Match List-I (limitations of planning) with List-II (situations):
| List-I | List-II | ||
|---|---|---|---|
| (A) | Planning reduces creativity | (I) | Workers of a factory are told to follow the plans of the top managers and are not allowed to act on their own. |
| (B) | Planning leads to rigidity | (II) | A firm pays large fees to outside experts and holds many board meetings while preparing its plan. |
| (C) | Planning involves huge costs | (III) | A new government rule forces a shoe company to revise its sales targets and its cash budget. |
| (D) | Planning may not work in a dynamic environment | (IV) | The branch managers of a bank want to change the yearly plan but are not in a position to change it. |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A)-(I), (B)-(IV), (C)-(II), (D)-(III)
| List-I | List-II | Reason |
|---|---|---|
| (A) Planning reduces creativity | (I) Workers of a factory are told to follow the plans of the top managers and are not allowed to act on their own. | Workers who cannot act on their own stop trying new ideas. Their creativity is reduced. |
| (B) Planning leads to rigidity | (IV) The branch managers of a bank want to change the yearly plan but are not in a position to change it. | A fixed plan decides the future course, and managers cannot change it. This is rigidity. |
| (C) Planning involves huge costs | (II) A firm pays large fees to outside experts and holds many board meetings while preparing its plan. | Fees to experts and board meetings are incidental costs of drawing up a plan. |
| (D) Planning may not work in a dynamic environment | (III) A new government rule forces a shoe company to revise its sales targets and its cash budget. | The rule is a change in the environment. Sales targets change, so the cash budget also changes. |
NCERT (2026-27 Edition): “(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. This kind of rigidity in plans may create difficulty. Managers need to be given some flexibility to be able to cope with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest.” “(ii) 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.” “(iii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually the rest of the members just implements these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Most of the time, employees do not even attempt to formulate plans. They only carry out orders. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.” “(iv) Planning involves huge costs: When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money for example, checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan.” |