“Planning cannot foresee everything and thus, there may be obstacles to effective planning”, is an explanation for:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Planning not effectively working in a dynamic environment
Option (1) Planning being rigid — Incorrect. This limitation means that once a plan is fixed, managers may be unable to change it even when conditions change. It is about the plan being too fixed, not about the future being unknown.
Option (2) Planning not effectively working in a dynamic environment — Correct. The business environment is dynamic: economic policy, political conditions and competition keep changing, and natural calamities can strike. Future trends cannot be judged accurately. Since planning cannot foresee everything, a plan can meet obstacles it never expected.
Option (3) Planning reducing creativity — Incorrect. This limitation means that plans are made by top management, and the others only carry them out. They are not allowed to deviate or to think of new ideas.
Option (4) Planning involving huge costs — Incorrect. This limitation is about the time and money spent on meetings, experts and research to prepare plans.
NCERT (2026-27 Edition): “Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity. Competition in the market can also upset financial plans, sales targets may have to be revised and, accordingly, cash budgets also need to be modified since they are based on sales figures. Planning cannot foresee everything and thus, there may be obstacles to effective planning.” |