Chapter 3 » Limitations of Planning | Business Studies – XII

Constraints/ limitations/problems of planning

1.  Costly process:  planning involves too much expenditure. Money and effort both are required in planning. Planning includes collecting information, data forecasting and evaluation of alternatives. It requires salary and allowances to the experts in the process of providing services.
   So, planning has been accepted as costly process by small and medium size organization
2.  Time consuming:  planning is the time consuming process. It delays the business activity to come in action. In the process of planning following the procedures of planning takes a lot of time which may create problem to the organization where immediate action has to be made. So in such situation planning is not suitable.

3.  Unsuitable in emergency situation: as planning is time consuming, it is not suitable in emergency situation because quick decisions is desirable in emergency situation buts planning delays the emergency demand in organization

4.  Lack of reliable data and problem of accurate premises: For planning assumptions have to be developed for future action but future is uncertain and unpredictable. To make reliable data and accurate premises is necessary., in the lack of reliable data and accurate premises, there is chance of business loss and failure

5.  Problem of rapid change: Planning is the game of prediction. Rapid changes may occur in macro and micro level environment of business. planning is to be made in a flexible way to compress the plans in the future

6.  Internal rigidity:  internal rigidity may be related to organizational and human psychology policy, procedure and capital investment which create problem in the process of implementation. Staff may not like the changes that may occur frequently in the working procedure. So rigidity may create problem in planning.

7.  Encourage false sense of security: Planning encourages false sense of security against future risk and uncertainty. As future is uncertain, it is unpredictable. Therefore, planning cannot give accurate and reliable results.