In practice, management has to revise the plans continuously and check on their execution. 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. Operational plans reflect commitments as to methods, time, money, etc. These variables often provide less flexibility in planning which is needed to cope up with the changers in future events. Tendency towards inflexibility or reluctance to change, is another drawback of planning. Later, you got married and had a child who has a medical condition that requires a lot of your attention. 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.
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. Formulation of policies and strategies: After the goals are defined and planning premises are identified, management can formulate policies and strategies for the accomplishment of desired results. How to avoid the failure of planning? In this connection the supporters of planning argue that the concept of planning is an abstract one. Financial planning involves analysis of financial flow of the company. Managers should have high conceptual skills and abilities to make strategic plans. It brought loss instead of profit. Again, under the umbrel1a of public interest, the bureaucracy will also change its color and behavior.
It can serve as a feasibility study. Such factors as technology consumer tastes and desires business conditions and many others change rapidly and often unpredictably. They are the following: i Internal Inflexibility:. They all start to look the same with less distinction in unique value. 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. This problem is further increased by inaccurate planning premises. It is very difficult to bring in changes time and again.
Too much planning comes about when planning is done so excessively it becomes counterproductive to the company or organization. Planning issues may lead to vacancies in vital positions and employees in positions for which they're not qualified, harming productivity if not addressed quickly. Several medium range and short-range plans are required to implement policies and strategies. Would you want a house with plumbing in the wrong spots? In completely planned economies where there is no private ownership deprive the men from profit motive. Managers should be prepared to do innovative thinking to increase the efficiancy of planning. If the evaluation shows that more than one alternative is equally good, the various alternatives may be combined in action.
But, the subordinates should be consulted as they are to implement the policies and strategies. Another major limitation of planning is that there are various alternatives to combat certain problems. Your overall work morale may suffer if you're unhappy. Providing for Flexibility: The financial planning should ensure proper flexibility in objective, policies and procedures so as to adjust according to changing economic situations. It can be a tool for obtaining financing. Three environmental factors generate inflexibilities for an organizational planning political climate trade unions and technological changes. The main purpose of financial planning should be to utilise financial resources in the best possible manner.
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. Bureaucratic attitude of planners is furnished with lot of procedural formalities which are time-consuming and frustrating. A manager may be bogged down by procedures, rules, etc. It has also certain limitations. For them planning tends to accelerate change and unrest. 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.
Often adequate facts may not be available. As a result they fail to take timely decision in case situations change suddenly and make the existing plan less effective. Financial plan is a plan where investors think of finances. You can also read more about here. Limitations of Planning Planning through an important tool of management is not a remedy for all types of problems. For example, eyen in market system the courts and police have to be set up to legalize and protect the contracts between buyers and sellers. They believe that if they do not take care of present future will not be there.
Consequently, everybody works as they have been directed to do and as it has been made clear in the plans. It brought loss instead of profit. Try to have parallel planning with lots of cross-checking, and 4. Generally, a longer period of planning makes it less effective. Alternative plans of action should be developed and evaluated carefully so as to select the most appropriate policy for the organization. Such inflexibilities may be either internal to the organization or may lie outside.
Human Element Limitations Your may be at top levels but the human element in any project can harm a project. These limitations restrict the smooth operation of plans and they must be anticipated and provided for. 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. This is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc. 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.
Accuracy of facts and information about the future is one of the limitations of planning. Often it is remarked that the cost of planning is in excess of its actual contribution. Provides a base from which progress can be measured, employees compensated and boundaries established for effective decision making. In planned economies bureaucracy dominates which is also injurious to initiatives. These costs are in no way essential for production or distribution, but they are very much must for ravening the market economy.