Limitations of Planning
Planning through an important tool of management is not a remedy for all types of problems. It has also certain limitations.
1Rigidity: the existence of a plan puts managerial activities in a rigid frame work. Programmes are carried out according to the plan and deviations are considered to be highly undesirable. This attitude makes managers and employees inflexible in their operations.
2 Misdirection: planning may be used by a particular individual and groups to serve their own interests. An attempt is made by them to influence setting of objectives formulation of plans and programmes to suit their limited aims and objects ignoring the interest of the organization. As a result planning may not serve any useful purpose.
3 Time consuming: Planning is a time consuming process. It requires collection of information its analysis and interpretation. The process may take considerable time. Thus planning is not practicable during emergencies and crisis when quick decisions are needed.
4 induce false sense of security: elaborate planning may create a false sense of security in the organization to the effect that everything is well taken care of by the plans. Managers assume that as work goes on as per plan it is satisfactory. As a result they fail to take timely decision in case situations change suddenly and make the existing plan less effective. It is also likely that employees may be concerned only with the fulfilment of plan requirements rather than improving their performance.
5 Lack of accurate information: planning is concerned with future activity and hence it quality will be determined by the quality of forecast of future events. As no manager can predict completely and accurately the events of future the planning may pose problems in operation. This problem is further increased by inaccurate planning premises.
6 problems of change: the problem of change is often complex in long range planning. Present conditions tend to weigh heavily in planning and over had owing future needs may sometimes in error of judgements. Such factors as technology consumer tastes and desires business conditions and many others change rapidly and often unpredictably. In such conditions planning activities taken in one period may not be relevant for another period because the conditions in the two periods may be quite different.
7 internal inflexibilities: managers while going through the planning process have to work in a set of given variables. These variables often provide less flexibility in planning which is needed to cope up with the changers in future events. Such inflexibilities may be either internal to the organization or may lie outside.
The major internal inflexibilities are psychological policy and procedures and capital investment.
1 psychological inflexibilities: psychological inflexibility is in the form of resistant to change. Managers and employees in the organization may develop patterns of thought and behaviour that are hard to change. They look more in terms of present rather than future. For them present is not only more certain but is also more desirable and more real. They believe that if they do not take care of present future will not be there. For them planning tends to accelerate change and unrest. Thus this approach works against planning because planning often depends on changes. Therefore managers instituting a new plan are often frustrated solely by the unwillingness of people to accept change.
2 policy and procedural inflexibility: another internal inflexibility emerges because of organizational policies and procedures. Once these are established they are difficult to change. Though these policies procedures and rules are meant to facilitate managerial actions by providing guidelines they often tend to be too exacting and numerous that they leave very little scope for managerial initiative and flexibility. Since managers have to plan for future which is not static but changing they often find themselves in great constraints. Such problems are more prominent in bureaucratic organizations where rules and procedures become more important than results.
3 Capital investments: in most cases once funds are invested in fixed assets the ability to switch future course of action becomes rather limited and investment itself becomes a planning premise. During the entire life of the fixed assets the inflexibility continues unless the organization can reasonably liquidate its investment or change its course of action or unless it can afford to write off the investment.
4 external inflexibilities: besides the internal inflexibilities managers are confronted with much external inflexibility and they do not have control over these. For example managers have little or no control over social economic technological and political forces. Whether these change quickly or slowly they do stand in the way of effective planning.
Three environmental factors generate inflexibilities for an organizational planning political climate trade unions and technological changes.
1 political climate: every organization to a greater or lesser degree is faced with the inflexibility of the political climate existing at any given time. Attitudes of government towards business taxation policy regulation of business etc. generate constraints on the organizational planning process. Government being the major supplier of certain raw materials finances through financial institutions may affect the business organizations considerably.
2 trade unions: the existence of trade unions particularly those organized at the national level tends to restrict freedom of planning. Apart from wages and other associated benefits they affect the planning process by putting limitations on the work that can be under taken by the organization. They set up the work rule productivity. To that extent managers are not free to make decisions of their choice.
3 technological changes: the rate and nature of technology changes also present very definite limitations upon planning. An organization is engaged in its process with a given technology. When there is a change in technology it has to face numerous problems resulting into higher cost of production and less competitive competence in the market however the organization cannot change its technology so frequently. Thus higher rate of technology changes more would be the problem of long range planning.