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Kalyan City is a fast emerging residential township in the Thane district of Maharashtra state, India. It is a central suburban town and resides 54 km north-east of Mumbai. This blog regularly shares quality academic materials. Here we also document our unique experiences and vivid memories of life. Read our lucid, informative articles to excel your understanding, knowledge and success.


Articles published on Kalyan City Life blog is inspired by our work experience, field research, study of various good books and papers, seminars and consultations from subject scholars. Our unique collection of useful study notes is an outcome of a team effort and hard work of Gaurav Akrani, Prof. Mudit Katyani and Manoj Patil.

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Importance of Planning - Why Planning is Important?

square Importance of Planning

The need and importance of planning is depicted in the following image.

importance of planning

Image credits © Prof. Mudit Katyani.

Following are the main advantages of planning:

  1. Planning increases the efficiency of an organization.
  2. It reduces the risks involved in modern business activities.
  3. It facilitates proper coordination within an organization.
  4. It aids in organizing all available resources.
  5. It gives right direction to the organization.
  6. It is important to maintain a good control.
  7. It helps to achieve the objectives of the organization.
  8. It motivates the personnel of an organization.
  9. It encourages managers' creativity and innovation.
  10. It also helps in decision making.

These ten points highlighting planning importance are discussed below.

square Why Planning is Important?

Now let's understand why planning is important for every organization:

  1. Increases efficiency : Planning makes optimum utilization of all available resources. It helps to reduce wastage of important resources and avoids their duplication. It aims to give the highest returns at the lowest possible cost. It thus increases the overall efficiency.
  2. Reduces business-related risks : There are many risks involved in any modern business. Planning helps to forecast these business-related risks. It also helps to take the necessary precautions to avoid these risks. Thus, it reduces business risks.
  3. Facilitates proper coordination : Often, the plans of all departments of an organization are well coordinated with each other. Similarly, the short-term, medium-term and long-term plans of an organization are also coordinated with each other. Such proper coordination is possible only because of efficient planning.
  4. Aids in organizing : Organizing means to bring together all available resources, i.e. 6 Ms. Organizing cannot be done without planning. This is because planning tells us how much resources are required, when it is required. This means that planning aids in organizing.
  5. Gives right direction : Direction means to give proper information, accurate instructions and right guidance to the subordinates. Direction cannot be done without planning. This is because planning tells us what to do, how to do it and when to do it. Therefore, planning helps to give right direction.
  6. Keeps good control : With control, the actual performance of an employee is compared with the plans, and deviations (if any) are found out and corrected. It is impossible to achieve such a control without right planning. Therefore, planning becomes important to keep a good control.
  7. Helps to achieve objectives : Every organization has certain goals or objectives or targets. It keeps working hard to fulfill these objectives. Planning helps an organization to achieve these objectives, but with some ease and promptness. Planning also helps an organization to avoid doing some random (done by chance) activities.
  8. Motivates personnel : A good plan provides various financial and non-financial incentives to both managers and employees. These incentives motivate them to work hard and achieve the objectives of the organization. Thus, planning through various incentives helps to motivate the personnel of an organization.
  9. Encourages creativity and innovation : Planning encourages managers to express and/or use their creativity and innovation. This brings satisfaction to the managers and success to the organization.
  10. Helps in decision-making : A manager makes many different plans. Then the manager selects or chooses the best of all available plans. Making a selection or choosing something means to take a decision. So, decision-making is facilitated by planning.



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