What are the limitations of Planning as faced by business executives?


Planning is not a substitute for executive judgment but merely an aid to it. It does not guarantee success. It suffers from the following limitations:

Planning is not a substitute for executive judgment but merely an aid to it. It does not guarantee success. It suffers from the following limitations:

1. Planning is based on forecasts which are never cent percent accurate. Accurate premising is not possible as future can not be predicted with complete accuracy. The conditions under which plans are executed may differ from assumed conditions.


The accuracy and reliability of forecasts diminishes as the forecasting period increases. The reliability of a plan depends upon the data on which it is based. If reliable forecasts and data are not available, planning becomes unrealistic.

Plans formulated by incompetent managers may be misleading. Accu­rate facts and information may not be available either due to personal bias or because of the inefficient techniques of data collection.

An efficient system of forecasting and research is essential for accurate planning. The planners should be fully competent and they should use effective techniques of planning.

2. Planning is a time-consuming and expensive process. Time, effort and money are required in the collection and analysis of data and in the formulation and revision of plans.


Planning is useful only when the expected gains from it exceed its costs. By the time plans are prepared, conditions might change rendering the entire efforts irrelevant.

Planning gives no assurance of fulfillment of objectives. No firm should spend more on planning than the expected benefits. But it is very dif­ficult to ascertain whether planning will be worth its cost.

3. Planning may result in internal inflexibilities and procedural rigidities which curb initiative and individual freedom. Sometimes, planning may cause delay in decision-making.

A manager may be bogged down by rules and procedures when there is need for quick decision. Detailed and rigid planning tends to restrict initiative and develop­ment of subordinate executives.


People often develop rigid patterns of thought and behaviour, once established policies and procedures become ingrained and people do not like to change them.

They tend to execute work in a straight jacket way. There is often in practice an urge for comprehensive and specific plans.

Rigidity in planning may lead to lack of adjustment with the changing environment. It may be checked through periodic review and revision of plans.

4. Planning often requires some change in the existing set up unless the required change is forthcoming planning may be ineffective Resistance to change is an important obstacle in planning.


Planning also requires a forward looking attitude. But very often people have greater regard for the present as future is uncertain. Organizational policies, procedures and rules tend to reduce internal flexibility. Long term commitment may also hinder required changes.

5. Planning may create a false sense of security in the organization A manager may feel that all problems will be solved once the plans art put into operation.

In reality, management has to continuously revise the plans and regularly check on their execution. Psychological problem like the tendency to consider present more important than future may also inhibit planning.

6. Powerful people and other vested interests may exert pressure to ensure that the plans serve their own interests. Moreover, the planner may be unduly influenced by the ‘pet projects’ of the ‘big boss’ and may not make an objective analysis of the available alternatives. It is very difficult to measure accurately the effectiveness of planning.


7. Some managers may have a negative mental attitude toward planning. They may consider the present more important than the future and may resist change.

They believe that future cannot be predicts accurately and all planning is inaccurate. This is a psychological barrier to planning.

8. The effectiveness of planning may be affected by external force which are beyond the control of those responsible for preparing plan Government control, natural calamities, political climate, technologic; change, labor organization and other unforeseen events may create hardies in the implementation of plans.

9. It is very difficult to predict and part vide for such external constraints. Working on a day-to-day basis may be more economical than on a planned basis in times of rapid change

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