Question

Explain the following points of importance of planning :

(i) Planning provides directions

(ii) Planning facilitates decision-making

Hint:

Planning states objectives and shows how to reach them, so everyone knows the direction. It also makes managers choose the best alternative in advance, which eases later decisions.

Answer 1

Step 1: Understanding the question:
Two points of the importance of planning are asked: planning provides directions and planning facilitates decision-making.

Step 2: Point 1 - planning provides directions:
Planning fixes the objectives and tells how they can be reached.
Employees therefore know what they have to do and what the firm expects from them.
Efforts of all are guided to the same goal, and there is no confusion. For example, a plan to raise sales by 15 per cent gives every salesman a clear target.

Step 3: Point 2 - planning facilitates decision-making:
In planning, the managers study the different alternatives and select the best one.
Since the goals are decided in advance, later decisions can be taken quickly and with more confidence.
For example, a firm that has planned its output for the year can easily decide how many workers and how much raw material it needs.

Final Answer:
Planning provides directions by showing the goal and the path, and it facilitates decision-making by choosing among alternatives in advance.