Planning Definition, Importance and Key Characteristics

Planning — Definition (George R. Terry)

George R. Terry: Planning is the selection and relationship of facts and the formulation and use of assumptions about the future for the display and development of proposed activities that are believed necessary to achieve the expected results.

Other Definitions

A systematic and consistent process for making decisions about goals and activities that an individual, group, unit or organization will undertake in the future. Administration: a new competitive landscape — Bateman & Snell.

• Effort with a goal
• By directors and managers control
• Knowledge and experience of employees
• Clear map for future activities
• Changing situations

Reasons Why Planning Is Important

• Fosters company development by establishing methods for the rational use of resources.
• Prepares the company to face contingencies that arise, with the best guarantees of success.
• Maintains a forward-looking mindset, with more vision of the future and a desire to achieve and improve things.
• Establishes a rational system for making decisions, avoiding hunches or empiricism.
• Minimizes risks and maximizes opportunities.
• Provides elements to carry out control.
• Minimizes potential problems and provides the administrator with excellent return on their time and effort.

Characteristics and Principles of Effective Planning

Feasibility

Should be achievable; no plans should be too ambitious or overly optimistic. The planning must adapt to reality and the objective conditions that act on the environment.

Objectivity and Quantification

Use real data and exact reasoning. Objective data include statistics, market research, feasibility studies and probability calculations. Plans must be quantified and expressed in money, time, quantities and specifications such as percentages, units and volume.

Flexibility

Allows alternative courses of action that can be adopted to fit changing conditions.

Unity

All plans should be integrated into an overall plan and approach to achieving the aims and objectives.

Changing Strategies

When a plan is extended over time it may require complete revision. Do not abandon the purposes.