Limitations of planning

Correct answer: C. Single dependence and external risk weaken the plan

Dependence on one partner reduces alternatives. In exams connect courier strike with external risk and no alternative.

Correct answer: A. Planning may make decisions highly centralised and slow

Sending every problem to head office stops local response. In exams write centralisation delay as rigidity limitation.

Correct answer: C. Planning may be affected by changing price sensitivity

Price sensitivity is a changing signal of market behaviour. In exams write cheaper alternative preference as dynamic demand.

Correct answer: C. Planning may become rigid against external educational changes

Material should change when the question pattern changes. In exams treat external syllabus change as dynamic environment.

Correct answer: A. Planning may limit experiments and innovation causing competitive loss

Stopping experiments reduces innovation and competitiveness. In exams write no experimentation plus competitor innovation as creativity limitation.

Correct answer: B. Planning is affected by uncertainty in cash assumptions

Customer payment timing is not under full control. In exams treat payment delay as assumption uncertainty.

Correct answer: A. Rigidity because predetermined rules may reduce flexibility in changing situations

Predetermined rules can reduce flexibility so this is the correct match. In exams read the reason carefully in matching questions.

Correct answer: B. Departmental targets may become rigid and harm the overall interest

The governing concept is the need to balance departmental specialization with organizational coordination. Separate targets can help managers measure performance, but they may also encourage each department to protect its own result instead of supporting the complete customer journey. For example, sales may promise speed, production may prioritize volume, and service may follow a different standard. If these targets conflict, the customer experiences gaps and the organization’s overall interest suffers. Option B is correct because it identifies rigidity and subordination of the common goal to departmental goals. A, C, and D are either false or absolute.

Correct answer: B. Narrow cost planning increases quality risk

The governing concept is that planning should consider several organizational objectives together rather than pursuing one cost measure in isolation. Replacing trained staff may reduce the wage bill initially, but it can also remove experience, increase mistakes, require retraining, and lower product or service quality. The short-term saving may therefore create larger long-term costs through rework, complaints, returns, or lost customers. Option B is correct because it describes the risk of narrow cost-based planning. Option A ignores trade-offs, C makes an unjustified generalization, and D wrongly claims that planning itself never values quality. The problem is the unbalanced priority, not cost control in every situation.

Correct answer: B. Cost and information error

The governing concept is that planning quality depends on both economical use of resources and reliable information. An expensive consultancy report creates a direct planning cost, but its value is further reduced when the consultant misunderstands local customers, competition, or distribution conditions. Management may then make decisions using inaccurate assumptions, producing a double disadvantage: resources are spent and the resulting information is unreliable. Option B is correct because it captures both the financial burden and the information error. Options A, C, and D name organizational areas that are not established by the facts. External advice can be useful, but it must be checked against local evidence and costs.

Correct answer: D. Uncertainty of the regulatory environment

The governing concept is that an organization must plan within an external regulatory and legal environment. A regulator’s inspection can reveal non-compliance and require production to stop, even if internal production targets and schedules appeared realistic. Because the timing and consequences of external enforcement may not be fully controlled by the firm, the plan should include compliance checks, required approvals, and contingency time. Option D is correct because it identifies uncertainty in the regulatory environment. A concerns staffing, B concerns communication with customers, and C concerns presentation of goods; none explains a regulator-induced shutdown. Planning cannot remove legal obligations.