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Planning — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesPlanning6 Marks
Question
State any three advantages and any two limitations of ‘Planning’.
✓

Answer

Advantages of Planning:
  1. Planning provides Direction: Under the process of planning the objectives of the organisation are defined in simple and clear words. The obvious outcome of this is that all the employees get a direction and all their efforts are focussed towards a particular end. In this way, planning has an important role in the attainment of the objectives of the organisation.
  2. Planning reduces Risks of Uncertainty: Planning is always done for future and future is uncertain. With the help of planning, possible changes in future are anticipated and various activities are planned in the best possible way. In this way, the risk of future uncertainties can be minimised.
  3. Planning reduces Overlapping and Wasteful Activities: Under planning, future activities are planned in order to achieve objectives. Consequently, the problems of when, where, what and why are almost decided. This puts an end to disorder and suspicion. In such a situation coordination is established among different activities and departments. It puts an end to overlapping and wasteful activities.
Limitations of Planning:
  1. Planning Creates Rigidity: Although the quality of flexibility is inherent in planning, but it must be admitted that only small changes are possible. Big changes are neither possible nor in the interest of the organisation. Since it is not possible to introduce desired changes according to the changed situations, the organisation loses many chances of earning profits.
  2. Planning does not work in a Dynamic Environment: Planning is based on the anticipation of future happenings. Since future is uncertain and dynamic, therefore, the future anticipations are not always true. Therefore, it can be said that planning does not work in dynamic environment.

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