(a) Function of Management Planning:
Characteristics of planning
(i) Planning focuses on achieving objectives.
(ii) Planning is a primary function of management
(iii) Planning is pervasive
(iv) Planning is continuous
(v) Planning is futuristic
(vi) Planning involves decision making.
(vii) Planning is a mental exercise.
(b) Any three limitations of planning:
(i) Planning leads to rigidity
(ii) Planning may not work in a dynamic environment
(iii) Planning reduces creativity
(iv) Planning involves huge cost
(v) Planning is a time consuming process
(vi) Planning does not guarantee success
Detailed Answer:
Characteristics of planning :
(i) Planning focuses on achieving objectives: Organisations are set up with a general purpose in view. Specific goals are set out in the plans along with the activities to be undertaken to achieve the goals. Thus Planning is Purposeful. Planning has no meaning unless it contributes to the achievement of predetermined organisational goals.
(ii) Planning is a primary function of management: Planning lays down the base for other functions of management. All other managerial functions are performed within the framer work of the plans drawn. Thus, planning precedes other functions. This is also referred to as the primacy of planning. The various functions of management are interrelated and equally important. However, planning provides the basis of all other functions.
(iii) Planning is pervasive: Planning is required at all levels of the management as well as in all departments of the organisation. It is not an exclusive function of top management or of any particular department. But the scope of planning differs at different levels and among different departments. For example, the top management undertakes planning for tire organisation as a whole. Middle management does the departmental planning. At the lowest Ievel, day-to-day operational planning is done by the supervisors.
(iv) Planning is continuous: Plans are prepared for a specific period of time, may be for a month, a quarter, or a year At the end of that period there is need for a new plan to be drawn on the basis of new requirements and future conditions. Hence, planning is a continuous process. Continuity of planning is related with the planning cycle. It means that a plan is framed, it is implemented, and is followed by another plan, and so on.
(v) Planning is futuristic: Planning essentially involves looking ahead and preparing for the future. The purpose of planning is to meet future events effectively to the best advantage of an organisation. It implies peeping into the future, analysing it and predicting it. Planning is, therefore, regarded as a forward looking function based on forecasting. Through forecasting, future events and conditions are anticipated and plans are drawn accordingly. Thus, for example, sales forecasting is the basis on which a business firm prepares its annual plan for production and sales.
(vi) Planning involves decision making: planning essentially involves choice from among various alternatives and activities. If there is only one possible goal or a possible course of action, there is no need for planning because there is no choice. The need for planning arises only when alternatives are available. In actual practice, planning pre-supposes the existence of alternatives. Planning, thus, involves thorough examination and evaluation of each alternative and choosing the most appropriate one.
(vii) Planning is a mental exercise: Planning requires application of the mind involving foresight, intelligent imagination and sound judgment. It is basically an intellectual activity of thinking rather than doing. Because, planning determines the action to be taken. However, planning requires logical and systematic thinking rather than guess work or wishful thinking. In other words, thinking for planning must be orderly and based on the analysis of facts and forecasts.
For Limitations of planning:
(i) Planning leads to rigidity: In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This kind of rigidity in plans may create difficulty. Managers need to be given some flexibility to be able to cope with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest.
(ii) Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity.
(iii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.
(iv) Planning involves huge costs: When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money. For example, Checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan.
(v) Planning is a time-consuming process: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.
(vi) Planning does not guarantee success: The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.
