Limitations of planning

Correct answer: A. Planning may be affected by external uncontrollable events

Curfew is an external event beyond company control. In exams connect sudden restriction with external limitation.

Correct answer: B. Planning may create rigidity

Fixed rules can reduce flexibility. In exams failure to meet a special customer demand indicates rigidity.

Correct answer: C. Planning can be time consuming

Planning often involves collecting information, evaluating alternatives, forecasting demand, consulting people, and obtaining approvals. These activities can improve decisions, but if the process becomes excessively long, the business may lose the opportunity to act before competitors. In the situation described, the survey delay allowed the competitor to launch first, so the relevant limitation is that planning can be time consuming. Option C is therefore correct. Options A, B, and D describe possible functions or effects of planning, but none explains the loss caused by delay in completing the planning process. Efficient planning should balance thoroughness with timely action.

Correct answer: D. The plan may become unrealistic

Ignoring real conditions can make implementation difficult. In exams connect ground reality with practical planning.

Correct answer: A. Planning may limit creativity

A rigid plan can reduce new ideas. In exams not giving a better idea shows creativity limitation.

Correct answer: B. Planning may be affected by government policy changes

A business plan is prepared within an external environment that includes laws, regulations, taxes, trade restrictions, and government policies. A sudden change in import rules can increase the cost of raw materials, delay supplies, restrict availability, or make the planned source unusable. The original plan may therefore need revision even if the internal calculations were reasonable. Option B is correct because it identifies dependence on government policy and the uncertainty of the external environment. Option A is false because planning cannot guarantee profit. Options C and D are definitions of unrelated activities or documents, not explanations of regulatory impact.

Correct answer: C. Planning can be costly

Data and software expenses increase planning cost. In exams write high planning tools cost as costly planning.

Correct answer: D. Plan based on wrong or weak assumptions

Planning is based on assumptions and wrong assumptions weaken it. In exams focus on the word assumption.

Correct answer: A. Planning does not guarantee success

A plan gives direction but does not make success certain. In exams connect despite planning failure with no guarantee.

Correct answer: B. When employees only wait for instructions

Only waiting for instructions shows lack of initiative. In exams connect initiative with self action.

Correct answer: B. Planning is affected by a changing economic environment

A sudden increase in fuel cost is a change in the external economic environment. Since the company had fixed its prices in advance, the rise in costs can disrupt its plan. Hence, planning is affected by a changing economic environment. Option A is incorrect because planning supports decision-making; it does not eliminate it. Exam tip: Changes in costs, inflation, interest rates, or taxes usually indicate changes in the economic environment.

Correct answer: D. Planning can consume time and energy

Too many meetings can slow work. In exams connect excessive meetings with time consuming planning.

Correct answer: A. Planning is difficult in a dynamic environment

A changing environment can reduce the usefulness of a plan. In exams connect irrelevant plan with dynamic environment.

Correct answer: B. Planning may create rigidity and delay

The governing concept is that planning can become rigid and time-consuming when authority for every change is concentrated at the top. If lower-level managers must wait for senior approval, they cannot respond quickly to market developments, operational problems, or new opportunities. This creates delay in decision-making and may also make the plan inflexible. Therefore, option B is correct because it combines both effects described in the question. Option A is incorrect because planning cannot guarantee profit; option C is unrelated to planning, and option D is not an automatic result of planning. Decentralised authority and periodic flexibility can reduce this limitation.

Correct answer: C. Dependence on old information can weaken planning

Old information may not show changing preferences correctly. In exams connect old survey with weak information base.

Correct answer: D. Incomplete forecasting and uncertainty

Sudden breakdown cannot be fully fixed in advance. In exams connect missing emergency expense with uncertainty.

Correct answer: A. Planning may become difficult in practical implementation

A complex plan can be difficult to implement. In exams connect complex report with implementation difficulty.

Correct answer: B. Change in legal environment

The governing concept is that planning is affected by changes in the external business environment. A new government standard is a legal or regulatory requirement, so the organisation must alter its packaging plan to remain compliant. The cause is therefore a change in the legal environment, not an internal routine event. Option B is correct because government standards are created through laws, rules, or regulations and can force businesses to revise existing plans. Employee leave and salary payment are internal personnel or financial matters and do not explain a compulsory packaging change. A company picnic is irrelevant. The example also shows why plans cannot always remain fixed when the external environment changes.

Correct answer: C. Planning may involve expense on research and expert advice

The direct answer is option C: planning may involve spending on research and expert advice. Planning is not free because managers often need market surveys, technical studies, forecasts, consultants and specialist opinions before choosing a course of action. The reasoning is: first, information is collected; second, that information is analysed; third, experts may be hired; therefore planning can create costs. Option A is wrong because planning does not happen without expense. Option B is wrong because planning cannot make every business expense zero; it may even require additional spending. Option C is correct because research and expert advice are genuine planning expenses and show its cost-related limitation. Option D is wrong because planning is a managerial thinking and decision process, not merely a spoken order. A useful exam cue is: research, surveys, consultants and expert advice mean planning cost.

Correct answer: D. Planning does not guarantee success

A decision may be wrong despite planning. In exams treat wrong location as an example of no guarantee.

Correct answer: A. Individual initiative may reduce

The same method can limit individual thinking. In exams write same method for all as initiative reduction.

Correct answer: A. Planning cannot make future demand fully certain

The correct answer is that planning cannot make future demand completely certain. Production matched the planned quantity, but demand doubled unexpectedly; this shows uncertainty in the business environment and future conditions. Creating departments is an organising function, while salary payment and accounting records are not limitations of planning. Exam tip: Link words such as “sudden”, “uncertain”, or “change in demand” with limitations of planning.

Correct answer: C. Planning may reduce creativity

Overdependence on checklists can reduce new thinking. In exams not thinking of a new solution shows creativity limitation.

Correct answer: D. Planning may be rigid and time consuming

Many approvals create delay and rigidity in decisions. In exams write multiple approvals as rigidity and delay.

Correct answer: A. Planning may be affected by changing customer habits

Customer payment habit is part of market environment. In exams connect digital payment shift with dynamic environment.