Question

Explain the following limitations of 'Planning' function of management: (i) Planning may not work in dynamic environment. (ii) Planning reduces…

Accepted Answer

(i) Planning may not work in a dynamic environment § The business environment is dynamic. The organization has to constantly adapt itself to changes in environment by making changes in its plans. § It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity etc. (ii) Planning reduces creativity § Planning is an activity done by the top management. As a consequence, middle management and other decision makers are not allowed to deviate from the plans nor are they permitted to act on their own. § As a result, initiative and creativity inherent in them gets lost or reduced. (iii) Planning does not guarantee success § A plan needs to be translated into action or it becomes meaningless. Also, managers have a tendency to rely on previously tried and tested plans. But a plan that has worked before may not work again. § The false sense of security created by planning may actually lead to failure instead of success. OR Single-use-plans § Single-use plans are developed for a one-time event or project. § Such a course of action is not likely to be repeated in future, i.e., they are for non-recurring situations. § These include budgets and programmes. Standing-plans § Standing plans are used for activities that occur regularly over a period of time. § These are designed to ensure that internal operations of an organisation run smoothly. § These include policies, procedures, methods and rules. Strategy § A strategy refers to future decisions defining the organisation’s direction and scope in the long run. § It is a comprehensive plan for accomplishing organisation’s objectives and involves determining long term objectives, adopting a particular course of action and allocating necessary resources. § Whenever a strategy is formulated, the business environment needs to be taken into consideration. Policy § Policy is a general statement that guides thinking and channelizes energies towards a particular direction. It brings uniformity in decision making for achievement of predetermined objectives. § It defines the broad parameters within which a manager may function § A manager may use his discretion to interpret and apply a policy.

Explain the following limitations of 'Planning'
function of management:
(i)
Planning may not work in dynamic environment.
(ii)
Planning reduces creativity.
(iii)
Planning does not guarantee success.

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