Systematic planning and the limitations of planning

Meaning of planning

Planning means settling beforehand what is to be done and the way to do it; it links the organisation's present position with the position it aims to reach. It involves setting objectives, working out the possible courses of action and choosing the best of them. Done systematically, it rests on facts and forecasts rather than guesswork.

Why the statement is largely true

I agree with the statement, for these reasons.

1. It sets the standards for control. Goals fixed by the plan are the standards against which performance is measured; without them deviations cannot even be found.
2. It reduces the risk of uncertainty. Planning looks ahead and anticipates change, so that responses can be prepared in advance.
3. It gives direction. Clearly stated goals tell every department and employee what to do and in which direction; without a plan people would pull in different directions.
4. It aids decision making. It requires the manager to evaluate alternatives and choose the most viable one.
5. It cuts overlapping and waste. It coordinates the efforts of divisions and individuals, so redundant activities are reduced and inefficiencies are easier to detect.
6. It is the base of all other functions. Organising, staffing, directing and controlling are carried out within the framework of the plan.

A Nagpur dairy co-operative that plans its milk collection, chilling capacity and distribution before the summer peak meets demand; one that reacts only when shortages appear loses both milk and customers.

Limitations of planning

The statement should not be read to mean that a plan guarantees results. Planning has these limitations.

1. The environment may not follow the plan. The business environment is dynamic; changes in economic policy, political conditions, natural calamities or competition can upset sales targets and budgets.
2. It can make the organisation rigid. Managers may be unable to change a well-defined plan when circumstances change.
3. It involves heavy costs. Time and money go into gathering and checking facts, meetings and expert advice, and the benefits may not justify them.
4. It can reduce creativity. When plans are made at the top and others only carry them out, initiative at lower levels is lost.
5. It does not guarantee success. A plan works only if it is properly drawn up and carried out; relying on a plan because it worked before can create false security.
6. It takes time. Drawing up plans can take so long that little time is left to implement them.

Conclusion

These limits do not make planning worthless; it remains a tool, one to be handled with care and kept flexible. An enterprise cannot reach its objectives without systematic planning, but the plan must be reviewed as conditions change.