Limitations of Planning in Business management
The Difficulties or Criticisms which are involved in planning process. Planning in Business management means set a goal. But we have often seen in our daily lives also, that things do not always go according to difficult to manage operations without formal planning. It is important for an organization to move towards achieving plan. Unforeseen events and changes, rise in costs and prices, environmental changes, government interventions, legal regulations, all affect our business plans. This is what we need to analyze. The major limitations of planning are given below:
Planning leads to rigidity: In an organization, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it.
Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organization has to constantly adapt itself to changes.
Planning reduces creativity: Planning is an activity which is done by the top management. Usually the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own.
Planning involves huge costs: When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money for example, checking accuracy of facts may involve lot of time.
Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.
Planning does not guarantee success: The success of an enterprise is possible only when plans are properly drawn up and implemented.