Question

Atul Sharma was the Chief Executive Officer of a footwear company, ‘Stepone Footwear’. The company manufactured innovative and comfortable footwear for all age groups. Atul Sharma was known for meticulous planning. He ensured that the goals and objectives of the company are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. Before each season, ‘Stepone Footwear’ carefully analysed market trends, customer preferences and production schedules. This analysis enabled the company to look ahead and anticipate changes and develop managerial responses, wherever necessary. As a result, they were able to consistently deliver innovative and comfortable shoes to the market.

During one season, there was a sudden surge in demand for eco-friendly shoes. ‘Stepone Footwear’ had already planned their production for the year with specific goals to be achieved within a specific time frame. The managers of ‘Stepone Footwear’ did not have the flexibility to change the plan to cope with the changed circumstances. Another shoe company ‘Eco Step’ quickly adapted and started manufacturing comfortable eco-friendly shoes. By not being able to adjust to the rapidly changing market, ‘Stepone Footwear’ faced inventory surplus while ‘Eco Step’ emerged as a market leader in sustainable eco-friendly footwear.

Quoting lines from the above paragraph, identify and explain two benefits and two limitations of ‘Planning’ function of management discussed in the above case. 

Answer 1

According to the paragraph, the 'planning' function of management provides the following benefits:

1. He ensured that the goals ................. in which direction.
   Planning provides directions: Planning ahead of time provides a clear path for activity. It outlines employee responsibilities, timing, methods, and accountability. When employees are aware of their responsibilities, departments and individuals may work together effectively.
2. This analysis enabled ................. shoes to the market.
   Planning encourages innovative ideas: Planning is an intellectual process that involves generating new ideas through creativity, invention, and foresight. New concepts can become solid programs. Effective planning is crucial for business growth and prosperity, making it the most complex job for management.

The paragraph highlights the limitations of management's planning function.

1. The manager of 'Stepone Footwear' ................ circumstances.
   Planning leads to rigidity: In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This kind of rigidity in plans may create difficulty. Managers need to be given some flexibility to be able to cope with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest. 
2. Another shoe company ................ eco-friendly footwear. 
   Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity. Competition in the market can also upset financial plans, sales targets may have to be revised and, accordingly, cash budgets also need to be modified since they are based on sales figures. Planning cannot foresee everything and thus, there may be obstacles to effective planning.