1 Answers
Limitations of planning are as follows:
(a) Rigidity. The existence of a plan puts managerial activities in a rigid framework. Programmes are carried out according to the plan and deviations are considered to be highly undesirable. This attitude makes managers and employees inflexible in their operation. They become more concerned with observance of rules and procedures as laid down in the plan rather than achieving the goals.
(b) Does not work in a dynamic environment. The business environment is dynamic in nature. There are various environmental factors affecting the performance of a business such as economic, political, physical, legal and social. Any change in any one of these factors may offer an opportunity or pose a threat to a business organization. For example, the Supreme Court’s decision regarding sealing of shops running in residential areas is a threat to these business firms. Planning does not guarantee that the business will never be affected by adverse circumstances. It is a way of keeping the firm’s eyes and ears open. Thus, planning cannot force everything and it is also subject to the errors and limitations of forecasting.
(c) Reduces creativity. People in the organization just implement the plans made by top management. They blindly implement the orders which results in loss of initiative and interest in them. Thus, planning reduces creativity as there is nothing new or innovative.
(d) Involves huge cost. Huge costs are involved in the formulation of plans which may not justify the benefits derived from the plans. Money is spent on incidental costs like expenses on boardroom meeting, discussions with professional experts, etc.
(e) Time consuming. Planning is a time consuming process and is not practicable during emergency or crisis. It requires a lot of time to collect information, its analysis and interpretation before preparing plans. Sometimes not much time is left for implementation of plan.