Question:
Explain the following limitation of planning :
(ii) Planning involves huge costs
Explain the following limitation of planning :
(ii) Planning involves huge costs
(ii) Planning involves huge costs
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Planning costs include money spent on R&D and professional data analysis.
Time is a hidden cost; too much planning can lead to "Analysis Paralysis."
Planning is only useful if it adds more value than the cost spent on it.
Updated On: Jul 18, 2026
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Solution and Explanation
Concept:
• Resource Allocation: Planning is not a free activity; it requires a significant investment of an organization's resources.
• Cost-Benefit Analysis: Management must ensure that the benefits derived from planning exceed the costs incurred in the process.
Step 1: Identify the various types of costs in planning
Planning involves the collection of vast amounts of data and information from various sources.
Large companies often hire professional experts and consultants to formulate complex plans, and these experts charge very high fees.
Step 2: Describe the administrative and time-related costs
Considerable time and money are spent in board meetings, discussions, and conducting market surveys.
Sometimes, the cost incurred in gathering data and checking the accuracy of facts is so high that it does not justify the final plan.
If planning takes too much time, it may lead to missing out on market opportunities.
• Resource Allocation: Planning is not a free activity; it requires a significant investment of an organization's resources.
• Cost-Benefit Analysis: Management must ensure that the benefits derived from planning exceed the costs incurred in the process.
Step 1: Identify the various types of costs in planning
Planning involves the collection of vast amounts of data and information from various sources.
Large companies often hire professional experts and consultants to formulate complex plans, and these experts charge very high fees.
Step 2: Describe the administrative and time-related costs
Considerable time and money are spent in board meetings, discussions, and conducting market surveys.
Sometimes, the cost incurred in gathering data and checking the accuracy of facts is so high that it does not justify the final plan.
If planning takes too much time, it may lead to missing out on market opportunities.
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