Limitations of Planning

Despite of many advantages of planning there may be some obstacles and limitations in this process. The follow are some of the planning.
1. Lack of Reliable data: Planning is based on various facts and figures supplied to the planners, which are difficult to procure absence of accurate data will upset the plan.
2. Expensive: Planning is an expensive process. The gathering of information and testing of various courses of action, setting up the planning machinery, require huge amount of money. Small companies can not afford to prepare plans.
3. Time consuming exercise: As planning involves a number of steps, a lot of time has to be devoted to plan before actual operations start.
4. Lack of workers initiatives: Under planning exercise worker has to act mechanically. It robs him of his interest in the work.
5. External factors may reduce utility: Besides internal factors, there are external factors is which adversely affect planning. These factors may be economic, social, political, technological or legal.
6. Psychological Hurdle: Human psychology also to an extent, places some hurdles in the success of planning. There is a certain degree of conservation in people which implies resistance to change.
7. Sudden emergencies: In case certain emergencies arise then the need of the hour is quick action and not advance planning. There situations may not be anticipated.

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Significance of Planning

1. Minimizes uncertainty: Planning certainly minimizes future uncertainties by basing its decisions on past experiences and present situations.
2. Better utilisation of resources: All the resources are first identified and then operations are planned. All resources are put to best possible uses.
3. Economy in operation: The operations selected being among possible alternatives, there is an economy in operations.
4. Better co-ordination: Planning will lead to better co-ordination in the organisation which will ultimately lead to better results.
5. Encourage innovation: Planning helps innovative and creative thinking among managers because they will think of many new things while planning.
6. Planning makes control possible: Control cannot be exercised without planning. With the help of planning the actual output can be compared the desired one, difference is acquired and reasons are located to get necessary action towards unfavorable differences.
7. Planning helps motivation: The manager cannot only verify but can encourage workers to attain the targets. When tangible goals are insight it is easier to encourage the workers to reach those levels.
8. Planning ensures against failures and setbacks: Planning is based on estimates. It is an effort to visualise the future and attain goals through present action.
9. Management by exception possible: Planning fixes objectives of the organisation and all efforts should be made to achieve these objectives. Management should interfere in other aspects only when things are not going well. Thus by the introduction of management by exception, managers are given more time for planning. The objectives rather than wasting their time in directing day-to-day work.

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Techniques of Planning

Planning will be useful only when it is effectively implemented. The following techniques makes the planning effective.
1. Consciousness for Planning: Planning will be effective only when there is proper climate for it.
The superiors should try to set objectives, review various goals and redraft them as is required for their effective implantation. The hurdles in the ways of planning should be removed. Every body should extend willing and co-operation for making the plans successful.
2. Initiative at top level: The initiative and support of top level management is essential for making the plans effective. The involvement of lower level management is also essential because execution will be more at these levels.
3. Proper communication: Communication among different levels in the organisation is very essential. If plans are not properly understood by those who are to implement them then these may not accheive the desired results. Communication provides a channel for the exchange of information among various persons without a proper communications system planning is bound to fail.
4. Participation in planning: The method and extent of participation will depend upon the type of organisation participating of persons at different levels may help in proper implementation of plans.
5. Emphasis on planning: Both long terms and short term plans should get proper emphasis. For effective implementation of planning both long-term and short-term plans should be given on equal weight-age.
6. Timing: Since the planning process is complex of any major and derivative plans and since plans are necessarily related to one another, it is important that they fit together, not only in terms of content and action, but also in terms of timing.

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Planning Process

   Planning can be accomplished in a series of steps, it is called as planning process. It starts from perception of opportunities to realisation of opportunities. it determines the future course of action for utilizing resources in the best possible manner to get optimum possible results. The various steps in planning process are described below.

Steps in Planning process:

i) Awareness of opportunities: While planning basically managers are needed to know the availability of opportunities to the organisation. Opportunities are available from environment. These are new project can be had from changing needs of customers, technological changes, competitors weaknesses and innovative patterns of the organisation. Awareness of opportunities involves preliminary understanding and estimation of opportunities and analysing them in the light of strengths and weakness of the organisation for the purpose of assuming them. When the managers are utilising the opportunities, it is to be observed they should be free from threats.

ii) Establishing Objectives: The second steps in planning is to setup objectives for the enterprise as a whole, and for the departments and individuals. Objectives are to be set for the long run as well as for the short run. These are the end points for managerial course of action and they are the destination for all the activities. Objectives specify the expected results and show how the destination is to be achieved and where emphasis is to be placed. 

Objectives of enterprise are to be translated into departmental objectives, and departmental objectives are to be converted into individual goals. Then only overall objectives for which the organisation is established can be achieved  Enterprise objectives give direction to major plans, in turn they are used to setup objectives for lower levels. Objectives appear in different forms, they are mission, overall objectives, divisional objectives and individual objectives etc.

iii)Planning Premises: Once the objectives are determined the next step is establishing the planning premises. Planning premises refer to the environmental conditions or surrounding circumstances in which plans work. Plans will operate in future, hence it is appropriate to expect future conditions and should plan accordingly.

iv) Identifying the Alternatives: In order to achieve the objectives under expected conditions managers first must identify various alternative courses of action. For instance, to achieve the objectives of securing desired profits, necessary plant and machinery should be established in the organisation. The machinery can be of different types like-

Manual plant,

Semi automatic plant,

Complete automatic plant.

These are known as alternatives. While developing the alternatives, organisational frame work like constraint of capital, manpower and philosophies may be taken into account.

v) Evaluating the Alternatives: After identifying the alternatives, the following stage is to evaluate their advantages and disadvantages. Their evaluation should be done in the light of the enterprise objectives.

vi) Selecting a course of Action: Choice of a particular alternative is the next step after evolution. Evolution explains the merits and demerits. Selection is the real point of decision making. At many times, it is confirmed  that selection of two or more alternatives is better than choosing only one alternative. Hence, managers should plan in such a manner to select right combination.

vii) Formulating Derivative Plans: The developmental plans are know as Derivative Plans. For instance, in order to generate desired profits for the organisation, production department should have production plan regarding number and quality of units to be produced.

viii) Budgeting: A budget is forecasted statement of revenue and expenditure, it is a numberised plan. It allovates the various resources to the required activities keeping in view of objectives. The organisation and each department working in it can have their own budget. Hence, budgeting is the last stage of planning which puts the plan into action.

                                  The planning sequence discussed above, is almost similar to all the managers but may differ according to the complexity and time duration of plans like some steps may be prolonged and some stages may be shortened. Future, plans must be cost-effective. Thus, proper planning should be done keeping in view the circumstance, the need, the magnitude and level of commitment.

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