Contributions

It forces managers to appraise overall performance in relation to long-range objectives and on both current and future goals.

Clarifies and simplifies day to day decisions since managers have a clear picture of where the company wishes to go.

Helps appraise a company that a firm may wish to acquire. Can also be of great use in cases of mergers.

It generally gives a better and clearer guide to the survival of the organization. Helps to keep the organization always on course.