Question

Explain the following limitations of planning function of management :
(i) Planning reduces creativity.
(ii) Planning involves huge costs.
(iii) Planning does not guarantee success.

Answer 1

Limitations of Planning Function of Management

While planning is an important function of management, it is not free from limitations. The following are key limitations:

(i) Planning Reduces Creativity:

In planning, decisions are mostly made by top management. As a result, middle and lower-level managers may not be given the freedom to act on their own ideas. This restriction on their initiative and innovation reduces their creativity.

Example: A marketing executive may have a new idea for promoting a product but may not implement it if it’s not part of the pre-decided plan.

(ii) Planning Involves Huge Costs:

Planning requires extensive resources such as time, money, and manpower to gather data, conduct research, and analyze future trends. Sometimes, the cost involved in planning may outweigh the benefits derived from it.

Example: Hiring consultants and conducting market surveys for planning may involve heavy expenditure.

(iii) Planning Does Not Guarantee Success:

Planning is based on forecasts and assumptions, which may not always be accurate. Sudden changes in the environment (economic, political, social) can render plans ineffective. Hence, even well-prepared plans may fail to deliver desired results.

Example: A company’s plan to expand production might fail due to unexpected raw material shortages or regulatory changes.

Conclusion: While planning is essential, managers must remain flexible and ready to modify plans as needed to respond to real-world changes and challenges.