This page contains the NCERT Business Studies class 12 chapter 4 Planning from Part 1 Principles and Functions of Management. You can find the solutions for the chapter 4 of NCERT class 12 Business Studies, for the Short Answer Questions, Long Answer Questions and Projects/Assignments Questions in this page. So is the case if you are looking for NCERT class 12 Business Studies related topic Planning question and answers.
Very Short Answer Type
1. How does planning provide direction?
Planning provides direction by stating in advance how work is to be done, ensuring 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. This ensures that all members of the organization work towards achieving the set objectives.
2. A company wants to increase its market share from the present 10% to 25% to have a dominant position in the market by the end of the next financial year. Ms Rajni, the sales manager has been asked to prepare a proposal that will outline the options available for achieving this objective. Her report included the following options – entering new markets, expanding the product range offered to customers, using sales promotion techniques such as giving rebates, discounts or increasing the budget for advertising activities. Which step of the planning process has been performed by Ms Rajni?
Ms Rajni has performed the “Identifying alternative courses of action” step of the planning process, where all the alternative courses of action to achieve objectives are identified.
3. Why are rules considered to be plans?
Rules are considered to be plans because they are specific statements that inform what is to be done, reflecting a managerial decision that a certain action must or must not be taken, ensuring that certain actions are consistently applied in specific situations.
4. Rama Stationery Mart has made a decision to make all the payments by e-transfers only. Identify the type of plan adopted by Rama Stationery Mart.
Rama Stationery Mart has adopted a “Rule” as the type of plan, as it is a specific statement that informs what is to be done without allowing for any flexibility or discretion.
5. Can planning work in a changing environment? Give a reason to justify your answer.
Yes, planning can work in a changing environment as it involves making assumptions and forecasts about the future, which can be adjusted based on changing circumstances.
Short Answer Type
1. What are the main aspects in the definition of planning?
The main aspects in the definition of planning are as follows:
Deciding in advance what to do.
Determining how to do the decided actions.
It is a process of decision-making.
Setting objectives for the future.
Making decisions based on future conjectures.
2. If planning involves working out details for the future, why does it not ensure success?
Planning is concerned with the future, which is uncertain. Every planner uses conjecture about what might happen in the future, and these assumptions are based on premises that might or might not hold true. Therefore, even with detailed planning, the unpredictable nature of future events and the assumptions made can lead to discrepancies between planned outcomes and actual results.
3. What kind of strategic decisions are taken by business organisations?
Strategic decisions that are taken by business organisations are of the following kinds:
Determining long-term objectives.
Adopting a specific course of action.
Allocating necessary resources to achieve the objectives.
Deciding on continuing in the same line of business or diversifying.
Combining new activities with the existing business.
Seeking a dominant position in the market.
4. Planning reduces creativity. Critically comment.(Hint: both the points – Planning promotes innovative ideas and planning reduces creativity – will be given).
Planning Promotes Innovative Ideas: Planning involves identifying various alternative courses of action, which encourages managers and employees to think creatively and come up with diverse solutions. This can lead to innovative strategies and methods to achieve organizational objectives.
Planning Reduces Creativity: On the flip side, planning can sometimes be restrictive. When employees have to strictly adhere to a set plan, they might feel constrained and less inclined to think outside the box or suggest new ways of doing things.
5. In an attempt to cope with Reliance Jio’s onslaught in 2018, market leader Bharti Airtel has refreshed its ₹ 149 prepaid plan to offer 2 GB of 3G/4G data per day, twice the amount it offered earlier. Name the type of plan is highlighted in the given example. ? State its three dimensions also.
Type of Plan highlighted in the given example is a “Strategy.”
Three Dimensions of Strategy are as follows:
Determining long-term objectives: Bharti Airtel aims to retain and possibly expand its customer base in the face of competition from Reliance Jio.
Adopting a particular course of action: Bharti Airtel decided to refresh its ₹ 149 prepaid plan to offer more data.
Allocating resources necessary to achieve the objective: Bharti Airtel would allocate technological and financial resources to support the increased data offering to its customers.
6. State the type of plan and state whether they are Single use or Standing plan:
A type of plan which serves as a controlling device as well.(budget)
A plan based on research and analysis and is concerned with physical and technical tasks. (Method)
The following are the types of plans and their classification into single-use and standing types.
Type of Plan: Budget
Classification: Single-use Plan
Explanation: A budget is a statement of expected results expressed in numerical terms for a specified period. Since it quantifies future facts and figures for a specific period, it is a single-use plan. Additionally, it serves as a controlling device by allowing for comparison between actu and expected figures.
Type of Plan: Method
Classification: Standing Plan
Explanation: Methods provide the prescribed ways or manner in which a task has to be performed, considering the objective. They deal with a task comprising one step of a procedure and specify how this step is to be performed. As they are used repeatedly for activities that occur regularly, they are classified as standing plans.
Long Answer Type
1. Why is it that organisations are not always able to accomplish all their objectives?
The organisations are not always able to accomplish all their objectives due to the following reasons:
Uncertain Future: One of the primary challenges in planning is its inherent association with the future, which remains unpredictable. While planning provides a roadmap, the unpredictability of future events, market dynamics, and unforeseen challenges can derail even the most well-thought-out plans. Every planner makes conjectures about potential future scenarios, but the actual future might unfold differently, affecting the achievement of objectives.
Assumptions and Premises: The planning process requires managers to establish certain assumptions or premises about the future. These assumptions form the foundation upon which plans are built. For instance, forecasts about demand for a product, changes in interest rates, or tax policies are all assumptions. If these assumptions prove to be inaccurate or if there’s a significant shift in the base material upon which these premises were made, the resultant plans might not be effective.
Changing Environment: The business environment is in a constant state of flux. Factors like economic conditions, political stability, technological advancements, legal regulations, and social trends can change rapidly. For instance, a sudden change in government policies or an unexpected technological breakthrough by a competitor can render existing plans ineffective. Organisations need to be agile and adaptive, but even then, they might not always be able to pivot quickly enough to align with the changing environment.
Limitations of Quantitative Data: Plans like budgets are often based on quantitative data, which, while providing clarity, might not capture the qualitative aspects or the intricacies of market dynamics. Relying solely on numbers without considering qualitative factors can lead to gaps in planning.
Human Element: Planning is a managerial activity, and like all such activities, it’s subject to human biases, errors, and limitations. Managers might have their own perceptions and biases which can influence the planning process. Moreover, for plans to be successful, they need to be effectively communicated and executed by the entire team. Any miscommunication or lack of alignment among team members can hinder the achievement of objectives.
2. What are the steps taken by management in the planning process?
The following are the steps taken by management in the planning process.
Setting Objectives: The initial step in the planning process is to establish clear objectives. These objectives define what the organisation aims to achieve, such as a specific increase in sales or profit margins. These goals provide a direction for all departments and units within the organisation.
Developing Premises: In this step, managers make assumptions about the future, which are termed as premises. These assumptions could be based on forecasts, existing plans, or past information. It’s essential that all managers involved in planning are aligned with these assumptions.
Identifying alternative courses of action: After setting objectives and developing premises, the next step is to identify all possible ways or courses of action to achieve the set objectives. This could involve routine or innovative approaches.
Evaluating alternative courses: Each identified course of action is then evaluated for its pros and cons. This evaluation considers the feasibility and potential consequences of each alternative in light of the objectives.
Selecting an alternative: Based on the evaluation, the most feasible and beneficial plan is chosen for implementation. Sometimes, a combination of plans might be selected.
Implementing the plan: This step involves putting the chosen plan into action. It might require mobilizing resources, hiring additional labor, or purchasing machinery.
Follow-up action: The final step is to monitor the implemented plans to ensure they are on track to achieve the set objectives. Any deviations from the plan are noted, and corrective actions are taken if necessary.
3. 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. C Ltd. realized that it needs to take steps immediately to improve its market standing in the future. For quality conscious consumers, C Limited plans to introduce new models with added features and new technological advancements. The company has formed a team with representatives from all the levels of management. This team will brainstorm and will determine the steps that will be adopted by the organisation for implementing the above strategy. Explain the features of Planning highlighted in the situation given below.(Hint: Planning is pervasive, Planning is futuristic and Planning is a mental exercise).
The following is the explanation of the features of Planning highlighted in the situation given:
Planning is Pervasive:
Explanation: Planning is an activity that is carried out at all levels of management and is not confined to top executives or strategists alone.
Illustration from the Situation: In the case of C Ltd., when faced with the challenge of declining market share, the company didn’t rely solely on its top management to devise a strategy. Instead, it formed a team with representatives from all levels of management. This inclusive approach emphasizes that planning is a universal function and is relevant across all departments and levels in an organization.
Planning is Futuristic:
Explanation: The essence of planning lies in looking ahead and preparing for the future. It involves anticipating changes, predicting future conditions, and making decisions that will be effective in the coming times.
Illustration from the Situation: C Ltd. recognized the competitive threat and understood that merely addressing the present wouldn’t suffice. They decided to introduce new models with advanced features targeting quality-conscious consumers. This move is a clear testament to the company’s forward-looking approach, aiming to secure a better market position in the future.
Planning is a Mental Exercise:
Explanation: Planning is an intellectual process. It requires thinking, reasoning, and judgment. It’s not a mere physical activity but involves deep contemplation, analysis, and foresight to arrive at decisions.
Illustration from the Situation: The company’s decision to form a team to brainstorm solutions is a prime example of planning as a mental exercise. Brainstorming is an activity that requires creative thinking, analysis of the current situation, and envisioning potential solutions. By engaging in this, C Ltd. is tapping into the collective intellectual power of its team to devise a robust strategy to counter its challenges.
By understanding these features of planning, it becomes evident that planning is a systematic and thoughtful activity that plays a crucial role in guiding an organization’s direction, especially in challenging situations like the one faced by C Ltd.