THE CRITICAL APPRAISAL OF THE ROLE OF PLANNING AND FORECASTING IN BUSINESS ORGANISATION (A CASE STUDY OF EASTERN SHOP NIGERIA LIMITED OGUI ENUGU, ENUGU STATE)
The role of planning and forecasting the business organization is a topic chosen from the business administration and management field.
The research was conducted mainly to examine the positive and negative effects of not making good use of planning and forecasting in the business administration of an organization. For effective research on this topic THE ROLE OF PLANNING AND FORECASTING IN BUSINESS ORGANIZATION, both primary and secondary data were used to elicit information from sample studied, the primary source of data were response from the personal interview, while secondary sources from text books on business management and administration periodicals.
Twenty- five persons were interviewed as the sample of the staff and management of EASTERN SHOP NIGERIA LTD.
The data analysis was based on oral interview we had with the staff of eastern shop (twenty-five). The major findings are as follows:
Ø The planning and forecasting is aids to correct mismanagement in business organization.
Ø And the planning and forecasting gives go ahead order to any individual, organization that is going into business to make judicious use of forecasting and planning as a way of success in any business.
Ø Poor forecasting attitude and inadequate planning.
Ø Poor integration of forecasting and planning in running of business.
Ø Problem of in- experience in running of organization, as a result of making use of sentiment, instead of strategy.
Ø Problem of business is also noticed to be an issue of planning on daily basis instead of medium term and long term planning and forecasting basis.
Ø Problem arises, because management “ organization believes that planning is not important, even if they believe that it is inborn and endowed from birth and indication.
This project has three chapters. Chapter one contains introduction, statement of problems, objectives of the study, significant of the study, definition and important terms and research questions.
Chapter two is the literature review. Here some related literatures were reviewed.
Chapter three deals with the finding, summary, recommendation and conclusion.
In summary, recommendation state that he who fails to plan, plans to fail, and so human heart can not breath without air, so also business will not work without planning.
Andreas faludi states “ planning and forecasting is the queen mother function of management (organization) and that if planning and forecasting fail, what/who will you direct, control, budget, staff, co-ordinate or organize rather than failure and shame! Again he states that, “theories provide explanations, explanations are response to state of tension resulting from observing unexpected events. (Toulinin, 1960)
Planning and forecasting present efforts to reduce surprise caused by such event by giving practicable accounts of how they come about”
WHAT IS PLANNING AND FORECASTING
Forecasting is preparing of an organizations future objectives and its current materials and personnel inventory, the general or departmental managers makes an estimate of the current materials and human resources that will be able to do in the future and how many more human and materials resources the organization must hire to meet its goals. (Needle 1999; 178)
Any business organization without element of forecasting is like driving a car bind –folded and being directed by a man look out through the back-window. Further more, forecasting is prediction, it is an effort by enterprises to know what the future holds for it. Hennery Fayoi speaks of prevalence as the essence of management. According to Fayoi, “ this looking ahead includes both assessing the future and making provision for it.
Modern business management has become a complex activity and so there is need for adequate forecasting. The need for adequate forecasting is apparent from the key role it plays in planning. Koonazetal stated that, “as influence in plans of the entire environment outside the enterprise has come to be insanely recognizes, forecasting of the environment has risen in importance”
The role of forecasting in business organization is so important that managers must adapt it. The making of forecasting and the review by manager complex thinking ahead looking to the future and providing for it. Also, the very act of forecasting may disclose area where necessary control is lacking.
Andreas Falodi states “man’s understanding of the world and his ability to act in it depends on his constructing and imaginary in his own mind. This applies equally were the planners understand of himself and his operation”
Planning in its simplest meaning is the determination of anything in advance of action, planning is defined by Koontz O’Donnell as, “deciding I advance what to do, who is to do it, how to do it, what to do, who is to do it, how to do it, when to do it, and why it should be done”
Planning bridges the gap from where we are, to where 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.
Designing an environment for the effective performance of individual working together in groups, the most essentia task is to see purpose and objectives, and methods of attaining them are clearly understood. Planning is the first function of a manager, it is necessary if anything or activities is to reach to the denied 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 connected with the unfolding of a plan, in identifying the role of planning in business organization, Koonzetal states that, “ we are in a economic, technological, social and political era in which planning like other function of managers, has become requisite far enterprise survival”
Planning is unique in that it established the objectives 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 project, in the analysis, measurement and improvement of current marketing strategy and manpower planning and in the identification and development of new products and new market, further they promote and facilitates the proper functioning of the many aspects of company’s activities.
Planning and forecasting are compliments in that for a good result both go together. They could be regarded as independent parts that make specified whole. Writing also in this concept, O’Donnell states that, “forecasting especially where participated throughout the organization, may help to unify and coordinate plans. By focusing attention on the future, it assists in bringing a singleness of purposes to planning”.
1.2 BACKGROUND OF THE SUBJECT MATTER
The popular super market called EASTERN SHOP was established in May 28, 1960. Almost five (5) months after independence of the country. This took place at Ogui Road, Enugu. Then Anambra sate now Enugu state, which is formerly known as the headquarters of the eastern shop Nigeria.
The supermarket is situated opposite Nnamdi Azikiwe Stadium and around it were other big shops like Bobbies, ABC Transport etc. the amazing thing that concerns this shop is that the manager or the sole proprietor is a family man, that had engage in other business and finally settle 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 managing director of the supermarket is Chief. M.O Okoli, Ozo Zulu Agulu I of Agulu in Aniocha local government of (old and new Anambra state) . he is one of the pioneer members of Enugu state association of supermarkets. This was to enable him to curb some of the problems that he is passing through, a as result of poor forecasting and planning in business. The supermarket has other branches in Lagos, and Onitsha. In the establishment, he employed general operation manager (Com) who sees to the running of the business. The company aso has shop manager who direct the affairs of cashier, store manager and restaurant departments and report of the AOM. East shop is made up of file (s) department/units
v Accounting department
v Cashier department
v Store department
v Restaurant department
v Cold room department
Eastern shop deals mostly on consumer’s good like cosmetics, wears, earned, food, baby wears and toys.
The problem of proper planning and forecasting is among the major problem that limits the more expansion of the business. These can be clearly seen from an adage that says, “ that business is full or risks” besides, the researchers were able to note that the sum of N500 naira was used as initial capital of the business and today the property of the business is on millions and it have more that twenty people as employees. This simply means that it is no longer small-scale business as the law required. But as a result ofinadequte application role, of good understanding in the techniques of forecasting an planning integration in business, he cannot make good pricing, quantity and quality of products.
Since improper planning is as good as not planning at all, based on the above promising and manifesting problem, these calls for the researchers to investigate the project topic to help the present situation that is facing the business.
1.3 PROBLEMS OF ASSOCIATED WITH THE SUBJECT MATTER
It has obviously been provide that “he who fails to plan plans to fail” and it is also believed that he who fails to put records and recognizance of the past event should not predict/forecast future. If any body that fails to envisage the future is bound to crash.
Planning and forecasting have been integrated to be wonderful tools for effective management. Since planning and forecasting are like touch light used in darkens. 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 says, “where there is no vision the people perish” in this context vision, which is sight in modern business management, is planning and forecasting. Moreover Hoesa 4: 6 said, “My people perish for lack of knowledge. Like wise, many business collapses 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 researchers to bring out the topic title “PLANNING AND FORECASTING IN BUSINESS ORGANISATION:
From the light to the above, it is approved that for a society to progress is to embrace planning and forecasting.
Peter drunker said that, “ planning and forecasting which is aspect of management is doing not knowing” therefore, we should know that planning must be practialized not nursing or desire in heart. It is a thing of paramount importance to see that problems or course of liquidation of much business is as a result of lack of adequate planning and forecasting. Moreover, this project necessitate a result that few people and some organizations that recognized the role of planning and forecasting. They do it any how, without knowing that planning is “QUEEN MOTER” 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 how understanding of the role or meaning and importance of twice brothers planning and forecasting makes business not to grow well, talk more of progressing. And if one will progress at all, without planning it will be by trying and error or miracle working or simply put just by chance or luck, but planning of business is a well program oriented for profit venture or business.
In attempt to plan, as many think, they do only half bake planning which is as good as not thinking at all, in which most of their planning is found wanting because it lacks the basic element of planning as regards as follows:
- futuristic in out look, that is, planning some future problems of business at today’s doorsteps besides that future can never be predicated with hindered percent efficiency. This is why provision has to be made to accommodate future uncertaies.
- most people in their planning lacks action, planning need to initiate action since mere sanding of the expected income an expenditure during fiscal year calls for Acton to make sure that the objectives of realizes.
- most people in their planning fails to identify manpower that will take the active action since everybody in an organization cannot take the action and also to identify at what point or time the action are to be taken.
The most disturbing and annoying issue that manifest in these lack of planning and forecasting in business, that makes the researchers to write on planning and forecasting as this topic is the nature –less in mode of their planning. Since most organization fails t adopt generalized approved nature of planning by all management according to Willian Nnewam 1963. He said that the four major aspects of planning could highlight the essential nature of planning.
Contribution to purpose and objectives primacy of planning, perverseness of planning and efficiency of plans. People fail to understand the need to appreciate planning process; this also, magnified needs of this project topic. All planning process must obey rules of goal setting, strategy formulation, recognition of some elements. Besides some people that tries to apply the process fails to update with the modifies by an author Nwachukwu C. C. who in his book called management theory and practice says that it is done in six step process which is shown in the diagram below.
All these challenges put together, make the researchers to found it duly worthy to write on this topic, to revive and resurrect a dead and sick business organization by the power of wonderful role of inseparable twin brothers which is planning an forecasting, since all management function and if it fails what or who and how will one (business manager) direct control budget, staff and so on and so fort.
It is nothing rather than to co-ordinate failure and shame.
Management today believes in managements by objectives (M.B.O) this project will also have it objective to draw the problem nearer home and to expose the thought biliously.
PROBLEMS OF THE STUDY WILL BE CONCERNED WITH
The problems planning and forecasting encounter in an organization affects it productivity. Over the years, business organization has series a lot eradicate these problems that some times equal management progress in eastern shop Nigeria limited Ogui Road Enugu.
The problems are stated thus:
v To know how planning and forecasting in Eastern shop Ltd carryout their tasks.
v To know both the internal and external affairs of the company.
v Whether the problems are caused as a result of poor motivation.
v What other variable could explain why the problems have not been eradicated.
v To know whether the working environment is conducive for planning and forecasting.
These problems also attached it with the research questions and we will use the same opportunity to discuss the research questions.
Why is planning and forecasting needed in an organization
What impact can it create in progress of business?
Does planning and forecasting has any theoretical backups and backgrounds
Can we really do without planning and forecasting
What makes planning and forecasting organic function 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 organization, both chartable and non-profit organization 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, it fails as house other thing will fail and so with the aid of proper planning business organization are bound to succeed.
In today’s business some people jumps into business world without minding the rate of planning and forecasting, due to he believe that says, “with money all things are possible” and also believe that they are man enough to handle any thing, which is very wrong, and also an abuse to the business concept.
They assumption, but by real planning and forecasting.
These questions were also raised to scrap 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 no forecasting) creates more progress of business?
This impact of planning in its strict senses 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 mangers to have objective goals or resources to arrest them which an be of (4m) man, material, money and machine or (m5) man, materials, money machine and method, and these erupt the modern strategy of (MBO) management by objective and being objective means seeing things from the generalized means seeing things form generalized and accepted phase not with personal subjective phase.
Does planning and forecasting have any theoretical backup and background? Theories provides explanation which are responses to states or tension resulting from observing unexpected event (TOULMIN, 1960) they represent efforts to reduce surprises caused by such events by giving plausible accounts of how they forecasting has any theoretical backup yes of course, it has. According to Hagreanves 1983: 3 and 7 says “Before planning will be completed you need to prepare deals in forecasting of sales, profits, production, finance an man-power, due to he fact that will help to validate your plan”.
Another pronounce professional, Jack Mitovurie states that “ forecasting is an essential aid for management decision in such critical areas as estimating, the profitability of new product, the cost and likely effectiveness of promotion possible effect of price change and the need for additional resources of sale man, advertising of administration.
According to Koonztz and Donnell (1980) defines planning as deciding in advance what to do, how to do it, who is do it and why it should be done. (Management Heinemann Oxford London 1973:60)
Again, Henry Fayol says that planning and forecasting 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 life wife loves, planning an he that hate planning embraces embarrassment; he that fails to plan, plans to fail.
To prove it worthy, it is justifiable of have scientific management theory background for much laudable pronunciation in management. Can we really do without planning and forecasting? The answer will be yes due to, if man wills still b alive after his heart organization breathing. But if not, so business has stop breathing. If not so business organization cannot do without embracing the role of planning and forecasting.
Again, as a clock cannot work without battery in it, and if man cannot live without food it will be impossible for us to operate business without planning and forecasting and if this is impossible, it is simply means that planning and forecasting is indispensable to business organization.
What makes planning and forecasting the organic function of management is that it was found to be master planner and bread winner of the family (organization, it also found to be encroached) power house) in business life.
To answer this question, clear, Andrew Falied state means of understanding of this word and his ability to act in it depends mind. This applies equally well that the planner understands 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 doorstep 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 making use of information as tool for effective planning and forecasting, it proves information is life wire of a business planning and forecasting. These information, as a means of communication keeps with ever dynamic changes in business world for business to be standard, it must fellow the trends of changes in information to put with fashion this is in rough.
1.5 THE IMPORTANCE OF THE STUDY
If this course or project does not its salt, it could not have approved, and the researches project supervisor believed that some people would benefit form this project topic when it is properly done.
Having know that planning is organic function of management; it brings much good to business in various ways, all business organization, both those that have arrived and get to arrive will benefit from these topic, if well utilized especially in areas of pricing, quantity, quality, man-power, money, capital control and so on.
This study is meant to examine the problems of planning and forecasting in business organization. It will examine the role, which managers, tries to implement by using planning and forecasting to achieve effective and efficient management of the organization 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 organization both profit and non-profit organizations, students both graduate and undergraduate will not be over emphasized. Family will also benefit from it, since management is done by all and planning is first born and major aspect of management.
Government agency, and prostates will also benefit from the this topic by applying knowledge of planning and forecasting in service of civil servants. Politicians of these 5th republic and others to come will benefit from it by planning their political manifesto ideology.
Generally, every body or anybody and all that want to survive in these ever dynamic business world must learnt to plan and forecast in these perilous or risk evil days of ours.
1.6 DEFINITION OF IMPORTANT TERM IN MANAGEMENT
MANAGEMENT: This is the application of human and materials resources in achieving the objectives of an organization effectively and efficiently through planning and forecasting.
MANAGER: This is a person that makes use of the materials and human resources of an organization achieving their objectives.
FORECASTING: to say what one think will happen in the future base on information that he has now.
ORGANIZATION: It is a system of behaviour designed to enable humans and their machines accomplished goals. Organization is also defined as the sum total of the way in which it divides the labour district tasks and then achieves coordination between them.
BUSINESS: This is any economic activity oriented towards producing goods and services at a profit for the satisfaction of mankind.