"Is planning actually worth the huge cost involved?" Explain.
There are various limitations with planning that could lead to huge costs :
(i) Time consuming process: Planning involves a significant amount of time and effort to collect and analyse information, find relevant alternatives and ideas along with allocating relevant resources for implementing business projects. Any emergency which is unaccounted for during the planning process may cause undue delay in operations.
(ii) Does not work in a dynamic environment: Unexpected changes in tastes, preferences, fashion, etc. may affect the sales forecasts projected during planning. To incorporate these changes, more study, time and effort would be required for planning.
(iii) Huge process costs: This involves a huge investment of money on managers for the time and effort spent in planning. These managers collect and analyse information as well as allocate resources for implementation of projects.
(iv) Strategies of competitors: Plans become ineffective due to policies or strategies were undertaken by competitors. Competitors can come up with newer or better products or marketing strategies due to which businesses can face lower demand and sales.
(v) Technological changes: Any technological change in the form of a new discovery, invention and innovation cannot be incorporated in an already formulated plan as planning is not dynamic in nature. To incorporate these changes, thorough research is required to evaluate the feasibility of the technological changes for an organisation thus making the planning process expensive.