From the definition of planning we can deduce that planning serves the following purposes:
- During planning management sets objectives. The objectives indicate the direction in which the organization must move. The management then makes plans to achieve these objectives.
- The feasibility of the plans determines whether the objectives can be achieved or must be adapted. Guesswork is reduced and the risks are therefore also reduced.
- Planning reduces uncertainty. By studying the future situation, managers will be able to identify possible changes, threats or problems. In this way they get a vision of the future and can take steps to ward off crises and identify opportunities.
- Planning facilitates control. Without planning there would be no control.
- During planning we set objective and standards.
- Through control we compare the real outputs with these objectives.
- Deviations are identified and corrective actions are taken.