Every organisation has to work within a framework of certain environmental forces and there is a continuous interaction between the organisation and its environment. The interaction suggests a relationship between the two. This relationship can be analyzed in three ways.

First, the organisation can be thought of as an input-output system. It takes various inputs-human, capital, technical-from the environment. These inputs are transformed to produce outputs-goods, services, profits-which are given back to the environment. Thus, the organisation merely performs the function of input-output mediator. In this process, the environment in its interaction with the internal factors of the organisation will determine what kind of inputs should be taken or outputs given.

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In any organization Planning plays an important part because of the numerous reasons listed below

1. Primacy of Planning

Planning precedes all other managerial functions. Since managerial operations in organizing, staffing, directing, and controlling are designed to support the accomplishment of organizational objectives, planning logically precedes the execution of all other managerial functions. Although all the functions intermesh in practice as a system of action, planning is unique in that it establishes the objectives necessary for all group effort. All other functions are performed to achieve the objectives set b the planning process.

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On the basis of the definition of planning, its following features can be identified:

1. Planning is a process rather than behaviour at a given point of time. This process determines the future course of action.

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