Question

Explain the following points of importance of planning :

(i) Planning facilitates decision-making

(ii) Planning establishes standards for controlling

(iii) Planning promotes innovative ideas

Hint:

Planning sets goals and chooses the best course in advance, gives targets that control compares actual work with, and makes managers think ahead and come up with new ideas.

Answer 1

Step 1: Understanding the question:
The question asks for three points of the importance of planning: it facilitates decision-making, establishes standards for controlling, and promotes innovative ideas.

Step 2: Point 1 - planning facilitates decision-making (meaning):
Planning means deciding in advance what to do, so the objectives and the course of action are already clear.
Managers study the different alternatives and choose the best one before the actual work starts.

Step 3: Point 1 - its benefit:
Because the goals are known, later decisions are easy and quick.
Managers do not have to think afresh at each step.
For example, if a firm has planned its yearly sales target, deciding the number of salesmen to hire becomes simple.

Step 4: Point 2 - planning establishes standards for controlling (meaning):
Controlling means comparing actual work with what was planned.
For this we need a yardstick, and planning gives it in the form of objectives, targets and budgets.

Step 5: Point 2 - its benefit:
Without a plan, there is nothing against which the actual results can be checked.
Deviations are found easily and corrective action can be taken in time.
For example, a plan of producing 1,000 units a day lets the manager see at once if the output is only 800.

Step 6: Point 3 - planning promotes innovative ideas (meaning):
Planning is a thinking process. Managers have to look ahead and study new ways of doing a task.

Step 7: Point 3 - its benefit:
This process brings out fresh ideas, new products, new methods and new markets.
It makes managers more forward-looking and creative.
For example, while planning for the next year, a firm may think of a new eco-friendly range of goods.

Final Answer:
Planning helps decisions by fixing goals in advance, gives standards against which control is exercised, and encourages new ideas through forward thinking.