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CSEET · Business Laws and Management · Functions of Management

A company's plan sets a yearly target, but a sudden change in government import duty makes the plan unworkable, and the manager refuses to alter it, saying planning is binding. Which limitation of planning is most directly illustrated?

The case shows the limitation that planning leads to rigidity and may not work in a dynamic environment. The manager sticks to a fixed plan even after an import duty change makes it unworkable, instead of revising it to suit the new conditions.

  1. APlanning leads to rigidity and may not work in a dynamic environmentCorrect
  2. BPlanning is a costly exercise
  3. CPlanning reduces creativity by encouraging initiative
  4. DPlanning involves no forecasting of the future

Explanation

Rigid adherence to a plan despite a changed environment is the limitation that planning may not work in a dynamic environment. Cost is a separate limitation not shown here. Planning does not encourage initiative to reduce creativity, and it does involve forecasting.

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