Planning Advantages and Disadvantages

Advantages of Planning

Planning is an important per-requisite for attaining the cherished goals of a business enterprise. Of all the managerial activities, it comes first because of the following benefits:

1. Planning leads to more effective and faster achievements in any organization.
2. Since planning foresees the future and also makes a provision for it, it gives an added strength to the business for its steady growth and continuous prosperity.
3. It secure unity of purpose, direction and effort by focusing attention on the objectives. Hence, unnecessary duplication, overlapping and cross-purpose workings are eliminated.
4. It has the effect of minimizing the cost of operations
5. It ensures an even flow of work, minimizes false steps and protects against unwanted deviations.
6. It enhances the efficiency of other managerial functions.
7. It provides an effective basis for control in all organizations whether small or big.
8. It facilitates the process of decision-making.
9. It enables the management to implement future programmes in a systematic way so that the management may get the maximum benefit out of the programmes framed. It enables all the activities to be conducted in an orderly and coordinated manner in order to achieve the common goals of the enterprise.
10. With the rapid growth of technological development, it is essential for a manager to keep abreast of the up-to-date technology. Otherwise, the products are likely to become obsolete. Planning helps in this process.

Limitations/Disadvantages of Planning

1. Lack of Reliable Data:

Planning is based on various facts and figures supplied to the planners. If the data on which decisions are based are not reliable then decisions based on such information will also be unreliable. Planning will lose its value if reliable facts and figures are not supplied.

2. Time Consuming Process:

Practical utility of planning is sometimes reduced by the time factor. Planning is a time- consuming process and actions on various operations may be delayed because proper planning has not yet been done. The delay may result in loss of opportunities. When time is of essence then advance planning loses its utility. Under certain circumstances an urgent action is needed then one cannot wait for the planning process to complete.

3. Expensive:

The planning process is very expensive. The gathering of information and testing of various courses of action involve greater amounts of money. Sometimes, expenses are so prohibitive that small concerns cannot afford to use planning. The long-term planning is a luxury for most of the concerns because of heavy expenses. The utility derived from planning in no case should be less than expenditure incurred on it.

According to Hainman, “The cost of planning should not be in excess of its contribution, and wise managerial judgment is necessary to balance the expense of preparing the plans against the benefits derived from them.”

4. External Factors may Reduce Utility:

Besides internal factors there are external factors too which adversely affect planning. These factors may be economic, social, political, technological or legal. The general national and international climate also acts as limitation on the planning process.

5. Sudden Emergencies:

In case certain emergencies arise then the need of the hour is quick action and not advance planning. These situations may not be anticipated. In case emergencies are anticipated or they have regularity in occurrence then advance planning should be undertaken for emergencies too.

6. Resistance to Change:

Most of the persons, generally, do not like any change. Their passive outlook to new ideas becomes a limitation to planning. McFarland writes. “The principal psychological barrier is that executives, like most people have more regard for the present than for the future. The present is not only more certain than the future, it is also more desirable. Resistance to change is commonly experienced phenomenon in the business world. Planning often implies changes which the executive would like to ignore, hoping they would not materialize.” The notion that things planned for future are unlikely to happen is not based on logical thinking. It is the planning which helps in minimizing future uncertainties.