LIMITATIONS OF PLANNING

LIMITATIONS OF PLANNING

INTERNAL

There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves.

1.      Rigidity

• Planning has tendency to make administration inflexible.
• Planning implies prior determination of policies, procedures and programmes and a strict obedience to them in all circumstances.
• There is no scope for individual freedom.
• The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
• Planning therefore introduces inelasticity and discourages individual initiative and experimentation.

2.      Misdirected Planning

• Planning may be used to serve individual interests rather than the interest of the organization.
• Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit one’s own requirement rather than that of whole organization.
• Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning.

3.      Time consuming

• Planning is a time consuming process because it involves collection of information, its analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
• Therefore planning is not suitable during emergency or crisis when quick decisions are required.

4.      Probability in planning

• Planning is based on forecasts which are mere estimates about future.
• These estimates may prove to be inaccurate due to the uncertainty of future.
• Any change in the anticipated situation may render plans ineffective.
• Plans do not always reflect real situations because future is unpredictable.
• Thus, excessive reliance on plans may prove to be fatal.

5.      False sense of security

• Elaborate planning may create a false sense of security to the effect that everything is taken for decided.
• Leaders assume that as long as they work as per plans, it is satisfactory.
• Therefore they fail to take up timely actions and an opportunity is lost.
• Employees are more concerned about fulfillment of plan performance rather than any kind of change.

6.      Expensive

• Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
• According to Koontz and O’Donell,’ Expenses on planning should never exceed the estimated benefits from planning. ’

EXTERNAL

Ø  Political Climate- Change of government from one political party to another political party, etc.

Ø  Labor Union- Strikes, lockouts, agitations.

Ø  Technological changes- Modern techniques and equipment’s, computerization.

Ø  Natural Calamities- Earthquakes and floods.

Ø  Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.

IMPORTANCE OF PLANNING

IMPORTANCE OF PLANNING

1. Planning facilitates management by objectives.

• Planning begins with determination of objectives.
• It highlights the purposes for which various activities are to be undertaken.
• In fact, it makes objectives more clear and specific.
• Planning helps in focusing the attention of employees on the objectives or goals of enterprise.
• Without planning an organization has no guide.
• Planning compels administrator to prepare a Blue-print of the courses of action to be followed for accomplishment of objectives.
• Therefore, planning brings order and rationality into the organization.

2. Planning minimizes uncertainties.

• Administration is dynamic and is full of uncertainties.
• There are risks of various types due to uncertainties.
• Planning helps in reducing uncertainties of future.
• Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks.
• Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.

3. Planning facilitates co-ordination.

• Planning revolves around organizational goals.
• All activities are directed towards common goals.
• There is a united effort throughout in various departments and groups.
• It avoids duplication of efforts. In other words, it leads to better co-ordination.
• It helps in finding out problems of work performance and aims at rectifying the same.

4. Planning improves employee’s moral.

• Planning creates an atmosphere of order and discipline in organization.
• Employees know in advance what is expected of them and therefore conformity can be achieved easily.
• This encourages employees to show their best and also earn reward for the same.
• Planning creates a healthy attitude towards work environment which helps in boosting employees moral and efficiency.

5. Planning helps in achieving economies.

• Effective planning secures economy since it leads to orderly allocation of resources to various operations.
• It also facilitates optimum utilization of resources which brings economy in operations.
• It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise.

6. Planning facilitates controlling.

• Planning facilitates existence of certain planned goals and standard of performance.
• It provides basis of controlling.
• We cannot think of an effective system of controlling without existence of well thought out plans.
• Planning provides pre-determined goals against which actual performance is compared.
• In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.

7. Planning provides competitive edge.

• Planning provides competitive edge to the organization over the others which do not have effective planning.
• With the help of forecasting not only the organization secures its future but at the same time it is able to estimate the future motives of its competitor which helps in facing future challenges.
• Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the competitive strength of the organization is improved.

8. Planning encourages innovations.

• In the process of planning, administrators have the opportunities of suggesting ways and means of improving performance.
• Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the organization.

CHARACTERISTICS OF PLANNING

CHARACTERISTICS OF PLANNING

1. Planning is goal-oriented.

• Planning is made to achieve desired objective.
• The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.
• Planning identifies the action that would lead to desired goals quickly & economically.
• It provides sense of direction to various activities.

2. Planning is looking ahead.

• Planning is done for future.
• It requires glancing in future, analyzing it and predicting it.
• Planning is based on forecasting and also synthesis forecasts.
• It is a mental preparation for things to happen in future.

3. Planning is an intellectual process.

• Planning is a mental exercise involving creative thinking, sound judgement and imagination.
• It is not a mere guesswork but a rotational thinking.
• Planning is always based on goals, facts and considered estimates.

4. Planning involves choice & decision making.

• Planning essentially involves choice among various alternatives.
• Therefore, if there is only one possible course of action, there is no need planning because there is no choice.
• Thus, decision making is an integral part of planning.
• An administrator is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.

5. Planning is the primary function of organization

• Planning lays foundation for other functions of organization.
• It serves as a guide for organizing, staffing, directing and controlling.
• All the functions of management are performed within the framework of plans laid out.
• Therefore planning is the basic or fundamental function of management.

6. Planning is a Continuous Process.

• Planning is a never ending function due to the dynamic environment.
• Plans are also prepared for specific period of time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions.
• Planning never comes into end till the organization exists, issues and problems may keep cropping up and they have to be tackled by planning effectively.

7. Planning is General.

• It is required at all levels of management and in all departments of enterprise.
• Of course, the scope of planning may differ from one level to another.
• The top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in departmental plans and the lower level plans implementation of the same.

8. Planning is designed for efficiency.

• Planning leads to accomplishment of objectives at the minimum possible cost.
• It avoids wastage of resources and ensures adequate and optimum utilization of resources.
• Planning must lead to saving of time, effort and money.
• Planning leads to proper utilization of men, money, materials, methods and machines.

9. Planning is Flexible.

• Planning is done for the future.
• Since future is unpredictable, planning must provide enough room to cope with the changes in customer’s demand, competition, and govt. policies etc.
• Under changed circumstances, the original plan of action must be revised and updated to make it more practical.

PLANNING

PLANNING

Meaning and Concept of Planning

In simple words, planning is deciding in advance what is to be done, when where, how and by whom it is to be done. Planning bridges the gap from where we are to where we want to go. It includes the selection of objectives, policies, procedures and programmes from among alternatives. A plan is a predetermined course of action to achieve a specified goal. It is an intellectual process characterized by thinking before doing. It is an attempt on the part of administrator to anticipate the future in order to achieve better performance. Planning is the primary function of management.

Definition

Planning is the French word `prevoyance', which means to look ahead.  According to Pfiffner and Presthus planning is a rational process characterized of all human behavior."

According to Dimock and Dimock "Planning is an organized attempt to anticipate and to make rational arrangement for dealing with future problems by projecting trends."

According to Simon, Smithburg and Victor A. Thomson: "Planning is that activity that concern itself with proposal for future, evaluation of alternative proposals and with method by which these proposals may be achieved”.

According to Allen, “A plan is a trap laid to capture the future.”

STEPS IN PLANNING / PLANNING PROCESS

Planning involves following steps:

1.  Recognizing the Need for Planning

This precedes planning and starts with intention of either solving problem or to attain some objectives. Organizations have need for planning to use scarce resources efficiently, and make best use of opportunities and prepare for threats. This is because plans are considered as future course of action. The organizations have to look ahead to solve their problems.

22. Establishment of objectives

• Planning starts with the setting of goals and objectives to be achieved.
• Objectives provide a foundation for undertaking various activities as well as indicate direction of efforts.
• Moreover objectives focus the attention of administrators on the end results to be achieved.
• As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.
• As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, etc. But such an objective cannot be stated in quantitative terms like performance, effectiveness of personnel manager. Such goals should be specified in qualitative terms.
• Hence objectives should be practical, acceptable, workable and achievable.

3. Establishment of Planning Premises

• Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations.
• It is to find out what obstacles are there in the way of business during the course of operations.
• Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.
• Planning premises may be internal or external. Internal includes financial matters, management of labor relations, philosophy of management, etc. Whereas external includes socio- political and economic changes. Internal premises are controllable whereas external are non- controllable.

4. Choice of alternative course of action

• When forecast are available and premises are established, a number of alternative course of actions have to be considered.
• For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization.
• The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made.
• After objective and scientific evaluation, the best alternative is chosen.

5. Formulation of derivative plans

• Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
• Secondary plans will flow from the basic plan. These are meant to support and expedite the achievement of basic plans.
• These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.
• Derivative plans indicate time schedule and sequence of accomplishing various tasks.

6. Securing Co-operation

• After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.
• The purposes behind taking them into confidence are:

• Subordinates may feel motivated since they are involved in decision making process.
• The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.
• Also the employees will be more interested in the execution of these plans.

7. Follow up/Evaluation of plans

• After choosing a particular course of action, it is put into action.
• After the selected plan is implemented, it is important to evaluate its effectiveness. This is done on the basis of feedback or information received from departments or persons concerned.
• This enables the administration to correct or modify the plan.
• This step establishes a link between planning and controlling function.
• The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic.

HURDLES FACED DURING EFFECTIVE DECISION MAKING

HURDLES FACED DURING EFFECTIVE DECISION MAKING

Effective decision making is an art which obviously cannot be earned overnight, hence, needs to be nurtured in time. However, even an efficient leader cannot remain unaware to certain hurdles which show his decision making capacity. An effective decision has positive effects on all the departments, and equal damage is caused by an ineffective decision. Hence, he has to remain vigilant about the repercussions caused by his decisions.

As a professional as well as an individual, we face many situations in our professional as well as personal lives, wherein it is quite tough to take a decision. A careful study of various hurdles faced will lead you to take effective and better decisions in future.

Following are typical barriers faced by an administrator while developing strategies.

1.      Level of Decision Making Not Clear

Sometimes, there is ambiguity in the level of power an administrator holds, whether he holds the right to make modifications in the existing system. This often leads into confusion in the minds of the administrator, especially at a middle level.

2.      Less Know-how

One of the most common barriers in decision making is not knowing how to make a decision in the first place. It may seem strange, but many people do not know how specifically they actually make decisions, or they use different decision making strategies in different circumstances without realizing it.

3.      Taking Help

Life numbing barriers in decision making is the idea of allowing someone else to make the decision for you. This occurs in a more subtle form when people wait for things to happen as opposed to making them happen. It allows people not to have to take responsibility for themselves and for what occurs.

4.      Faulty models

Some of the available decision making models are themselves decision making barriers. The models may seem rational and sensible but they may not necessarily reflect how humans actually make decisions. With the result that after a few poor decisions, the decision-maker loses confidence and makes decisions reluctantly, if at all.

5.      Lack of Time

Quick decisions often lead to terrible effects. However, institutions are subject to emergencies and often, as a decision making authority, you need to take a call in the limited time available. This can pose as a most difficult hurdle to most leaders, however an efficient leader has to go through these testing times.

6.      Lack of reliable data

Lack of reliable data can be a major hindrance in making apt decisions. Unclear and incomplete data often makes it difficult for them to make appropriate decision, which may not be best suited for any organization.

7.      Risk-Taking Ability

Any decision attracts a fair deal of risk of resulting into negative outcome. However, it is necessary to take calculated risks for an effective decision. Also, at the same time, casual attitude and completely ignoring risks will not result into taking appropriate decisions.

8.      Too Many Options

A leader can be in a problem if there are too many options to an effective solution. Finding the appropriate one can be very difficult, especially if a particular decision favors a department over the other.

9.      Inadequate Support

A leader, however good he may be, cannot work without an adequate support level from his subordinates. Lack of adequate support either from top level or grass root level employees may result into a great jeopardy for the leader.

10.  Lack of Resources

An administrator may find it difficult to implement his decisions due to lack of resources- time, staff, and equipment. In these cases, he should look out for alternative approaches which fit in the available resources. However, appropriate steps must be taken in case he feels that lack of resources may stop the growth of the organization.

11.  Inability to Change

Every organization has its own unique culture which describes its working policies. However, some policies are not conducive for leaders who are looking out for a change. Rigid mentality of top level management and the subordinates are the biggest hurdle, wherein a leader cannot make positive amendments even if he wishes to do so.

HOW TO OVERCOME THESE HURDLES

Problems often compel administrators to act in rush before the facts are known and often before the actual primary problem is recognized or understood. A knowledge of these barriers will assist you in your attempts to analyses problem situations and make reasoned decisions. 

In case you are a member or leader of any decision making group, you would like to overcome these hurdles. Here are several strategies to overcome these barriers: 

·         Leaders can encourage each member to be a critical elevator or various proposals. 

·         When individuals are given a problem to solve, leaders can refrain from starting their own position and instead encourage open enquiry and impartial searching of a wide range of alternatives. 

·         The organization can give the same problem to two different independent groups and compare the resulting solutions. 

·         Before they reaches a final decision, members can be required to take a respite at intervals and seek advice from other wings of the organization before returning to make a decision. 

·         Outside experts can be invited to group meetings and encouraged to challenge the views of group members. 

·         At every meeting, one member could be appointed as a devil's advocate to challenge the testimony of those advocating the majority position. 

·         When considering the feasibility and effectiveness of various alternatives, divide the employees into two sections for independent discussions and compare results. 

·         After deciding on a preliminary consensus on the first choice for a course of action, schedule a second meeting during which members of the group express their remaining doubts and rethink the entire issue prior to finalizing the decision and initiating action.