Limitations of Planning

Though planning is an important tool of management; but still it is not a remedy for all types of problems. Limitations of planning are as follows

1) Rigidity: The plan’s existence puts managerial activities in a rigid framework. Programs are carried out according to the plan and deviations are believed to be highly undesirable. This kind of attitude makes employees and managers inflexible in their operations.

2) Misdirection: Planning may be used by a particular individual and group to serve their interests. Attempts are made by them to influence the setting of objectives, and formulation of plans and programs to suit their limited aims and objectives, ignoring the interest of the organisation. As a result, planning may not serve any helpful purpose.

3) Time-Consuming: Planning is a time-consuming process. It requires the collection, analysis and interpretation of information. The process may take considerable time. Thus, planning is not practicable during emergencies, and crises and when prompt decisions are needed.

4) Induces False Sense of Security: Elaborate planning may create a false sense of security in the organisation to the effect that everything is well taken care of by the plans. Managers assume that as long as work goes on as per plan, it is satisfactory.

As a result, they fail to take a timely decision in case situations change suddenly and make the existing plan less effective and less useful. It is also likely that employees may be concerned only with the completion of plan requirements rather than improving their performance.

5) Problems of Change: The problem of change is frequently complex in long-range planning. Present conditions tend to weigh heavily in planning and overshadowing future needs, & may sometimes result in errors in judgments. Such factors as technology, business conditions, consumer tastes and desires, and many others change rapidly and often unpredictably. In such conditions, planning activities taken in one period may not be appropriate for another period because the conditions in the two periods may be quite different.

6) Lack of Accurate Information: Planning is concerned with future activity and hence, its quality will be determined by the quality of the forecast of future events. As no manager can completely and accurately predict future events, the planning may pose problems in operation. This problem is further boosted by inaccurate planning premises.

7) Internal Inflexibilities: Managers while going through the planning process have to work with a given set of variables. These variables frequently provide less flexibility in planning which is needed to cope with changes in future events. Such inflexibilities may be either external to the organisation or may be internal. The major internal inflexibilities are policies, procedures, psychological, and capital investment.

i) Psychological Inflexibilities: Psychological inflexibility is in the form of resistance to change in managers and employees in the organisation.

ii) Policy and Procedural Inflexibility: Another internal inflexibility emerges because of organisational procedures and policies.

iii) Capital Investment: In most cases, once funds are invested in fixed assets, the ability to switch future courses of action becomes rather limited, and the investment itself becomes a planning premise. During the whole life of the fixed assets, this inflexibility continues unless the organisation can reasonably liquidate its investment or change its course of action, or unless it can afford to write off the investment.

8) External Inflexibilities: Besides internal inflexibilities, managers encounter much external inflexibility and they do not have control over these. For example, managers have little or no control over technological, social economic, and political forces. Whether these change fast or slowly, they do stand in the way of effective planning.

Three environmental factors generate inflexibilities for organisational planning: political climate, trade unions, and technological changes.

i) Political Climate: Every organisation, to a greater or lesser degree, is faced with the inflexibility of the political climate existing at any given time due to government attitudes towards the regulation of business, business, taxation policy, etc. which generate constraints on the organisational planning process.

ii) Trade Unions: The existence of trade unions, especially those organised at the national level, tends to restrict freedom of planning. Apart from wages and other associated benefits, they affect the planning process by placing limitations on the work that can be undertaken by the organisation. They set up the work rules and productivity. To that extent, managers are not free to make decisions of their own choice.

iii) Technological Changes: The rate and nature of technology changes also present very certain limitations upon planning.