(a) Planning is the function of management being discussed in the given para. One of the characteristics of planning is that planning is a mental exercise. Planning implies ability to think out ways to benefit from the opportunities which have yet to arise. Planning is a mental activity. Planning requires application of mind involving foresightedness, intelligent imagination and judgment. Managers have to consider various courses of action, evaluate the merits and demerits of every course of action and then finally decide which course of action may suit them best. The quality of planning will vary according to quality of mind of the manager.
(b) Following are the limitations of planning :
1. Planning is a time-consuming process – Planning requires collection of information, its analysis and interpretation. These activities take considerable time. Planning is not practicable when quick decisions are to be made. Planning requires time for thinking, collecting data, forecasting, evaluating alternatives and attending other aspects of planning.
2. Planning results in rigidity – Planning implies prior determination of policies and procedures while business environment is dynamic. This prevents managers from taking initiatives and from doing innovative thinking. Blind conformity with predetermined rules and procedures promotes red tapism and delay in the performance of work. A manager is caught between procedures and formalities where there is a need for quick action.
3. Planning is an expensive process – Planning depends on effective system of feedback, transmitting necessary data, collection and analysis of data and evaluation of various courses of action. It results in heavy expenditure. Cost of planning may go on increasing if planning becomes more elaborate and formalised. Apart from direct cost involved, such as paper work etc. may also be a costly affair.