Monday, March 29, 2010

LIMITATIONS OF PLANNING

Planning plays an important role in directing the organizational activity. Despite of many benefits of panning, there are several limitations or disadvantages of planning. Some are inherent in planning process whereas others are associated with planning techniques and planners themselves. Some of them are as follows:

(1) Lack of Reliable Data: Planning is undertaken on the basis of certain assumptions in the future. The future is unpredictable and uncertain. Hence, future cannot be known accurately because reliable information and data are not available. If reliable data and information are not available for planning it is sure to lose much of it value.

(2) Rigidity: Planning implies strict adherence to predetermined policies, procedures, and programs. This restricts individuals freedom, initiative and desire for creativity. Business is by nature dynamic and the red-tapism created by detailed planning can prove disastrous for an organization.

(3) Time Consuming Process: Planning is a time consuming process. The various steps of planning may consume a lot of time. It is, therefore, unsuitable in those situations where sudden or immediate action is required to meet unexpected contingencies.

(4) Costly Process: Planning is also costly process. Money and effort have to be spent in collecting information, preparing estimates, forecasting and evaluation of alternatives. Services of experts may be necessary to select the best and most economical course of action for the organization. Planning cost may go on increasing if planning becomes more elaborate and formulated due to additional staff, time and proper work.

(5) Rapid Change: Rapid changes in technology, consumer tastes and fashions are further constraints to planning. In a complex and rapidly changing environment planning is more difficult as it adds new problems. In rapidly changing conditions planning activity taken in one period can not be relevant for another period.

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