Limitations of planning:

1. Uncertain future:

• Planning is based on assumptions and forecasting i.e. it talks about future. But, no one knows future and so it is uncertain.
• So, one may make assumptions and frame plans based on these assumptions. But it should be well noted, that assumptions can be wrong. Hence, uncertainties prevail in planning.

2. Expensive process:

• In a large unit, experts are engaged in the planning function.
• Since these experts are highly experienced and knowledgeable they charge high consultation fees for assisting in framing the plans.
• While planning several resources are also to be gathered like holding meetings, conducting surveys, gathering data and performing analysis, etc. All these activities require .time, effort and money. Hence, planning incurs huge expenses to the unit.

3. Time-consuming: Planning involves collection of necessary information, its classification, analysis and interpretation to decide alternatives for the business. Thus it is a lengthy and time-consuming process.

4. Planning is irrelevant:

• Although planning is extremely important but future is uncertain. There are chances of changes in government policies, tax slabs, price, demand, supply, etc.
• Any major change can fail even a solid plan and hence planning becomes irrelevant in such a situation.

5. Tends to be rigid:

• Planning is done keeping future in mind. Now, if an adverse situation occurs in the future, managers or employees avoid taking risk,of deviating from the plan and making changes as per the new market situation.
• They stick to the plan i.e. remain rigid for making changes.

6. Uncertainty of external factors: Business units are affected by external factors which keep on changing. This hinders the success of planning.

7. Incomplete information:

• Collecting necessary information is the pre-condition of the planning process.
• If a plan is formulated and implemented on the basis of incomplete and unclear information then it may not give the desired result.

8. Restricts creativity of employees:

• A plan is formed by manager but implemented by the employees (or say workers) of the business unit.
• Although employees have creativity and experience about the processes of the business unit they do not have the authority to make changes in the plan. Thus planning restricts the creativity of employees.

9. Use of faulty methods: While deciding assumptions and estimates for a plan, the planners make use of different mathematical and statistical methods. If these methods or information are faulty or say inappropriate, there are chances that the unit may take a wrong decision. This may fail the plan.

10. Other limitations: Over and above these limitations, many other factors that affect planning are changes in technology, prejudice of planner, ignorance of facts, problem of leadership, etc.