Planning is the most basic of all managerial functions which involves establishing goals, setting out objectives and defining the methods by which these goals and objectives are To be attained. It is, therefore, a rational approach to achieving pre-selected objectives.
Planning involves selecting missions and objectives and the actions to achieve them. An important aspect of planning is decision making – that is, choosing the right alternatives for the future course of action.
Organizations have to typically plan for long-range and short-range future direction. By forecasting and predicting the market and socio-political-economic trends, managers can plan to determine where they desire the company to be in future.
Planning involves determining various types and volumes of physical and other resources to be acquired from outside, allocating these resources in an efficient manner among competing claims and to make arrangement for systematic conversion of these resources into useful outputs.
Since plans are made to attain goals or objectives, every plan should lead to the achievement of the organization’s purpose and objectives. An organized enterprise exists to accomplish group objectives through willing and purposeful co-operation.
Planning bridges the gap between where the organization stands currently and wishes to be in future. In the absence of planning, events are left to chance.