The Manager, Mr. Rehman, strictly adheres to the organisational plan that lays down a maximum of 10 $%$ discount to be offered to customers on sale of goods. But Mr. Rehman could not provide a 10.5 $%$ discount on a large order to an old customer Mr. Ram when he demanded a discount. The firm lost the large order and hence incurred losses.

(i) Which two limitations of planning are reflecting here?

(ii) How can this limitation be overcome?

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Solution

(i) The two limitations are :

(a) The first limitation of planning portrayed by Mr. Rehman is that planning can create rigidity which limited or restricted Mr. Rehman to make some changes in the policy for their old customer Mr. Ram.

(b) The second limitation is that planning can reduce creativity and stifled initiative that restricted Mr. Rehman’s freedom or initiative to be creative and flexible and provide 10.5 $%$ discount to Mr. Ram as he was an old customer.

(ii) Limitations could be overcome if :

(a) The policy could have been made flexible during its preparation process. During the preparation time, the management should have used foresight and made an exception for older customers subject to following some conditions.

(b) Accordingly, Mr. Rehman could have been empowered wherein he could be able to negotiate the terms and provided a discount to Mr. Ram while avoiding potential losses.

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