Question

Explain the following limitation of planning :
(ii) Planning involves huge costs

Hint:

Planning costs include money spent on R&D and professional data analysis. Time is a hidden cost; too much planning can lead to "Analysis Paralysis." Planning is only useful if it adds more value than the cost spent on it.

Answer 1

Step 1: Identify the concept being tested.
The question asks how planning involves huge costs, another well known limitation of planning.
Step 2: Explain the concept.
Planning is not a cost-free exercise, it needs the organisation to gather large amounts of data and information before any plan can even be drawn up.
Step 3: Explain the different costs involved.
Companies often hire outside experts and consultants to prepare detailed plans, and such experts charge heavy fees. On top of this, a great deal of time and money is spent in meetings, discussions and market surveys, and the cost of verifying the accuracy of the data collected can itself be considerable.
Step 4: Final answer.
Planning involves huge costs because it requires expensive data collection, expert or consultant fees, and considerable time and money spent on meetings and surveys, and management must ensure these costs do not outweigh the benefits of the plan.