Limitations of Planning
1. Planning leads to rigidity: most of the times planning leads to rigidity I n functioning because it is not easy to make changes in them. When the circumstances change, following the pre-decided plan may no be in the interest of the organization.
2. Planning may not work in dynamic environment: Business environment is dynamic. The organization has to constantly adapt itself to the changes. For example, if economic policies are modified, or political conditions change, or there is a natural calamity. All these changes may not be predicted by planners and so there may be an obstacle to effective planning.
3. Planning reduces creativity: Planning is an activity done by the top management. Rests of the members just implement it. They are not permitted to deviate from the plans. So the creativity in them gets lost. For them, there is nothing new or innovative.
4. Planning involves huge cost: planning involves a lot of cost in terms of time, money and accuracy. A lot of calculations are required to be done and professional experts are to be hired in order to plan. When the cost of planning exceeds the value of benefits derived from it, it becomes uneconomical to plan.
5. Planning is time consuming: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.
6. Planning does not guarantee success: The success of an organization depends upon properly drawn plans. Managers generally have a tendency to rely on previously tried and tested successful plan. However, it is not always true that just because a plan has worked before it will work again. It may lead to failure instead of success.


Types of plans
1. Objectives: They are the ends towards which the activities are directed. It is what you would like to achieve. An objective should be:
-Related to a single activity.
-Related to end result and not to the activity performed.
-It should be measurable in quantitative terms.
-It must have a time limit for achievement.
-It must be achievable.
2. Policies: It is an organizational own way of handling a problem. Its general response to a particular situation. They are the guides to thinking and decision making. For example:
· A school’s policy that admissions will be granted to only those applicants scoring minimum 75% marks.
· An organization’s policy of handling complaints within four hours.
3. Procedures: it is the sequence of steps to be followed by employees in different situations. It is the exact manner in which an activity is to be achieved. For example:
-Set up a file for applicants;
-Accept the forms and put them in a file;
-Ask for other certificates to verify marks of students;
-Put those documents into the file;
-Give the file to admission incharge.
4. Rules: They are the directives to do or not to do things, to behave or not to behave in a particular way. They must be strictly followed and if they are not followed, then strict actions can be taken against those who are disobeying the rules. They are spelt out to create an atmosphere of discipline in the organization. For example there can be a rule of no smoking in the organization.
5. Programme: it is a combination of goals, policies, procedures, and rules. They are prepared at different levels. A primary programme is prepared at the top level and then to support the primary plan, supportive programmes at different levels are prepared for smooth functioning of the company.
6. Methods: A method is a systematic way of doing routine and repetitive jobs. It is common way of doing a job so that there is no confusion in the minds of employees and comparisons are possible. For example, method of valuation of stock may be LIFO or FIFO.
7. Budgets: It is the statement of expected result expressed in numerical terms. Most of the times, budgets are financial in nature but it does not mean that company prepares only financial budget. Along with the financial budget, it also prepares capital budget, sales budget etc.