Ministry Draws up Plan to Turn Around SEB's by 2008
To give a boost to the financial health of state electricity boards (SEBS), the power ministry has outlined an 11-point agenda to initiate their financial turnaround by 2007-08. Suggestions include changes= in the way distribution utilities submit tariff fixation petitions to the regulators and introduction of the concept of a proper timebound business plan. The ministry has asked all utilities to adopt a multi-year tariff approach while filing the next tariff petition for 2007-08 before the state regulator. This must be undertaken before December 2006. It has also asked utilities to have a state approved business plan with identifiable goals for a three, six and twelve month period. Also, approval needs to be sought from the state regulator for automatic tariff adjustment to recover additional fuel and other unanticipated costs.
Inspite of the pre-planning of the power ministry SEB's may not achieve the outlined goals Explain why?

Explanation

Inspite of best planning, an organisation may not be able to achieve its goals because of the following reasons
(i) Planning does not guarantee success Success of planning rests on its implementation Lack of proper implementation may lead to failure of planning. Even if a plan has worked earlier, it may not work again due to changes in the external environment
(ii) Planning does not work in dynamic environment Business environment consists of social, economic legal and other factors that keep on changing The organisation has to adapt itself to such changes But planning cannot assess future trends exactly and thus fails in a dynamic environment