Planning in Management: Definition, Objectives,

Features, Process, Principles, Types, and

Importance
Here, we will discuss what planning is, its features, objectives, how to
make plans, principles, and its importance in an easy yet insightful
way.

What is Planning?
Planning is the process of deciding on necessary activities to be done
today so that the desired goals can be achieved as expected. It is the
action that bridges the gap between where we are now and where we
want to be.

In a simple sense, planning is making plans in advance on what is to

be done and how it is to be done. It includes setting organizational
goals and objectives and choosing various activities to ensure the
achievement of those goals and objectives as effectively and efficiently
as possible.

Planning is the first and one of the foundational functions

of management. It is not more but an act to think before taking an
action. It is also called an action to choose the best one from the pool
of choices.

It is an effective tool to ensure an organization’s desired goals are

achieved. Managers have to make effective plans to make the
company’s goals gain in an efficient manner. Effective plans help to
convince the employees and motivate them to give their highest
effort.
Planning in management is not just to see the future but also to shape
the future of the organization. It reduces uncertainty in
implementation, increases efficiency, and provides an effective
direction to get the intended outcome. Every manager must strive to
make a plan that is precise, measurable, achievable, logical, and time-
specific.

What is the Objective of Planning?

Planning is critical for organizational success, growth, and survival. It is
the roadmap of an organization that depicts a way and how the
organization has to walk on it to get its desired outcome i.e. goal. The
following are its main objectives:

 Ensure the achievement of organizational goals and objectives.

 To provide effective direction to invest organizational efforts.
 Reduce uncertainties that a firm would face in the future.
 Brings the economy into operation.
 Increase organizational efficiency.
 To reduce the failure rate of plan implementation.
 Helps to see the future and be ready to take action.

Characteristics of Planning
Planning is defining the organizational goals, establishing an overall
strategy for achieving those goals, and developing a comprehensive
set of plans to integrate and coordinate organizational goals – Robins
and Coulter. The following are the common features of the planning
function of management.
Goal Focused
Organizational plans are focused on organizational goals. It clearly
states the necessary courses of action to achieve the desired goals. For
this, it scans the environments, analyzes possible means to achieve
goals, selects the most promising one, and implements it successfully.

Primary Function
Planning is the primary function of management and after it, other
functions (organizing, staffing, directing, and controlling) come to
play.

Pervasive in Nature
It is not like if the top managers make plans and other subordinate
managers do not have to care about making plans. It is pervasive in
nature i.e. all levels of managers (top, medium, and lower) have to
make some plans in the workplace based on their power and
responsibilities.

Continuous Process
Planning is not only a process rather it is a continuous process. Till the
presence of the company managers continuously have to make
different plans. In addition, once one goal is achieved, for the
achievement of the next one making necessary plans is necessary.
Future-Oriented
One of the characteristics of planning is that it is future-oriented. Plans
are prepared in the organizations for future courses of action. Their
main motive is to chase future uncertainties.

Intellectual Activity
Everyone can not make effective plans. For effective plans, the
intellectual capacity of plan makers or managers is needed. It needs
vision, wisdom, foresight, imagination, and intelligence.

Decision-Making
Since decision-making is the selection of the most feasible option
from many. Managers also have to select the same while creating
different plans.

Steps in the Process of Planning

How do make a plan in the organization? You or managers should
make an effective plan that is appealing, feasible, acceptable, and
understandable by all the members of your organization. The plans
should convince the employees instead of bringing confusion to
the workplace.

The following are the common steps for making organizational plans.
Scan The Environment
At first, managers should scan the environment i.e. the inside and
outside environment of the organization. He should be able to identify
the strengths and weaknesses of his organization and probable threats
and opportunities that come from the external environment.

Set The Desired Goals

In the second step, the manager should be able to set the desired goal
that matches the organizational internal strengths and the probable
opportunities. The goals or objectives should be specific, clear, and
practical.

Determine Premises
Premises are assumptions about the future and are based on future
possibilities. Managers should define some premises upon which the
plan will be implemented.

Determine Alternatives
Alternatives are the choices a manager can make to achieve the
desired goals. There can be many alternatives relating to the desired
goals. Managers should develop different alternatives by their
experience and the support from the experts.
Analyze the Alternatives
In this step, a manager should analyze the different alternatives based
on their cost, benefits, feasibility, risks, chances of achieving desired
goals, and effectiveness. He should realize an effective analysis of all
alternatives support in the selection of the right one.

Select The Best Alternative

After alternative analysis, a manager must choose an alternative or
option that has a greater rate of organizational goal achievement. He
must ask a question himself “Whether or not the selected alternative
ensures the goal achievement?.”

Develop Supportive Plans

Once the best option is selected, the manager also needs to set
supportive or action plans that support the main plan. These action
plans may include the formulation of policies, rules, schedules, and
budgets.

Implement the Plan

Only making a plan is not enough to attain the desired goals, unless
the plan is implemented. Managers should communicate with all
employees and provide the necessary guidance to effectively
implement the plan.
Reviewing
Reviewing the implemented plan is the last step in the planning
process. It is an action taken to know whether or not the implemented
plan is working. If necessary, it helps to take corrective actions to
ensure the right direction of the plan’s progress.

Principles of Planning
These principles are also called the principles of effective planning. It is
said that “a well-designed plan is half completion of the task.”

Related: The 14 Principles of Management :

{
Henri Fayol’s 14 Principles of
Management [Explained]
What are the Principles of Management?
Principles of management are the basic guidelines for effectively and
efficiently running the organization. They are the essence of
management, applicable universally, and are the results of thorough
research, observation, and practice.
These principles guide managers on how to conduct activities in the
workplace according to their responsibility. They are the means to run
organizations successfully in order to achieve desired goals and
objectives.

Management principles are fundamental truths of general validity

that have value in predicting the result of management action.
– Kootz and Weihrich

What are the Henri Fayol’s 14 Principles of

Management?
Henri Fayol is a French industrialist who is best known for his
14 management principles. He is also regarded as the father of
modern management.

Fayol’s principles are general guidelines that are applicable

worldwide to all types of managers, organizations, and departments.
They are the means to managers’ success to bring efficiency and
productivity to the organization.

In 1916, Fayol published his book “Administration Industrielle et.

General” which was translated into English as “General and
Industrial Management”. In his book, he introduced the 14 principles
of management.

He also stated due to the very dynamic business environment

management practices are also changing rapidly. Although these
principles are applicable to every organization they are not such hard
and fast rules that must be followed as they are rather he stated that
they can be modified according to the time and situation.
Although there are other principles contributors to the management
such as Max Weber, F.W. Taylor, etc. Henri Fayol’s principles are
regarded as mostly yet widely accepted.

Henri Fayol’s fourteen management principles are mentioned below:

Division of Work
As its name suggests, division of work refers to dividing the given
whole task into its different components. This principle states that the
divided task should be given to a specified person (employee) who is
skilled in it.

As a manager, you should give a specific task to a particular employee

that fits his knowledge, skills, and expertise. This leads to
specialization of work, less time consumption, no wastage increases
efficiency, and ultimately the productivity of your organization.

Authority and Responsibility

Authority is the power to get command and get work done through
others. Through authority, the manager has a right to control his
subordinates. Responsibility is simply the obligation or duty to be
performed in the organization.

These two terms authority and responsibility are tools of management

that are interrelated and interdependent.

If there is authority there must be some responsibility to fulfill and

vice versa. The absence of one can leads to misuse of one. Thus,
this principle of management states that there should be a balance
between them.
Discipline
The discipline principle of management is the core function of an
organization to succeed. Here, discipline means honoring the rules
and regulations of the organization in which an individual is
associated.

Discipline implies obedience and respect for authority. Irrespective of

position each member of the organization should be disciplined in the
workplace. There should be an appropriate environment in the
organization to follow specified rules, regulations, and guidelines.

Unity of Command
When you work under many superiors (supervisors) at a time, you
might not work efficiently as they wish to do. Your productivity may
decrease. The solution to this problem in the workplace is the unity of
command principle.

Unity of command means you (employee) should have only one boss-
one task and you are responsible for only one boss at a time. This
helps to reduce confusion, efficient work, and speed ups the work.

Unity of Direction
The unity of direction principle of management means there should
be one head and one plan for similar activities.

More simply, if some activities are similar these activities should be

grouped into one group, and a boss should make a plan to accomplish
them. This means there should be only one instruction for similar
types of jobs.
If employees get different types of instruction to accomplish the job,
they get confused. Implementation of instruction becomes difficult. As
such there should be the same direction for subordinates to
accomplish similar tasks.

Subordination of Individual Interest to

General Interest
This management principle emphasizes general interest i.e.
organizational common interest than individual interest.

Every individual (employee) is guided by his/her own personal goals

and that might not align with organizational goals. If every employee
gives priority to his personal goals organizational goals can not be
achieved.

Thus this principle states that, for the betterment of the organization,
every employee should give first priority to organizational goals and
place their own goals second.

Remuneration of Personnel
Remuneration is the pay employees get for their service to the
organization. The pay should be fair.

To this principle, organizations should provide fair and marketable

rewards to their employees. The reward must be based on
experiences, qualifications, productivity, and inflation rate. It must be
transparent and competitive.

Fair pay motivates employees to work better, increases satisfaction,

and they stay longer in the organization. Organizations further should
provide financial and non-financial benefits to their employees to
boost their performance.
Centralization and Decentralization
Centralization refers to resting decision-making authority only on the
top management i.e. higher positions of the management has the
power to make decisions. Whereas in decentralization, decision-
making power is vested also to subordinate levels.

However, following centralization or decentralization depends upon

the nature and size of the organizations and no organization is fully
centralized or decentralized. This management principle states that
there must be a balance between centralization and decentralization
for the effective functioning of the organization.

Scalar Chain
The scalar chain principle of management refers to the chain of
superior subordinates ranging from top to bottom (or bottom to top)
for the effective flow of authority, orders, and information.

There should be an unbroken chain of command and communication.

An unbroken scalar chain facilitates the effective flow of
communication and command.

Although this is an unbroken line between subordinates and superiors

in the organization, Fayol also introduced Gang Plank for emergency
situations.

Order
Order principle indicates placing the man (employees), machine, and
things in the right manner so that they can be used at the right time
without delay.
It says that the right man should be appointed at the right place at the
right time. For efficiency and productivity, the right things (raw
materials, machinery, finished goods, etc.) must be kept in the right
place. This increases the efficiency and effectiveness of the
organization.

Equity
Equity refers to fair treatment or equality or justice in the behavior of
all concerned people associated with the organization.

This principle states that there should not be any discrimination on

the basis of race, gender, caste, religion, demography, education, etc.

It ensures a healthy industrial relation in the organization so that

absenteeism and turnover get reduced. It further improves the job
satisfaction of employees.

Stability of Tenure
The stability of tenure refers to the job security of employees. Job
insecurity decreases the morale of employees due to which efficiency
and productivity get lowered. The lack of stability of tenure leads to
higher turnover.

This principle states that management should establish a guarantee of

job continuity for the employees. Managers should work for
increasing tenure (years of working employees in the same
organization) of employees.

Low turnover of employees increases organizational image and

reduces the cost of recruitment, selection as well as training, and
development.
Initiative
According to the initiative principle, managers must take steps in
order to make work done properly to realize the goal of the
organization.

Managers must encourage initiative. Every employee should be

encouraged to be creative with new ideas and ways of doing new
things. Initiation makes every work possible as it encourages and
boosts the morale of employees.

Espirit De Corps
This principle refers to the “Strength in Unity“. It states that
management should establish cooperation and coordination.

It means joint work materializes the goal of an organization as a single

effort is not enough. Cooperation increases a positive attitude toward
the organization and its goals.

Teamwork with cooperation and coordination generates synergy

which becomes the reason for organizational success.

}
That means if we prepare the plans appropriately, half of the total
tasks get completed by themselves. It is critical that every manager
should create well-designed or effective plans.

For effective plans, experts have suggested some principles that are
worth considering. Let’s understand them shortly.
 Contribution To Objectives – By this principle, the plan that is
made should contribute to the achievement of organizational
desired goals and objectives.
 Management Interset – Managers are the ones who make the
plans, they should be interested in making plans. Their interests have
a significant influence on the effectiveness of plans.
 Premises – These are the assumptions about the future likely events.
Plans should be based on some premises.
 Primacy – Plan is the first function of management. Plans should be
made first because without a proper plan, other management
functions can not get the direction.
 Efficiency – This principle states the plans should be made in a way
that ensures the goal achievement with minimum efforts and costs.
 Flexibility – The plan should be flexible enough to adapt to
changing circumstances.
 Navigational Change – The manager should continually focus on
plans, their implementation, and their progress, and review, if
necessary bring changes.
 Commitment – The commitment principle is that logical planning
encompasses a period of time in the future necessary to foresee,
through a series of actions, the fulfillment of commitments involved
in a decision today.
 Timing – According to the timing principle of planning, the
important ones and less important ones or major and minor plans
should be arranged in a time hierarchy.
 Pervasive – All managers should make necessary plans according to
the need, power, and responsibilities they hold.
 Alternative – For effective plans planning should be through the
selection of alternatives.
 Limiting Factor – An organization may have some limiting factors
(e.g. limited resources), and managers must tackle such issues to
ensure the effective realization of ultimate goals.
 Comparative Strategies – Managers should also consider the
strategies of competitors while setting plans.
 Cooperation – All the members of the organization should
cooperatively participate and collectively make the plans.
  Framework – It refers to organizational policies that should be in
favor of inclusivity in the workplace.
 Long Range View – Managers must carefully analyze all the
available data and plan decisions after thoroughly analyzing and
comprehending their long-term future impacts.


Types of Planning
There are five types of plans found in organizations. These include.

 Plans Based on Hierarchy – Hierarchal plans are based on the

authority and responsibilities of employees in the organization. They
are drawn at three major hierarchal levels, they include strategic
plans, tactical plans, and operational plans.
 Plans Based on Frequency of Use – Some plans are used regularly
whereas some are only once. Based on frequency plans are single-
use plans and standing-use plans. Single-use plans include budgets
and programs whereas standing-use plans include goals, strategies,
procedures, policies, and rules.
 Plans Based on Flexibility – Based on the extent the plans can be
modified or remain static including two specific plans and flexible
plans. Specific plans are once made and can not be modified later
whereas flexible ones will be modified according to needs.
 Plans Based on Time Frame – According to time frame plans
include long-term plan (more than five years), medium-term plan
(less than four years), and short-term plan (less than one year).
 Contingency Plan – A backup strategy developed in the event that
the primary course of action is unexpectedly interrupted or
considered inappropriate is known as a contingency plan, also
known as a situational plan.
Importance of Planning
A successful plan lays out a clear road map for achieving such targeted
organizational goals which are required for their successful
accomplishment. A better strategy will probably result in the outcomes
being attained for the least amount of money and effort.

After reading all the above explanations you may have

understood why planning is important. In addition, some importance
of planning can be mentioned below:

 It provides direction to organizational efforts and activities.

 Ensure the achievement of organizational goals.
 Helps to reduce future uncertainties.
 Decreases the chances of risks.
 Effective utilization of organizational resources.
 Efficient and economic operations.
 Brings coordination.
 Encourage innovative ideas.
 Ensure effective control.
 Reduces business failure.
 Improves organizational performance.
 Helps to identify opportunities and threats.
Presence of effective planning is unavoidable in every organization for
smooth functioning and timely goal achievement. It is not necessary
but a compulsion for every organization as well as manager to set
effective plans.

In Conclusion…

Hence… we can say that planning is all about setting goals and
deciding, selecting, and evaluating the alternatives in advance to
ensure the desired organizational goals are achieved. And, every
organizational member should contribute to developing effective
plans.