CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Planning is the first and perhaps the most important function of management. The essence of planning is to prepare for and predict future events. Planning goes beyond attempting to attain strategy and procedure required for effective realization of the entire plan. It entails determination of control, direction and methods of accomplishing the overall organization objectives. According to C. C. Nwachuwu (2015), planning is a process that involves the establishment of objectives, strategies to achieve the objective and a step by step determination of the activities and resources necessary to achieve them.
Planning helps to identify the organizational philosophy, policies, programmes, procedures, practices and problems, it is during this process and decision activity that important questions are asked such as who, what, when, why and how much (resources) are to be used and they are answered intelligently. Many studies point to the fact that there is a positive relationship between planning and higher profits, higher return on assets and other positive financial results. Planning is the selection of a course making (Weihrich and Knootz, 2011). A plan cannot be said to exist unless a decision, commitment of resources, direction or reputation has been made.
This research work is concerned with finding appropriate planning patterns for particular situations and the nature of management decision making. The study takes a searching look into the managerial activity of planning and uses Anchor Insurance Plc as a case study. How planning is carried out for the attainment of the company’s aims and objectives are examined. An organization is composed of people who interact in a structures relationship to achieve goals or objectives. Organizations are important because they satisfy some socially and economically functions.
1.2 Statement of the Problem
Both public and private sector organizations do not seem to know the relevance of planning and how it affects effective decision making. The problem now is, in such situations which managers face today, how would they know that decisions which they make are right and appropriate? What would be the impact of any decision made without adequate plans on the organization? Whether rational or not, what technique do they use to ensure creative plans? Researchers show that many indigenous Nigeria business owners and managers do not attach much important to planning. According to C. C. Nwachukwu (2015), 49% of these entrepreneurs do not attempt any formal business forecasting. How then can good business decision be made? The research work will attempt to answer these questions with a view to finding solutions to the problems.
1.3 Objectives of the Study
The purpose of this study generally, is to ascertain how planning works as a tool for effective decision making. It will also assess the following:
1. To evaluate whether planning is a very important and necessary tool for decision making.
2. To know whether planning can be used for effective decision making.
3. It will find out whether planning can be effectively carried out by organizations.
1.4 Research Questions
This study would attempt to answer the following questions in order to provide solutions to the problems of lack of planning or poor and inadequate planning in organizations:
1. Is planning a very important and necessary tool for decision making?
2. Can planning be used for effective decision making?
3. Can planning be effectively carried out by organizations?
1.5 Hypotheses
The following hypothesis has been formulated and would be tested to be sure whether planning is really a good tool for decision making in organizations.
Hypothesis I
H0: Planning is not a good tool for effective decision making in organizations.
H1: Planning is a good tool for effective decision making in organizations.
Hypothesis II
H0: Planning is not necessary in the day to day operations of business organizations.
H1: Planning is necessary in the day to day operations of business organizations.
Hypothesis III
H0: Planning cannot be effectively carried out in organizations.
H1: Planning can be effectively carried out in organizations.
1.6 Significance of the Study
This study will be important to the management of public and private sector organizations as it will assist them in making good plans for effective decision making. It will also be of great help and assistance to managers at all levels in their business organizations. Also, it will help students to be able to conduct further research on the subject matter. The findings of the study would definitely be of great value to business management students as it would guide them in their further career development programmes. The recommendations will be useful to career and non-career managers and encourage them to put adequate plans in place for good decisions to be made.
1.7 Scope of the Study and Limitation
This study is restricted to scope of planning and its role on decision making in organizations. To give an exhaustive research finding on the topic would have meant carrying out studies on several business and public organizations in Akwa Ibom State. However, due to constraints outline below, the research could only study planning and decision making in Anchor Insurance Plc, Uyo, Akwa Ibom State, and certain factors sought into place limitations of the study. They include time and financial constraints.
Time: Allocated for this study was limited and insufficient for wider scope hence the study concentrated on one case of study. One would need time and money for a work of nature to be exhaustive and encompassing. However, the limitations did not affect the quality and success of the work.
1.8 Definition of Terms
The following terms are defined for easy understanding:
Planning: Ezinne (2014) describe planning as “a blueprint of business growth and a road map that tells you and the world how you expect your company to achieve its stated objective”.
Tool: The Oxford English Dictionary (2010), edition defines the word tool as: An instrument that you hold in your hand use for making things, repairing things, etc. Things that help you to do your job or to achieve, e.g. research tools like questionnaires.
Decision Making: A decision making could be seen as a mental process that forces us to analyze the situation in order to master it, or increase our knowledge on the area in which decision is to be made C. C. Nwachukwu (2015).
Organization: This refers to the form or every human association for attainment of a common purpose by James Mooney.