Radhika completed her MBA from a reputed organisation. Now she is trying to start a new set up, for this she is preparing plans. Her father explains her that things do not always go according to the plan. Radhika said that "If we can not adhere to our plans, then why do we plan at all? Father said "this is what we need to analyse", father explained her the limitations of planning.

Identify which of the following is not a limitation of planning.

Planning always works in dynamic environment

The correct answer is option 2 i.e. Planning always works in dynamic environment.
Planning may not work in a dynamic environment.

Planning is deciding in advance what to do and how to do. The major limitations of planning are given below:

(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.

(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.

(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.

(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.

(v) Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.

(vi) Planning does not guarantee success: The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.