Detailed, Step-by-Step NCERT Solutions for 12 Business Studies Chapter 4 Planning Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.
Planning NCERT Solutions for Class 12 Business Studies Chapter 4
Planning Questions and Answers Class 12 Business Studies Chapter 4
Short Answer Type Questions
What are the main points in the definition of planning?
Planning is what managers at all levels do. It requires taking decisions since it involves making a choice from alternative courses of action. Planning, thus involves setting objectives and developing appropriate courses of action to achieve these objectives. Objectives provide direction for all managerial decisions and action. Planning provides a rational approach for achieving predetermined objectives. All members, therefore need to work towards achieving organisational goals.
How does planning provide direction?
Planning provides direction 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 will defined, employees are aware of what the organisation has to do and what they must to do achieve those goals. Departments and individuals in the organisation are able to work in coordination If there was no planning, employees would be working in different directions and the organisation would not be able to achieve its desired goals.
Do you think planning can work in a changing environment?
No, planning.cannot work in a changing 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 adopt itself to change.
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. Competition in the market can also upset financial plans, sales targets may have to be revised and accordingly.
Cash budgets alsoneed to be modified since they are based on sales figures. Planning cannot foresee everything and thus, there may be obstacles to effective planning.
If planning involves working out details for the future, why does it not ensure success?
Yes, only planning does not guarantee success. The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or becomes meaningless. Managers have a tendency to rely on previously tried and tasted successful plans.
It is not always true that just because a plan has worked before it will work again. Besides there are so many other unknown factors to be considered. This kind of complacency and false sense of security may actually lead to failure instead of success.
However, despite its limitations, planning is not a useless exercise. It is a tool to be used with caution. It provides a base for analysing future courses of action. But, it is not a solution to all problems.
Why are rules considered to be plans?
A rule is a guide to action. It specifies what is to be done and what is not to be done and thus leaving the concerned person with no direction. 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. These are important for an organisation because
- It is a code of conduct governing human behaviour.
- It is used to maintain discipline and command.
- Rules are authoritative in nature.
- It is the result of managerial values and thinking.
What kind of strategic decisions are taken by business organisations?
A strategy provides the broad contours of an organisation’s business. It will also refer to future decisions defining the organisations direction and scope in the long run. Thus, we can say a strategy is a comprehensive plan for complishing an organisation objectives.
Whenever a strategy is formulated the business environment needs to be taken into consideration. The changes in the economic, policital, social, legal and technological environment will affect an organisations strategy. Strategies usually take the course of forming the organisations identity in the business environment.
Major strategic decisions will include decision like whether the organisation will continue to be in the same line of business or combine new lines of activity with the existing business or seek to acquire a dominant position in the same market.
Long Answer Type Questions
Why is it that organisations are not always able to accomplish all their objectives?
Planning is essential for business organisation. It is difficult to manage operations without formal planning. It is important for an organisation to move towards achieving goals. But in our daily lives also we have seen that things do not always go according to plan.
Unforeseen events and changes, rise in costs and prices, environmental changes, government intervention, All affect our business plans thus organisations are not always able to accomplish all their objectives as they have certain limitations such as :
1. Planning leads to rigidity
In an organisation a well-defined plan is drawn up with specific goals to be achieved within a specific timeframe. But rigidity in plans may create difficulty. Managers need to be given some flexibility.
2. Planning may not work in a dynamic environment
The business environment is dynamic, nothing is constant. It consists of a number of demensions, economic, political, legal and social dimensions competition may also upset financial plans.
3. 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 result, middle management and others decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. thus must of the initiative inherent in them also gets lost or reduced.
4. Planning involves huge costs
When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money. Like expencison boards room meeting, discussions with professional experts to find out the viability of the plan.
5. Planning is a time consuming process Some time, plans to be drawn up take so much of time that there is not much time left for their implementation.
6. Planning does not guarantee success
The success of an enterprise is possible only when plans are properly drawn up and implemented any plan needs to be translated into action or becomes meaningless. Besides, there are so many other factors to be considered. This kind of complacency may actually lead to failure instead of success.
What are the main features to be considered by the management while planning?
Features of planning
The planning function of the management has certain special features. These features throw light on its nature and scope.
1. Planning focuses on achieving objectives
Organisations are set up with a general purpose in view. Specific goals are set out in the plans along with the activities to be undertaken to achieve the goals.
2. Planning is a primary function of management
Planning lays down the base for other functions of management. All other managerial functions are performed within the framework of the plans drawn and planning provides the basis of all other functions.
3. Planning is pervasive
Planning is required at all levels of management as well as in all departments of the organisation, it is not only for top management but it differs at different,levels and among different departments.
4. Planning is continuous
Plans are prepared for a specific period of time, may be for a month, a quarter or a year. At the end of that period there is need for a new plans to be drawn on the basis of new requirements and future conditions. Hence it is q continuous process.
5. Planning is futuristic
Planning essentially involves looking ahead and preparing for the future the purpose of planning is to meet future events effectively to the best advantage of an organisation. Therefore it is regarded as a forward looking function based on forecasting.
6. Planning involves decision making
It essentially involves choice from among various alternatives and activities. If there is only one possible goal there is no need for planning because there is no choice.
7. Planning is a mental exercise
Planning requires Application Of the mind involving foresight, intelligent imagination and sound judgement. It is basically an intellectual activity of thinking rather than doing in other words thinking for planning must be orderly and based on the analysis of facts and forecasts.
What are the steps taken by management in the planning process ?
Plannirig is deciding in advance what to do and how to do. It is a process of decision making. Since it is an activity there are certain logical steps for every manager to follow.
1. Setting objectives
The first and formost step is setting objectives every organisation must’have certain objectives. Objectives may be set for the entire organisation and each department within the organisation.
2. Developing premises
Planning is concerned with the future which is uncertain and every planner is using conjucture about what might happen in future. Therefore the manager is required to make certain assumption about the future. These assumptions are called premises. They must be some for all anci there should be total agreement on them.
3. Identifying alternative courses of action
Once objectives are set assumptions are made. Then the next step would be to act upon them. There may be many ways to act and achieve objectives.
4. Evaluating alternative courses
The next step is to weight the pros and cons of each alternative. Each course will have many variables which have to be weighed against each other, the positive and negative aspects of each proposal need to be evaluated in the light of the objective to be achieved.
5. Selecting an alternative
This is the real point of decision making. The best plan has to be adopted and implemented. The ideal plan of course would be the most feasible profitable and with least negative consequences.
6. Implement the plan
This is the step where other managerial function also come into the Picture. The step is concerned with putting the plan into action i.e. doing what is required.
7. Follow-up action
I’m see whether plans are being implemented and activities are performed according to schedule is that part of planning process.
Is planning actually worth the huge costs involved? Explain.
Planning is certainly important as it tells us where to go, it provides direction and reduces the risk of uncertainity by preparing forecasts. The major benefits are as follows :
1. Planning provides direction
By stating in advance how work is to be done planning provides direction for action. It ensures that the goals or objectives are clearly stated so that they act as a guide for deciding about actions.
2. Planning reduces the risks of uncertainity
Planning 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.
3. Planning reduces overlapping
It serves as basis of coordinating the activities and efforts of different divisions and individuals. It helps in avoiding confusion and misunderstanding.
4. Planning promotes innovative ideas
Since it is the first function of management new ideas can take the shape of concrete plAnswer:It is the most challenging activity for the management.
5. Planning facilitates decision making
Planning helps the manager to look into the future and made a choice from amongest various alternative courses of action.
6. Planning establishes standards for controlling
Planning involves setting of goals. The entire managerial process is concerned with accomplishing predetermined goals through planning, organising, staffing, directing and controlling. Therefore we can say that planning is a prerequisite for controlling it is not a costly affair.
An auto company C Ltd. 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 priced models for mass consumers who are price sensitive. For quality conscious consumers, the company is introducing new models with added features and new technological advancements.
Prepare a model business plan for C Ltd. to meet the exsiting challenge. You need not be very specific about quantitative parameters. You may specify which type of plan you are preparing.
New Plans of ‘C Ltd.’
‘C’ Ltd which has had a monopoly in the auto world is set to see some tough competitions fn the coming days. Many new companies are now in the market with new models and lower prices, the new chairman shares his thoughts on how he plans to take the company ahead.
Now the companies priority is to meet the challenge with new technology and low prices. So the consumer 9an easily get the car. Thus C Ltd. should adopt the planning which is based on future.
Identify the limitations of such plans.
The limitations of this plan are these, that, they might be a costly affair and even than success is not assure
How will you seek to remove these limitations?
Before entering and adopting new technology the company should arrange proper funds so that success can be achieved without any problem.