The planning function of management is the most crucial function as it pertains to plan about the future and designing several future courses of actions. It is a preliminary move in the functioning of a firm. It is an organized activity that defines when, how and who is going to execute an explicit task. Planning function of management is also recognized as a detailed programme concerning future courses of action. With the help of planning, it becomes easy for a firm to consider all its available & potential human and physical resources. This consideration facilitate in getting an effective co-ordination, involvement & ideal balance.
Although planning is an important function of management. However, the planning may fail if the following limitations.
- Lack of accuracy: planning relates to future and future is always uncertain and so prediction about future is so much difficult. Moreover planning are based on data/information relating to past and as such planning based on any wrong information may not be useful to the organisation.
- Costs: formulation of plans involves too much cost which are in the form of time spend, money spent etc. but some times there is little benefit from in plan and than it becomes a burden for the institution. If the plan is not useful than the amount or time spent on its formulation is a waste.
- Advance effect on decisions: some plans are rigid and a manager faces difficulty while making any changes where as there may be continuous change in environment where as the quick decision is required as per the changed environment.
- Delay in actions: planning requires some time for thinking, analyzing the situation and designing the final plan and so in case emergency decision is required it will take time and business will lose its opportunity. Moreover delay in decision will further delay the action.
- Psychological barrier: people in organisation have to work strictly according to plan where as they may be able to give better performance in a way decided by themselves. Secondly they do not think beside the plan and performs their activities like a machine without using their psychology.
- Limited flexibility: there may be some changes in planning only up to some extent because measure changes in plan will further attract the changes in supporting plans also and as such the whole system is disturbed moreover changes in plans time and again will prove a wastage of time and money spent on previous plan (pre-changed plan).
- Human elements: planning are the results of thinking of human being. Information on the basis of which plan is formulated may not be free form bias or there may be some other errors which will further Reebok (problem) the better plan.
- Limited practical value: planning is too much theoretical and have a less practical use planning is more suitable when environment is suitable but due to unsuitability of environment business has to take various quick steps/decision time and again and as such the importance of other resources which are used according to changing environment, is more than that of planning.
- Improper plan: planning/target set at the lower side than the capability of or resources and target on over side than the capacity of the resources both are termed as improper planning because lower target will be easily achieved and we will feel false sense of security. On the other hand over planned target beyond resources cannot be achieved even all effort both are the situation of improper plan.
- Planning is a time-consuming and costly process: this may delay action if certain cases. But it is also true that, if sufficient time is not given to the planning process, the plans so produced may prove to be unrealistic. Similarly, planning involves costs of gathering and analyzing information and evaluation of various alternatives. If the management is not willing to spend on planning, the result may not be good.
- Planning is a forward-looking process: the planner must possess the required initiative. He should be an active planner and should take adequate follow up measures to see that plans are understood and implemented properly.
- Resistance to change is another important factor, which puts limits on planning: It is commonly experienced phenomenon in many organisations. Sometimes, planners themselves do like change and on other occasion, they do not think it desirable to bring change, as it will create resistance on the part of the workers. This attitude makes the planning process ineffective.
- Internal inflexibility in the organisation may compel the planners to make rigid plans: this may deter the managers from taking initiative and doing innovative thinking. So, the planners must have sufficient discretion and flexibility in the enterprise. They should not always be required to follow the procedures rigidly.
- Psychological factors also limit the scope of planning: some people consider present as more important than future because present is less uncertain. Such persons are psychologically opposed to planning. But it should not be forgotten that dynamic managers always look ahead. Long-term well being of the enterprise cannot be achieved unless proper planning is done for future.
- The effectiveness of planning is sometimes limited: because of external factors, which are beyond the control of the planners. External stringencies are very difficult to predict. Sudden breakout of war, government controls, natural havocs and may other factors are beyond the control of management. They make the execution of plans very difficult.