What are the primary arguments directed at formal planning?

Answer 1

1. Planning may create rigidity. Formal planning efforts can lock an organization into specific goals to be achieved within specific timetables. When these goals were set, the assumption may have been that the environment wouldn't change during the time period the goals covered. If that assumption is faulty, managers who follow a plan may face trouble. Rather than remaining flexible-and possibly throwing out the plan-managers who continue to do the things required to achieve the original goals may not be able to cope with the changed environment. Forcing a course of action when the environment is fluid can be a recipe for disaster.
2. Plans can't be developed for a dynamic environment. Most organizations today face dynamic environments. If a basic assumption of making plans-that the environment won't change-is faulty, then how can you make plans at all? Today's business environment is often chaotic, at best. By definition, that means random and unpredictable. Managing under those conditions requires flexibility, and that may mean not being tied to formal plans.
3. Formal plans can't replace intuition and creativity. Successful organizations are typically the result of someone's innovative vision. But visions have a tendency to become formalized as they evolve. Formal planning efforts typically involve a thorough investigation of the organization's capabilities and opportunities and a mechanical analysis that reduces the vision to some type of programmed routine. That approach can spell disaster for an organization. For example, the rapid growth of Apple Computer in the late 1970s and throughout the 1980s was attributed, in part, to the innovative and creative approaches of one of its co-founders, Steven Jobs. As the company grew, Jobs felt there was a need for more formalized management-something he was uncomfortable doing. He hired a CEO who ultimately ousted Jobs from his own company. With Jobs's departure came increased organizational formality, including detailed planning-the same things that Jobs despised so much because he felt that they hampered creativity. By the mid-1990s, Apple, once an industry leader, was struggling for survival. The situation became so bad that Jobs was brought back as CEO to get Apple back on track, which he eventually did by refocusing on innovation.
4. Planning focuses managers' attention on today's competition not on tomorrow's survival. Formal planning has a tendency to focus on how to best capitalize on existing business opportunities within an industry. It often doesn't allow managers to consider creating or reinventing an industry. Consequently, formal plans may result in costly blunders and high catch-up costs when other competitors take the lead. On the other hand, companies such as Intel, ABB (Asea Brown Boveri), and Sony have found success from forging into uncharted waters, spawning new industries as they go.
5. Formal planning reinforces success, which may lead to failure. Success breeds success. That's an "American tradition." If it's not broken, don't fix it, right? Well, maybe not! Success may, in fact, breed failure in an uncertain environment. It's hard to change or discard previously successful plans-to leave the comfort of what works for the anxiety of the unknown. Successful plans, however, may provide a false sense of security, generating more confidence in the formal plans than is warranted. Many managers will not face the unknown until they're forced to do so by environmental changes. By then, it may be too late!

Source: http://gmx.xmu.edu.cn/ews/business/management/chapter07.htm (2012, June, 26)