Planning is the activity of setting goals, objectives, and actions for the future. Consequently, it is one of the basic functions of management. Planning is how management provides a unified direction for the efforts of all members of the organization toward achieving its common goals. This function is the beginning of the management process, and the organization’s success depends on its quality. For example, setting goals for the company and its teams at Amazon is a mutual process. Company leaders and the board of directors approve the plan for the next year. They discuss which projects they will work on and which they can postpone. A similar process occurs within the teams when each participant offers ideas for development in their work area. After receiving the task, the team comes up with its own metrics and agrees on them with the managers. Team members agree on who will perform what task and define their expected results. Without planning, Amazon would have had to take a huge risk of creating any new products (Flamand, 2020). This would have been dangerous with catastrophic cost increases and production chaos.
Strategic planning is designed to determine the overall strategic objectives and directions of the development of the firm. It also includes the resources required for this and the tasks’ stages. Tactical and current (operational) plans, developed on a planning basis, are oriented to the actual achievement of the planned objectives based on the specific conditions and state of the market at each stage of development. Therefore, the current plans supplement, develop and adjust the future development directions, considering the specific situation. What goals are planned determines how the organization’s function will be carried out. (Lloyd, 2020) For example, short-term goals require rapid mobilization of current resources and possibly an immediate search for new ones. It is also much easier to control activities if the company has a specific plan of what needs to be done. The same applies to leading in the firm because it will be easier for managers to determine which tasks to give to their subordinates if they have a list of planned goals and deadlines for their implementation. In general, there is a strong mutual influence and interdependence between the four functions.
Nowadays, the effective operation of any organization is impossible without a thoroughly worked out system of plans in advance. The system of plans includes documents for the company as a whole, for various terms for all the most important components. Without predetermined goals, it would be impossible to eliminate the uncertainty and variability of the organization’s operating environment and to focus on the main tasks. It is with planning that begins both the creation and functioning of an economic entity. This is evidenced by the experience of countries with developed market economies. Underestimation of planning in market conditions, reducing it to a minimum, or ignoring it leads to great economic losses and the insolvency of enterprises. All these factors allow evaluating this function of management above others. Instead of developing a potential product right away, Amazon prefers to take its time (Flamand, 2020). The employees first need to have a complete idea of the proposed product and formulate it in the form of a written press release. This approach avoids the situation where a product is launched that is not needed by the customer, and the company will only incur losses.
Flamand, O. J. (2020). Strategic plan: Amazon. University of Montana. Web.
Lloyd, R. (2020). The four functions of management – an essential guide to management principles. Fort Hays State University. Web.