Benefits of planning

From CEOpedia | Management online

Benefits of planning

Benefits of planning is a positive effect of setting specific goals that lead to development of the company. The main purpose of planning is making the right decisions. The planning process consist of combining information, assessing alternative solutions and estimating the future consequences.

There are several benefits of planning:

  • it is necessary component of decision making
  • improves decision making results
  • reduces risks of activities on operational and strategic level
  • helps to anticipate potential problems
  • motivates to be proactive rather than reactive
  • gives clear quantitative measures of specific goals and results
  • provides method for optimal resource allocation
  • gives sense of direction to all employees according to organization's mission and vision
  • increases focus on results and goals
  • improves communication and team cohesion
  • provides information necessary to other management functions
  • provides method for coordination of complex action and multiple projects
  • is crucial for efficient time management
  • is a tool for learning and knowledge transfer

Advantages of planning

Planning is a system of actions arranged in the right order, which form a whole. It is not possible to predict what will happen in the future, but having a plan of action we strive to achieve the set goals is. It is a tool used to determine and implement strategic decisions. The main purpose of planning is making the right decisions. The planning process consist of combining information, assessing alternative solutions and estimating the future consequences[1].

Advantages of planning are as follows[2]:

  • Planning supports improved organization in the company.
  • Planning starts with setting goals.
  • Planning makes it easier to manage through goals.
  • Goals become more specific and clear.
  • Planning distinguishes the most important goals.
  • Employees are more focused on the goals of the company.
  • Every organization/company should have guide/boss who is responsible for setting, controlling and achieving goals.

Managing of Benefits

It delivers information for optimizing resources. Managing of benefits consist of[3]:

  • setting tasks regarding the presentation of benefits in each project
  • creating a deadline of achieved the goal
  • updating plans
  • setting a person who will be responsible for benefit after finished project
  • monitoring benefits

Examples planning of benefits:

  • a completed investment
  • increasing the competence of employees
  • increased sales revenues

The role and benefits of planning

Planning in companies and organizations serves to set goals and strategies, and translate them into feasible activities in the field of operational activities. It creates a concept of stages that defines how to achieve goals. The benefits that we achieve from planning result from setting clear goals that strive to grow your business[4].

The benefits of making a business plan

Every entrepreneur starts a business should draw up a business plan. It is a very important element in the planning process, because how we prepare it determines the success or failure of the company. A business plan is a document that helps in managing a business[5].

BUSINESS PLAN - a document containing an assessment of the profitability of an economic venture. It performs the function of[6]:

  • planning - allows you to develop goals to be achieved through a given investment,
  • control - a set of goals with results achieved, allows you to make the appropriate analyzes,
  • information - is an important source of information for potential investors, contractors.

Benefits of a business plan:

  • verify the expected financial results,
  • increase the efficiency of a business project,
  • focus your attention on strengths and weaknesses which will help you run the business,
  • helps in obtaining a loan or subsidy for running a business,
  • the ability to control planned expenses and receipts in the company.

The benefit of the planning horizon

Companies or organizations try to estimate the economic benefits of planned activities using two types[7]:

  • Longer planning horizons (20 to 30 years) can give to the users more benefits in the future, increased benefits and decreases cost.
  • Shorter planning horizons (1 year) can give to the users more benefits but in shorter time than longer planning horizons, however shorter planning is more popular than longer one because benefits may lose their value.

Examples of Benefits of planning

  • Improved decision making: Planning helps to identify the best possible decisions by comparing options and analyzing their potential outcomes. For example, a company may plan to launch a new product by analyzing the market and assessing the potential benefits and risks.
  • Increased efficiency: Planning helps to identify the most efficient ways to achieve a goal. For example, an organization may plan to streamline processes and procedures in order to improve efficiency and reduce costs.
  • Improved coordination: Planning helps to coordinate the activities of multiple stakeholders and departments. For example, a business may plan to outsource certain tasks to an external vendor in order to reduce costs and increase efficiency.
  • Reduced risk: Planning helps to identify and mitigate potential risks by analyzing the consequences of different outcomes. For example, a company may plan to invest in a new technology in order to reduce the risk of failure.
  • Increased motivation: Planning helps to motivate individuals and teams by setting achievable goals and providing incentives for success. For example, a business may plan to reward employees for meeting certain performance targets in order to promote a culture of excellence.

Limitations of Benefits of planning

Planning has numerous benefits, including helping to achieve goals, organizing resources, and reducing stress. However, there are some limitations that should be considered when planning. These limitations include: *Time constraints - Planning can be a time-consuming process, which can be difficult to manage if there is limited time available. *Bias - When planning, it is important to remain unbiased and open-minded to ensure that all ideas are considered. *Inflexibility - If a plan is too rigid, it may not allow for changes or unexpected outcomes. *Lack of creativity - When plans are too structured, it can limit creativity and stifle innovation. *Incorrect assumptions - If incorrect assumptions are made when planning, it can lead to inaccurate results.

Other approaches related to Benefits of planning

Planning is an essential tool for organizations and individuals to achieve their goals and objectives. Other approaches related to benefits of planning include:

  • Time Management: Planning is essential for managing and organizing one’s time. It helps individuals to prioritize tasks and complete them in a timely manner.
  • Improved Decision Making: Planning helps individuals and organizations to make informed decisions and evaluate their options. By considering the pros and cons of different options and their impact, they can make more effective decisions.
  • Enhanced Productivity: Planning helps to increase productivity by breaking down complex tasks into smaller and more manageable chunks. Furthermore, it helps to create a structure and timeline for tasks, enabling them to be completed more efficiently.
  • Increased Efficiency: Planning helps to reduce waste and maximize efficiency by creating a systematic approach to work. This leads to improved resource utilization and reduced costs.

In conclusion, planning is a key tool for improving efficiency, productivity, decision-making, and time management. It is an essential component of success for both individuals and organizations.


Benefits of planning — recommended articles
Strategic goal — Strategy deployment — Importance of strategic management — Planning — Strategic planning functions — Strategy — Nature of strategic management — Strategic planning — Strategic management

References

Footnotes

  1. ↑ A.A. Dzurik, D.A. Theriaque, (2003)
  2. ↑ A.A. Dzurik, D.A. Theriaque, (2003)
  3. ↑ G. Bradley, (2012)
  4. ↑ A.A. Dzurik, D.A. Theriaque, (2003)
  5. ↑ G. Schwetje, S. Vaseghi, (2007)
  6. ↑ G. Schwetje, S. Vaseghi, (2007)
  7. ↑ J.R.Illingworth (2002)

Author: Patrycja Garbacik

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