What ate the advantage and disadvantage of Planning?
In business world success of an organization depends very much on its capability of looking ahead i.e. planning. Good planning needs better thinking by the manager and it can the following advantage and disadvantage of Planning.
Advantage / Benefits of Planning
- Reduces Uncertainty
- Focus on Objectives/Goals
- Economical Operation
- Facilitates Control
- Encourages Innovation and Creativity
- Improves Motivation
- Avoids Random Activity
- Improves Competitive Strength
(1) Reduces Uncertainty
An organization has to work in an environment, which uncertain and ever changing.
Planning gives an opportunity to a manager to foresee various uncertainties, which may because change in technology, taste and fashion of the people etc.
It h in reducing uncertainties of future because it involves anticipation of future events.
Effective planning is the result of deliberate thinking based on past experience and present situations.
(2) Focus on Objectives/Goals
Organizations exist to pursue and achieve certain goals or objectives. Planning focuses on these objectives and direct actions for achieving these objectives.
Planning defines these objectives more clearly while determining the course of action to achieve them. It eliminates aimless activities.
A plan serves as the blueprint of the action to be followed for the achievement of objectives. Hence, good management is management by objectives.
(3) Economical Operation
Planning involves selection of the best possible course of action. It helps to eliminate all types of waste and to achieve in utilization of available resources.
Planning is a rationale activity that leads to efficient and economical operations. It helps to minimize the cost of operations and improve the competitive strength of an organization.
(4) Facilitates Control
Planning and control are inseparable. Planning provides the standard against which the actual performance can be measured and evaluated.
Actual performance is compared with standards fixed by the plans. Deviation if any is located.
Control involves keeping activities on the predetermined course b rectifying deviations from plans. Thus, planning helps to control by setting standards and comparing actual performance.
(5) Encourages Innovation and Creativity
Planning is basically the deciding function of management. Planning It helps innovative and creative thinking among managers when they are planning.
It helps to think out new ideas and adjust to the realities of existing situation. It creates a forward-looking attitude among the managers.
(6) Improves Motivation
A good planning ensures participation of all managers which will improve their motivation.
It encourages sense of involvement and team spirit.
It improves the motivation and morale of workers because they know clearly what is expected of them.
(7) Ensures Better Coordination
Planning provides the basis for organized and coordinated effort of the organization.
It secures unity of direction towards the organizational objectives.
All the activities are directed towards the common goals.
There is an integrated effort throughout the organization. This will lead to better coordination in the organization.
(8) Avoids Random Activity
Planning means deciding in advance what objectives are to be achieved and how they are to be achieved.
It makes systematic integrated and orderly efforts possible and avoids random activity It avoids the need for snap decisions based on impulse and intuition.
Planning provides order and rationality to the organization. It avoids duplication of works and overlapping efforts.
(9) Improves Competitive Strength
Effective planning increases the competitive strength of an organization. Planning is based on systematic and careful forecasts.
It enables the organization to discover new opportunities and thereby shape its own future. It ensures an orderly progress of the organization.
Thus, planning is essential to the successful functioning of every organization. It makes systematic, integrated and orderly efforts.
In fact, it increases the overall efficiency of the organization and timely completion of jobs at minimum cost. It avoids duplication of work, random activity, and over-lapping efforts.
Constraints / Disadvantage or Limitations of Planning
Planning plays an important role in directing the organizational activity. It is a primary and pervasive function. Hence, the need for planning is unquestioned.
Despite of many benefits of planning, there are several constraints and limitations of planning. Some constraints are inherent in planning process whereas others are associated with planning technique s and planners themselves.
- Lack of Reliable Data
- Time Consuming Process
- Costly Process
- Rapid Change
- Internal Inflexibility
- External Inflexibility
(1) Lack of Reliable Data
Planning is undertaken on the basis of certain assumptions in the future. The future is unpredictable and uncertain. Hence. future cannot be known accurately because reliable information d data are not available.
If reliable information and data are not available for planning it is sure to lose much of its value. Planning becomes inaccurate and unreliable due to errors in individual judgement and imperfect techniques of planning.
A wrong assumption or lack of required competence on the part of planners also reduces the effectiveness of planning. Thus, planning for future risks and uncertainties can give no perfect assurance.
Planning implies strict adherence to predetermined policies procedures, and programmes. This restricts individual’s freedom. initiative and desire for creativity.
Business is by nature dynamic and the red-tapism created by detailed planning can prove disastrous for an organization. However, this difficulty can be overcome by making flexible plans.
(3) Time Consuming Process
Planning is a time consuming process. The various steps of planning may consume a lot of time. Considerable time is required for collection, analysis and interpretation of information for planning.
It is, therefore, unsuitable in those situations where sudden or immediate action is required to meet unexpected contingencies.
In some cases, advance planning can delay action, resulting in loss of profitable opportunities.
(4) Costly Process
Planning is also costly process. Money and effort have to be spent in collecting information, preparing estimates, forecasting and evaluation of alternatives.
Services of experts are necessary to select the best and most economical course of action for the organization.
Planning cost may go on increasing if planning becomes more elaborate and formulated due to additional st time and proper work.
(5) Rapid Change
Rapid changes in technology, consumer tastes and fashions are further constraints to planning. In a complex and rapidly changing environment planning is more difficult as it adds new problems.
In rapidly changing conditions planning activity taken in one period can not be relevant for another period.
(6) Internal Inflexibility
Internal inflexibility may be psychological, policy and procedures, and capital investment which create difficulties in planning and implementation.
Psychological inflexibility lies in the form of resistance to change. Whenever a change is undertaken employees’ resist to change, as they believe that present is more desirable and more reliable.
Similarly, once policies and procedures are established they are hard to change. In most cases once capital is invested in fixed assets, it becomes more difficult to change work procedures in the near future.
This inflexibility continues during the entire life of fixed assets.
(7) External Inflexibility
There are certain external inflexibility over which managers do not have any control. Changes in technology, changes in government policies, industrial unrest, etc are important external inflexibility on planning.
They greatly hamper managerial planning in the organization.
The above limitations of planning point out the complexities and problems involved in the planning process. Recognition of these limitations will help managers in more careful and systematic planning