6.

Limitations of Planning
1. Time-consuming and costly: It is argued that planning is a lengthy process
as it involves collection of data, forecast, research and analysis. Similarly,
planning is essentially the job of highly paid experts. As a result, planning is a
time-consuming and costly activity. Only large firms can undertake planning
due to heavy cost and lengthy procedure involved in it.
2. Ineffective due to environmental changes: Business environment
changes frequently and plans are required to be adjusted as per the changes
in the situation through suitable modifications. However, such
revision/modification creates a number of problems. Such adjustments in the
operational plan are always costly, time-consuming.
3. Dangers of unreliable data: Planning needs accurate data from internal
and external sources. The quality of planning depends on such accurate
feedback. If the information supplied by various departments is unreliable,
the planning process will be adversely affected. Planning based on
incomplete information may prove to be even dangerous. In brief, plans
based on unreliable data are not useful /effective. Securing reliable
information is always difficult and this brings deficiencies in the entire
planning process.
4. Encroachment on individual freedom and initiative: Planning is a
centralized process. At the lower levels, plans are to be executed as per the
directives issued. This affects individual freedom and initiative at the lower
levels. Employees at the lower levels act as instruments for the execution of
plan prepared by the top level managers. People are asked to become cogs in
the machine with little scope for initiative or independent thinking.
5. Delays actions: Planning is a lengthy process. As a result, the actions to be
taken for execution are delayed. Planning is not useful when quick decisions
and actions are required.
6. Unsuitable to small firms: Small firms prefer to function without long term
comprehensive planning as they find planning rather costly and timeconsuming. They prefer to face the situations as they come. Similarly, quick
decisions and prompt actions are necessary in the case of certain business
activities. Here, long term planning is not suitable.
7. Limited practical value: It is argued that planning is too theoretical and
has limited practical utility. Planning takes long time for preparation and the
situation changes when such plans are ready for execution. Planning for
example, is not suitable in the case of speculative business. It is also not
useful for taking quick benefits of business opportunities. In brief, planning
has limited practical value.
8. No guarantee of expected results: Planning is for achieving certain well
defined objectives. However, there is no guarantee that the objectives will be

achieved within the specific time limit by using planning as a tool. Actual
performance may not be as per the expectation due to various reasons. Thus
planning has an element of uncertainty. Planning leads to probable results
and not the expected results. It gives benefits but may not be exactly as per
the expectation. Thus, there is no guarantee that planning will give 100 per
cent positive/expected results.
9. Generates frustration: At the lower levels, plans are imposed on the
employees. No consideration is given to their difficulties, views and opinions.
The targets may be too ambitious and the employees may not be able to
achieve them in spite of best efforts. This leads to frustration among
employees at lower levels.
10.Involves huge paper work: Planning involves huge paper work in the
preparation of master plan and departmental plans.
11.Danger of overdoing: Sometimes, planners overload the work. Elaborate
reports are prepared without practical utility.
The advantages of planning are more important/significant while its limitations are
few and also not of serious nature. Moreover, these limitations can be minimized.
The practical utility of planning is universally accepted. It is not fair to give up the
concept of planning due to certain limitations. The better alternative is to make it
more effective, purposeful and result oriented.