“Organisations that fail to plan are planning to fail.” Critically discuss this statement.
Businesses do not plan to fail, they fail to plan. In my opinion, the planning process is a vital component towards successful operation of any business, thus i believe the above statement to be correct. According to Stephen Chapman, planning is defined as ‘the process of setting targets and deciding how to achieve them. It acts as a link between the business owner’s ideas and the actual operation of the business’. (2011 pg. 396) It is a managerial and leadership task and is such an integral part of managing a business, especially in today’s rapidly changing environment.
The contemporary business environment is dynamic, ever-changing and increasingly competitive. Their is potential for success, but even more for failure. Businesses are heavily influenced by the changing organisational environment and this intern creates much uncertainty for managers and organisations. With increasing uncertainty in the external environment, the more important it is that managers engage in continual planning. (Robbins 2012 p. 32) Businesses must be flexible and evolve in accordance with their external environment.
Planning aims to reduce uncertainty. It does this by forcing managers to look ahead, anticipate change, consider the impact of change and develop appropriate responses. (Robbins 2012) Through attempted monitoring of conditions in a changing environment, one is able to respond quicker to new information and new circumstances, thereby becoming more flexible. In addition, having the environment under constant observation enables managers to analyse how the organisation will differentiate itself from its competitors, therefore facilitating more chance of success in such an aggressive environment. Involvement in business planning ultimately works towards reducing the impact of change.
Through the establishment of objectives and determining how to achieve them, planning sets the standards that facilitate control. This control is beneficial to the organisation as it allows a manager to identify whether the plan has been carried out and the standards met. If significant deviations are identified, corrective action can be taken. (Robbins 2012 p. 87) An organisation is able to review its progress to date; recognise, acknowledge, and celebrate noted accomplishments; identify and share lessons learned and determine whether its current focus and effort should be emphasised, deemphasised or directed elsewhere. (Simerson, 2011) The plan can now be used as a tool for measuring performance, thereby identifying areas that need improvement. Without planning, there would be no goals against which to measure or evaluate work efforts. “If you don’t know exactly where you’re going, how will you know when you get there?” ― Steve Maraboli, Life, the Truth, and Being Free
Planning allows a new organisation to make fundamental decisions about the market in which it will operate; the...