Question

Atul Sharma was the Chief Executive Officer of a footwear company, 'Stepone Footwear’. The company manufactured innovative and comfortable footwear for all age groups. Atul Sharma was known for meticulous planning. He ensured that the goals and objectives of the company are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. Before each season, 'Stepone Footwear’ carefully analysed market trends, customer preferences and production schedules. This analysis enabled the company to look ahead and anticipate changes and develop managerial responses, wherever necessary. As a result, they were able to consistently deliver innovative and comfortable shoes to the market. During one season, there was a sudden surge in demand for eco-friendly shoes. 'Stepone Footwear' had already planned their production for the year with specific goals to be achieved within a specific time frame. The managers of 'Stepone Footwear' did not have the flexibility to change the plan to cope with the changed circumstances. Another shoe company 'Eco Step' quickly adapted and started manufacturing comfortable eco-friendly shoes. By not being able to adjust to the rapidly changing market, 'Stepone Footwear’ faced inventory surplus while 'Eco Step' emerged as a market leader in sustainable eco-friendly footwear. Quoting lines from the above paragraph, identify and explain two benefits and two limitations of 'Planning function of management discussed in the above case.

Answer 1

Benefits of planning: (i) Planning provides directions:
- Planning provides direction for action by stating in advance how work is to be done.
- “He ensured that the goals and objectives of the company are clearly stated so that they act as a guide for deciding what action should be taken and in which direction.” (ii) Planning reduces the risks of uncertainty:
- By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events.
- “This analysis enabled the company to look ahead and anticipate changes and develop managerial responses, wherever necessary.” Limitations of planning:
(i) Planning leads to rigidity:
- In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame, these plans then decide the future course of action and managers may not be in a position to change it.
- “The managers of 'Stepone Footwear' did not have the flexibility to change the plan to cope with the changed circumstances.” (ii) Planning may not work in a dynamic environment:
- The organisation has to constantly adapt itself to changes taking place in the dynamic environment. However, planning cannot foresee everything and thus, there may be obstacles to effective planning.
- “By not being able to adjust to the rapidly changing market, 'Stepone Footwear’ faced inventory surplus while 'Eco Step' emerged as a market leader in sustainable eco-friendly footwear.”