Question
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 huge amount of money had already been devoted to the predecided plan. It caused losses to the company.
Explain any two limitations of planning highlighted in the above case. Also, quote the lines from it.
Solution
- ‘XYZ ltd. has devoted a lot of time and money to its plan.’
Planning is a time consuming process. It also involves huge costs. - ‘The competition starts increasing, so it could not change its plan to beat its competitors because huge amount of money had already been devoted to the predecided plan.’
Planning leads to rigidity. Following a pre-decided plan, when circumstance change,may not turn out to be in the organisation’s interest.
