What are the Advantages and Limitations of Planning?Posted in Principles of Management | Email This Post
Advantages of Planning
Planning is considered as one of the most important features of management. It is a basic function of management. Planning defines the goals of the organization and also the means that can be used to achieve these goals. In this way without planning, there cannot be any proper organization and guidance. As a result of the below mentioned factors, planning is considered as a significant function for all the organizations.
1. Attention on objectives: with the help of planning, the management can clearly define the organizational goals. Therefore the management can only concentrate on the achievement of these goals. In the same way, planning also helps the managers in prioritizing the organizational goals. Therefore, the objectives of the organization that are more important and need to be achieved first of all can receive the attention of the managers while the other objectives can be achieved later on.
2. Better utilization of resources: a significant advantage provided by planning is that it helps the managers in utilizing the resources available with the organization in a better way. Therefore, in this process the resources that are available with the organization are identified first of all and then the operations of the organization are planned on the basis of these resources. In this way, with the help of planning, the managers are able to use all the resources of the organization in the best possible way.
3. Minimizing uncertainties: planning is always related the future. However it is also true that the future cannot be predicted with certainty and a lot of changes keep on taking place in the business environment. Therefore, with the help of planning, the managers try to predict what is going to happen in future and then make plans to achieve the organizational goals. In this way, planning helps in reducing the uncertainties of the future as the decisions are based on the past experiences and also the situation that is being faced by the organization at present.
4. Economy in operations: in case of planning, first of all the objectives of the organization are decided and then the best course of action that can be adopted for achieving these goals is decided. In this way the operations that are selected for this purpose are the better alternative out of all the alternatives that are available and this result in an economy in operations. It also allows avoiding the method of trial and error and at the same time, the resources of the organization are not wasted while making choices. Such economy can be achieved by all the departments of the organization like production, sales and finance etc.
5. Encourages innovation and creativity: A better system of planning is the system that is capable of encouraging the managers to come up with new ways of doing things. In this way, it should encourage creative thinking and innovation among the managers because in this case they think regarding new ways while involved in the process of planning. This process should provide awareness regarding the individual participation and at the same time it should encourage an atmosphere of openness which in turn helps in achieving the goals of the organization.
6. Better coordination: as the organizational goals are common, all the persons make concerted efforts to achieve these objectives. At the same time, planning also helps in avoiding the duplication of efforts. In this way planning results in better coordination and ultimately results in the achievement of better results.
7. Facilitates control: the process of planning and control cannot be separated from each other. The process of planning helps in deciding the objectives of the organization, and also lays down the standards of performance. This helps the management in evaluating the performance of different persons in the organization. At the same time, if there is any deviation in performance, early steps can be taken by the management to rectify this position.
8. Allows management by exception: the meaning of management by exception is that the management of the organization is not required to be involved in all the activities. Therefore if certain things are going well, there is no need that the management should focus on these things. Therefore, the management is required to intervene only if things are not going according to plan. While the organizational objectives are determined by the process of planning, all efforts can be made to achieve these objectives. The management is required to interfere only when it appears that the things are not going well and these objectives may not be achieved. In this way, when management by exception is introduced, the managers have more time to indulge in the process of planning instead of spending time in directing the routine activities of the organization.
9. Facilitates delegation: with the help of the process of planning, the management can dedicate the powers. In this case, the goals are assigned to different persons. However, these persons may need the authority to achieve these goals. In this way, the process of planning also facilitates the delegation of authority within the organization.
Limitations of planning
There are a large number of advantages associated with planning however there can be certain obstacles and limitations faced by the process of planning. In the same way, it also needs to be noted that planning cannot be considered as a remedy for all the problems faced by the organization. Planning can only help in reducing the uncertainties of the future and that too, only up to a certain extent. In this way, the limitations of planning can be described as follows:-
1. Lack of reliable data: The process of planning is based on different facts and figures that have been provided to the managers while they are involved in the process of planning. However, in case the data that has been provided to the managers is not reliable, it is possible that the decisions that are based on this data can also be unreliable. In this way, the purpose of planning can be defeated if the managers are not provided with relevant data at the time of planning.
Expensive: it also needs to be noted that the process of planning can be very expensive. For example, collecting information and testing different course of action require much investment by the company. In the same way, sometimes these expenses can be so high that it is very difficult for small enterprises to become involved in planning. Therefore, particularly the long-term planning is out of reach for a large number of organizations due to the heavy expenses that are involved in it. It is very important that the utility that has been derived from planning should not be less than the expenses that have been incurred on planning.
Time-consuming: the process of planning can be very time consuming and this in turn reduces the practical utility of planning. It is a time-consuming process and the actions that need to be taken regarding various operations can be delayed if proper plans have not been formulated on time. Such a delay may also cause a loss of opportunities for the organization. Particularly when time is of essence, the advanced planning is not of much help. In some cases, there can be circumstances where immediate action is required and therefore it is not possible to wait that first of all the process of planning should be completed.
Sudden emergencies: there can be certain cases where an emergency may arise. In such a case, quick action is required by the organization and therefore advance planning is not possible. At the same time, many times it is not possible to anticipate these situations. On the other end if these emergencies can be anticipated or if they occur regularly, it may be possible to undertake planning in order to deal with these emergencies also.
External factors may decrease the utility: apart from the internal factors, there can be certain external factors that may have an adverse impact on planning. Among these factors, there are social, political, economic and technological factors. In the same way, the general environment at the national as well as international level also acts as a limitation when it comes to the effectiveness of the process of planning.
Resistance to change: generally, it has been seen that most of the people do not want to change. The passive outlook of these persons towards the new ideas can also be considered as a limitation when it comes to planning. Therefore there is a psychological barrier according to which the executives are also more concerned with the present as compared to the future. The reason is that while the present is more certain as compared to the future, the present is also more desirable. In this way the business organizations generally see the resistance to change.