Question

Explain the following limitations of planning function of management :

(i) Planning may not work in a dynamic environment.

(ii) Planning reduces creativity.

Hint:

Plans are based on assumptions that fail when the environment changes. Also, as top managers decide and others only follow, employees get no chance to show new ideas.

Answer 1

Step 1: Understanding the question:
Planning is useful, but it also has some limits.
We have to explain two limitations: planning may not work in a dynamic environment, and planning reduces creativity.

Step 2: Limitation 1 - the dynamic environment:
A plan is made on the basis of assumptions about the future.
The business environment keeps changing. Tastes of customers, technology, prices, competition and government rules do not stay the same.
When the environment changes quickly, the assumptions go wrong and the plan becomes out of date.

Step 3: Effect of the dynamic environment:
Managers then find it hard to follow the plan, and the results can be poor.
For example, a firm may plan to sell a certain type of camera phone, but a new technology may arrive and make that phone unwanted.
Constant revision of plans also costs time and money.

Step 4: Limitation 2 - planning reduces creativity:
In planning, top managers decide the objectives and the way to reach them.
Other managers and workers have to follow the plan as it is, so they get little chance to think or try new ideas.
Their initiative gets blocked and the plan becomes a fixed routine.

Step 5: Effect on the organisation:
The employees feel that their ideas are not wanted, so their interest in work falls.
The organisation may lose useful suggestions that could have improved the work.
For example, a sales executive may not try a better selling method because the plan allows only one way.

Final Answer:
Planning may not work in a dynamic environment because changes make the assumptions false, and it reduces creativity because only top managers think while others just follow the plan.