White Forest Financials is a small investment firm, operating in an extremely volatile environment

One of the company's two owners, David White, is of the opinion that it would be futile for the company to engage in formal planning as the business environment is constantly shifting. However, the co-owner, Marsha Forest, believes that planning is essential for the company's success. Whom would you support? Why?
What will be an ideal response?

Answer: Marsha Forest is correct in her observation that planning is essential to a company's success. Generally speaking, formal planning is associated with positive financial results. Planning offers several advantages to companies. It establishes coordinated effort and gives direction to managers and non-managers alike. It reduces overlapping and wasteful activities. Planning also establishes goals or standards that are used in controlling. Planning reduces uncertainty by forcing companies to look ahead, anticipate change, consider the impact of change, and develop appropriate responses. It also clarifies the consequences of actions companies might take in response to change. Even though planning can't eliminate change, companies plan in order to anticipate changes and develop the most effective response to them.
Even when the environment is highly uncertain, it's important to continue formal planning in order to see any effect on organizational performance. It's the persistence in planning that contributes to significant performance improvement. In an uncertain environment, managers should develop plans that are specific, but flexible. Managers need to recognize that planning is an ongoing process. The plans serve as a road map although the destination may change due to dynamic market conditions. They should be ready to change directions if environmental conditions warrant.