Posted by / Monday 13 November 2017 / No comments

The limitations of planning

Definition of planning
Planning can be defined as ‘’thinking ahead with the aim to determine what must be done, when it must  be done, how it must be done, and who should do it” in very simple term, planning the closes the gap between where the business is standing now (its present state)  and where the business wants to be in the future (in two years, five years, or ten years from now). This means that time is very important in planning because plans are always made for a given time period since no business can afford to be planning without an end in mind.

Some amount of planning is needed for every business which is seeking to succeed. However, before planning can be helpful to the business, every manager should also be aware that planning alone may not be enough because planning has some limitations. 

Planning Creates rigidity and does not allow flexibility
Although it is possible to review a plan and make changes to it, managers must understand that there is a limit to the extent of changes that can be made once a plan is approved. Big changes become very difficult and sometimes not desirable because it may not help the business to make those big changes to the plan. As a result, planning can make the running of the business rigid or inflexible. Further, because it is difficult or sometimes impossible to change the plan in response to the changes in the business environment, the business may lose money by failing to change to take advantage of opportunities which the change in business might present.   

Internal Inflexibility
We say the rigidity in planning is internally caused or is an internal rigidity if, as at the time that managers are making plans, certain factors such as the company’s policies, procedures, and work system makes it difficult to change the plan time and time again, after it has been approved. 

External Inflexibility
This is when one or several external factors makes it difficult to allow some flexibility in the plan. Among these factors are: the political climate in the country where the business is located; changes in the economy within which the business is operating; policies of companies competing with the business; changes in technology used in the business’ operation and natural disasters. For instance, if there is a change in government and the new government changes the import policy or the trade policy or introduces a new tax policy, then plans made earlier under the old policies may become meaningless. In much the same way, when a business competing with your company in the same market changes his policy your plan could become unusable because in making your plan, you carefully considered the policies of your competitor(s) 

Planning may Not Work in a Rapidly Changing Environment
Since planning is done based on what can happen in the future, it becomes difficult to rely on the plan when the future conditions anticipated becomes very uncertain; especially when the business environmental conditions was assumed would be fairly stable turns out to be one that keeps changing very often. In fact, because the future by nature is uncertain and dynamic it might not be helpful to rely on planning alone. In fact, planning might not work well in a dynamic environment. For instance, if a company believes that the government could allow some product to be exported out of the country, and based on this the company invests heavily in the production of this product only to notice that the government did not give the approval for such product to be exported out of the country, then all the planning which went into the production becomes useless. The company would make a loss instead of profit. 

Planning Reduces Creativity and better ways of conducting business activity
When planning is done, every activity which would help the company achieve its business goals are all set and written into the plan. This leaves very little room for creativity and spontaneity because everybody is expected to follow exactly what is stated in the plan. Planning therefore restrains from resorting to new, creative and more efficient ways of doing things. 

Planning Involves Huge Costs
Planning is not the main business activity but planning involves big processes. Proper planning takes time, involving the collection of information, analyzing that information in the light of both present and future changes. The exercise of planning is a thorough and expensive one. Many times several people are involved in planning for one organisation. All these people must be paid and this leads to huge cost to the company. 

Planning is a Time-consuming Process
Planning may take too much of time and getting to the point of taking decision on what the firm must do can become a rather lengthy process especially when the firm needs to take immediate action. Time therefore becomes a serious limitation where prompt actions are required. In such cases, it is not possible to follow the detailed planning process, nor is it possible to follow exactly what the plan prescribes. Planning thus, becomes time consuming process and delays the taking of action. 

Planning Does Not Guarantee Success
Sometimes managers think that by extensive planning, they can foresee and solve all the problems which the firm might face in the future. Thinking this way has the potential of making them neglect the actual work they must do to get the business running properly.  The negative consequence is that real work is left undone at the expense of detail and elaborate planning. By offering managers a false sense of securing the success of the business in the future, planning fails to guarantee actual success.
Related Posts