[Commerce Class Notes] on Features and Limitations of Planning Pdf for Exam

All businesses that work collectively with human resource, technological resource, and natural resources, etc. towards a common objective need planning to function smoothly. It is, therefore, the first and essential most steps which businesses need for improved productivity and performance.

Planning is the fundamental function of management. It is the general outline of the activities that are needed to be done in the future to achieve the goals. It means visualizing in advance and sketching out the future course of action. Planning is the process of setting goals for the future and choosing the means in the present to achieve those goals. We will study about the features of planning in our next section.

Features of Planning

Defining objectives is the crucial most thing that companies must do so that employees of all levels have a direction where they can proceed. Having an objective makes the task simpler for managers and employees working together as the tasks and deadlines are defined. Hence, the manager will keep checking on employees and the progress of assigned tasks.

Therefore, the features of a good plan involve objectives as an essential feature so that this process is carried successfully.

Out of all other management functions like organising, staffing, directing, and controlling, planning is the initial most steps. Without proper planning, all other functions of management can’t be attained.

For example, an organisation ABC industries need to produce 100 units of air conditioner by the end of this month. Here, they must plan and decide objectives and tasks to proceed further. Then, tasks and requirements are organised; staffing is coordinated to declare which employees will work on which level and team, etc. Without a plan, the company will not be able to work with the other functions and fail in attaining the goal.

Planning is pervasive and applies to all levels of management, and all should work in sync to produce the best output. For example, top-level management thinks from the company’s perspective and declares the ultimate goal that a company should meet within a decided time. Middle-level management focuses on department-wise goals that they must meet. And low-level management deals with daily execution of work. 

Planning is mandatory in every organization and every level of management. However, the scope of planning is varied.

Top-level management frame plans for the entire organization as one. 

Middle-level management thinks from the department perspective and involves departmental planning.

Lower-level management frame plans for the daily operations.

One of the features of planning is that it is aimed for upcoming events and activities. These are planned ahead of time so that people can work in a coordinated environment towards its success. With adequate planning, one can achieve the goals decided for the future. 

Planning is a continuous process and is created for a definite period after which new plans are needed. After the end of a period, new plans are created as per situation and business demand. 

For instance, due to a pandemic situation in the country, there is a rise in demand for hand sanitizer and hand wash liquids. In such a case, a company that used to produce 1 lakh units of hand sanitizer bottles in a month will have to change their plan so that they can produce more considering the rising demand.

Decision making is one of the essential features of planning as they tell the feasibility and success of a plan. Choosing the appropriate option amongst the available alternatives decides if this plan will help in achieving a goal or not. If there is no alternative available for an action, then decision making isn’t needed.

Mental exercise is one of the characteristics of planning as individuals need to think critically and form a plan which can produce the best output. Hence, an effective plan is the result of good critical thinking and logical reasoning.

Despite the several advantages of planning as a function of management, it may have specific limitations in the business environment.

Planning always comes first as it lays down the foundation for all other functions of management. Other functions such as organizing, staffing, directing, and controlling are performed within the boundary of the plan. Without a proper plan execution of other functions of the management is impossible. Planning is the fundamental function of management and it is also referred to as “Primacy of Planning”.

When a plan is made, we often focus on two things, one is the specific goals that need to be achieved and the second is the activities involved to achieve this specific goal. These specific activities become objectives to achieve goals and these objectives are measurable. Without objectives, planning could not be made. In the absence of planning, employees will not have a proper direction of work and goals cannot be reached. 

Planning means looking forward and paving the way to meet future events effectively. Planning is regarded as a futuristic function based on forecasting. On the basis of forecasting, future conditions and events are predicted and plans are prepared.

Planning is an on-the-go process and plans can be made for a certain period of time.

Plans may be prepared for all time periods like a day, week, month, quarter, or year.

At the end of a certain period, new plans are framed and revised on a regular basis, based on the feedback of the previous plans, new needs, and future conditions.

Decision-making is the process of choosing the best alternative. Without alternatives, there is no need for planning as there is only one option. On deep analysis of every alternative, choosing the best one can be made. Therefore there is a need for planning.

Planning involves thinking and it is separate from the activities of the organization. It is based on logical thinking, facts, foresight, vision, intelligent imagination, and sound judgment.

Limitations of Planning 

Planning leads to rigidity in the process as all the employees of the organisation have to adhere to the plan even if they have alternatives to perform better. This rigidity in the process may affect the overall productivity of an organisation. 

It is difficult for organisations to keep adhering to the plan as one is unaware of the future situations they may come across. Market fluctuations, natural calamities, etc. are a few examples of dynamic changes that may affect a business. In such a scenario, it becomes difficult to stick to a plan and organisations have to form new strategies to cope with the new situation. 

Sometimes, the planning process may consume more time and money and may not prove to be that beneficial. Acquiring expert suggestion, verifying facts and data, and spending on boardroom meetings, etc. may cost significant money. In such a case, planning the processes may not be a feasible option. 

The planning process can be time-consuming and may sometimes result in delaying other processes. Delay in other processes of organising, staffing, directing, etc. may result negatively for the organisation as they miss achieving the planned target on time. 

The low-level management and employees follow up on the plans and steps decided by the top-level management, and this eliminates any room for creativity in the process. They aren’t allowed to add or suggest any innovation which may impact the overall performance of an organisation.

Even with several beneficial features of planning in business studies, it may not work as well as existing projections. The success of a firm hugely depends upon the well-drafting of plans and its implementation in the real world. But, in many cases, businesses fail to make the right plan as per the changing business market. Managers tend to stick to a tried and tested plan which may not work well considering the changing market scenario. Besides, there is no guarantee if a particular plan will work out for a company or not.

With such limitations of planning, businesses must try to form an effective plan which caters to the changing need of enterprises and market. Students can get a more in-depth idea about this concept by visiting ’s website.

The plans cannot be flexible and it has to be followed throughout the organization.

The rigidity of plans may be both internal and external.

Internal rigidity is related to plans, policies, programs, rules, and methods, etc.

External rigidity is related to political, industrial, technological, legal and economic changes, etc.

The business environment keeps on changing on a daily basis.

It is difficult for an organization to predict future trends, the taste of customers, natural calamity, competitors’ policies, and the effects of changing components of the environment.

The organization should constantly adapt to changes and it is very difficult to forecast the future accurately.

The dynamic environment in a specific situation may lead to the failure of plans.

Most of the plans are made by the top-level management and the members from middle and lower levels of management should only follow the plans framed.

They cannot deviate or alter the plans made by their higher officials.

Under this situation, employees have to only follow orders which kills the creative thinking of employees.

Planning can be too costly because it requires a lot of time and money. Like expenses on boardroom meetings, discussions with professionals, and primary investigations to find out the feasibility of the plan.

Checking the accuracy of facts and scientific calculations involves lots of time.

The enterprise’s success is only possible when the plans are properly executed.

Plans become meaningless if they are not put into action.

Managers may rely on previously tested successful plans.

Every successful plan in the past may not be successful in the future, and cannot be adapted in every situation.