Planning facilitates decision-making and establishes standards for controlling. Explain how?

Planning means deciding the most feasible course of action and resources (Human and

physical) required to reach a goal, in advance. Planning is a prerequisite for controlling

because planning suggests ways or a controlled design for attaining future goals through

controlling. For example, car manufacturers decide to control the production of cars for

consumers depending upon the calendar dates of festivals and accordingly control the

purchasing coasts of auto-components and raw materials, human resources, etc., by

planning ahead.

Question

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XYZ Ltd. has a plan of increasing profits by 20%. It has devoted a lot of time and money

to this plan. But the competition starts increasing, so it could not change its plan to beat

its competitors because a huge amount of money had already been devoted to the pre-

decided plan. It caused losses to the company.

Explain any two limitations of planning highlighted in the above case. Also, quote the

lines from it

Ans:

 (i) ‘XYZ Ltd. has devoted a lot of time and money to its plan.’

Planning is a time-consuming process. It also involves huge costs.

(ii) ‘The competition starts increasing, so it could not change its plan to beat its

competitors because a huge amount of money had already been devoted to the pre-

decided plan.’

Planning leads to rigidity. Following a pre-decided plan, when circumstance change,

may not turn out to be in the organization’s interest.