Question

‘Bawa Cycles’ was in the business of manufacturing racing-cycles and had a monopoly in the market. The business was doing very well and the company was consistently meeting its objective of 10% increase in sales every year. Encouraged by the good track record, the Managing Director of the company kept an ambitious target of 15% increase in sales for the next year. The same year two competitors also entered the market and because of this, the company was not able to meet its target. Identify the limitation of one of the functions of management because of which the company was not able to achieve its target

Answer 1

The company was not able to meet its target as planning does not work in a dynamic environment. Nothing is constant in a business environment; it is dynamic in nature. As a business environment is dynamic in nature and keeps on changing as and when new competitors enter the market, planning may not prove to be fruitful in such cases. This is because planning cannot foresee such sudden changes in the business. This may lead to failure in the accomplishment of objectives. An organisation must adapt its functioning to the changing environment; a long-term planning will make this dynamic environment less effective.