Running Head: Organizations that fail to plan are planning to fail

Planning

‘Organizations that fail to plan are planning to fail’

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September 2, 2012

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Part A- Planning
A plan defines the course of action in order to accomplish a particular objective. The one
of the vital and crucial function of management is planning as it is the initial point which relates
the other functions of management with one another. Planning function is carried out at all
levels of an organization i.e. at top level, middle and low level and it is acknowledged as a main
factor behind success and prosperity, whether in business or at individual level. Planning is as
important at individual level as in organizations because if an individual does not plan ahead, he
or she has to face trouble in future and same is the case at organization level. Planning provides
the discipline for an organization to reach its goals (Akrani, 2012).

Planning is procedure of devising objectives and selecting the ways and means to
complete those objectives. Definitely, without planning, it is not possible for managers to
arrange and manage people and other resources effectively because they do not know about
the direction where to utilize the available resources. It means planning gives direction to
management and provides idea about where to go and what to do (Morden, 2004). Without a
plan, it is not possible for managers to lead their subordinates with confidence and there is little
chance that organizations can able to achieve their goals without a clear plan. Even, without
planning, controlling, which is another important function of management, becomes useless
and ineffective because when directions are not clear then how and what they will control.

No doubt that planning does not give any guarantee of success but it increases the
chances of success. Organizations that do planning before taking any action also have to face
failure which may be due to other reasons which have to analyzed properly to find out where
actually the mistake occur. For example Coke, who planned to change its basic products but that
plan failed poorly due to not testing the idea properly regarding how consumers will react on
this change. There are some limitations of planning but these limitations do not decrease its
universal importance. An organization cannot be successful only with help of plan; however,
planning focuses attention and resources in specific direction (Schermerhorn, 2007).

There are many examples in real worlds which show how companies achieve big
successes by doing proper and accurate planning. Apple started in the garage of a young man
has proven to be the one of the successful company in IT industry and ranked at 103 on the
Fortune 500. Another example is of Dell which began with an idea and investment of $ 1,000
and now ranked at 34 on Fortune 500. Wal-Mart, Procter & Gamble, amazon.com and many
more are some other examples (Bottary, 2010).

Need of Planning:

I absolutely agree with this statement that those organizations that fail to plan are
actually planning to fail. Organizations that do not plan about their future are more likely to fail.
In fact, anything done at any level without proper planning has decreased its chances of
success. Planning is required for organizations in order to survive in any particular industry.

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Planning helps the company in decreasing the distance from where a company stands currently
and where it wants to stand in future. Through planning, organizations try to bring together
their resources in order to achieve their objectives and to avail opportunities. Planning is
needed for several reasons;

 In order to survive in highly competitive market.

 In order to grow to increase the market share.
 To face new problems and situations; which may arise due to different reasons like
change in customer taste and expectations and so on.
 It is needed as it is the foundation of whole management process.
 It is needed to face new challenges.
 It is required to accomplish the objectives, finalized by management.

It is obvious that efforts which are directed by proper planning are more efficient as
compare to unplanned efforts. In other words, it improves the efficiency and effectiveness of
organizations by providing a rational approach towards predefined objectives. Planning tells us
which action will help in achieving particular goal and which action is irrelevant. Moreover,
planning makes organizations flexible and adaptable and it increases the chances of change with
the changing environment and hence increases the chances of success (Akrani, 2012).

Planning and making strategy for future course of action is critical for today’s
organizations and if they fail in planning properly, they have to face serious consequences
because in current world, there is fierce competition among companies and competitors do not
leave single chance to snatch the market share. Therefore, in order to achieve competitive
advantage and to increase market share, organizations have to see what are their strengths and
weaknesses, what available resources are, where they are standing currently in market as
compare to their competitors and what available opportunities are in market (Hitt, Ireland,
Hoskisson, 2010). Then, they have to make future goals and objectives and make plan in order
to achieve those objectives and to improve their current position in industry (Pirtea, Nicolescu,
Botoc, 2009).

Organizations may achieve financial success without planning due to luck or may be due
to some other factor but it does not happen always and moreover, organizations can think that
they can be more successful if they put their efforts in organized way through proper planning
(RAO, 2008).

Types of Plans

Typically, there are two types of plans i.e. strategic plans and operational plans. Strategic
plans are broad in nature and are devised by top management while operational plans contains
details regarding how to implement those strategic plans and are designed by middle and low
level of management. For example, the strategic plan of FedEx would be how to position its
services against its competitor UPS while the operational plan of FedEx would include the detail
about aircraft maintenance schedule. Strategic plan is focused around people of same

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organization but strategic plan moves around people of your organization and other
organizations also. Both these plans differ in many aspects like;

Time Horizon: Time horizon is more in strategic plan as compare to operational plan.
Strategic plans consist of mostly five to ten years while operational plan mostly consist of one
year.

Scope: The scope of strategic plan is wide while operational plans are narrow- scoped
and limited.

Degree of Details: Strategic plans are less detailed while operational plans, as they have
been derived from strategic plans, are more detailed and comprehensive.

Importance of Planning:

Planning is of supreme importance not only for organizations but also for economy
(Akrani, 2010). Planning is important for organizations in the following ways:

Drives attention towards objectives and results: Planning helps the members of
organization not to be lost in mess of routine activities. It drives attention of management
towards goals of organization.

Planning reduces uncertainty: Through planning, organizations cannot remove the

uncertainty and risks but t it can help companies in predicting future opportunities and threats
and can prepare for them.

Planning gives direction: Planning gives direction to all members of an organization. It

makes work more meaningful and orderly. Without planning, work becomes random and
haphazardly which creates turmoil in organization (RAO, 2008).

Increases coordination: Planning increases integration among diverse workforce and

interconnects all activities in organization due to having common shared goals.

Helps in decision making: When target are pre-planned then it becomes easy for
management to select the best alternative among all available alternatives in order to achieve
the targets. Planning reduces the chances of trial and error while making decisions (Bennett,
Borchardt, Duckworth, 2003).

Decentralization: When plans become finalize and communicated to all members at all
levels, and then everyone knows his or her role in achieving that plan. It helps in
decentralization and reduces the risk involved in delegation of authority. Moreover, in this way
it helps in increasing the motivation level of employees (Akrani, 2012).

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Helps in controlling: Planning provides standards for the evaluation of performance. In

other words, it helps the management in controlling. It tells the management in deciding
whether efforts are targeted in right direction or not. An organization cannot exercise control
without having plan. Planning provides gauge to organization to measure the performance.

The Reasons Plans Fail

Different surveys have shown that the return on investment is 34% in case of traditional
planning and the percentage of successful strategic plans is only 19%. There are many reasons
due to which plans fail. Some of these reasons are lack of having vision, not having complete
information (internal & external), lack of strategy, communication and coordination problems,
ambiguous plans, conflicts and not having accounting mechanism (Bottary, 2010).

Conclusion

It is important to understand that there are some limitations along with benefits and
advantages of doing planning. No doubt, planning is not a magic which pulls the organization
from sufferings and troubles. However, planning can helps organization in identifying its
strengths and weaknesses. It can help in finding out new opportunities. Commitment of
management; especially top management is very crucial for the success of any plan. If they are
committed to implement the plan, then no doubt through planning, organizations can achieve
growth and success and can go there where they want to go (Daft & Marcic, 2008). There are
some limitations of planning like it is time consuming and costly, no guarantee of required
results, collected data can be defected and fast changes in external environmental factors.
Along with these limitations there are many advantages also, which cannot be ignored at any
stage, like it helps in achievement of goals, make sure the utilization of resources in required
direction, creates consistency in efforts at all levels, helps in achieving and maintaining
competitive advantage, helps in making rational decisions and finally planning ensures effective
control (Hill, n.d.).

Part B- Planning
I personally feel that I can plan things well. I have basic level of skills to do sound
planning. Throughout my academic level, I prefer to organize and plan the things before taking
any action. I personally give importance towards the collection of information and reliable data
before finalizing any plan because I think it is the most crucial step in making plans. If you get
wrong information, then your whole plan becomes a big flop. I try not to rely on intuitions and
feelings and do proper research. Whenever it is required, I try to list down objectives on short
term and long term basis and I try to be specific in those objectives in order to remove any
ambiguousness. Afterwards, I look into the resources required to get those objective and make
plan how to proceed further in order to accomplish those objectives. I can improve further my
planning skills by give attention towards my weak points like I cannot anticipate possible
problems which I can face. I am not able to prioritize the tasks on the basis of urgency. These

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problems can be solved by properly evaluating every aspect so that I can find out which aspect
can be cause of problem in future and by finding out the importance of each task in order to
solve priority problem.

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References

Akrani, G. (2010). Planning First Primary Important Function of Management. Retrieved September
7, 2012, from http://kalyan-city.blogspot.com/2010/06/planning-first-primary-important.html

Akrani, G. (2012). Importance of Planning - Why Planning is Important? Retrieved September 7,

2012, from http://kalyan-city.blogspot.com/2012/02/importance-of-planning-why-planning-
is.html

Bennett, B., Borchardt, R., & Duckworth, B. (2003). The Role of Business Planning. Retrieved
September 7, 2012, from http://dallas.tamu.edu/econ/business%20planning/section
%201/business%20planning.pdf

Bottary, L. (2010). Ten Common Reasons Strategic Plans Fail. Retrieved September 7, 2012, from
http://blog.vistage.com/business-leadership/ten-common-reasons-strategic-plans-fail/

Daft, R.L., & Marcic, D. (2008). Understanding Management (6th ed.). Cengage Learning

Freeonlineresearchpapers.com (n.d.). Management and Organisational Planning. Retrieved

September 7, 2012, from http://www.freeonlineresearchpapers.com/strategic-management-
process

Hill, B. (n.d.). The Importance of Planning in an Organization. Retrieved September 7, 2012, from
http://smallbusiness.chron.com/importance-planning-organization-1137.html

Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2010). Strategic Management: Competitiveness and
Globalization, Concepts (9th ed.). Cengage Learning

Morden, T. (2004). Principles of Management (2nd ed.). Ashgate Publishing, Ltd

Pirtea, M., Nicolescu, C., & Botoc, C. (2009). The Role of Strategic Planning in Modern Organizations.
Annales Universitatis Apulensis Series Oeconomica, 11(2). Retrieved September 7, 2012, from
http://www.oeconomica.uab.ro/upload/lucrari/1120092/40.pdf

RAO, A. (2008). The Importance of Planning at Organization. Retrieved September 7, 2012, from
http://www.citeman.com/4641-the-importance-of-planning-at-organization.html

Schermerhorn, J.R. (2007). Management. John Wiley & Sons