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Planning — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesPlanning1 Mark
Question
“Unforeseen events and changes, rise in costs and prices, environmental changes, governmental interventions, legal regulations, all affect business plan’. In the light of the statement state any three limitations of planning function of management.
✓

Answer

The limitations of planning function of management are:
  1. Leads to rigidity. The existence of a plan puts managerial activities in a rigid framework. Programmes are carried out according to the plan and deviations are considered to be highly undesirable. This attitude makes managers and employees inflexible in their operation. They become more concerned with observance of rules and procedures as laid down in the plan rather than achieving the goals.
  2. Reduces creativity. People in the organisation just implement the plans made by top management. They blindly implement the orders which results in loss of initiative and interest in them. Thus, planning reduces creativity as there is nothing new or innovative.
  3. Involves huge costs. Huge costs are involved in the formulation of plans which may not justify the benefits derived from the plans. Money is spent on incidental costs like expenses on boardroom meetings, discussions with professional experts etc.

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