Planning is the most basic and pervasive procedure in management. It means deciding in advance what actions to take and while and how to take them. Planning is required for committing and allocating the organization's (limited) resources towards achieving its objectives in the best possible manner, and anticipating future opportunities and problems.
i) Making choices: There can be various diversification opportunities to select from. The wisdom of the management lies in choosing the option that offers the maximum potential for growth and profitability.
ii) Committing resources: The marketing manager who increases the amount earmarked for promotion, and adds more salesmen in every territory along with the purpose of achieving higher sales, commits scarce resources (money, people and etc.).
iii) A time horizon: Planning always refers to a specific time limit inside that it must be completed. The field supervisor plans movements of every of her/ his salespersons on a daily basis. The marketing manager plans promotion efforts for the further three months, six months or twelve months. The top management might have a long time perspective, that may extend anywhere among 5 and 15 years.
Planning ensures the most efficient use of scarce resources. Planning is the only way through which an organization can exercise control to check in which it is on the desired course of action.