The limitations of Planning are furnished below:
(1) Planning Leads to Rigidity
● The plans are rigid in nature and have to be complied with throughout the organisation.
● Such rigidity of plans may be internal as well as external.
● Internal rigidity relates to plans, policies, programs, rules, and methods, etc.
● External rigidity relates to political, industrial, technological, legal and economic changes, etc.
● Example: A super speciality hospital has fine branches in a city. Whatever the top management of the hospital decides the head of the branch of the hospital and their subordinates have to follow. Though on occasions they know they could have done better on their own but the plan laid out provides rigidity to their approach.
(2) Planning May Not Work in Dynamic Environment
● The environment in which a business survives is dynamic as it keeps on changing.
● It is difficult for an organisation to access future trends, the taste of customers, natural calamity, competitors’ policies and effects of changes in the different components of the environment.
● The organisation has to constantly adapt itself to changes because it is difficult to forecast the future changes with absolute accuracy.
● The dynamic environment may sometimes lead to failure of plans.
● Example: Nestle, a very successful producer was very proactive in deciding strategies for Maggi noodles. Maggi noodles were in a lot of demand but they were off the shelf due to political and legal dimensions. This was due to the high content of lead in Maggi noodles.
(3) Planning Reduces Creativity
● Planning is mostly done by the top management and other members
● like middle and lower levels of management have to follow these plans.
● They can’t deviate or change the plans made by their seniors.
● Under such circumstances, employees become orders following machines and don’t involve creative thinking from their side.
● Such rigidity to comply with the laid plans kills the creativity of some talented persons.
● Example: The need for a branch of a renowned shoe manufacturing company sees a lot of scope in customized shoes. The top management is not interested in this idea as the company manufactures standardised shoes.
(4) Planning Involves Huge Cost
● Formulation of plans can be too much costly because there is a lot of time and money is involved.
● Some costs are incidental in nature like- expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the feasibility of the plan.
● Checking the accuracy of facts and scientific calculations may involve lots of time.
● Sometimes, cost incurred may not justify the benefits derived from the plans; it may leave a harmful effect on the enterprise.
● Example: Companies like IBM spend a lot of research. Many world-class levels give their advice to this company and change their fee. However, without so much of painstaking such a huge company won’t be able to sustain itself. So planning in case of IBM becomes necessary.
(5) Planning is a Time-consuming Process
● Planning is a very lengthy process as it consumes a lot of time for collection, analysis, and interpretation of data.
● Due to such a lengthy process, sometimes decisions get delayed, opportunities are lost and there is not much time left for the implementation of plans.
● Example: Health is wealth Ltd. plans to organise 25 health checkup camps on the World Health Day and send a requisition to the top management but management could send its approval just a day before and the sales manager could organise only 5 camps and thus huge opportunity is lost. Here the implementation was delayed.
(6) Planning Does Not Guarantee Success
● The success of an enterprise is possible only when plans are properly drawn up and implemented.
● Plans become meaningless if it is not translated into action.
● Managers have a tendency to rely on previously tried and tested successful plans.
● It is not necessary that a successful plan in the past will bring success in the future also as every business organisation survives in a dynamic and uncertain environment.
● Plans must be implemented in the light of changing environment otherwise it may lead to failure of the business.
● Example: In a paint manufacturing company, the top management very meticulously chalked out a great plan. The whole company worked out on the plan in a much focused manner. However, with the entrance of a competitor with better paint quality the whole plan failed. The reason for the failure was the dynamic conditions which were not in control of the organisation.