What is Planning? Definition, Meaning and Importance

Published by: Madhubala Minda

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Planning is a conscious act of the management that decide in advance how a specific goal will be developed and accomplished and how the future course of action will be taking place.

It is a fact that decisions can be made without a proper planning process but planning cannot be possible without making decisions

What is Planning

Planning is considered the first of the managerial functions as it deals with setting goals and finding the ways to achieve those predetermined goals and objectives.

Definition of Planning

Definition: Planning is defined as one of the important managerial functions that involve thinking about the actual performance beforehand. It includes creating a strategic plan and viable decision-making about how the predetermined goals can be achieved

If you are looking for a proper definition of planning then several renowned economists have written the definition of planning in explicit terms.

According to Koontz and O’Donnell, the definition of planning is,

“Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning bridges gap from where we are to where we want to go”

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Meaning of Planning

What is planning, the definition of planning and understanding planning are all related terms that involves thinking and determining the specific goals, tasks and objectives, assessment, implementation and development of the various process, the risks involved and deciding in advance which future course of action will prove most beneficial for the organization.

Understanding the term Planning

To understand the term planning first you have to know what is planning? The planning process is a strategic plan about the future activities, future opportunities, future course of action as well as alternative future courses of action related to the actual performance.

The plans are made by the management to accomplish tasks, avoid risks and achieve predetermined goals and objectives as smoothly as possible

Without a proper plan, the managers couldn’t organize resources and goal setting in the organization.

The process of effective planning is developed by every manager as a rational approach to cash in future opportunities and bring forth a change in the present state to desired or alternate future state.

Employees are the most important assets of an organization and it is the management who is responsible for managing them and making sure that they are involved in the growth and development of the company.

Nature of Planning

Nature of Planning

The nature of planning includes

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1. Planning to achieve objectives

What is planning is a vital topic for all the organizations as it takes the help of this process in setting goals and determining the best course of action to accomplish predetermined goals and group objectives. The nature of planning is to achieve and accomplish present and future tasks with help of human resources and related course of action

2. Primacy of planning

Planning is a primary function of a manager that benefits the company as a whole. All other managerial functions like controlling, staffing human resources, directing and organising are designed to support the business objectives. Planning and control should be interlinked as without control the plan for actual performance can go haywire

3. Character and scope of planning

The character and scope of planning depend upon the manager and his ability to handle all the courses of action determined by the management. The primary function of every manager is to plan irrespective of his position in the hierarchy table

4. The efficiency of the resulting plans

Planning involves deciding in advance about future and alternative future courses of action to achieve the target objectives. To make the plan efficient the manager has to identify its contribution to the organizational purpose and objectives along with the cost and other factors required to formulate and operate it. Proper planning reduces overlapping of goals and objectives and helps in achieving them at a reasonable cost

Conceptual and Practical Reasons in Support of Planning

The two conceptual and practical reasons in support of systematic planning are as follows

1. Meeting Resource Scarcity

Every company has limited resources and it is the planning committee that is responsible for making effective plans that will stretch their limited resources to the fullest. An example of a scarce resource is financing. If these resources were unlimited or cheap there would be no need to make viable plans and find alternative courses for future activities

2. Facing Environmental Uncertainty

Another important reason for planning is the environmental uncertainty which every company has to face throughout their lifetime. The planning safeguards help the company to meet challenges head-on and opt for suitable alternative courses

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Importance of Planning

Importance of Planning

The importance of planning is as follows

1. Planning provides directions

Planning is the primary function of the managers who are involved in setting goals and deciding in advance about the courses of action that should be taken to achieve predetermined goals and objectives. Planning provides a sense of direction to both the managers and the employees whose other functions include following the directions of the managers

2. Planning helps in controlling risks in advance

Managers can predict changes in the future state because of proper plans. It helps in controlling risk in advance and reaching a specific goal ahead of time

3. Planning reduces overlapping and wasteful activities

Planning lays the groundwork for all the activities that take place in the present and future state of the organizations. It helps to set a proper course of action and avoid chaos and confusion amongst workers. The proper action reduces overlapping of future activities and delays

4. Planning encourages innovative ideas

Plans help the managers to take on new approaches with innovative ideas that will felicitate progress and development in the company. It helps to boost the actual performance of the workforce

5. Planning helps to remove the fear of concerned community

When a new business sets up the community is concerned about the impact of the business on the said community. Planning helps to allay those fears with proper example and shows how the business will handle involved risk and move ahead

6. Planning aids in decision-making

Planning encourages the managers to look into the future state and make viable decisions from the several alternative courses of action at their disposal

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Characteristics of Planning

1. Managerial function

Planning is a vital managerial function that takes precedence over other functions of management. It involves organizing, controlling, directing, and staffing so that the set course of action can take place

2. Goal-oriented

Planning involves defining the goals, making operational plans, deciding in advance the appropriate course of action plan and identifying alternative future courses of action to reach the goals

3. Pervasive

Every department has to make plans and find alternatives to reach set targets and achieve financial growth

4. Continuous process

Planning is a continuous process where plans are made for specific terms and once over new plans are drawn after considering the present and future requirements

5. Intellectual process

Planning involves thinking things through and applying the mind to forecast the future state and predict future risk

6. Futuristic

Planning is a futuristic process because it helps the planner peep into the future state and then determines which course of action will be best suitable to meet future needs. It helps the managers to meet future challenges and take alternative courses of action if necessary

7. Decision-making

Plans help in making decisions regarding the alternatives that should be taken to reach desired goals

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Types of Planning

The four types of planning include

1. Hierarchical Plans

The hierarchical plans are drawn at technical, managerial and institutional levels and include

  1. Strategic plans
  2. Administrative plans
  3. Operational plans

2. Standing Plans

Standing plans often referred to as standard operating procedure or SOP include issues which the manager has to face regularly. These are

  1. Purpose
  2. Strategy
  3. Roles
  4. Procedure
  5. Policies

3. Single-Use Plans

Single-Use Plans are the ones that are used for unique or single situations. These are replaced or discarded after a single use and include

  1. Objectives or goals
  2. Budgets
  3. Projects
  4. Programs

4. Contingency Plans

Contingency plans are alternative plans that are used to deal with situations that occur unexpectedly or when assumptions turn wrong. These are alternative courses of action that are taken if any event cause disruption to the planned course of action


By now the article has managed to answer the question of what is planning and the definition of planning quite categorically. To summarize, planning is about setting targets and finding alternatives in case the company is unable to reach set goals effectively.

The objective of planning is to include all the resources at its disposal for the survival, success and growth of the organization.

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Madhubala Minda

Madhubala Minda is a content writer for Digiaide. She writes unique and research-driven content on various Brands, Competitors, Management topics and wellness. With years of content writing under her belt, Madhu Bala is one of the strengthening pillars of Digiaide content team.