Even though planning is an all-pervasive and a primary function of management, planning is subject to certain limitations. Without proper understanding of such limitations, planning may result into futile exercise.
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We have listed some limitations of planning, understanding of which may improve the efficiency of planning.
1. Planning Premises May Be Wrong:
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Planning premises are the basis and framework for decisions. Understanding the planning premises with absolute accuracy is not possible. Hence, there always exists some margin of error, which obviously vitiates the plans. Difficulty in assessing the premises for planning is, therefore, the most important limitation.
2. Rapidity of Change:
Every organization operates under certain internal and external environment. Environment cannot always be stable. Extent of change in internal and external environment, therefore, creates a situation of instability, making the planning job extremely difficult.
3. Time and Cost Constraints:
Every organization has to plan within given time and cost constraints. Such constraints stand against the efficiency of planning. In a situation of crisis, organization may even have to take decisions on war-footing, which is literally without planning. Non-availability of time and resources may compel the organization to come out with the best business plans.
4. Planning May Limit the New Ideas:
New ideas or innovativeness in planning may not be possible because of the traditional mindset of people. Vision and philosophy of the organization and its people, if not progressive, may limit the planning initiative of the management.
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Similarly, procedural and policy rigidities also come in the way of planning. Procedures, rules and policies once documented are difficult to change. Such inflexibility obviously affects planning.
5. Capital Investment Constraint:
Capital sunk in the business, both in the form of equipment and employees (investment in training) often limit the planning initiative, keeping pace with the environmental changes. Managers are quite often compelled to set their planning premises, keeping in mind the capital investment, which cannot be foregone.
6. Non-Control over External Factors:
Some external factors may seriously impede the planning like sudden change in government policies, union pressures on wage hike, war, international policies (like WTO, EEC, ASEAN resolutions), etc.
Despite such limitations, organizations cannot get away without planning. Every manager has to plan systematically to achieve desired results.