plan before hand:

  • Make sure that your packing is done before you leave for the office as after you are done with your meetings, you may not get time to pack before leaving for the airport and you might miss packing some essential stuff.
  • Since it is an International Flight, you very well are aware of the fact that you have to check-in 3 hours prior to take off. Depending on the time it will take from your home to airport, you need to plan the time you leave from the house for the airport.


We might not realize making these petty but pivotal decisions in our daily lives almost everyday. These decisions are nothing but the process called “Planning”.

Planning, therefore, is process of defining in advance what is to be done, how it is to be done, when it is to be done and who has to do it. Planning bridges the gap between where we are and where we want to go.

The way we manage our everyday routine starts from planning the day before hand. We make a to do list to spend our day effectively and hassle – free. Therefore, Planning is the first function of Management process and also termed as a forward – looking function.


Nature / Features of Planning:

After carefully going through the above instance, following features of planning are clear:

  1. It is the first step in the management process
  2. It is a forward – looking function
  3. It helps in making important managerial decisions
  4. It is a universal management function which is applied to all parts and levels of the organisation


Importance of Planning:

In the above mentioned situation, take for instance, we didn’t plan it properly and the whole routine went like this: You got up late so couldn’t finish the packing before leaving for the office. You got stuck in the traffic on the way back home. Came home late and did some last minute packing before leaving for the airport. In all this chaos, you forget to book a cab for the airport. You reached Airport late and just saved yourself from missing your flight. What did we realize here? We realize that making small plans to set our routine is very important. Planning at Individual level is called Micro – planning.

Macro – planning is the planning done for the whole organisation. It is the most important function of management. The importance of planning has increased all the more in view of the increasing size of organisations and their complexities. Here are some of the major advantages of planning:


  • Planning Provides Direction:

Planning is to decide in advance what needs to be done. Therefore, all the employees get a direction and all their efforts are focused towards a particular end. In this way, planning has an important role in the attainment of the objectives of the organisation.

  • Planning Reduces Risks of Uncertainty:

Planning is always done for future and future is uncertain. With the help of planning possible changes in future are anticipated and various activities are planned in the best possible way. In this way, the risk of future uncertainties can be minimized.

  • Planning Reduces Overlapping and Wasteful Activities:

Under planning, future activities are planned in order to achieve objectives. Consequently, the problems of when, where, what and why are almost decided. This puts an end to disorder and suspicion. In such a situation coordination is established among different activities and departments. It puts an end to overlapping and wasteful activities.

  • Planning Promotes Innovative Ideas:

It is clear that planning selects the best alternative out of the many available possibilities. While trying to find out the possibilities of a particular  situation, many new ideas emerge and they are studied intensively in order to determine the best out of them.

  • Planning Facilitates Decision Making:

Decision making means the process of taking decisions. Under it, a variety of alternatives are discovered and the best alternative is chosen. The planning sets the target for decision making. It also lays down the criteria for evaluating courses of action. In this way, planning facilitates decision making.

  • Planning Establishes Standards for Controlling:

By determining the objectives of the organisation through planning all the people working in the organisation and all the departments are informed about ‘when’, ‘what’ and ‘how’ to do things. Thus, Planning lays down the foundation and standards for effective control.


Limitations of Planning:

Following are the limitations of planning:

  • Planning Creates Rigidity:

Once the planning is done, it becomes very difficult to make major changes in the organisation. Only small changes are possible. That is why, planning brings rigidity in organisations.

  • Planning Does Not Work in a Dynamic Environment:

Planning is based on the anticipation of future happenings. Since future is uncertain and dynamic, therefore, the future anticipations are not always true. Therefore, to consider planning as the basis of success is like a leap in the dark.

  • Planning Reduces Creativity:

Under planning all the activities connected with the attainment of objectives of the organisation are pre-determined. Consequently, everybody works as they have been directed to do and as it has been made clear in the plans. Possibility of doing things in your own way is very less. Therefore, once the decision is made on one alternative, it becomes difficult to be more creative and make changes in the existing plan.

  • Planning Involves Huge Costs:

Planning is a small work but its process is really big. During this entire period, the managers remain busy in collecting a lot of information and analyzing it. In this way, when so many people remain busy in the same activity, the organisation is bound to face huge costs.

  • Planning is a Time-consuming Process:

Planning is a blessing in facing a definite situation but because of its long process it cannot face sudden emergencies. In case of such emergencies, if the manager thinks of completing the planning process before taking some decision, it may be possible that the situations may worsen or the chance of earning profit may slip away. Thus, planning is time consuming and it delays action.

  • Planning Does Not Guarantee Success:

Sometimes the managers think that planning solves all their problems. Such thinking makes them neglect their real work and the adverse effect of such an attitude has to be faced by the organisation. In this way, planning offers the managers a false sense of security and makes them careless. Hence, we can say that mere planning does not ensure success; rather efforts have to be made for it.

Many companies have a goal of becoming more environmentally sustainable. One of the most important steps they can take is controlling paper waste. Choose a company - any type, any size. Imagine that you have been put in-charge of making a plan to control paper waste for the company. What possible things will you keep in mind while preparing the plan. What limitations will you face while designing the plan.
Planning doesn't guarantee success, but we still give emphasis on it. Why do you think so?
Clearly explained, Knowledgeable, Precise, Creative, Well crafted/ articulated, Informative, Persuasive, Satisfying

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