Alpha Ltd. has a plan of increasing profit by 20%. The company spent lot of time and money to frame and implement this plan. The competition starts increasing, so it could not modify its plan to beat its competitors because huge amount of money is already spent. The plan failed and company suffered huge loss.
State any two limitations of planning.

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Solution

limitations of planning-
Planning Creates Rigidity
Planning involve huge cost
Planning is time consuming
Planning may not work in dynamic environment

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Beta Ltd. spent a lot of money to hire specialised people for framing their plans and collecting important facts from the environment. The company cut down their cost by canceling the employee's trip for recreation.

The limitation of planning mentioned in the above paragraph.

Q. Alpha Ltd. spent a lot of money to hire specialised people for framing their plans and collecting important facts from environment. The company cut down their cost by cancelling the employee's trip for recreation.
(i) Name the limitation of planning mentioned in above para
(ii) Name the value overlook by management.

Q. The company is negotiating to sell its profitable credit card subsidiary, which it plans to use money from to acquire some of the mortgage-servicing operations that are being sold by troubled savings institutions.

(A) subsidiary, which it plans to use money from

(B) subsidiary, from which it plans to use money

(C) subsidiary, and it plans the use of money from that

(D) subsidiary and plans to use money from that sale

(E) subsidiary and plans the use of money from that sale

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Q. An electronic company is facing a problem of declining market share due to increased competition from other new and existing players in the market. Its competitors are introducing lower price models for mass consumers. Who are price sensitive? For quality conscious consumers company is introducing new model with added features and new technological advancements.
(i) Prepare a model business plan for this company. Specify which type of plan you are preparing.
(ii) Identify the limitations of such plans.
(iii) How will you remove these limitations?

Santo Ltd. has to develop its organisational, plan for the current year and for this purpose they hire professional consultants from the United States. These consultants incurred a lot of money in a collection of facts, figures, surveys, etc., including the salaries of the consultants. This whole process of planning has already proved to be a very costly affair and the eventual total cost may exceed the gains expected from the plan. In addition, the top management did not involve a middle and supervisory level of management during the planning process. These two levels of management are neither allowed to deviate from their plans nor are they permitted to act on their own. They keep thinking along the same lines as others so that nothing new or innovative gets added to the process.

(i) Should Santo Ltd, continue with existing planning with consultants from the United States? Explain with reasons. Also explain, which limitation of planning is reflected in this case?

(ii) Which limitation of planning is reflected when top management does not involve a middle and supervisory level of management during the planning process the above case? What remedial steps can Santo Ltd., take to overcome this limitation?

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limitations of planning-Planning Creates RigidityPlanning involve huge costPlanning is time consumingPlanning may not work in dynamic environment

limitations of planning-
Planning Creates Rigidity
Planning involve huge cost
Planning is time consuming
Planning may not work in dynamic environment