Planning - Class 12 Commerce Business Studies - Extra Questions

A company needs a detailed plan for its new project - construction of shopping mall. What type of plan is it?

Its a programme, because it includes policies, procedures, rules, objective and budget which is all very much essential for the construction of shopping mall.


Describe the characteristics of an ideal plan.

 Certain characteristics that should be a part of any good plan-
1. Clear objective
2. Proper understanding
3. Comprehensive
4. Flexibility
5. Economical


What are the main points in the definition of planning?

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action.
It is rightly said “Well planned is half done”. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.


Why are rules considered to be plans?
(Rules are considered as plans because they are made in advance for smooth functioning of an organisation)

Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. They are usually the simplest type of plans because there is no compromise or change unless a policy decision is taken.


State any two types of plans.

Two types of plans are :-
1.Strategic Plans
2.Tactical Plans


Do you think planning can work in a changing environment?

Planning may not work in a changing environment. The environment consists of a number of dimensions, economic, political, social, legal and technological dimensions. The organisation has to constantly adapt itself to changes. Planning cannot foresee everything and thus, there may be obstacles to effective planning.


What are the key elements in the concept of planning?


Key elements in the concept of planning
Vision,
Values,
Focus areas 
Strategic objectives.


Distinguish between: (i) Policies and objectives (ii) Rules and methods (iii) Policies and procedure

Policies and objectives
  • There is a difference between the objectives and the policies of an organization.While the objectives can be described as the goals that have to be achieved by the organization, on the other hand, policies can be described as the tools that are used for achieving the objectives of the organization. In the same way, another difference that is present between objectives and policies is related to their need for the organization. While objectives can be described as the foundations of the organization and therefore, any organization without an objective is directionless as it will not be aware of the goals that have to be achieved by it and the direction in which it needs to go. On the other hand, policies provide the means that can be used by the organization to achieve these goals. In this way, while policies are essential for achieving the goals of the organization but they are not indispensable.
Rules and methods 
  • Methods are called directly.
  • Specific instances are passed.
  • One call results in a single execution.
  • Rules execute by matching against any data as long it is inserted into the engine.
  • Rules can never be called directly.
  • Specific instances cannot be passed to a rule.
  • Depending on the matches, a rule may fire once or several times, or not at all.

Policies and procedure 
  • Rules and regulation of the business organization are framed in the form of policies. These are the guiding principles of an organization. It should not be confused with procedures, as both are created by top-level management for middle and low-level management. Procedure implies the step by step sequence, for the performance of activity within the organization.
  • Policies are the general statement that sets out the limits within which decisions are taken by the managers and thus assures the consistent performance. On the contrary, procedures, suggest the exact way of performing an activity. It indicates the sequence for handling various business activities.


Name the type of plan which provides directions for all decisions, and actions.

A specific result that a person or system aims to achieve within a time frame and with available resources.
In general, objectives are more specific and easier to measure than goals. Objectives are basic tools that underlie all planning and strategic activities. They serve as the basis for creating policy and evaluating performance. Some examples of business objectives include minimizing expenses, expanding internationally, or making a profit.


What are the steps taken by management in the planning process?

Planning process-
1] Recognizing Need for Action

2] Setting Objectives

3] Developing Premises

4] Identifying Alternatives

5] Examining Alternate Course of Action

6] Selecting the Alternative

7] Formulating Supporting Plan

8] Implementation of the Plan



How does planning reduce the risk of uncertainty?

All business ventures involve some element of risk—the uncertain outcome of meeting your business objectives. Risks are constraints on actions that must be evaluated in order to plan and act effectively. The idea is to reduce, manage and anticipate risk as much as possible.


Name the type of plan which specifies the steps to carry out different activities in a chronological order.

Methods planing - It provides prescribed ways or manner in which a task has to be performed considering the objective


How does planning help coordination, facilitate decision making and promote creativity?

A) Facilitates proper coordination: Often, the plans of all departments of an organization are well coordinated with each other. Similarly, the short-term, medium-term and long-term plans of an organization are also coordinated with each other. Such proper coordination is possible only because of efficient planning.
B) Helps in decision-making: A manager makes many different plans. Then the manager selects or chooses the best of all available strategies. Making a selection or choosing something means to take a decision. So, decision-making is facilitated by planning.
C) Encourages creativity and innovation: Planning helps managers to express their creativity and innovation. It brings satisfaction to the managers and eventually success to the organization.


'Though planning is an important tool of management yet it is not remedy for all types of problems.' Do you agree with this statement? Give any five reasons to support your answer.

Planning is an important tool of management yet it does not remedy for all types of problems because a good plan does not guarantee success, in this dynamic environment it is not easy to stick on one plan, the rigidity of plan will not work in this dynamic environment.
Limitations of planning-
(1) Planning Creates Rigidity
(2) Planning Does Not Work in a Dynamic Environment
(3) Planning Reduces Creativity
(4) Planning Involves Huge Costs
(5) Planning is a Time-consuming Process
(6) Planning Does Not Guarantee Success 


Why is it said that planning is a prerequisite for controlling?

With control, the actual performance of an employee is compared with the plans, and deviations (if any) are found out and corrected. It is impossible to achieve such a control without right planning. Therefore, planning becomes necessary to keep a good control. Therefore planning is a prerequisite for controlling


Explain in detail the steps involved in planning process.

Although the specific steps differ slightly from company to company and depend on which type of plan you're developing, there are general steps that should be taken in order to ensure a good result. The steps in the planning process are:
  • Develop objectives
  • Develop tasks to meet those objectives
  • Determine resources needed to implement tasks
  • Create a timeline
  • Determine tracking and assessment method
  • Finalize plan
  • Distribute to all involved in the process


Explain policies and procedures as types of plans. Differentiate between the two on any four basis.

 Basis Policy Procedures
 Meaning A precise statement which contains the set of principles acting as guidelines for achieving the goals of an organization is known as Policy. The Procedure is a systematic sequence for an activity or task which is predefined by an organization
 Nature Policies are flexible in nature, i.e. they allow exceptional situations. Procedures are rigid in nature.
 Reflects The mission of the organization. The practical applicability of the policies.
 Involves Decision Making Actions
Rules and regulation of the business organization are framed in the form of policies. These are the guiding principles of an organization. It should not be confused with procedures, as both are created by top-level management for middle and low-level management. Procedure implies the step by step sequence, for the performance of activity within the organisation.
Policies are general statement that sets out the limits within which decisions are taken by the managers and thus assures the consistent performance. On the contrary, procedures, suggest the exact way of performing an activity. It indicates the sequence for handling various business activities.


Name the type of plan which defines the parameters in which a manager may function.

Rules- 
Rules are very specific statements that define an action or non-action. Also, rules allow for no flexibility at all, they are final. All employees of the organization must compulsorily follow and implement the rules. Not following rules can have severe consequences.


Why are rules considered to be plans?

Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. They are usually the simplest type of plans because there is no compromise or change unless a policy decision is taken.


State and explain the various steps of planning function.

Various steps of the planning function
1. Goal setting:
Plans are the means to achieve certain ends or objectives. Therefore, the establishment of organizational or overall objectives is the first step in planning. Setting objectives is the most crucial part of planning. The organizational objectives should be set in key areas of operations.
They should be verifiable i.e., they should as far as possible be specified in clear and measurable terms. The objectives are set in light of the opportunities perceived by managers. Establishment of goals is influenced by the values and beliefs of executives, the mission of the organization, organizational resources, etc.
Objectives provide the guidelines (what to do) for the preparation of strategic and procedural plans. One cannot make plans unless one knows what is to be accomplished. Objectives constitute the mission of an organization. They set the pattern of future course of action.
The objectives must be clear, specific and informative. Major objectives should be broken into departmental, sectional and individual objectives. In order to set realistic objectives, planners must be fully aware of the opportunities and problems that the enterprise is likely to face.
2. Developing the planning premises:
Before plans are prepared, the assumptions and conditions underlying them must be clearly defined these assumptions are called planning premises and they can be identified through accurate forecasting of likely future events.
They are forecast data of a factual nature. Assessment of the environment helps to reveal opportunities and constraints. Analysis of internal (controllable and external (uncontrollable) forces is essential for sound planning premises are the critical factors which lay down the bounder for planning.
They are vital to the success of planning as they supply per tenant facts about the future. They need revision with changes in the situation. Contingency plans may be prepared for alternate situations.
3. Reviewing Limitations:
In practice, several constraints or limitations affect the ability of an organization to achieve its objectives. These limitations restrict the smooth operation of plans and they must be anticipated and provided for.
The key areas of Imitations are finance," human resources, materials, power, and machinery. The strong and weak points of the enterprise should be correctly assessed.
4. Deciding the planning period:
Once the broad goals, planning premises, and limitations are laid down, the next step is to decide the period of planning. The planning period should be long enough to permit the fulfillment of the commitments involved in a decision.
This is known as the principle of commitment. The planning period depends on several factors e.g., future that can be reasonably anticipated, a time required to receive capital investments, expected future availability of raw materials, lead time in development and commercialization of a new product, etc.
5. Formulation of policies and strategies:
After the goals are defined and planning premises are identified, management can formulate policies and strategies for the accomplishment of desired results. The responsibility for laying down policies and strategies lies usually with management. But, the subordinates should be consulted as they are to implement the policies and strategies.
Alternative plans of action should be developed and evaluated carefully so as to select the most appropriate policy for the organization. Imagination, foresight, experience and quantitative techniques are very useful in the development and evaluation of alternatives.
Available alternatives should be evaluated in the light of objectives and planning premises. If the evaluation shows that more than one alternative is equally good, the various alternatives may be combined in action.
6. Preparing operating plans:
After the formulation of overall operating plans, the derivative or supporting plans are prepared. Several medium range and short-range plans are required to implement policies and strategies.
These plans consist of procedures, programmers, schedules, budgets, and rules. Such plans are required for the implementation of basic plans.
Operational plans reflect commitments as to methods, time, money, etc. These plans are helpful in the implementation of long-range plans. Along with the supporting, plans, the timing and sequence of activities are determined to ensure continuity in operations.
7.Integration of plans:
Different plans must be properly balanced so that they support one another. Review and revision may be necessary before the plan is put into operation. Moreover, the various plans must be communicated and explained to those responsible for putting them into practice.
The participation and cooperation of subordinates are necessary for successful implementation of plans. Established plants should be reviewed periodically so as to modify and change them whenever necessary.
A system of continuous evaluation and appraisal of plans should be devised to identify any shortcomings or pitfalls of the plans under changing situations.




Which type of plan has the least flexibility and why?

  • A rule is an explicit statement that tells an employee what he or she can and cannot do. Rules are “do” and “don't” statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of fairness. Hence this plan is least flexible.


Explain the following as features of planning:
(a) Planning is continuous and
(b) Planning is futuristic

  • Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.
  • Futuristic: In the process of planning we take a sneak peek of future. It encompasses looking into future, to analyse and predict it, so that the organisation can face the future challenges effectively.


State any three points of importance of planning.

  • Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
  • Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
  • Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.


Suppose you are the manager of ABC Clothing Ltd. It comes to your knowledge that postal expenses have increased by 15% over the standard price and cost of labour and raw materials has increased by 3%. Which of the two situations is more critical according to you? 

There are two situations which is more critical-
a)- increase in labour cost.
b)-increase in price of raw materials


Mention any two types of plans and explain each with a suitable example.

Two types of plans are :-
  • Procedure-
They are a step-wise guide for the routine to carry out the activities. These step-wise sequences are to be followed by all the employees so the activities can be fulfilled in an organized manner. The procedures are described in a chronological order. So when the employees follow the instructions in the order and completely, the success of the activity is pretty much guaranteed.
A procedure is stated by upper-level management in TATA motors how work is to be done and in what step Motorcars will be manufactured.
  • Rules- 
Rules are very specific statements that define an action or non-action. Also, rules allow for no flexibility at all, they are final. All employees of the organization must compulsorily follow and implement the rules. Not following rules can have severe consequences.
Certain rules are framed for employees in the company regarding punctuality, in a company.


What are the main features to be considered by the management while planning?

1) Planning Focuses on Achieving Objectives: Management begins with planning and planning begins with the determining of objectives. In the absence of objectives, no organization can ever be thought about. With the determining of objective, the way to achieve the objective is decided in the planning.

(2) Planning is Primary Function of Management:Planning is the first important function of management. The other functions, e.g., organizing, staffing, directing and controlling come later. In the absence of planning, no other function of management can be performed. 

(4) Planning is Continuous: Planning is a continuous process for the following reasons:

(a) Plans are prepared for a particular period. Hence, there is a need for a new plan after the expiry of that period. 

(b) In case of any discrepancy, plans are to be revised.

(c) In case of rapid changes in the business, environment plans are to be revised.

(5) Planning is Futuristic: Planning decides the plan of action what is to be done, how is it to be done, when it to be done, by whom is it to be done all these questions are related to future. Under planning, answers to these questions are found out. 

(6) Planning Involves Decision Making: Planning becomes a necessity when there are many alternatives to do a job. A planner chooses the most appropriate alternative. Therefore, it can be asserted that planning is a process of selecting the best and rejecting the inappropriate. It is, therefore, observed that planning involves decision making.

(7) Planning is a Mental Exercise: Planning is known as a mental exercise as it is related to thinking before doing something. A planner has mainly to think about the following questions:(i) What to do? (ii) How to do it? (iii) When to do it? (iv) Who is to do it?



"To see whether plans are being implemented and activities are being performed according to schedule is a step of Planning process." Identify the step.

Methods
Methods prescribe the ways in which in which specific tasks of a procedure must be performed. Also, methods are very specific and detailed instructions on how the employees must perform every task of the planned procedure. So managers form methods to formalize routine jobs.
Methods are very important types of plan for an organization. They help in the following ways
Give clear instructions to the employees, removes any confusion.
Ensures uniformity in the actions of the employees.
Standardizes the routine jobs Acts as an overall guide for the employees and the managers


Two years ago Nishant, completed his degree in Textile Engineering. He worked for some time in a company manufacturing readymade garments. He was not happy in the company and decided to have his own readymade garments manufacturing unit. He set the objectives and targets and formulate action plan to achieve the same.
One of his objectives was to earn 80% profit on the amount invested in the first year. It was decided that raw materials like cloth, thread, button, etc will be purchased on two months credit. He also decided to follow the steps required for marketing the products through his own outlets. He appointed Ritesh as a PRoduction Manager who decided the exact manner in which the production activities are to carried out. Ritesth also prepared a statement  showing the requirement of workers in the factory throughout the year. Nishant informed Ritesh about his sales target for different products areawise for the forthcoming quarter.
A penalty of Rs. 200 per day was announced for the workers who found smoking in the factory premises.
Quoting lines from the above para identify and explain the different types of plans discussed.

Types of plans being discussed in the given paragraph are as follows.
 i. Objective - An objective broadly outlines the key task or target to be reached at the end of a certain time period by the organization. In the given case, the objective is highlighted in the words "One of her objectives was to earn 80% profit on the amount invested in first year 
ii. Policy-A policy is a code of conduct to be followed by a particular organization in a particular scenario. It is not specific in nature and hence is interpreted according to the situation. In the given case, the lines "It was decided that raw materials like cloth, thread, buttons etc, will be purchased on two months credit"
lll. Procedure A procedure comprises of guidelines to be followed in a specific order to make a policy decision to come into reality. In the given case, the line Decided to follow the steps required for marketing of the products through her own outlets" highlights the procedure to be followed
iv. Method - A method is a specific process to be conducted to carry out a desired task. In the given case, the method is highlighted in the words the exact manner in which the production activities are to be carried out highlight the type of plan called "method 
v. File- A rule is the type of plan that mentions the exact way of completing a particular task and its degree of compulsion A rule can also be negative and guide the employees about not doing a particular thing In the given case the line A Penalty of Rs 200 per day was announced for the workers who found smoking in the factory premises" highlights a rule 
vi Budget A budget is usually a number that specifies the financial constraints and targeted achievements on an organization It mentions the upper limit of the expenditure of resources. In the given case the line "Ritesh also prepared a statement showing the requirement of workers in the factory throughout the year implies a budget


Mention any two steps of plans and explain each with an example.

1. Perception of Opportunities:
Perception of opportunities is not strictly a part of the planning process. But this awareness of opportunities in the external environment as well as within the organisation is the real starting point for planning. It is important to take a preliminary look at possible future opportunities and see them clearly and completely.
 2. Establishing Objectives:
This is the second step in the planning process. The major organisational and each unit's objectives are set in this stage. This is to be done for the long-term as well as for the short range. Objective specifies the expected results and indicates the endpoints of what is to be done, where the primary emphasis is to be placed and what is to be accomplished by the various types of plans.


State any five limitations of planning.

Limitations of Planning:
1. Corporate Planning is not Integrated into the Total Management System: The top management fails to identify and associate properly the formal planning with the central concept of the organisation’s mission.
2. There is a Lack of Understanding of the Different Steps of the Planning Process: The management may not be knowledgeable or skilled in understanding all steps of the planning requirements.
3. Non-Availability of Correct Information and Data: Planning is made by having information and data available. Generally correct information and data not available.
4. Management at Different Levels in the Organisation has not Properly Contributed to Planning Activities: Generally all strategic planning are made and conducted at top management. So sometimes middle level and lower level of management, which are closer to the operation, may not understand all aspects of planning. This will affect their fullest contribution.
5. Costly or Uneconomical: Planning is expensive. The cost of planning should not be in excess of its contribution and managerial judgement is necessary to balance the expenses of preparing the plans against the benefits derived from them.


"Planning is an important function of management." State any five reasons in favour of the statement.

Planning is an important function of management because it-
Increases efficiency: Planning makes optimum utilization of all available resources. It helps to reduce wastage of valuable resources and avoids their duplication. It aims to give the highest returns at the lowest possible cost. It thus increases the overall efficiency.
Reduces business-related risks: There are many risks involved in any modern business. Planning helps to forecast these business-related risks. It also helps to take the necessary precautions to avoid these risks and prepare for future uncertainties in advance. Thus, it reduces business risks.
Facilitates proper coordination: Often, the plans of all departments of an organization are well coordinated with each other. Similarly, the short-term, medium-term and long-term plans of an organization are also coordinated with each other. Such proper coordination is possible only because of efficient planning.
Aids in Organizing: Organizing means to bring together all available resources, i.e. 6 Ms. Organizing is not possible without planning. It is so, since, planning tells us the number of resources required and when are they needed. It means that planning aids in organizing in an efficient way.
Gives the right direction: Direction means to give proper information, accurate instructions and useful guidance to the subordinates. It is impossible without planning. It is because planning tells us what to do, how to do it and when to do it. Therefore, planning helps to give the right direction.
Keeps good control: With control, the actual performance of an employee is compared with the plans, and deviations (if any) are found out and corrected. It is impossible to achieve such a control without right planning. Therefore, planning becomes necessary to keep a good control.


State any five features of planning.

Planning states in advance where to go and in which direction to move ahead. It is a continuous process that helps in reducing the risk of uncertainty. Planning is an essential activity that provides the rationale for undertaking policies in the direction of achieving goals. Following are the highlighted features of planning:
(i)Focus on objectives: Planning serves the basis for guidelines for the goals to be achieved and the way they are to be achieved.Any management should formulate plans keeping specific goals in mind. These plans must ensure that the desired objective is attained. The managers must make sure that the plans made are purposeful. For example,if sales target is to be achieved, then the plans must be made in sync with this objective.
(ii) Stepping stone: Planning serves as the stepping stone for all other functions of an organisation. In other words,planning precedes all other functions such as organising, directing,staffing and controlling. This is because plans state the objectives and all over the functions are in accordance with the said objectives. Once the plans are determine,the roles of other interrelated functions come into place. Thus, planning sets the basis for other functions of an organisations.
(iii)Pervasiveness: Planning must to done at all levels of the organisation. It is not a function of just the top level managers; it is function to be performed at every level of management. However, its scope differs across the various dimensions of business. for example, the top level managers have to chalk out the policies regarding the overall management, whereas the middle levels manager plans out the authority to be assigned to the subordinates. On the other hand, the lower level managers make out small targets for day-to-day working.
(iv)Continuity: Planning should be done continuously. This is because after the completion of one plan period, the need arises for the formulation of another plan keeping in view the new objectives and circumstances . Moreover, within a plan period, need may arise to modify plans as per the changing needs and requirements. Thus, planning does not have an end. It is a continuous process along the life of a business enterprise.
(v) Choice making: Planning is a process of making choices amongst different alternatives for the attainment of the desired objectives. These alternatives are based on the path to be taken, strategies or policies to be followed to achieve the goals, etc.Managers need to evaluate these choices thoroughly and then the select the most rational scheme to achieve the set objectives.
(vi) Futuristic: Plans must be futuristic in nature.In other words,they must be able to foresee and analyse the future.Planning should be done so as to prepare the organisation to deal with the future events.Managers must be able to anticipate the probable situations and plan accordingly so as to cope with them in a better manner.


Explain the relationship between planning and controlling.

The relationship between planning and controlling can be understood by the fact that both are related to each other in the sense that one is the prerequisite for the other. On one hand, planning involves thinking and deciding about what is to be done and hoe it is to be done. On the other hand, controlling involves assessing and evaluating the work as against the set standards and taking the required corrective measures. each of the functions forms a base for the other. Planning forms a prerequisite for controlling in the sense that it provides various objectives and policies against which the actual performance would be evaluated.Controlling without planning would e meaningless. In other words, if there are no standards and objectives, there would be nothing to control. That is, if the managers do not know what the final objective is, they do not have any standards against which they can judge the present performances and deficiencies. Similarly, planning without controlling holds no meaning. Once the plans are formulated, it becomes necessary to monitor and evaluated the performance as per the desired plans. Controlling is a required to ensure that the plans is being properly implemented and that there are no deficiencies in the work. It also identifies the need for taking corrective actions, in order to ensure achievement of the planned goals. If there is no controlling,planning cannot be accomplished.Thus, it can be said that both planning and controlling complement each other and are, therefore, interrelated functions of management.


Define strategy as a type of plan.

Strategy as a plan is a comprehensive plan for accomplishing an organization's objectives. This comprehensive plan will include three dimensions -
(i) determining long term objectives
(ii) adopting a particular course of action
(iii) allocating resources necessary to achieve the objective.


How does planning provide direction?

Planning provides direction by stating in advance how work is to be done planning provides direction for action. It ensures that the objectives of the organisation are clearly stated to the act as a guide to decide what action must be taken. If the goals are well defined, the employees would know what they must do to achieve those goals.


Explain any three features of 'Planning.'

The following points highlight the features of planing.
i) Focus on Objectives: Planning serves the basis far guidelines for what goals are to be achieved and how they are to be achieved. Any management should formulate plans keeping view the specific goals in mind. These plans must ensure that the desired objective is attained. The managers must make sure that the plans made are purposeful. For example, if sales target is to be achieved then the plans must be made in sync with this objective.
ii) Stepping Stone: Planning serves as the stepping stone for all other functions of an organisation. That is, planning precedes all other functions such as organising, directing, staffing and controlling. This is because plans states the objectives and all other functions are in accordance with the said objectives. Once the plans are determined, the role of other interrelated functions comes into place. Thus, planning sets the basis for other functions of an organisation.
iii) Pervasiveness: Planning must be done at all levels of the organisation. It is not a function of just the top level managers but, is a function to be performed at every level of management. However, its scope differs along the various dimensions of business. For example, the top level managers have to chalk out the policies regarding the overall management whereas the middle level managers plan out the authority to be assigned to the subordinates. On the other hand, the lower level managers make out small targets for day-to-day working.


What are the objectives of the Tenth Five Year Plan?

The objective of tenth five year plan are as follows:-
(i) The first and foremost objective is to increase the enrollment in higher education of the $$18$$ to $$23$$ years age group from the present $$6$$% to $$9$$% by end of the plan period.

(ii) The plan focuses on increasing access, quality, adoption of states-specific curriculum modification, vocationalisation, and networking on the use of information technology.

(iii) The plan also focuses on distant education, the convergence of formal, non-formal, distant, and IT education institutions.


State any three features of planning.

Following are the highlighted features of planning. 
a. Focus on Objectives: Planning serves the basis for guidelines for what goals are to be achieved and how they are to be achieved. Any management should formulate plans keeping view the specific goals in mind. These plans must ensure that the desired objective is attained. The managers must make sure that the plans made are purposeful. For example, if sales target is to be achieved then the plans must be made in sync with this objective. 

b. Stepping Stone: Planning serves as the stepping stone for all other functions of an organisation. That is, planning precedes all other functions such as organising, directing, staffing and controlling. This is because plans states the objectives and all other functions are in accordance with the said objectives. Once the plans are determined, the role of other interrelated functions comes into place. Thus, planning sets the basis for other functions of an organisation. 

c. Pervasiveness: Planning must be done at all levels of the organisation. It is not a function of just the top level managers but, is a function to be performed at every level of management. However, its scope differs along the various dimensions of business. For example, the top level managers have to chalk out the policies regarding the overall management whereas the middle level managers plan out the authority to be assigned to the subordinates. On the other hand, the lower level managers make out small targets for day-to-day working.


Give the meaning of 'Strategy' and 'Rule' as types of plans.

a. Strategy: A strategy is a comprehensive plan that includes determining the long-term objectives, adopting the required course of action and allocating the necessary resources. They are often defined as the future decisions which showcase the direction and scope of the organisation in the long run. While formulating a strategy, a manager must consider all the different aspects of the business environment and based upon all factors, should finally take up the strategic decisions. 
b. Rule: A rule refers to a standard or specific statement that gives information about what is to be done and what is not to be done. Rules are the simplest type of plans that do not allow any kind of flexibility. They signify the managerial decision that a particular task or action has to be performed or not. Such rules do not allow any scope for compromise or change unless a policy decision is taken by the managers. 


In $$2015$$, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother's dream of converting their $$25$$-acre ancestral land into a fertile farm. For this he set out specific goals along with the activities to be performed to achieve the goals.
Every activity was a challenge since he was clueless about farming. He learnt every activity from filling the land to sowing the seeds. To aid farmers he launched his own company 'Innovative Agriculture Solutions Pvt. Ltd'.
It was difficult initially as no one trusted an urban youth telling farmers about farming. But when everything was discussed in detail the farmers started taking interest. He wanted to ensure that the future events meet effectively the best interests of the company. Through sales forecasting, he prepared an annual plan for production and sales.
He also found that the farmers grew only paddy, which was an activity of $$3-4$$ months and the land remained idle for the rest $$8-9$$ months of the year. He not only identified but evaluated various alternatives through which the farms could b utilised for the remaining months of the year. Through correct foresight and logical and systematic thinking based on analysis of all facts, all alternatives were examined and evaluated. He presented a plan to the farmers, where after harvesting paddy, vegetables could be grown.
The case highlights the features of one of the functions of management. By quoting lines from the given identify and explain the features.

The following are the features of Planning:
Line: he set out specific goals .................... the goals.
(i) Planning focuses on achieving objectives: Planning starts with the determination of objectives and decides the methods, strategy or course of action to achieve these objectives.
Line: Through sales forecasting ................. and sales.
(ii) Planning is futuristic: All the managers try to make predictions and assumptions for the future with the regular scanning of general environment. Thus planning is looking ahead or futuristic.
Line: He not only identified .................... year".
(iii) Planning involves decision making: It involves choice of the most suitable or the best from amongst the various alternative courses of action.
Line: Through correct foresight evaluated".
(iv) Planning is a mental exercise: It is an intellectual activity requiring high order thinking skills with logic and reasoning power to evaluate and decide the best course of action. 



'Planning is not a guarantee of success'. In this context, explain the limitations of Planning.

The limitations of planning are:
1. Planning leads to rigidity as they are pre-decided and every organisation follows the plans very blindly.
2. Planning may not work in a dynamic environment because they might not result the same way at the time of implementation as they sounded at the time of making.
3. It reduces creativity of the employees who are implementing the plans. 
4. Planning has lack of accuracy.   


What  is the relationship between Systems, Procedures and Methods?

Every activity system in an office consists of a number of Procedures or Routines; the performance of which is necessary to complete the activity. Procedures or Routines are performed in a particular way called Methods. So the system is a group or sequence of various operations or routines or Procedures with a particular Method to perform such routine.


Write short notes on:
Programme, as a type of plan.

Programs are plans of action followed in proper sequence according to objectives, policies, and procedures. Thus a program lays down the major steps to be taken to achieve an objective and sets an approximate time frame for its fulfillment. Programs are usually supported by budgets.


Distinguish between the following:
Planning and Controlling.

  • Planning refers to deciding in advance about what to do, how to do and when to do. It involves determining the goals and preparing a course of action to be taken to fulfill these objectives. It is the first and foremost function of the management and is continuous in nature. 
  • Whereas, Controlling is a process to measure the deviation of the actual performance from the standard performance. It includes taking corrective action. It is the end process of management.


State the main aspects in the concept of planning?

The Nature of planning can be understood by examining four aspects:
1.Its contribution to purpose and objectives
2.Its importance in managerial task
3.Its pervasiveness
4.The efficiency Vs. effectiveness of plan


Name any two features of planning.

  • Any two features of planning are:- 
  • Planning starts with the determination of objectives. We cannot think of planning in absence of objective. After setting up of the objectives, planning decides the methods, procedures and steps to be taken for achievement of set objectives. Planners also help and bring changes in the plan if things are not moving in the direction of objectives.
  • Acts as an insurance against future uncertainties: Planning acts as an insurance against future uncertainties. It takes care of all business uncertainties. In fact, in planning, future problems and situations are studied in advance and alternative solutions are kept ready. This enables management to face any type of critical situation with ease and confidence.


What is meant by "single use plan"?

A set of activities aimed at achieving a specific goal within a particular budget and time period that is unlikely to be repeated in future. Example of a single use plan that could be employed by a business might be an advertising campaign for a new product launch or an integration plan for a recent acquisition.


Which limitation of planning suggests that the employees stop thinking and become the blind followers of plan?

Encroachment on individual freedom and initiative: Planning is a centralized process. At the lower levels, plans are to be executed as per the directives issued. This affects individual freedom and initiative at the lower levels. Employees at the lower levels act as instruments for the execution of plan prepared by the top level managers. People are asked to become cogs in the machine with little scope for initiative or independent thinking.


Which plan suggest actions and non-actions of employees?

A rule is an explicit statement that tells an employee what he or she can and cannot do. Rules are “do” and “don't” statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of fairness.


Define policy?

Policies are generic statements, which are basically a guide to channelize energies towards a particular strategy. It is an organization’s general way of understanding, interpreting and implementing strategies. Like for example, most companies have a return policy or recruitment policy or pricing policy.


Define "Planning premises".

Planning premises means systemic and logical estimate for the future factors affecting planning.
According to Dr. G. R. Terry, ”planning premise is the assumptions providing a background against which the estimated events affecting the planning will take place”.
Koontz and O’Donnel, “a key part of planning is the establishment of clear planning premises. To assure co-ordination among all managers who make plans in organization, these premises should be used by all concern persons premises guides planning".


In which type of plan the sequences to perform a job are determined?

A procedure is a set of step‐by‐step directions that explains how activities or tasks are to be carried out. Most organizations have procedures for purchasing supplies and equipment, for example. This procedure usually begins with a supervisor completing a purchasing requisition. The requisition is then sent to the next level of management for approval. The approved requisition is forwarded to the purchasing department. Depending on the amount of the request, the purchasing department may place an order, or they may need to secure quotations and/or bids for several vendors before placing the order. By defining the steps to be taken and the order in which they are to be done, procedures provide a standardized way of responding to a repetitive problem


Which function of management is considered as the base of all other functions?

Planning is the primary function of management and occupies the first position in the management process. It is the starting point of the whole management process as other management functions are related to planning function. Planning, in simple words, means to decide the objectives clearly and to prepare a plan. Thereafter to take suitable steps for the execution of the plan. Planning function is performed by managers at all levels. It is deciding the objective to be achieved and taking suitable follow-up steps for achieving the same.


Planning function of management is conducted at which level of management?

Planning function is conducted at all the three levels.
Top level Plans: Plans which are formulated by general managers and directors are called top-level plans. Under these plans, the objectives, budget, policies etc. for the whole organization are laid down. These plans are mostly long term plans.
Middle-level Plans: Managerial hierarchy at the middle level includes the departmental managers. A corporate has many departments like purchase department, sales department, finance department, personnel department etc. The plans formulated by the departmental managers are called middle-level plans.
Lower level Plans: These plans are prepared by the foreman or the supervisors. They take the existence of the actual workplace and the problems connected with it. They are formulated for a short period of time and called short term plans.


In which step of planning process the planners make predictions and assumptions regarding future?

Establishment of Planning Premises
  • Planning premises are the assumptions about the lively shape of events in future.
  • They serve as a basis of planning.
  • Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations.
  • It is to find out what obstacles are there in the way of business during the course of operations.
  • Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.
  • Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes.
  • Internal premises are controllable whereas external are non- controllable.


No smoking- this statement is related to which type of plan?

A rule is an explicit statement that tells an employee what he or she can and cannot do. Rules are “do” and “don't” statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of fairness.


At which level of management more time is consumed on planning as compared to other levels?

Top level Plans:
Plans which are formulated by general managers and directors are called top-level plans. Under these plans, the objectives, budget, policies etc. for the whole organization are laid down. These plans are mostly long term plans.It consumes more time in planning compared to other levels.


'Planning is not a guarantee of success of a business."Comment.

Some limitations of planning, understanding of which may improve the efficiency of planning.
1.  Planning Premises May Be Wrong.
2. Rapidity of Change
3. Time and Cost Constraints
4. Planning May Limit the New Ideas
5. Non-Control over External Factors


Define derivative plans.

Derivative plans are the sub plans or secondary plans which help in the achievement of main plan. 
These are meant to support and expediate the achievement of basic plans. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc.


Which plan helps in analysing competitor's policy?

Strategic Plan
A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind, rather than with the goals of specific divisions or departments. Strategic planning begins with an organization's mission.
Strategic plans look ahead over the next two, three, five, or even more years to move the organization from where it currently is to where it wants to be. Requiring multilevel involvement, these plans demand harmony among all levels of management within the organization. Top‐level management develops the directional objectives for the entire organization, while lower levels of management develop compatible objectives and plans to achieve them. Top management's strategic plan for the entire organization becomes the framework and sets dimensions for the lower level planning.


Give two examples of limitations of planning, which are beyond the control of an organisation

  • Natural calamity:
Natural calamities such as flood, earthquake, famine etc. may result in failure of plan.
  • Change in taste/fashion and trend in the market: Sometimes plans may fail when the taste/fashion or trend in market goes against the expectation of planners.


A company wants to introduce a new product. What type of plan should it prepare? 

Strategic Plan.
A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind, rather than with the goals of specific divisions or departments. Strategic planning begins with an organization's mission.
Strategic plans look ahead over the next two, three, five, or even more years to move the organization from where it currently is to where it wants to be. Requiring multilevel involvement, these plans demand harmony among all levels of management within the organization. Top‐level management develops the directional objectives for the entire organization, while lower levels of management develop compatible objectives and plans to achieve them. Top management's strategic plan for the entire organization becomes the framework and sets dimensions for the lower level planning.


'No enterprise can achieve its objectives without systematic planning. Do you agree with this statement? Give any five reasons in support of your answer.

Yes the statement 'No enterprise can achieve its objectives without systematic planning' is right.

Reasons why planning is important for the organization are as follows:

  1. Increases efficiency: Planning makes optimum utilization of all available resources. It helps to reduce wastage of valuable resources and avoids their duplication. It aims to give the highest returns at the lowest possible cost. It thus increases the overall efficiency.
  2. Reduces business-related risks: There are many risks involved in any modern business. Planning helps to forecast these business-related risks. It also helps to take the necessary precautions to avoid these risks and prepare for future uncertainties in advance. Thus, it reduces business risks.
  3. Facilitates proper coordination: Often, the plans of all departments of an organization are well coordinated with each other. Similarly, the short-term, medium-term and long-term plans of an organization are also coordinated with each other. Such proper coordination is possible only because of efficient planning.
  4. Helps in Organizing: organizing means to bring together all available resources. Organizing is not possible without planning. It is so, since, planning tells us the number of resources required and when are they needed. It means that planning aids in organizing in an efficient way.
  5. Gives the right direction: Direction means to give proper information, accurate instructions and useful guidance to the subordinates. It is impossible without planning. It is because planning tells us what to do, how to do it and when to do it. Therefore, planning helps to give the right direction.
  6. Keeps good control: With control, the actual performance of an employee is compared with the plans, and deviations (if any) are found out and corrected. It is impossible to achieve such a control without right planning. Therefore, planning becomes necessary to keep a good control.
  7. Helps to achieve objectives: Every organization has certain objectives or targets. It keeps working hard to fulfill these goals. Planning helps an organization to achieve these aims, but with some ease and promptness. Planning also helps an organization to avoid doing some random (done by chance) activities.
  8. Motivates personnel: A good plan provides various financial and non-financial incentives to both managers and employees. These incentives motivate them to work hard and achieve the objectives of the organization. Thus, planning through various incentives helps to motivate the personnel of an organization.
  9. Encourages creativity and innovation: Planning helps managers to express their creativity and innovation. It brings satisfaction to the managers and eventually succeeded to the organization.
  10. Helps in decision-making: A manager makes many different plans. Then the manager selects or chooses the best of all available strategies. Making a selection or choosing something means to take a decision. So, decision-making is facilitated by planning.
.


Describe the features of an ideal plan.

The features of an ideal plan are:
(i) Ideal plan should be goal-oriented
(ii) Ideal plan must be futuristic
(iii) Ideal plan should be flexible
(iv) Ideal plan should be continuous process
(v) Ideal plan must involve choice.


Give two examples of internal premises.

Internal premises are those which exist within the business enterprise. This may include men, material, money and methods. Competence of managerial personnel and skill of labor force are some of the important internal premises.


'Sometimes planning fails in spite of the best efforts of management.' Do you agree? Give any five reasons in support of your answer.

Yes, the statement is right. Sometimes planning fails in spite of the best efforts of management. Following are the reasons.

1. Lack of reliable data

2. Expensive

3. Time-consuming

4. External factors may decrease the utility




On the introduction of Goods and Services Tax Act, experts in the field of business started analysing and forecasting its impact on various sectors and industries. Vivek, an established businessman, attended a few seminars and conferences organised by such experts to familiarize himself with this information. He wanted to use these forecasts to reduce the uncertainty in making decisions for the future in his business.
Name the step in the planning process that is being discussed in the above paragraph.

The forecast or the assumptions about future which provide a base for planning in present are known as planning premises. They are “the anticipated environment in which plans are expected to operate. They include assumptions or forecasts of the future and known conditions that will affect the operation of plans.


Does mere planning ensure success? Explain why?

Mere planning does not guarantee success:
Sometimes managers have false sense of security that plans have worked successfully in past so these will be working in future also. There is a tendency in managers to rely on pretested plans.

It is not true that if a plan has worked successfully in past, it will bring success in future also as there are so many unknown factors which may lead to failure of plan in future. Planning only provides a base for analysing future. It is not a solution for future course of action


'ABC Ltd.' decides to advise their product on TV and radio. What type of plan should it prepare?

Strategy Plan
Strategic Plan: Strategic plan is the plan which is formulated by the top level management for a long period of time of five years or more. They decide the major goals and policies to achieve the goals. It takes in a note of all the external factors and risks involved and makes a long-term policy of the organization. It involves the determination of strengths and weaknesses, external risks, mission, and control system to implement plans.


Name the type of plan which serves as guide for overall business planning and defines the end result which organisation strives to achieve. Also give difference between this plan and policy.

A specific result that a person or system aims to achieve within a time frame and with available resources.
In general, objectives are more specific and easier to measure than goals. Objectives are basic tools that underlie all planning and strategic activities. They serve as the basis for creating policy and evaluating performance. Some examples of business objectives include minimizing expenses, expanding internationally, or making a profit.


'Infinite Ltd. decided to give 20% of jobs to women'. What type of plan is it? Explain this plan.

It is a type of policy formed by the Company
A policy provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. Typical human resources policies, for example, address such matters as employee hiring, terminations, performance appraisals, pay increases, and discipline


Give two examples of external premises.

External premises center around the markets and derived from the external environment surrounding the business. Examples: Product market, money market, population growth, government policies, business cycles technological changes.


Give two examples of objective and policy.

Objectives:
(1) Increase in production by 10% in six months
(2) Increase in sale by 5%
Policy:
(1) Policy of school to give admission to students securing more than 60% marks
(2) Policy of McDonald, not to give franchise to a business, who is already having a restaurant


Name the type of plan in which the details are worked out i.e., procedure, rules, budgets etc.

A program plan is the outline of events and activities that your members follow to reach the goals of the organization. A successful program plan provides detail and shows how each activity supports your organization's mission.


Which type of plan has least flexibility?

Rules
A rule is an explicit statement that tells an employee what he or she can and cannot do. Rules are “do” and “don't” statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make disciplinary decisions rapidly and with a high degree of fairness.


ABC Ltd. gives promotion on the basis of seniority. Which type of plan is it?

It is s type of policy.
A policy provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. Typical human resources policies, for example, address such matters as employee hiring, terminations, performance appraisals, pay increases, and discipline.


"Swachha Bharat Abhiyaan" started by government of India is an example of which type of plan? Explain.

A program plan is the outline of events and activities that your members follow to reach the goals of the organization. A successful program plan provides detail and shows how each activity supports your organization's mission.


A firm wants to increase its sales by 25% for the coming year. Which type of plan is involved in it?

A specific result that a person or system aims to achieve within a time frame and with available resources. In general, objectives are more specific and easier to measure than goals. Objectives are basic tools that underlie all planning and strategic activities


What type of plan is defined a long range blue print of an organisation's desired image, direction and destination?

A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind, rather than with the goals of specific divisions or departments. Strategic planning begins with an organization's mission.
Strategic plans look ahead over the next two, three, five, or even more years to move the organization from where it currently is to where it wants to be. Requiring multilevel involvement, these plans demand harmony among all levels of management within the organization. Top‐level management develops the directional objectives for the entire organization, while lower levels of management develop compatible objectives and plans to achieve them. Top management's strategic plan for the entire organization becomes the framework and sets dimensions for the lower level planning.


Name the type of plan which provides the basis for interpreting the strategy.

A policy provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. Typical human resources policies, for example, address such matters as employee hiring, terminations, performance appraisals, pay increases, and discipline.


Laxmi Chemicals Ltd., a soap manufacturing company wanted to increase its market share from 30% to 55% in the long run. A recent report submitted by the Research and Development Department of the company had predicted a growing trend of herbal and organic products. On the basis of this report the company decided to diversify into new variety of soaps with natural ingredients having benefits and fragrances of Jasmine, Rose, Lavender, Mogra, Lemon Grass, Green Apple, Strawberry etc. The Unique Selling Proposition (USP) was to promote eco-friendly living in the contemporary life style. The company decided to allocate Rs. 30 crores to achieve the objectives.
Identify the type of function of management mentioned above which will help the company to acquire dominant position in the market.

Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organizations.


After completing her studies in product design, Sarita wishes to start her own business to design products to cater to the mobility and communication requirements of persons with special needs. She told her friend that she wanted to focus on supplying high quality products at affordable prices. The Unique Selling Proposition (USP) of the products would be sensitive to the challenges and needs of the differently abled people. She wants to employ only differently abled persons in her factory and sales offices across the country. This decision of Sarita provides the base for interpreting her strategy. This also defines the broad parameters within which the company may recruit the persons. Sarita has also to decide about the exact manner and the chronological order of how the selection of the differently abled applicants will be done. In the above lines, Sarita is discussing about one of the function of management. This function has several types. Identify and explain the types Sarita is discussing in the above lines.

Types of plans
(a) Policy
Policy is a general guidelines which brings uniformity in decision making for the achievement of predetermined objectives.
(b) Procedure
It consists of sequence of routine steps on how to carry out activities. It details the exact manner in which any work is to be performed.


An employee will retire at the age of 60 year. What type of plan is it?

It is the policy of the company.
A policy provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. Typical human resources policies, for example, address such matters as employee hiring, terminations, performance appraisals, pay increases, and discipline


Super Fine Rice Ltd. has the largest share of 55% in the market. The company's policy is to sell only for cash. In 2015, for the first time company's number one position in the industry has been threatened because other companies started selling rice on credit also. But the managers of Super Fine Rice Ltd. continued to rely on its previously tried and tested successful plans which didn't work because the environment is not static. This led to decline in sales of Super Fine Rice Ltd.
The above situation is indicating two limitation of planning which led to decline in its sales. Identify these limitations.

Planning should not be rigid, because environment is dynamic rigid plan will not work in dynamic environment.
Planning does not guarantee success 


Procter and Gamble Ltd. is offering a free bucket on every purchase of five kgs of Tide washing powder. In response to this Hindustan Unilever Ltd. started new scheme of giving free one kg of Rin Washing powder with every purchase of five kg of Rin washing powder. Identify the plan stated in above paragraph and explain it.

It is a type of strategy.
Strategic Plan: Strategic plan is the plan which is formulated by the top level management for a long period of time of five years or more. They decide the major goals and policies to achieve the goals. It takes in a note of all the external factors and risks involved and makes a long-term policy of the organization. It involves the determination of strengths and weaknesses, external risks, mission, and control system to implement plans.


Suhasini a home science graduate from a reputed college has recently done a cookery course. She wished to start her own venture with a goal to provide 'healthy food' at reasonable price. She discussed her idea with her teacher (mentor) who encouraged her. After analyzing various options for starting her business venture, they shortlisted the option to sell ready-made and 'ready to make' vegetable shakes and sattu milk shakes. They, they both weighed the pros and cons of both the shortlisted options
(a) Name the function of management being discussed above and give any one of its characteristics.
(b) Also briefly discuss any three limitations of the function discussed in the case.

1. Planning contributes to Objectives
2. Planning is Primary function of management
3. Pervasive
4. Planning is forward looking
5. Planning is continuous
6. Planning involves decision making
7. Planning is a mental exercise



"KOHINOOR FOODS Ltd. has banned smoking in the factory premises".
(a) Identify the plan stated in above lines
(b) State the features of this plan
(c) Differentiate between policy and this plan

The plan stated in the above lines are related to rules.
Features of rules
1) Disciplined culture
2) Introduced method
3) Effective utilization of resources

Following are the difference between policy and rule stated in a paragraph:

  • Rules and Policies are sometimes so packed together that it becomes impossible to segregate one from the other. And it varies from one perspective to the other that whether rules are based on policies or policies are based on rules. Therefore, it will be good if we first confine our discussion to an understandable perspective so that we can understand the difference.

  • In the context of business entities, rules usually mean the rules applied by the government or some other body responsible for regulating business entities.

  • Rules are clear instructions that must be followed by the entities. And in case if rules are not followed then the entity will have to face some legal action in the form of penalties, suspension etc. So basically rules are given the ability to have the protection of their own.

  • Policies related to how the rules are going to be implemented. Entities design their policies on the basis of rules applied by regulatory authorities AND their business objectives. Policies basically give a direction to the entity that is in line with both applicable laws and aims that business wants to achieve.

  • But here is another thing. Based on these policies, management may design internal rules for the imposition of such policies.


PK Ltd. has been notorious for delay in decision making an overlapping of work done. Identify management function lacking in the organisation and state importance of this function.

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action.
Planning is the first and most important function of management. It is needed at every level of management. In the absence of planning all the business activities of the organisation will become meaningless. The importance of planning has increased all the more in view of the increasing size of organisations and their complexities.
Planning has again gained importance because of uncertain and constantly changing business environment. In the absence of planning, it may not be impossible but certainly difficult to guess the uncertain events of future.



A company gave its sales executives, the directives that they would sell on credit but told the employees to strictly inform the customer that if they will not make payment within one month they will have to pay an interest of 10% per annum. In the above-given paragraph, two types of PIAs have been mentioned. Identify them and explain them with their feature.

Two types of PIA which have been mentioned in above paragraph are-
A) Policy
B) Rule
  1. Policy- A policy is a set of ideas or plans that is used as a basis for making decisions, especially in politics, economics, or business.
An effective business policy must have following features-
  • Specific- Policy should be specific/definite. If it is uncertain, then the implementation will become difficult.
  • Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There should be no misunderstandings in following the policy.
  • Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the subordinates.
  • Appropriate- Policy should be appropriate to the present organizational goal.
2.Rule- one of a set of explicit or understood regulations or principles governing conduct or procedure within a particular area of activity.


A company is manufacturing garments. The manager wants to increase profits by purchasing new high speed machines or increasing the sale price or using waste materials in manufacturing stuffed toys. He decided that "using waste material" is the best solution for him.
(a) Identify the concept of management involved.
(b) Mention the steps involved in the above process by quoting the lines from the question.

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action.
Steps involved in Planning are:
  • Develop objectives
  • Develop tasks to meet those objectives
  • Determine resources needed to implement tasks
  • Create a timeline
  • Determine tracking and assessment method
  • Finalize plan
  • Distribute to all involved in the process


Rahul, a worker is given a target of assembling two computers per day. Due to his habit of doing things differently, an idea struck him, which would not only reduce the assembling time of computer but also reduce the cost of production. But instead of appreciating his ideal his supervisor scolded him and asked him to complete the work as per prescribed technique. Identify and describe the limitation of planning stated here.

Planning reduces creativity:
With the planning the managers of the organisation start working rigidly and they become the blind followers of the plan only. The managers do not take any initiative to make changes in the plan according to the changes prevailing in the business environment. They stop giving suggestions and new ideas to bring improvement in working because the guidelines for working are given in planning only.


The production manager of a company received the complaint that the quality of the goods was not reasonable. After investigation, it came to light that the machines had become very old. That is why they were unable to achieve standardized quality. The production manager developed several options by way of solution to this problem. Example, getting the machines repaired, purchasing new local machines, purchasing new imported machines, if possible taking machines on rent, etc.
The CEO of the company wanted the list of options to be minimum, so that a thorough study could be made for them. In order to make the list narrower, he decided to give only those options which required the investment of more than 10 crores.
(a) Identify the concept described in the paragraph given above.
(b) What do you understand from the fact of company fixing the maximum investment limit on options?

(a) A planning process is a concept described in the para above.
The development of goals, strategies, task lists and schedules required to achieve the objectives of a business. The planning process is a fundamental function of management and should result in the best possible degree of need satisfaction given the resources available.
(b) A company is constantly working for a development. Fixation of maximum investment limit is a part of the development process.



In Chak DE movie, Sharukh Khan becomes the coach of the girl's hockey team. He knows that he has to prepare the girls for the international hockey matches and win the cup. For this he prepares a long term plan and thinks of ways of how to beat the opponent team. He coaches the girls to play in different ways like defensive, offensive, etc.
At the outset of the match, he explains who will open the match, and how the ball will be passed by one player to another step by step.
Identify all the types of plans mentioned above. State them along with lines which refer to them in the above paragraph.

1. Objective- prepare the girls for the international hockey matches and win the cup.
2. Strategy-  prepares a long-term plan and thinks of ways of how to beat the opponent team. He coaches the girls to play in different ways like defensive, offensive, etc.
3. Procedure- At the outset of the match, he explains who will open the match, and how the ball will be passed by one player to another step by step.



Why is that organizations are not always able to accomplish all their objectives?

No guarantee of expected results: Planning is for achieving certain well defined objectives. However, there is no guarantee that the objectives will be achieved within the specific time limit by using planning as a tool. Actual performance may not be as per the expectation due to various reasons. Thus planning has an element of uncertainty. Planning leads to probable results and not the expected results. It gives benefits but may not be exactly as per the expectation. Thus, there is no guarantee that planning will give 100 per cent positive/expected results


Alpha Ltd. spent a lot of money to hire specialised people for framing their plans and collecting important facts from environment. The company cut down their cost by cancelling the employee's trip for recreation.
(i) Name the limitation of planning mentioned in above para
(ii) Name the value overlook by management.

Limitation stated in above para is-
Planning involves huge cost.
Value overlooked by management-
affecting the psychological condition of employees



ABC Ltd announced a plan that nobody would smoke in the organisation premises and they further added that certain penalty will be imposed on those employees overlooking this.
(i) Name the type of plan related to above para
(ii) Name the feature of that plan
(iii) Name the values emphasized by the company 

1. Rule is a type of plan mentioned in above para.
2. Rules are very rigid.
3. Respect towards environment is the value stated in the above problem


Palvinder, is working as a supervisor in Alpha Ltd. To achieve the target he wants to try a new method and different way of allocating the work. His superior did not permit him and forced him to do the work strictly as per the plan.
(i) Name the limitation of planning indicated in above case
(ii) Name the value overlook by Palvinder's superior

(i) 'Planning reduces creativity".
(ii) motivational need of employee are not fulfilled


Is planning actually worth the huge costs involved? Explain.

  • Planning involves huge costs in terms of time and money. It involves analysis, research and scientific calculations that involve huge cost However, despite being an expensive function it is a very basic and essential function of an organisation. Following are some of the highlighted factors due to which we can say that planning is a very significant action despite of the gigantic costs-
  •  Renders Direction: Planning clearly states the goals and objectives to be achieved. Thus, it acts as a guide for the actions to be taken. It provides a direction to the actions of different departments of the organisation. They guide the managers about things to be done, what route to take and how the objectives are to be achieved It ensures that the path taken for accomplishment of goals is righteously chosen Planning also ensures that various departments of the organisation work in a coordinated manner towards the achievement of the desired objectives.
  •  Subdued Risk: By guiding an organisation in the right direction, it accredits its managers to analyse and anticipate changes. This leads to a reduction in the uncertainty of the foreseen events. Planning shows how to deal with situations which may arise in the due course of management, though it does not fully eliminate the problems 
  •  Minimised Overlapping As the managers are well comprehended with the policies and plans of the organisation, they coordinate the activities together to reach the objectives. Thus, overlapping of the work is reduced. Also, any wastage of resources that takes place due to repeatedness is reduced. Proper planning ensures that there is no confusion and misunderstanding and the work proceeds smoothly 
  • Encourages Creativity Planning serves as the stepping stone of any organisation's success. It includes formulating policies and plans which requires innovation. It is a crucial activity which demands the best of managers thinking capabilities and creativity. It calls out for new ideas by the management to attain the goals. 
  •  Helps in Decision Making Planning serves as the basis for decision making. Planning involves analysing the future, evaluating the various courses of action and choosing best alternative as per the objective. Thus, following a proper planning process helps the managers in making rational decisions.
  •  Essential for Controlling: Planning states the objectives that are to be achieved. Thus, it sets the standards against which the performance is evaluated. It also helps in determining whether there is any deviation from the said objectives and thereby, facilitates the corrective measures Hence, we can infer that despite the costs involved, planning is a very important function in management and worth the costs incurred.


The management of ABC Ltd. set up the target of selling 10,000 products per week and made all their plans based on this target. But due to change in technology adapted by competitors which reduced their cost, the ABC Ltd, could not achieve their target.
(i) Identify the limitation of planning discussed in the above para.
(ii) State any other two limitations.

Limitation stated above-
Planning may not work in dynamic environment
Two limitations of planning-
1. Planning does not guarantee success.
2. Planning creates rigidity.


A company is manufacturing garments. The manager wants to increase the profit by:
(a) Purchasing new high speed machine
(b) Increasing the sale price
(c) Using waste material in manufacturing stuff toys.
He decided that using waste material to increase the profit is the best solution for him
(i) Identify the concept of management involved
(ii) State any four features of that concept.

Planning is the primary function of management and occupies the first position in the management process. It is the starting point of the whole management process as other management functions are related to planning function. Planning, in simple words, means to decide the objectives clearly and to prepare a plan. Thereafter to take suitable steps for the execution of the plan. Planning function is performed by managers at all levels. It is deciding the objective to be achieved and taking suitable follow-up steps for achieving the same.
Goal oriented: the main purpose of plan is always to determine the goal to be achieved and the activities to be performed to achieve these goals. So planning relates to creative thinking for the solution of various problems.
Primacy (basic function) of planning: it means planning is the basic function of all other managerial functions. It provides a base for other managerial functions like organizing, staffing, directing and controlling. We can say that structure of all other functions depends on planning.
Forward looking: planning is never done for past but is done for the future to achieve certain objective. Therefore, it is said that planning is thinking before doing. Planning is based on estimated future trends of social, economic and technological changes because it has to tackle the future requirements.
Pervasiveness: planning is required in all sectors, i.e. business, industry, profession etc. whether it is of large scale or small scale and in all the department of organisation like purchase, production, marketing, finance department etc. however nature of planning differs from one department to another.


An electronic company is facing a problem of declining market share due to increased competition from other new and existing players in the market. Its competitors are introducing lower price models for mass consumers. Who are price sensitive? For quality conscious consumers company is introducing new model with added features and new technological advancements.
(i) Prepare a model business plan for this company. Specify which type of plan you are preparing.
(ii) Identify the limitations of such plans.
(iii) How will you remove these limitations?

The type of plan needed to be prepared under this situation is strategy and the steps involved in preparing this plan are:
(a) Setting up of objective: The company may set up a long term objective of capturing more and more quality conscious consumers or becoming a leader in quality and trend setter in market by one year time.
(b) Adopting a particular course of action: The company must import latest technology or spend more or research and development department to innovate latest technology to make their goods superior than competitor's goods
(c) Allocating resources for achieving the objectives. Company must take permission for importing technology and must allocate extra funds to their R and D section and appoint people with latest knowledge to innovate new technology.
(ii) The common limitations are
(a) It may involve huge costs
(b) It is time consuming process
(c) There is no guarantee of success
(d)  It may not fit in dynamic environment.
(iii) To overcome these problems
(a) Prepare budget to carry on this plan and function within the revenue allocated in the budget
(b) Fix a time limit to achieve the plan and then to execute the plan within that time limit only.
(c) Scan the environment properly before implementing the plan
(d) Use the plan with caution and care.



Explain any two features of planning.

Goal oriented: the main purpose of plan is always to determine the goal to be achieved and the activities to be performed to achieve these goals. So planning relates to creative thinking for the solution of various problems.
Primacy (basic function) of planning: it means planning is the basic function of all other managerial functions. It provides a base for other managerial functions like organizing, staffing, directing and controlling. We can say that structure of all other functions depends on planning.


'Planning restricts creativity.' Explain

Planning reduces creativity :-

With the planning the managers of the organisation start working rigidly and they become the blind followers of the plan only. The managers do not take any initiative to make changes in the plan according to the changes prevailing in the business environment. They stop giving suggestions and new ideas to bring improvement in working because the guidelines for working are given in planning only.


'Planning involves choice.' Explain briefly.

Involving choice (alternative): planning can be when there are two or more alternatives and the planner can make a choice for the best, in other words, in the absence of choice there will be no planning because then there is a single way of doing something i.e. to be adopted.


'Planning provides the basis of all other functions.' Comment

Planning is the primary function of management and occupies the first position in the management process. It is the starting point of the whole management process as other management functions are related to planning function. Planning, in simple words, means to decide the objectives clearly and to prepare a plan. Thereafter to take suitable steps for the execution of the plan. Planning function is performed by managers at all levels. It is deciding the objective to be achieved and taking suitable follow-up steps for achieving the same.


'Planning is not a guarantee of success of a business'. Comment.

No guarantee of expected results: Planning is for achieving certain well defined objectives. However, there is no guarantee that the objectives will be achieved within the specific time limit by using planning as a tool. Actual performance may not be as per the expectation due to various reasons. Thus planning has an element of uncertainty. Planning leads to probable results and not the expected results. It gives benefits but may not be exactly as per the expectation. Thus, there is no guarantee that planning will give 100 per cent positive/expected results.


Define planning.

According to Urwick, “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses”. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.
Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action.


Explain the meaning of planning premises with the help of a suitable example.

Planning premises means systemic and logical estimate for the future factors affecting planning.According to Dr.G.R.Terry, ”planning premise are the assumptions providing a background against which the estimated events affecting the planning will take place”.
There are mainly two types of planning premises include external premises and internal premises.


Why are derivative plans formulated? Justify with suitable example.

Derivative plans are the sub plans or secondary plans which help in the achievement of main plan. These details plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprises.
Eg sales maximization, production maximization.


Explain briefly the external limitations of planning.

External Limitations of Planning:
Sometimes planning fails due to following limitations on which managers have no control.
(i) Natural calamity:
Natural calamities such as flood, earthquake, famine etc. may result in failure of plan.
(ii) Change in competitors’ policies:
Sometimes plan may fail due to better policies, product and strategy of competitor which was not expected by manager.
(iii) Change in taste/fashion and trend in the market:
Sometimes plans may fail when the taste/fashion or trend in market goes against the expectation of planners.
(iv) Change in technologies:
The introduction of new technologies may also lead to failure of plans for products using old technology.
(v) Change in government/economic policy:
Managers have no control over government decisions. If government economic or industrial policies are not framed as expected by manager then also plans may fail.


Briefly explain rigidity as a limitation of planning.

1) Planning leads to rigidity:
Once plans are made to decide the future course of action the manager may not be in a position to change them. Following predefined plan when circumstances are changed may not bring positive results for organisation. This kind of rigidity in plan may create difficulty.


'Planning is Pervasive'. Explain briefly

Pervasiveness: planning is required in all sectors, i.e. business, industry, profession etc. whether it is of large scale or small scale and in all the department of organisation like purchase, production, marketing, finance department etc. however nature of planning differs from one department to another.
Planning is required at all levels of the management. It is not a function restricted to top level managers only but planning is done by managers at every level. Formation of major plan and framing of overall policies is the task of top level managers whereas departmental managers form plan for their respective departments. And lower level managers make plans to support the overall objectives and to carry on day to day activities.


State the meaning and features of planning.

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action.
Features of planning:
Goal oriented: the main purpose of plan is always to determine the goal to be achieved and the activities to be performed to achieve these goals. So planning relates to creative thinking for the solution of various problems.

Primacy (basic function) of planning: it means planning is the basic function of all other managerial functions. It provides a base for other managerial functions like organizing, staffing, directing and controlling. We can say that structure of all other functions depends on planning.

Forward looking: planning is never done for past but is done for the future to achieve certain objective. Therefore, it is said that planning is thinking before doing. 
Planning is based on estimated future trends of social, economic and technological changes because it has to tackle the future requirements.
Pervasiveness: planning is required in all sectors, i.e. business, industry, profession etc. whether it is of large scale or small scale and in all the department of organisation like purchase, production, marketing, finance department etc. however nature of planning differs from one department to another.


Explain steps involved in process of planning.

Steps involved in process of planning:
1. Goal setting: Plans are the means to achieve certain ends or objec­tives. Therefore, establishment of organizational or overall objectives is the first step in planning. Setting objectives is the most crucial part of planning. The organizational objectives should be set in key areas of operations.
2. Developing the planning premises: Before plans are prepared, the assumptions and conditions underlying them must be clearly defined these assumptions are called planning premises and they can be identified through accurate forecasting of likely future events.
3. Reviewing Limitations: In practice, several constraints or limitations affect the ability of an organization to achieve its objectives. These limitations restrict the smooth operation of plans and they must be anticipated and provided for.
4. Deciding the planning period: Once the broad goals, planning premises and limitations are laid down, the next step is to decide the period of planning. The planning period should be long enough to permit the fulfillment of the commitments involved in a decision.
5. Formulation of policies and strategies: After the goals are defined and planning premises are identified, management can formulate poli­cies and strategies for the accomplishment of desired results. The res­ponsibility for laying down policies and strategies lies usually with management. But, the subordinates should be consulted as they are to implement the policies and strategies.
6. Preparing operating plans: After the formulation of overall operat­ing plans, the derivative or supporting plans are prepared. Several medium range and short-range plans are required to implement policies and strategies.
7.Integration of plans: Different plans must be properly balanced so that they support one another. Review and revision may be necessary before the plan is put into operation. Moreover, the various plans must be communicated and explained to those responsible for putting them into practice.


"Is planning actually worth the huge cost involved? Explain.

  • Planning involves huge Cost: Planning process involves lot of cost because it is an intellectual process and companies need to hire the professional experts to carry on this process. Along with the salary of these experts the company has to spend lot of time and money to collect accurate facts and figures. So, it is a cost-consuming process. If the benefits of planning are not more than its cost then it should not be carried on.


Why is planning an important function of management?

  •  Planning Promotes innovative ideas:Planning requires high thinking and it is an intellectual process. So, there is a great scope of finding better ideas, better methods and procedures to perform a particular job. Planning process forces managers to think differently and assume the future conditions. So, it makes the managers innovative and creative.

  •  Planning Facilitates Decision Making:Planning helps the managers to take various decisions. As in planning goals are set in advance and predictions are made for future. These predictions and goals help the manager to take fast decisions.

  • Planning establishes standard for controlling:Controlling means comparison between planned and actual output and if there is variation between both then find out the reasons for such deviations and taking measures to match the actual output with the planned. But in case there is no planned output then controlling manager will have no base to compare whether the actual output is adequate or not.


Why does planning sometimes fail in spite of the best efforts of management?

Planning does not guarantee success:
Sometimes managers have false sense of security that plans have worked successfully in past so these will be working in future also. There is a tendency in managers to rely on pretested plans.
It is not true that if a plan has worked successfully in past, it will bring success in future also as there are so many unknown factors which may lead to failure of plan in future. Planning only provides a base for analyzing future. It is not a solution for future course of action.


Do you think planning can work in changing environments?

  • Planning may not work in dynamic environment:
Business environment is very dynamic as there are continuously changes taking place in economic, political and legal environment. It becomes very difficult to forecast these future changes. Plans may fail if the changes are very frequent.
The environment consists of number of segments and it becomes very difficult for a manager to assess future changes in the environment. For example there may be change in economic policy, change in fashion and trend or change in competitor’s policy. A manager cannot foresee these changes accurately and plan may fail if many such changes take place in environment.


What kind of strategic decisions are taken by business organisation?

Some examples of strategic decisions include:
to enter a new market/exit an existing market or not
to launch a new product/service / withdraw an existing product/service or not
to target a new/abandon an existing customer segment or not
to enter into/exit from a significant partnership or not
to change the attributes of a product/service or not


Explain why planning is necessary for effective management.

1. Planning contributes to Objectives: Planning starts with the determination of objectives. We cannot think of planning in absence of objective. After setting up of the objectives, planning decides the methods, procedures and steps to be taken for achievement of set objectives. Planners also help and bring changes in the plan if things are not moving in the direction of objectives.
2.Planning is Primary function of management: Planning is the primary or first function to be performed by every manager. No other function can be executed by the manager without performing planning function because objectives are set up in planning and other functions depend on the objectives only.
3. Pervasive: Planning is required at all levels of the management. It is not a function restricted to top level managers only but planning is done by managers at every level. Formation of major plan and framing of overall policies is the task of top level managers whereas departmental managers form plan for their respective departments. And lower level managers make plans to support the overall objectives and to carry on day to day activities.


Describe the meaning of policies, procedures and budgets.

  • Policies:
Koontz and O’Donnell defines “policies are general statements or undertakings which guide or channel thinking in decision-making of subordinates.” So, policies act as guides to thinking and action of subordinates in the organisations. It should be clearly prescribed and understandable by all.
  • Procedures: Procedures are plans that establish a required method of handling future activities. They are guides to action, rather than to thinking and they detail the exact manner in which certain activities must be accomplished. They are chronological sequences of required actions.
  • Budgets:A budget is a statement of expected results expressed in numerical term. It may be referred to as a numbered programme. A budget may be expressed either in financial terms or in terms of labor-hours, units of product, machine hours, or any other numerically measurable term. It helps the organisation to control the action by comparing budgetary and actual result.


If planning involves working out details for the future, why does it not ensure success?

Planning does not guarantee success. The success of an enterprise is possible only when plans are properly drawn up and implemented. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.


Explain any five Limitations of planning.

Limitations of Planning:
1. Corporate Planning is not Integrated into the Total Management System: The top management fails to identify and associate properly the formal planning with the central concept of the organisation’s mission.
2. There is a Lack of Understanding of the Different Steps of the Planning Process: The management may not be knowledgeable or skilled in understanding all steps of the planning requirements.
3. Non-Availability of Correct Information and Data: Planning is made by having information and data available. Generally correct information and data not available.
4. Management at Different Levels in the Organisation has not Properly Contributed to Planning Activities: Generally all strategic planning are made and conducted at top management. So sometimes middle level and lower level of management, which are closer to the operation, may not understand all aspects of planning. This will affect their fullest contribution.
5. Costly or Uneconomical: Planning is expensive. The cost of planning should not be in excess of its contribution and managerial judgement is necessary to balance the expenses of preparing the plans against the benefits derived from them.


Define 'Planning'.

Planning can be defined as “thinking in advance what is to be done, when it is to be done, how it is to be done and by whom it should be done”. In simple words we can say, planning bridges the gap between where we are standing today and where we want to reach.
Planning involves setting objectives and deciding in advance the appropriate course of action to achieve these objectives so we can also define planning as setting up of objectives and targets and formulating an action plan to achieve them.


Explain any two advantages and any three limitations of planning.

ADVANTAGES OF PLANNING:
1.Primacy of Planning:
Even though there are other managerial functions such as organising, staffing, directing and controlling which helps to achieve the organisational goals, planning precedes all other managerial functions. It establishes objectives necessary for all group effort.
2. Helping to Management:
Since the planning is a future course of action, mangers are able to define their objectives and get direction. Also it creates a unity of purpose.

DISADVANTAGES OF PLANNING:
1. Corporate Planning is not Integrated into the Total Management System:
The top management fails to identify and associate properly the formal planning with the central concept of the organisation’s mission.
2. There is a Lack of Understanding of the Different Steps of the Planning Process:
The management may not be knowledgeable or skilled in understanding all steps of the planning requirements.
3. Non-Availability of Correct Information and Data:
Planning is made by having information and data available. Generally correct information and data not available.


State how 'planning reduces creativity'

Planning reduces creativity:
With the planning the managers of the organisation start working rigidly and they become the blind followers of the plan only. The managers do not take any initiative to make changes in the plan according to the changes prevailing in the business environment. They stop giving suggestions and new ideas to bring improvement in working because the guidelines for working are given in planning only.


Name the type of plan which provides the prescribed ways in which a task has to be performed considering the objective.

Methods
These provide the- prescribed ways or manner in which a task has to be performed considering the objective. It deals with a task comprising one step of a procedure and specifies how this step is to be performed. The method may vary from task to task. Selection of proper method saves time, money and effort and therefore, increases efficiency.
For example, for the valuation of stock, the organisation must decide in advance which method has to be adopted (LIFO or FIFO), so that everyone must follow the same.


Name the type of plan which tells what is to be done and what is not to be done.

  • Procedure
They are a step wise guide for the routine to carry out the activities. These step wise sequences are to be followed by all the employees so the activities can be fulfilled in an organized manner.
The procedures are described in a chronological order. So when the employees follow the instructions in the order and completely, the success of the activity is pretty much guarantee


'Planning always leads to success.' Do you agree? Give reason in support of your answer.

Planning does not guarantee success:
Sometimes managers have false sense of security that plans have worked successfully in past so these will be working in future also. There is a tendency in managers to rely on pretested plans.
It is not true that if a plan has worked successfully in past, it will bring success in future also as there are so many unknown factors which may lead to failure of plan in future. Planning only provides a base for analysing future. It is not a solution for future course of action.


"Planning is doing the work for the achievement of goals." Do you agree? Give reason.

Planning contributes to Objectives:
Planning starts with the determination of objectives. We cannot think of planning in absence of objective. After setting up of the objectives, planning decides the methods, procedures and steps to be taken for achievement of set objectives. Planners also help and bring changes in the plan if things are not moving in the direction of objectives.
For example, if an organisation has the objective of manufacturing 1500 washing machines and in one month only 80 washing machines are manufactured, then changes are made in the plan to achieve the final objective.


In spite of many advantage, state how planning can be detrimental.

Planning does not guarantee success:
Sometimes managers have false sense of security that plans have worked successfully in past so these will be working in future also. There is a tendency in managers to rely on pretested plans.
It is not true that if a plan has worked successfully in past, it will bring success in future also as there are so many unknown factors which may lead to failure of plan in future. Planning only provides a base for analysing future. It is not a solution for future course of action.


Name the type of plan which provides the broad contours of an organization's business.

Strategy.
Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.


Differentiate between 'Method' and 'Budget' as types of plans.

Methods:
Methods can be defined as formalized or systematic way of doing routine or repetitive jobs. The managers decide in advance the common way of doing a job. So, that
(a) There is no doubt in the minds of employees;
(b) There can be uniformity in actions of the employees;
(c) These help in applying the techniques of standardization and simplification;
(d) Act as guide for employees.
If the common way of doing the job is not decided in advance then there will be confusion and comparison will not be possible.
Whereas,
Budget is the statement of expected result expressed in numerical terms. In budgets the results are always measurable and most of the time these are financial in nature but it does not mean that company prepares only financial budget. Financial budget is also known as profit plan of the company because it includes the expected income and related expenditures with that income and the profit which the company will earn in the coming year.


Explain 'objectives' as one of the types of plans.

Objectives or the goals of the organization are the ends towards which every activity of the organization is aimed at. Therefore, goals or objectives are the results that the organization tries to achieve. Objectives are considered as a prerequisite for planning. The managers cannot make plans if they have not established the organizational goals first. While the objectives of the enterprise are the basic plans of the firm, it is also possible that various departments of the organization may also have their own objectives. Therefore, even if the objectives of the departments are required to contribute to achieving the objectives of the enterprise, but it is possible that the goals adopted by these two can be totally different. For example, while the objective of the enterprise is to earn a particular amount as profit but on the other hand, the goal of a particular department is to sell the products.


Give the meaning of "Objective" as a type of plan.

Objectives or the goals of the organization are the ends towards which every activity of the organization is aimed at. Therefore, goals or objectives are the results that the organization tries to achieve.


Explain how 'planning facilitates decision-making.'

Planning Facilitates Decision Making:
Planning helps the managers to take various decisions. As in planning goals are set in advance and predictions are made for future. These predictions and goals help the manager to take fast decisions.


Explain how 'planning leads to rigidity'.

Planning leads to rigidity:
Once plans are made to decide the future course of action the manager may not be in a position to change them. Following predefined plan when circumstances are changed may not bring positive results for organisation. This kind of rigidity in plan may create difficulty.


Explain the following features of planning:
(a) Planning focuses on achieving objective
(b) Planning is a mental exercise.

  • Helps to achieve objectives: Every organization has certain objectives or targets. It keeps working hard to fulfill these goals. Planning helps an organization to achieve these aims, but with some ease and promptness. Planning also helps an organization to avoid doing some random (done by chance) activities.
Planning is a mental exercise:
  • It is mental exercise. Planning is a mental process which requires higher thinking that is why it is kept separate from operational activities by Taylor. In planning assumptions and predictions regarding future are made by scanning the environment properly. This activity requires higher level of intelligence. Secondly, in planning various alternatives are evaluated and the most suitable is selected which again requires higher level of intelligence. So, it is right to call planning an intellectual process.


Differentiate between 'Objective' and 'Strategy' as types of plans.

Objectives are the ends toward which activity is aimed— they are the results to be achieved. They represent not only the end point of planning but also the end toward which organising, staffing, leading and controlling are aimed.
Organisation can grow without any difficulty if it has well-defined objectives. These objectives should be clearly defined and communicated throughout the organisation. Such objectives must be realistic.
Whereas,
Strategy formulation is the task of top level people and it is must to scan and understand clearly the business environment before framing the strategy. The common decisions in strategy are whether to introduce a new product or not. If to introduce then how, finding out customer for your products making changes in existing products etc. All the strategic decisions are greatly influenced by the business environment. Strategy defines the future decisions regarding the organisation’s direction and scope in the long run.
For example, Choice of advertising media, sales promotion techniques, channels of distribution, etc.


Give the meaning of  'Method' as a type of plan.

The managers decide in advance the common way of doing a job. So, that
(a) There is no doubt in the minds of employees;
(b) There can be uniformity in actions of the employees;
(c) These help in applying the techniques of standardization and simplification;
(d) Act as guide for employees.
If the common way of doing the job is not decided in advance then there will be confusion and comparison will not be possible. 


Give the meaning of 'Programme' as a type of plan.

  • Programme 

Programmes are the combination of goals, policies, procedures and rules. All these plans together form a program. The programmes are made to get a systematic working in the organisation. The programmes create relation between policies, procedures and goals. The programmes are also prepared at different levels. A primary programme is prepared by the top level and then to support the primary programme supportive programmes of different levels are prepared for smooth function of the company.
For example, construction of shopping mall, Development of new product.


Give the meaning of 'Policy' as a type of plan.

Policy can be described as the general statements or understanding that provides guidance to the managers in decision-making. Policies are standing plans that guide the management that is engaged in managerial operations. The policies of the organization also prescribe the boundaries within which the managers have to make decisions and it also ensures that all the decisions made by the managers are directed towards achieving the goals of the organization. At the same time, the policies also help in dealing with the issues before they take the shape of problems. In this way, with the help of policies, the managers do not have to waste their time in analyzing the same situation whenever it arises. Policies also allow the managers to delegate authority within the permissible parameters and still the managers can retain control on these activities. Therefore, it can be said that policies encourage initiative and discretion but also ensure that they remain within the limits.


Define 'Planning'. State any four points of importance of planning.

Planing is the fundamental management function, which involves deciding beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down organisation’s objectives and develops various courses of action, by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.
Importance of Planning:
  • Increases efficiency: Planning makes optimum utilization of all available resources. It helps to reduce wastage of valuable resources and avoids their duplication. It aims to give the highest returns at the lowest possible cost. It thus increases the overall efficiency.
  • Reduces business-related risks: There are many risks involved in any modern business. Planning helps to forecast these business-related risks. It also helps to take the necessary precautions to avoid these risks and prepare for future uncertainties in advance. Thus, it reduces business risks.
  • Facilitates proper coordination: Often, the plans of all departments of an organization are well coordinated with each other. Similarly, the short-term, medium-term and long-term plans of an organization are also coordinated with each other. Such proper coordination is possible only because of efficient planning.
  • Aids in Organizing: Organizing means to bring together all available resources, i.e. 6 Ms. Organizing is not possible without planning. It is so, since, planning tells us the amount of resources required and when are they needed. It means that planning aids in organizing in an efficient way.


State any three point of importance of planning function of management.

  • First and foremost managerial function: Planning provides the base for other functions of the management, i.e. organizing, staffing, directing and controlling, as they are performed within the periphery of the plans made.
  • Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
  • Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.


Explain 'objective' and 'policy' as types of plan using suitable examples.

  • Objectives or the goals of the organization are the ends towards which every activity of the organization is aimed at. Therefore, goals or objectives are the results that the organization tries to achieve. Objectives are considered as a prerequisite for planning. The managers cannot make plans if they have not established the organizational goals first. While the objectives of the enterprise are the basic plans of the firm, it is also possible that various departments of the organization may also have their own objectives. Therefore, even if the objectives of the departments are required to contribute to achieving the objectives of the enterprise, but it is possible that the goals adopted by these two can be totally different.
  • Policies can be described as the general statements or understanding that provides guidance to the managers in decision-making. Policies are standing plans that guide the management that is engaged in managerial operations. The policies of the organization also prescribe the boundaries within which the managers have to make decisions and it also ensures that all the decisions made by the managers are directed towards achieving the goals of the organization. At the same time, the policies also help in dealing with the issues before they take the shape of problems. 


Explain 'objectives' and 'strategy' as types of plan.

  • Objectives or the goals of the organization are the ends towards which every activity of the organization is aimed at. Therefore, goals or objectives are the results that the organization tries to achieve. Objectives are considered as a prerequisite for planning. The managers cannot make plans if they have not established the organizational goals first. While the objectives of the enterprise are the basic plans of the firm, it is also possible that various departments of the organization may also have their own objectives.
  • Strategy formulation is the task of top level people and it is must to scan and understand clearly the business environment before framing the strategy. The common decisions in strategy are whether to introduce a new product or not. If to introduce then how, finding out customer for your products making changes in existing products etc. All the strategic decisions are greatly influenced by the business environment. Strategy defines the future decisions regarding the organisation’s direction and scope in the long run.


Explain 'Strategy' as one of the types of plans.

A strategy is a comprehensive plan to achieve the organisational objectives. The dimensions of strategy are:
(i) Determining long term objectives.
(ii) Adopting a particular course of action.
(iii) Allocating resources for achieving the objectives.
Strategy formulation is the task of top level people and it is must to scan and understand clearly the business environment before framing the strategy. The common decisions in strategy are whether to introduce a new product or not. If to introduce then how, finding out customer for your products making changes in existing products etc. All the strategic decisions are greatly influenced by the business environment. Strategy defines the future decisions regarding the organisation’s direction and scope in the long run.


Give the meaning of 'procedure' and 'rule' as types if plans.

  • Procedures can be described as the details of action or the guidelines that are given in order to achieve the objectives of the organization. The procedures provide details regarding the ways in which the things have to be done by the organization. In this way, there is no room for personal judgment in these cases. It is also important that the procedures should help in implementing the policies of the organization. The procedures should also decide the policy of accountability.
  • Rules are the plans that provide the required course of action regarding a particular situation. Therefore a rule can also be described as a decision that has to be made by the management regarding what needs to be done in case of a particular situation. In this way, a rule is always rigid and definite and it does not allow the subordinates to have any discretion or deviation.


Explain the following features of planning:
(a) Planning involved decision making and
(b) Planning is pervasive

Facilitates Decision-making:
Planning provides a framework for decision-making. Since the planning provides for feedback, periodic evaluation, and indication for any deviation, corrective action can be taken which leads to better decision-making.
Pervasive:
Planning is required at all levels of the management. It is not a function restricted to top level managers only but planning is done by managers at every level. Formation of major plan and framing of overall policies is the task of top level managers whereas departmental managers form plan for their respective departments. And lower level managers make plans to support the overall objectives and to carry on day to day activities.


State any three features of 'Planning'.

  • Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
  • Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
  • Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.


Give the meaning of 'objectives' and budget' as types of plans.

  • Objectives or the goals of the organization are the ends towards which every activity of the organization is aimed at. Therefore, goals or objectives are the results that the organization tries to achieve. Objectives are considered as a prerequisite for planning. The managers cannot make plans if they have not established the organizational goals first. 
  • Budgets are the monetary or the quantitative expression of the plans and policies that have to be followed by the organization in future. Therefore the term budgeting is used in order to describe the activity of preparing budgets and other procedures related with planning, coordinating and controlling the business of the organization.


Explain 'procedure' and 'programme' as types of plan.

  • Procedures are required steps established in advance to handle future conditions. The sequence of steps to be followed by employees in different situations must be predetermined so that everyone follows same steps.
The procedure can be defined as the exact manner in which an activity has to be accomplished.Procedures are made common for all the departments to co-ordinate their activities. So procedures cut across all the departmental lines. For example, the procedure to handle the order by manufacturing department may involve sales department also.
  • Programmes are the combination of goals, policies, procedures and rules. All these plans together form a program. The programmes are made to get a systematic working in the organisation. The programmes create relation between policies, procedures and goals. The programmes are also prepared at different levels. A primary programme is prepared by the top level and then to support the primary programme supportive programmes of different levels are prepared for smooth function of the company.For example, construction of shopping mall, Development of new product.


State any two advantages and any two limitations of 'Planning'.

ADVANTAGES OF PLANNING:
1. Primacy of Planning:Even though there are other managerial functions such as organising, staffing, directing and controlling which helps to achieve the organisational goals, planning precedes all other managerial functions. It establishes objectives necessary for all group effort.
2. Helping to Management:Since the planning is a future course of action, mangers are able to define their objectives and get direction. Also it creates a unity of purpose.
LIMITATIONS OF PLANNING:
1. Corporate Planning is not Integrated into the Total Management System:The top management fails to identify and associate properly the formal planning with the central concept of the organisation’s mission.
2. There is a Lack of Understanding of the Different Steps of the Planning Process:The management may not be knowledgeable or skilled in understanding all steps of the planning requirements.


Explain any five limitations of 'Planning'.

1. Corporate Planning is not Integrated into the Total Management System:
The top management fails to identify and associate properly the formal planning with the central concept of the organisation’s mission.
2. There is a Lack of Understanding of the Different Steps of the Planning Process:The management may not be knowledgeable or skilled in understanding all steps of the planning requirements.
3. Non-Availability of Correct Information and Data:Planning is made by having information and data available. Generally correct information and data not available.
4. Management at Different Levels in the Organisation has not Properly Contributed to Planning Activities:Generally all strategic planning are made and conducted at top management. So sometimes middle level and lower level of management, which are closer to the operation, may not understand all aspects of planning. This will affect their fullest contribution.
5. Costly or Uneconomical:Planning is expensive. The cost of planning should not be in excess of its contribution and managerial judgement is necessary to balance the expenses of preparing the plans against the benefits derived from them.


State any five points which highlight the importance of management.

  • First and foremost managerial function: Planning provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made.
  • Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
  • Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
  • Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.
  • Intellectual Process: It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc.


Explain the following types of plans
(a) Objectives  (b) Process

(a)Objectives: Objectives are the ends toward which activity is aimed— they are the results to be achieved. They represent not only the end point of planning but also the end toward which organising, staffing, leading and controlling are aimed.
Organisation can grow without any difficulty if it has well-defined objectives. These objectives should be clearly defined and communicated throughout the organisation. Such objectives must be realistic.
(b) The process are described in a chronological order. So when the employees follow the instructions in the order and completely, the success of the activity is pretty much guaranteed.


Explain the following types of plans
(a) Strategy  (b) Policy

(a) Strategy: Koontz and Heinz Weihrich defined strategy as “a general programme of action and deployment of resources to attain comprehensive objectives” or ” the determination of the basic long-term objectives of an enterprise “and the adoption of courses of action and allocation of resources necessary to achieve these goals. It is specific type of plan for achieving organisational goal
(b) Policies: Koontz and O’Donnell defines “policies are general statements or undertakings which guide or channel thinking in decision-making of subordinates.” So, policies act as guides to thinking and action of subordinates in the organisations. It should be clearly prescribed and understandable by all.


'Planning facilities decision-making' and 'establishes standard for controlling.' Explain how?

  •  Planning Facilitates Decision Making:
Planning helps the managers to take various decisions. As in planning goals are set in advance and predictions are made for future. These predictions and goals help the manager to take fast decisions.
  •  Planning establishes standard for controlling:
Controlling means comparison between planned and actual output and if there is variation between both then find out the reasons for such deviations and taking measures to match the actual output with the planned. But in case there is no planned output then controlling manager will have no base to compare whether the actual output is adequate or not.


Explain any five features of planning.

  • First and foremost managerial function: Planning provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made.
  • Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
  • Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
  • Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.
  • Intellectual Process: It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc.


Explain the steps involved in the process of planning.

 Steps involved in the process of planning-
1. Perception of Opportunities:
Perception of opportunities is not strictly a part of the planning process. But this awareness of opportunities in the external environment as well as within the organisation is the real starting point for planning. It is important to take a preliminary look at possible future opportunities and see them clearly and completely.
 2. Establishing Objectives:
This is the second step in the planning process. The major organisational and unit objectives are set in this stage. This is to be done for the long-term as well as for the short range. Objective specifies the expected results and indicates the endpoints of what is to be done, where the primary emphasis is to be placed and what is to be accomplished by the various types of plans.
3. Planning Premises:
After determination of organisational objectives, the next step is establishing planning premises that is the conditions under which planning activities will be undertaken. Planning premises are planning assumptions the expected environmental and internal conditions.
4. Identification of Alternatives:
The fourth step in planning is to identify the alternatives. Various alternatives can be identified based on the organisational objectives and planning premises. The concept of various alternatives suggests that a particular objective can be achieved through various actions.
5. Evaluation of Alternatives:
The various alternative course of action should be analysed in the light of premises and goals. There are various techniques available to evaluate alternatives. The evaluation is to be done in the light of various factors. Example, cash inflow, and outflow, risks, limited resources, expected payback etc., the alternatives should give us the best chance of meeting our goals at the lowest cost and highest profit.
6. Choice of Alternative Plans:
This is the real point of decision-making. An analysis and evaluation of alternative courses will disclose that two or more .ire advisable and beneficial. The fit one is selected.
7. Formulation of Supporting Plan:
After formulating the basic plan, various plan are derived so as to support the main plan. In an organization, there can be various derivative plans like planning for buying equipment, buying raw materials, recruiting and training personnel, developing new product etc. These derivative plans are formulated out of the basic or main plan and almost invariably required to support the basic plan.




'Planning provides directions and reduces the risks of uncertainty.' Explain how?

1. Planning provides Direction: Planning is concerned with predetermined course of action. It provides the directions to the efforts of employees. Planning makes clear what employees have to do, how to do, etc. By stating in advance how work has to be done, planning provides direction for action. Employees know in advance in which direction they have to work. This leads to Unity of Direction also. If there were no planning, employees would be working in different directions and organisation would not be able to achieve its desired goal.
2. Planning Reduces the risk of uncertainties: Organisations have to face many uncertainties and unexpected situations every day. Planning helps the manager to face the uncertainty because planners try to foresee the future by making some assumptions regarding future keeping in mind their past experiences and scanning of business environments. The plans are made to overcome such uncertainties. The plans also include unexpected risks such as fire or some other calamities in the organisation. The resources are kept aside in the plan to meet such uncertainties.


Answer the following question in a sentence or a word.
Give an example for rule.

The definition of a rule is an official regulation, code of regulations or set practice.An example of a rule is that a red light means stop. 
An example of a rule is an employer demanding their employees arrive at 8 am.


How can the company ensure that higher order needs, i.e., the esteem and self actualisation needs are met?

Generally, higher order needs are not satisfied with money alone. To satisfy these needs, psychological, social and emotional factors also play an important role. Non-financial incentives mainly focus on these needs and common non-financial incentive which can ensure that higher order needs are satisfied.


Answer the following question in a sentence or a word.
State a type of plan.

Strategic Plans

To best understand the relationship between the different types of plans, let's start at the top. Strategic plans are designed with the entire organization in mind and begin with an organization's mission. Top-level managers, such as CEOs or presidents, will design and execute strategic plans to paint a picture of the desired future and long-term goals of the organization. Essentially, strategic plans look ahead to where the organization wants to be in three, five, even ten years. Strategic plans, provided by top-level managers, serve as the framework for lower-level planning.
Tommy is a top-level manager for Nino's Pizzeria. As a top-level manager, Tommy must use strategic planning to ensure the long-term goals of the organization are reached. For Tommy, that means developing long-term strategies for achieving growth, improving productivity and profitability, boosting return on investments, improving customer service and finding ways to give back to the community in which it operates.




Answer the following question in $$2$$ or $$3$$ sentences.
Define planning.

Planning is the process of thinking about the activities required to achieve a desired goal. It is the first and foremost activity to achieve desired results. It involves the creation and maintenance of a plan, such as psychological aspects that require conceptual skills. There are even a couple of tests to measure someone’s capability of planning well. As such, planning is a fundamental property of intelligent behavior. An important further meaning, often just called "planning" is the legal context of permitted building developments


Answer the following question in $$2$$ or $$3$$ sentences.
State any two limitation of planning.


(1) Planning Creates Rigidity :

Although the quality of flexibility is inherent in planning, meaning thereby that in case of need changes can be brought in, but it must be admitted that only small changes are possible. Big changes are neither possible nor in the interest of the organisation.

Since it is not possible to introduce desired changes according to the changed situations, the organisation loses many chances of earning profits. For this limited flexibility in planning, both the internal as well as external factors are responsible. These facts are called internal and external Inflexibility. 

They are the following: 

(i) Internal Inflexibility:

At the time of planning the objectives of the organisation, its policies, procedures, rules, programmes, etc. are determined. It is very difficult to bring in changes time and again. It is known as internal inflexibility,

(ii) External Flexibility:

External inflexibility means various external factors that cause limited flexibility in planning.

These factors are beyond the control of the planners. The chief among them are: political climate, economic changes, technical changes, natural calamities, policies of the competitors, etc.

For example, in political context, as a result of change, a new government brings up a new trade policy, policy of taxation, import policy, etc. All these changes make every sort of planning a meaningless waste. Similarly, a change in the policies of the competitors suddenly makes all types of planning ineffective.

(2) Planning Does Not Work in a Dynamic Environment:

Planning is based on the anticipation of future happenings. Since future is uncertain and dynamic, therefore, the future anticipations are not always true. Therefore, to consider planning as the basis of success is like a leap in the dark.

Generally, a longer period of planning makes it less effective. Therefore, it can be said that planning does not work in dynamic environment.

For example, a company anticipated that the government was thinking about allowing the export of some particular product. With this hope the same company started manufacturing that product. But the government did not allow the export of this product. In this way, the wrong anticipation proved all planning wrong or incorrect. It brought loss instead of profit. 



Answer the following question in $$20$$ to $$30$$ sentences.
Explain any five types of plans.



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Answer the following question in $$2$$ or $$3$$ sentences.
State any two features of planning.

1. Planning is Primary Function:

Planning provides the base for another function of management. It is followed by organising, staffing, directing and controlling. All the managerial functions are performed within the framework of plans. Planning provides the foundation for managerial action by specifying the objectives and the ways of achieving them. Thus, we could say that planning is the most primary function.

2. Planning is Pervasive:

Planning is practiced in all kinds of organisations and each and every level of management. However, the nature and scope of planning is different at different organisations and level of management. For example, top managers plan for the organisation as a whole, while middle level managers propose departmental plans and lower level manager formulate day-to-day operational planes.



What is meant by 'Rule' ?

A rule refers to a standard or specific statement that gives information about what is to be done and what is not to be done.


Explain any three points of importance of planning function of
management.

The following are the importance of planning as a function of management:
(i) Direction for Action: Planning provide direction for action by prescribing what is to be achieved (objectives) and how it can be achieved (various actions organization-wide);
(ii) Reducing Risks of Uncertainty: Changes in the business environment create uncertainty and consequently risks for an organization. Managers' actions, thereby reducing the risks of uncertainty.
(iii) Reducing Overlapping and Wasteful Activities: Planning reduces overlapping and wasteful activities by prescribing what is to be done and how this can be done, and only necessary activities are performed without duplication of activities.


Answer the following question in a word or sentence.
Give the meaning of "Rule".

Rules are instructions that tell you what you are allowed to do and what you are not allowed to do.


Answer the following question in $$10$$ to $$12$$ sentences.
Explain the importance of planning with any four points.

Importance of Planning:
 (i) Planning provides directions: By stating in advance how work is to be done planning provides direction for action. Planning ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals. 
(ii) Planning reduces the risks of uncertainty: Planning is an activity which enables a manager to look ahead and anticipate changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed. 
(iii) Planning reduces overlapping and wasteful activities: Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions. 
(iv) Planning promotes innovative ideas: Since planning is the first function of management, new ideas can take the shape of concrete plans. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business.


Answer the following question in $$20$$ to $$30$$ sentences.
Briefly explain the various steps involved in the planning process.

Step 1. Perception of Opportunities:
Perception of opportunities is not strictly a part of the planning process. But this awareness of opportunities in the external environment as well as within the organisation is the real starting point for planning. It is important to take a preliminary look at posAll managers should know where they stand in the light of their strengths and weaknesses, understand the problems they wish to solve and know what they gain. Setting objectives depends on the awareness. Planning requires realistic diagnosis of the opportunity situation.

Step 2. Establishing Objectives:
This is the second step in the planning process. The major organisational and unit objectives are set in this stage. This is to be done for the long term as well as for the short range. Objective specify the expected results and indicate the end points of what is to be done, where the primary emphasis is to be placed and what is to be accomplished by the various types of plans.
Organisational objectives give direction to the major plans, which by reflecting these objectives define the objective of every major department. Major objectives, in turn, control the objectives of subordinate departments and so on down the line. In other words, objectives from a hierarchy.
The objectives of lesser departments will be more accurate if subdivision managers understand the overall enterprise objectives and the derivative goals. Managers should also have the opportunity to contribute their ideal to setting their own goals and those of the organisation.

Step 3. Planning Premises:sible future opportunities and see them clearly and completely.
After determination of organisational objectives, the next step is establishing planning premises that is the conditions under which planning activities will be undertaken. Planning premises are planning assumptions the expected environmental and internal conditions.
Thus planning premises are external and internal. External premises include total factors in task environment like political, social, technological, competitors, plans and actions, government policies. Internal factors include organisation’s policies, resources of various types, and the ability of the organisation to withstand the environmental pressure. The plans are formulated in the light of both external and internal factors.
The nature of planning premises differs at different levels of planning. At the top level, it is mostly externally focused. As one moves down the organisational hierarchy the composition of planning premises changes from external to internal. The major plans both old and new will materially affect the future against which the managers at lower units must plan.

Step  4. Identification of Alternatives:
The fourth step in planning is to identify the alternatives. Various alternatives can be identified based on the organisational objectives and planning premises. The concept of various alternatives suggests that a particular objective can be achieved through various actions.
For example, if an organisation has set its objectives to grow further, it can be achieved in several ways like expanding in the same Field of business or product line diversifying in other areas, joining hands with other organisations, or taking over another organisation and so on. Within each category, there may be several alternatives.
The most common problem is not finding alternatives but reducing the number of alternatives so that the most promising may be analysed. Even with mathematical techniques and the computer, there is a limit to the number of alternatives that can be thoroughly examined. The planner must usually make a preliminary examination to discover the most fruitful possibilities.

Step  5. Evaluation of Alternatives:
The various alternative course of action should be analysed in the light of premises and goals. There are various techniques available to evaluate alternatives. The evaluation is to be done in the light of various factors. Example, cash inflow and outflow, risks, limited resources, expected pay back etc., the alternatives should give us the best chance of meeting our goals at the lowest cost and highest profit.

Step 6. Choice of Alternative Plans:
This is the real point of decision-making. An analysis and evaluation of alternative courses will disclose that two or more .ire advisable and beneficial. The fit one is selected.

Step  7. Formulation of Supporting Plan:
After formulating the basic plan, various plan are derived so as to support the main plan. In an organisation there can be various derivative plans like planning for buying equipment, buying raw materials, recruiting and training personal, developing new product etc. These derivative plans are formulated out of the basic or main plan and almost invariably required to support the basic plan.

Step 8. Establishing Sequence of Activities:
After formulating basic and derivative plans, the sequence of activities is determined so those plans are put into action. After decisions are made and plans are set, budgets for various periods and divisions can be prepared to give plans more concrete meaning for implementation.

The overall budgets of an enterprise represent the sum total of income and expenses, with resultant profit or surplus, and budgets of major balance sheet items such as cash and capital expenditures. Each department or programme of a business or other enterprise can have its own budgets, usually of expenses and capital expenditures, which tie into the overall budget.



Define 'Planning'. Explain the first two steps in the process of planning. 

Planning is the process of setting an objective for a given period, formulating various the course of actions to achieve them and then selecting the best possible alternative from the various courses of action available.

 The following are the first two steps involved in the process of planning:
(i) Setting objectives: The first and foremost step is setting objectives. Every organization must have certain objectives. Objectives may be set for the entire organization or for each department or unit within the organization. Objectives or goals specify what the organization wants to achieve. It could mean an increase in sales by 20% which could be an objective of the entire organization.
(ii) Developing premises: Premises refers to making assumptions regarding the future. Premises are the base on which plans are made. It is a kind of forecast, made keeping in view existing plans and any past information about various policies. There should be total agreement on all these assumptions.


Explain any three limitations of planning function of management. 

The following are the limitations of planning as function of management:
(i) 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.
(ii) 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.
(iii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced.


Define turnaround.

Turnaround can be defined as a business strategy which is followed by an organization when it feels that the decision made earlier is wrong and needs to be undone before it damages the profitability of the company. It is also known as Retrenchment strategy.


Two years ago Mayank obtained degree in food technology. For some time he worked in a company manufacturing Bread and Biscuits. He was not happy in the company and decided to have his own Bread and Biscuits manufacturing unit. For this he decided the objectives and the targets and formulated action plan to achieve the same. 
One of his objective was to earn 50% profit on the amount invested in the first year. It was decided that raw materials like flour, sugar, salt etc. will be purchased on two months credit. He also decided to follow the steps required for marketing the products through his own outlets. He appointed Harsh as a Production-Manager who decided the exact manner in which the production activities are to carried out. Harsh also prepared a statement showing the requirement of workers in the factory throughout the year. Mayank informed Harsh about his sales target for different products, areawise for the forth coming quarter. While working on the production table a penalty of Rs. 150 per day was announced for not wearing the helmet, gloves and apron by the workers. 
Quoting lines from the above pars identify and explain the different types of plans discussed. 

The different types of plans are:
(i) Objective:
‘One of his objectives was to earn 50% profits on the amount invested in the first year’.
An objective is the end which the management seeks to achieve within a given time period.
(ii) Policy:
‘It was decided that raw materials like flour, sugar salt etc. will be purchased on two credit.’
Policy is a general guideline which brings uniformity in decision making for achievement of predetermined objectives.
(iii) Procedure:
'He also decided to follow the steps required for marketing the products through his own outlets.'                                            
It consists of sequence of routine steps on how to carry out activities. It details the exact manner in which any work is to be performed.
(iv)Budget:
'Harsh also prepared n statement showing the requirement of workers in the factory throughout the year.'                                    
A budget is plan which states expected results of a given future period in numerical terms. It may be expressed in time, money or physical units.

(v)Rule:
'While working on the production table a penalty of Rs.150 per day was announced for not wearing the helmet, gloves and apron by the workers.'
A rule is a statement that specifies what is to be done or not to be done.



Class 12 Commerce Business Studies Extra Questions