Limitations of planning

Correct answer: A. Wrong assessment of resource capacity can make the plan impractical

Availability and actual usable capacity can be different. In exams, check both quality and capacity of resources.

Correct answer: B. Decisions may be based on wrong information

Biased information gives wrong forecasting. In exams, link quality of information with success of planning.

Correct answer: C. Compliance failure and need for plan revision

Regulatory changes can force revision of plans. In exams, treat legal environment as an external limitation.

Correct answer: A. Supplier behaviour can create external uncertainty

Supplier delay can disturb the plan's timeline. In exams, write supply side as an external limitation.

Correct answer: B. Departmental cooperation and adaptation may decrease

Rigid departmental targets can weaken coordination in practice. In exams, understand the balance between targets and cooperation.

Correct answer: C. Success does not depend only on planning

Leadership and implementation are also needed along with planning. In exams, write the limitation of no guarantee of success.

Correct answer: D. Uncertainty of economic forecasting

Wrong inflation estimate can disturb the cost plan. In exams, link economic estimates with uncertainty.

Correct answer: A. Excessive formality and time in planning

Excessive paperwork can slow real action. In exams, write the limitation of time and formality.

Correct answer: B. Non-financial risks can increase due to cost targets

Every plan should consider safety and quality, not only cost. In exams, understand the limitation of narrow planning.

Correct answer: C. Missing opportunity due to rigidity

The direct answer is Option C: missing an opportunity due to rigidity. Planning gives a predetermined sequence of activities, but the business environment may suddenly offer a useful opportunity. If employees must complete the old sequence without adjustment, the organisation may be too slow to respond and may lose the opportunity. Option A is wrong because clarity of objectives is generally a benefit of planning and does not describe the missed opportunity. Option B is wrong because staffing means arranging human resources, not explaining inflexibility. Option C is correct because excessive attachment to a fixed procedure reduces flexibility and prevents quick action. Option D is wrong because accounting control concerns recording and checking financial transactions, not responding to sudden market opportunities. Remember: a plan should guide work, but it should also allow suitable changes when conditions change.

Correct answer: D. Local customer response may be wrongly assessed

Local culture affects customer behaviour. In exams, link social environment with limitation of planning.

Correct answer: A. Human behaviour and resistance cannot be fully predicted

Employee insecurity can obstruct implementation. In exams, write the human aspect as a practical limitation.

Correct answer: A. Cash flow planning may be affected

Customer payment behaviour is not fully controllable. In exams, link cash flow with external dependency.

Correct answer: B. Incomplete information and haste will increase chances of error

A hurried plan may be based on a weak foundation. In exams, write the role of information and analysis.

Correct answer: C. Planning being affected by ignored technological risks

Technological risks can affect planning both externally and internally. In exams, link technology with changing environment.

Correct answer: A. Rigidity of planning

Ignoring external signals can make a plan blind. In exams, link rigidity with practical decision-making.

Correct answer: B. Because they may stick to the old plan due to fear of poor appraisal

Fear of appraisal can create behavioural rigidity. In exams, understand the relation between human behaviour and rigidity of planning.

Correct answer: D. Large loss due to wrong forecasting

Wrong estimation of risk can make investment decisions dangerous. In exams, understand forecasting and investment together.

Correct answer: A. The plan may be affected by a narrow approach

Only short-term goals can cause long-term loss. In exams, write the importance of a balanced view.

Correct answer: C. Wrong data can create a wrong plan

Unverified data can reduce the quality of planning. In exams, focus on reliability of information sources.

Correct answer: D. Planning is useful, but its effectiveness may be limited by assumptions, cost, rigidity, human behaviour and external uncertainty

Planning is important but not a complete solution. In exams, give a balanced analysis of benefits and limitations.

Correct answer: A. Rigidity of planning

The correct answer is rigidity of planning. A plan becomes rigid when managers continue following it despite changing conditions or continuing losses merely because it was decided earlier. Improved coordination and clarity of objectives are advantages of planning, while cost of planning refers to the expenditure involved in preparing plans. Exam tip: If a plan cannot be revised according to changed circumstances, identify rigidity as the limitation.

Correct answer: B. Incorrect forecasting of customer behaviour

The correct answer is incorrect forecasting of customer behaviour. The plan assumed that every customer would use online payment, but the actual preference in the rural market was for cash. This shows that planning relies on forecasts about future conditions and consumer behaviour, which may not always be accurate. Option A refers to the cost of planning, whereas the issue here is an inaccurate forecast. Exam tip: When actual market behaviour differs from a plan’s assumption, identify it as a forecasting error.

Correct answer: C. Time-consuming process can reduce opportunity

Extensive research and report preparation may delay decision-making. If market conditions change in the meantime, the information used for planning can become outdated and business opportunities may be lost. Therefore, option C is correct. Research itself is not useless; the limitation is the time-consuming nature of the process. Exam tip: Link this limitation of planning with ‘time-consuming process’ and a ‘changing business environment’.

Correct answer: D. Narrow targets can cause long-term loss

Purely number-based targets can ignore quality. In exams, write the importance of balanced planning.