- The Importance of Planning in an Organization
Planning helps draw a path for a company to achieve its goals. The process starts by evaluating the organization’s current operations and assessing what needs to be operationally changed in the coming year. From there, planning involves visualizing the results that the organization wants to achieve, and determining the steps needed to reach the intended destination–success, whether financially measured, or goals that include being the highest-rated customer satisfaction organization. - Efficient Resource Use
Most businesses have limited resources. The planning process includes the knowledge top management needs to make strategic decisions on how to allocate resources so that the company can achieve its goals. Maximizing productivity and not wasting resources on projects with little chance of success. - Setting of Organizational Goals
One of the key aspects of the planning process is setting goals that encourage everyone in the company to aim for better performance. The targets must be aggressive, but they must be realistic. Organizations cannot allow themselves to be too comfortable with how they are doing at the moment–or competing companies are likely to gain ground.
The goal-setting method can be a wake-up call for administrators who have become complacent. The other advantage of setting goals lies when matching predicted effects with actual outcomes. Organizations evaluate major variances from the forecast and take action to address circumstances where sales were lower than the schedule or expenses higher. - Risk Management And Uncertainty
Risk management is essential to the success of an organization. The economic and competitive climate can never be governed by even the largest corporations. Unforeseen events arise, which must be dealt with quickly, before the negative financial effects of these events become serious.
Planning promotes the creation of “what – if” scenarios where administrators try to identify potential risk factors and create contingency plans to address them. The acceleration of market change is high, and companies need to be able to adjust their strategies quickly to these changing conditions. - Development and Coordination of Teams
Planning encourages team building and a collaborative spirit. When the project is developed and conveyed to the members of the organization, everyone knows what their duties are and how many parts of the organization require their support and skills to accomplish the assigned tasks. Employees see how their work contributes to the progress of the company as a whole and can be proud of their efforts.
Potential conflict can be minimized if top management asks the feedback of department or division managers during the process of setting expectations. If people have a say in their development, they are less likely to criticize budgetary goals. - Evolving Competitive Advantages
Planning allows companies to gain a practical insight into their existing strengths and weaknesses in comparison to major competitors. The management team identifies places where rivals may be vulnerable and then maps out marketing strategies to exploit these vulnerabilities. Observing the behavior of rivals can also help companies find opportunities that they may have missed, such as new international markets or marketing opportunities to completely different groups of customers.
