THE ROLE OF PLANNING AND FORECASTING IN BUSINESS ORGANIZATION

CHAPTER ONE

1.1      Introduction

                Andrena Faludi state that “planning and Forecasting is the    Queen mother function
of management (organistion) and that if planning and forecasting fail, what/who will you
direct, control, budget staff, co-ordinate or organize rather than provide explanations,
explanations are response to state of tension resulting from observing unexpected events.
(Toulinin, 9660).

        Planning and forecasting present efforts to reduce- surprise caused by such events by
giving practicable accounts of how they come about’

 WHAT IS PLANNING AND FORECASTING?

FORECASTING:                                          

        Forecasting is preparing of an organistion’s future objectives and its current material and
personnel inventory, the general or departmental managers makes resources that will be able
to do in the future and how many more human and material resource the organisation must
hire to meet its goals (Needle 1999: 178)

Any business organization without element of forecasting is like driving a car blind- folded
and being directed by a man looking out through the back window. Furthermore, forecasting
is prediction. It is an effort by  enterprises to know what the future holds for it. Henry Fayol
speaks of prevalence as the essence of management. According to Fayol  “this looking ahead
include both assessing the future and making provision for it.

Modern business management has become a complex activity and so there is the need for
adequate forecasting. The need for adequate forecasting is apparent from the key role it plays
in planning. Koontzat al stated that, as influence  in plans of the entire environment outside
the enterprise has come to be increasingly recognizes, forecasting of the environment has
risen in importance”

 The role of forecasting in business organisation is so important that it must be adapted by 
managers. The making of forecasting and their review by managers compel thinking ahead
looking to the future and providing for it. Also the very act of forecasting may disclose areas
where necessary control is lacking.

 PLANNING

Andreas Faludi state “man’s understanding of this world and his ability to act in it, depends
on his constructing an imaginary in his own mind. This applied equally well to the planner’s
understanding of himself and his operation”

Planning in it simplest meaning is the determintion of anything in advance of action.

Planning is defined by koontz O Donneil as , “ deciding in advance what to do, who is to do
it, how to do it, how to do it , when to do it , and why it should be done” planning bridge the
gap from where we are to wher we want to go.

        Planning can also be defined as “a predetermined cause of action that helps to provide
purpose and direction for members of an enterprise.

        In designing an environment for the effective performance of individual working

together in groups, the most essential tasks is to see that purpose and ibjective and mwthod of
attaining them are clearly understood.

        Planning is the first function of a manager, it is necessary if anything or activities is to

reach the denial goal. Through planning, a manager, can approach pre-determined objective
rationally. All the work of an executive, whether he knows it or not is some  way connective
whether he knows it or not, is some way connected with the unfolding of a plan. In
identifying the role of planning in business organisation, Koonzet al states that, “ we are in an
economic, technological social and political era in which planning like other functions of
managers has become requisite far enterprise survival.

        Planning is unique in that it established the objective necessary for all group efforts.

        Planning and forecasting are important tools of company management and decision
making as they assist in the appraisal of investment of current marketing strategy and
manpower planning and in the indentification and development of new products and new
market, further they promote and facilitate the proper functioning of the many aspects of
company’s activities

        Planning and forecasting are compliments in that for a good result botjh go together.
They could be regarded as  independent parts that make a specified whole writing also in this
concept, Koontz O’ Donneil states that ‘ forecasting especially where participated throughout
the organization, may help to unify and co-ordinae plans. By focusing attention ion the
future, it assists in bringing a singleness of purpose to planning.

 1.2   BACHGROUND OF THE SUBJECT MATTER

the popular super market called EASTERNSHOP was established in may 28, 1960. about
five (5) months after the independence of this country. This took place at Ogui Road, Ogui
Road. Then Anambra state now Enugu state, which is formerly known as the headquarters of
eastern Nigeria.

The supermarket is situated opposite Nnamdi Azikiwe stadium and around it were other big
shops like Boddie’s ABC Transport etc. the amazing thing that concerned this shop is that the
manager or the sole proprietor is a family man, that had engaged in other business an finally
settled in opening a big supermarket. He entered into the business with little or no experience
in the field of supermarket business.

        Originally, the name of the managing director of the supermarket is chief M. O. Okoli,
Ozo Zuliu Agulu 1 of Agulu in Aniocha local Government Area of (old and New) Anambra
stat he is one of the pioneer members of Enugu state association of supermarket. This was to
enable him to curb some of the problems that he is passing though, as result of poor
forcasting and planning in business. The supermarket has other branches in lagos, and
onitsha. In the establishment, he employed general operation magager (GOM) who sees to
the running of the who direct the affairs of cashier, store manager and restaurant departments
and report to the Gom. Eastern shop is made up of five (s) departments/ units.

 Ø Accounting department
 Ø Cashier department
 Ø Store department
 Ø Restaurant department
 Ø Cold room department

Easterm shop deals mostly on consumer’s goods like cosmetics, wears caned foods baby
wears and toys.

The problem of proper planning and forecasting is among the major problems that limits  the
more clearly seen from an adage that says “ that business is full of risks.

        Besides, the researches were able to note that the sum N500 naire was used as initial
capital of the business and today the property of the business is on millions and it have more
than twenty people as employees. This simply means that it is no longer small scale business
at the low required. But as a result of inadequate applocation role, of good  understanding in
the techniques of forecasting and planning integration in business, the cannot make good
pricing quality and quantity of product scales.

        Since improper planning is as good as not planning at all, based on the above promising
and manifesting problem, there calls for the researchers to investigate the project topic to help
the present situation that is facing the business.

1.2      PROBLEMS ASSOCIATED WITH THE SUBJECT MATTER

        It has obviously been that “ he who fails to plan, plans to fail” and it is also believed that
he who fails to put records and recognizance of past event should not predict/ forecast future
if anybody that fails to envisage the future is bound to crash.

Planning and forecasting have been integrated to be wonderful tools effective ,management
since planning and forecasting have been integrated to be wonderful tools for effective
management. Since touch used in darkness. We also believed that business dwell in the world
of dynamism and unsteady – setting, which called for effective use of planning and
forecasting.

It can also be seen as an eye of every business that wants to grow in a competitive
environment.

 Even the Bible say’s, “ where  there is no vision, people perish” in this context vision, which
is sight in modern business management, is planning and forecasting. Moreover Hosea 4: 6
said , “ my people perish for lack of knowledge of planning and  forecasting. It is because of
inadequate knowledge of planning and forecasting. It is because of these present problems
and eminent problems, which many business are encountering and also will encounter in
future, that make the researcher to bring out the topic title “PLANNING AND
FORECASTION IN BUSINESS ORGANISATION from the light of the above, it is
approved that for a society to progress is to embrace planning and forecasting.   

 PETER DRUNNER said that “planning and forecasting is aspect of management is doing
not knowing” therefore we should know that planning must be practicalized not nursing or
desire in the hear. It is a thing of paramount importance to see that problems or courses of
liquidation of problems or courses of result of lack of adequate planning and forecasting.
Morever this project necessitate a result that new people and some organisation that
recognized the roles of planning and forecasting . they do  it any how, with out knowing that
planning ius QUEEN MOTHER of all the management and if it fails what / how then will
you direct, organize, control, staff and budget it to and so on.

        This issue of poor attitude and low understanding of the role or meaning and importance
of twin brothers planning and forecasting makes business not to grow well,  talk more of
progressing. And if any one will progress at all, without working or simply put just by chance
or luck, but planning of business is a will program oriented profit venture or business.

         In attempt to plan, as many thinks, they do a only half bake planning which is as good
as not  planning at all, in which most of their planning is found wanting because it lacks the
basic elements of planning as regard as follow.

a,     Futuristic in out look, that is planning some future problems of business at to day’s door
steps beside that future can never be predicted with  hundred percent efficiently.

This is why provision has to be made to accommodate future uncertainties.

Theory and practice says that it is done in six step process which shown in the diagram
below.    

    PLANNING PROCESS

        All these challenges put together, makes the researchers  to found it duly worthy to write
on topic, to  revive and resurrects a deed and sick business organisation by the power of 
wonderful role of inseparable twin brothers which is planning and forecasting is queen
mother of all management function and if it fails or who and low will one (business manager)
direct, control budget, staff and so on and so fort. It is nothing rather that to co-ordinate failed
and shame.

1.3      THE PROBLEMS THE STUDY WILL BE CONCERNED WITH.

The problems planning and forecasing encounter in an organisation effects its productivity.
Over the years, business organisation has tried a lot engulf managerial progress in Eastern
Shop Nigeria a limited Ogui Road Enugu.

 The problems are stated thus:

1. To know how planning and forecasting in EASTERN SHOP LTD     carryout their
tasks
2. To know both the internal and external affairs of the company.
3. Whether the problems are caused as a result of poor motivation.
 4. what other variables could explain why the problems have been eradicated?
5. To know whether the working environment is conducive for planning  and
forecasting.

    These problems also attached itself with the research questions and we will use the same
opportunity to discuss the research questions.

RESEARCH QUESTION

Why is planning and forecasting needed in an organisation.

What impact can it create in progress of business

Does planning and forecasting had any theoretical backups and back ground?

Can we really do without planning and forecasting?

What makes planning and forecasting organisation of management?

Is information an effective tool for planning and forecasting in business organization?

 On the reason why, is planning and forecasting needed in an organisation, both charitable
and none- profit organisation had fail because of inadequate. Planning and forecasting.

Planning having initiate in selection of man- power, bridge or links up past, present and
future together for effective returns by bringing in future at door step of managers. Planning
being  the primary of all business function has tried to house all functions because, if it fails
as house other thing will  fail and so with the aid of proper planning business organisation 
are bound to succeed.

    In to days business some people jumps into business world without minding the rate of
planning and forecasting due to the believe that says “ with money all things are possible”
and also believed that they are man enough to handle anything which is very wrong and also
an abuse to the business concept. They tail to realize that success cometh not by assumption,
but by real planning forecasting.

        These question were also raised to scap out issues that manager is born not made and
since proper planning and forecasting has brought increase in productivity that is
immeasurable and quantifiable in today’ s business. What input can (planning and
forecasting) this impact of planning and forecasting creates more progress in business,
because the is a quote that says” those who fails to plan, plan to fail? And planning in its
strict sense means being organized to co-ordinate things no matter the face of circumstances.
Having known these, the important of planning and forecasting will not be far fetched or
traced, since planning makes managers to have objective goals or resources to arrest them
which can be of (m4) man material, money and machine and these eruo the modern strategy
of (mbo) management by objective and being objective means seeing things from the
generalized and adapted phase not with personal subjective phase. Does planning and
forecasting have any theoretical back up or ground ? theories provide explanation which are
responses to state of tension resulting from observing unexpected event (Toumin,1960) they
represent efforts to reduce surprise caused by such events by giving plausible accounts of
how they have come about. Mean while does planning and forecasting has any theoretical
back up. Yes of course, it has, according planning  will be complete you will need to propose
details in  forecasting of sales, profit, production, finance and man- power due to the fact that
they will help to validate your plan”.

Another to Koontz and DONNELL(1980) define planning as deciding in advance what to do,
how to do it,who is to do it and why it should be done. (management HEINEMAN OXFORD
LONDON 1973:60)

        Again, HENRY FAYOL says that planning and forewcasting is looking ahead includes
both assessing the future and making provision for it”

Lastly but not the least that are going to mention is PETER DRUNKER in practical
management 1995:p4. it says “ he that love his wife loves planning and he that hate planning
embrace embarrassment; he that fails to plan, plans to fail.  

To prove it worthy, it is justifiable to have scientific management theory backup for much
laudable pronunciation in management. Can we really do without planning and forecasting?
The answer will be  yes due to, if man will still be a love after his hear has stop breathing.
But if not, so business organization  cannot do without embracing the role of planning and
forecasting.

        Again as a clock work without battery in it, and if man can not live without food it will
be impossible for us to operate without planning and forecasting and if this is impossible, it is
simple means that planning and forecasting is indispensable to business organisation.

What makes planning and forecasting the organic function of management is that it was
found to be a master planner and breadwinner of the family (organization, it also found to be
microchendra) (power house) in business life.

        To answer question clear, Andrew faludi states mean of understanding of this world and
his ability to act in it depends on his constructing an immanency  in his own mind. This
applies equally well that the planners under stand himself and his operation.

        Finally is information an effective tool for planning and forecasting? Yes of course.
Since planning aids to bringing future at the door step of an organization, this shows that
planning is to manage future. According to peter Drunker, he says that “ to manage future is
to manage business and to manage business is to manage information, planning and
forecasting, it proves that information is life wire of a business planning and forecasting.
These information, as a means of communication keeps business planning and forecasting in
a brace with ever dynamic changes in business world for business to be standard, it must
follow the trends of change in information to put up with fashion that is in vogue.

1.5   THE IMPORTANCE OF THE STUDY

If this course or project does not its salt, it could not have been approved and the research,
project supervisor believed that some people will benefit from this project topic when it is
properly done.
Having known that planning is organic function of management; it bings much good to both
in various ways. All business organisation both those that have arrived and get to arrive will
benefit from these topic, if well utilized especially in areas of pricing quantity, man-power,
money, capital control and so on.

This study is meant to examine the  problems of planning and forecasting in business
organisation. It will examine the role, which managers tries to implement by using planning
and forecasting to advice effective and efficienct management of the organisation and society
at large.

        The research  will also find solution to some of the problems managers encounter by
implementing planning and forecasting in their day – to – day activities. However, the
importance of the research to management of any organisation students both graduate and
undergraduate will not be over emphasized. Family will also benefit from it since
management is done by all and  manning is first born and major aspect of management.

Government agency, and parastatals will also benefit from this topic by applying knowledge
of planning and forecasting in service of civil servant. Politicians of these 5th republic and
others to come will benefit from it by planning their political manifesto ideology.

           Generally everybody or anybody and all that went to survive in these ever dynamic
business world must learnt  to plan and fore cast in these perilous or risk evil days ours.  

 1.6   DEFINITON OF IMPORTANT TERMS

MANAGEMENT:- this is the application of human and material resources in achieving the 
objective and efficiently through planning and forecasting.

MANAGER:- it is a person that makes use of the material and human resources of an
organsiation in achieving  their objectives.

PLANNING:- it is the act or process of making plan. Planning is a major component of the
management process, which is concerned with defining ends, means and conduct at every
level of organization life.

FORECASTING:-to say that one think will happen in the future base on information that he
has now.

ORGANISATION:- it is a system of behaviour designed to enable human and their machines

accomplished goals. Organisation is also defined as the sum total of the way in which it
divides the labour distinct tasks and them achieves co-ordinates between them.

 BUSINESS       :- this is any economic activity oriented towards producing goods and
services at profit for the satisfaction of mankind.

         REFERENCES

Ani B.N, and  Nwandu. E. (2001) Introduction to business  management; Enugu; NERCT
publishers.
Ani B.N.,Agbo G.O. and Nwandu E.(2002) Small business entrepreneurships Enugu; NERIT
NERICT publishers.

Cole G.O (1996) Management theory and practice; F Fth  edition London; Ashford Colours
Press.

DALTON M..C. Far land; (1974) management principles and practice. Fourth edition. New 
York; Macmillan.

Philip Kotler. (2003) Marketing Management, millennium edition. India;  prentice Ltd.