Planning is needed both in the business and non-business organizations. Some people think that planning is based on the future anticipations and nothing can be said with certainty about future. Therefore, it is a useless process.
In fact, these people point towards the difficulties in the way of planning. If planning has to be successful and purposeful, the managers should be aware of these difficulties and limitations of planning.
Following are the limitations of planning:
(1) Planning Creates Rigidity
Although the quality of flexibility is inherent in planning, meaning thereby that in case of need changes can be brought in, but it must be admitted that only small changes are possible. Big changes are neither possible nor in the interest of the organization.
Since it is not possible to introduce desired changes according to the changed situations, the organization loses many chances of earning profits. For this limited flexibility in planning, both the internal as well as external factors are responsible. These facts are called internal and external inflexibility.
They are the following:
(i) Internal Inflexibility
At the time of planning the objectives of the organization, its policies, procedures, rules, programmes, etc. are determined. It is very difficult to bring in changes time and again. It is known as internal inflexibility,
(ii) External Inflexibility
External inflexibility means various external factors that cause limited flexibility in planning.
These factors are beyond the control of the planners. The chief among them are: political climate, economic changes, technical changes, natural calamities, policies of the competitors, etc.
For example, in political context, as a result of change, a new government brings up a new trade policy, policy of taxation, import policy, etc. All these changes make every sort of planning a meaningless waste. Similarly, a change in the policies of the competitors suddenly makes all types of planning ineffective.
(2) Planning Does Not Work in a Dynamic Environment
Planning is based on the anticipation of future happenings. Since future is uncertain and dynamic, therefore, the future anticipations are not always true. Therefore, to consider planning as the basis of success is like a leap in the dark.
Generally, a longer period of planning makes it less effective. Therefore, it can be said that planning does not work in dynamic environment.
For example, a company anticipated that the government was thinking about allowing the export of some particular product. With this hope the same company started manufacturing that product. But the government did not allow the export of this product. In this way, the wrong anticipation proved all planning wrong or incorrect. It brought loss instead of profit.
(3) Planning Reduces Creativity
Under planning all the activities connected with the attainment of objectives of the organization are pre-determined. Consequently, everybody works as they have been directed to do and as it has been made clear in the plans.
Therefore, it checks their incisiveness. It means that they do not think about appropriate ways of discovering new alternatives. According to Terry, “Planning strangulates the initiative of the employees and compels them to work in an inflexible manner.”
(4) Planning Involves Huge Costs
Planning is a small work but its process is really big. Planning becomes meaningful only after traversing a long path. It takes a lot of time to cover this path.
During this entire period the managers remain busy in collecting a lot of information and analysing it. In this way, when so many people remain busy in the same activity, the organization is bound to face huge costs.
(5) Planning is a Time-consuming Process
Planning is a blessing in facing a definite situation but because of its long process it cannot face sudden emergencies. Sudden emergencies can be in the form of some unforeseen problem or some opportunity of profits and there has been no planning for all these situations beforehand and which now requires immediate decision.
In such a situation, if the manager thinks of completing the planning process before taking some decision, it may be possible that the situations may worsen or the chance of earning profit may slip away. Thus, planning is time consuming and it delays action.
(6) Planning Does Not Guarantee Success
Sometimes the managers think that planning solves all their problems. Such thinking makes them neglect their real work and the adverse effect of such an attitude has to be faced by the organization.
In this way, planning offers the managers a false sense of security and makes them careless. Hence, we can say that mere planning does not ensure success; rather efforts have to be made for it.