CBSE Class 12 Business Studies HOTs Planning

Question.“Planning involves choice “Elaborate
Answer: Planning involves choice from among various alternatives and activities.

Question.“No smoking in office “ is an example of which type of plan?
Answer: Rules

Question. Name the function of management is considered a base for all other function
Answer: Planning

Question. Name the plan which specifies a detail step by step presentation of a job?
Answer: Procedure

Question. A company allows only eight leave for his employees during one year .Which type of plant is it?
Answer: “Rules”

Question. Without one function of management the controlling function is not possible. Name the concerned function.
Answer: “Planning”

Question. ‘No enterprises can achieve its objectives without systematic planning’. Do you agree with this ? Give any five reasons in support of your answer.
                                                 OR
Is planning actually worth the huge costs involved ? Give 4 reasons
Answer: Yes ,it is worth every amount spent on its .A company needs to plan because of the following benefits.(Explain 4 important of planning).
(a) Provides Directions
(b )Reduce risk of uncertainty
(c) Promotes innovative ideas.
(d) Facilitate controlling.

Question. “planning is not a guarantee of success of a business”. Comment
                                                        OR
“sometimes planning fails in spite of the best efforts of management’. do you agree? Give any 5 reasons in support of your answers.
                                                       OR
Why is it that organizations are not always able to accomplish all their objectives?
Answer: Hint: Yes, I agree with the statement ,planning though an important tool of management is not a remedy for all types of problems because it suffers from following limitations;[Explain any 4 limitation]
(a) Rigidity
(b) Does not work in a dynamic environment
(c) Reduces creativity
(d) Involves huge costs.

Question. Name the type of plan in which expected results are expressed in numerical term
Answer: Budgets.

Question. Name any two external factors due to which planning may not work.
Answer: (a) Political factors    (b) Economic factors

Question. MC Donald’s Co. Does not give its franchise to any other co. which is running food business. this is related to which type of plan?
Answer: It is related to policy of the company.

Question. In which step of planning process the planner make predictions and assumptions regarding future?
Answer: “Setting up of planning premises for all alternatives” predictions are made.

Question. IN which type of plan the sequence of activities to complete a job is determined
Answer: under procedure

Question. name the type of plan in which the moves of competitors is considered
Answer: it is strategy

Question. a company needs a detailed plan for its new project’construction of a shopping mall’ what type of plan is it?
Answer: it’s a program

Question. How does planning provide direction?(Any Three)
Answer: (a) Planning is goal oriented.
(b) Continuous process.
(c) Pervasive function. 

Question. The planning function of management is conducted at which level of management ?
Answer: At all Three Levels. 

Question. One of the functions of management is considered as a base for all other functions. Name that Function.
Answer: Planning. 

Question. Planning strangulates the initiative of the employees and compels them to work in an inflexible manner” Discuss.
Answer: Planning reduces creativity. 

Question. Which limitation of planning suggest that the employees stop thinking and become the blind followers of Plan?
Answer: Planning reduce creativity. 

Question. A company needs a detailed plan for its new project- construction of shopping mall. What type of plan Is it ?
Answer: Programme. 

Question. In which type of plan the sequence to perform a job is determined?
Answer: Procedure. 

Question. Which plans suggest action and non action of employees?
Answer: Rules 

Question. “No Smoking : the statement is related to which type of plan?
Answer: Rule.   

Question. Mc Donald does not give its franchise to any other company which is running food business. This is Related to which type of plan.
Answer: Policy. 

Question. Name the type of plan which serve as a guide for overall business planning and define the future state of  Affair which the organization strive to realize?
Answer: Objectives. 

Question. In which step of planning process the planners make prediction and assumptions regarding future?
Answer: Setting up of planning premises for all the alternatives. 

Question. How should a manager select the best possible course of action?
Answer: Manager should apply permutation and combination. 

Question. Without one function of management the controlling function is not possible. Name the concerned function.
Answer: Planning. 

Question. Planning is an activity which enables a manager to look ahead and anticipate changes. Mention the Benefit of planning highlighted here.
Answer: Planning reduces the risks of uncertainty. 

Question. Planning ensures clarity in thoughts and actions, works is carried on smoothly without interruptions . Which importance of planning is mentioned here?
Answer: Planning reduces overlapping and wasteful activities. 

Question. It helps the manager to look into future and make a choice amount various alternative courses of Action enumerate the importance of planning indicate here.
Answer: Planning facilitates decision –making. 

Question. Planning lays down the base for other functions of management which feature of planning is Highlighted here?
Answer: Planning is a primary function of management. 

Question. A plan is framed it is implemented and is followed by another plan and so on. Mention the feature of  Planning indicate here?
Answer: Planning is continuous process. 

Question. Which features of Planning is stressed by saying that planning is an intellectual activity of thinking Rather than doing?
Answer: Planning is a mental exercise .

Case Study Based HOTs Class 12 Business Studies

Read the following text and answer the following questions on the basis of the same:

Simplex limited had been taken over by Mundhra Group immediately following India’s independence. Since then it enjoys a rich record of industry presence and experience. In 2005, with the aim to accelerate growth the company had gone through several rounds of meetings and discussions before launching ERP system to attract large projects. The management had done effective forecast and critical thinking regarding allocation resources to reduce wastage. For this purpose the company had laid down multiple courses of action to meet the challenge of adverse situations. In 2008, the company suffered loss in many projects due to the great recession despite taking many cost cutting measures. The management had taken utmost care regarding the possible outcome and timely review of the plans to achieve the set target during that hard time. In 2010 the system implemented successfully which subsequently helped the company to execute numerous projects with precision and timeliness.

Question. “In 2005, with the aim to accelerate growth the company had gone through several rounds of Meetings and discussions.” What is the objective mentioned here according to the process stated here?
A. Developing Premises
B. Growth & development
C. Launching IT enabled system
D. Cost cutting.

Answer : B

Question. “In 2008, the company suffered loss in many projects due to the great recession despite taking many cost cutting measures.” Which limitation of the management process is indicated here?
A. It fails to cope with sudden changes
B. It involves huge cost
C. It requires critical thinking
D. Need to construct multiple action plans

Answer : A

Question. State whether the given statement is True or False:
“The management had done effective forecast and critical thinking regarding allocation of resources to reduce wastage.”

Answer : true

Question. “The management had taken utmost care regarding the possible outcome and timely review of the Plans to achieve the set target during that hard time.” Which is the last step of the Process mentioned here?
A. Implementation of plan
B. Timely execution of projects
C. Follow up
D. To prepare alternative course of action

Answer : C

Question. Which limitation of planning suggest that the employees step thinking and become the blind follows of plan ?

Answer: “Reduces creaturity or adverse effect on initiative”. Briefly explain.

 

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

Answer: Procedure.

 

Question. Which plan suggests acts and non-action of employees ?

Answer: Rules

 

Question. ‘No Smoking’-this statement is related to which type of plan ?

Answer: Rule

 

Question. Mc Donald co. does not give its franchise to any other co. Which is running food business. This is related to which type of plan ?

Answer: Related to policy of company.

 

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

Answer: “Setting up of planning permi sex all the alternatives”. predictions are made.

 

Question. ‘No enterprise can achieve its objectives’. Do you agree with this statement ?

Answer: Yes, I agree with the statement. Planning is the primary function of every organisation objectives are laid down- Give 5 reasons for importance of planning.

 

Give any five reasons in support of your answer.

 

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

Answer: It is right to say that planning is not a guarantee of success of business. Since it based on assumptions regarding future and assumptions can not be hundred percent accurate- Give 5 limitations of planning.

 

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

Answer: yes I agree-state 5 limitations of planning.

 

Question. Give two examples of goal, objectives, policy.

Answer: Goal

1. Increase in Sale.

2. Attain No. 1 position in market.

Objective

1. Increase in production by 10% in 6 months.

2. Increase in Sale by 5%.

Policy :

1. Give admissions to students securing more than 60% marks.

2. Policy of MC. Donald, not to give franchise to a business man, who is already having a restaurant.

 

Question. Define planning.

Answer: Planning in deciding in advance what to do and how to do. Before doing something, the manager always formulates an idea of how to work on a particular task.

 

Question. Point out whether Planning is a physical or mental activity.

Answer: Planning is a mental activity. It requires application of the mind involving creative thinking and imagination, foresight & judgment. A manager can make sound. Plans only when he has sound judgment, foresignt & vision. Plg; in not mere guess work but involves logical & systematic thinking.

 

Question. Does planning eliminate risk ?

Answer: No, Planning does not eliminate risk. It only reduces the risks. Business enterprises operate in an uncertain environment and face several types of risk. Planning enable these enterprices to predict future events & prepare to face the unexpected events. With the help of planning mangers can identify potential dangers and take steps to overcome them. Thus plg. helps to reduce risk.

 

Question. How does planning affect initiative ?

Answer: Planning affects initiative as it facilitates the decision making and reducesthee overlapping and wasteful activities.

 

Question. Name the managerial function, which is the beginning and end of all managerial activities.

Answer: Planning.

 

Question. Name three types of plan.

Answer: (a) Policies (b) Objectives (c) Strategies.

 

Question. ‘Planning in mental preposition to do things!’ Who thinks so ?

Answer: Koontz and O’ Donnell.

 

Question. Why is planning regarded as pervasive function of management ?

Answer: Planning is regarded as a pervasive function as it is required at all levels of mgt. as well as in all departments of the organisation. However the scope of plg. differs at differs at different levels and among different departments.

 

Question. How does planning restrict creativity ?

Answer: Plg in an activity which is done by top mgt. usually the rest of the organisation just implements these plans. The result is that middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. This planning restricts creativity.

 

Question. What is meant by policies as a type of plans ?

Answer: Policies are general statements or understandings which guide thinking indecision-making. Example : Different business firms may follow different sales policies as stated below : 

“We don’t sell on credit.”

“It is our policy to deal with wholesalers only.”

A policy is based on the objectives of the enterprise. While objectives provides the ends which a manager should try to achieve, the policies provided broad guidelines as to how the objectives of the enterprise are to be achieved.

 

Question. Explain rule as a type of plan ?

Answer:  Rules are specific statements that tell what is to be done. 

o A ‘rule’ reflects a managerial decision that a certain action must or must not be taken.

o They are usually the simplest type of plans because there is no compromise or change unless a policy decision is taken.

o Rules are rigid and definite plans that specify what is to be done or not to be done is given situations.

o Rules are to be enforced rigidly and there is generally a fine or penalty for violation of rules. They do no allow for any flexibility or discretion.

 

Question. Name the other name of directional plan.

Answer: Strategy.

 

 

Short Answer Type Questions Chapter Planning Class 12 Business Studies

 

Question. Enumerate the differences between policies and strategies.

Answer:

 

Question. Distinguish between rules and methods.

Answer:

 

Question. State the limitations of planning.

Answer: I) Planning does not work in dynamic environment.

2) It is a time consuming process.

3) It involves huge costs.

4) It creates rigidity.

 

Question. How does planning help co-ordination ?

Answer: Planning makes co-ordination of various activities, departments and groups relatively easy, planned programmes of activity serve as the basis of harmonizing the efforts of different division, departments and people. Thus, for example, manufacturing and sales activities can be co-ordinate only if plans of the production department are drawn on the basis of sales plane. In the absence of proper planning of interrelated activities the production department may turn out goods which the sales department may not be able to sale and conflict may occur between then heads of two departments. Confusion and misunderstanding may also occur in the absence of integrated planning of different activities co-ordination of departmental operations is facilitated by planning through the establishment of common goals as guide posts.

 

Question. Explain the characteristics of a sound plan.

Answer: Characteristics of sound plan are :

• Plan should be simple : for a good plan to be effective, it should be simple, to understand and worked upon different individuals and groups.

• Plan should be specific : objectives and goals should be clearly defined and explained. Thus planning is purposeful.

• Plan must be flexible : conditions under which a business operate keep on changing. Therefore, planning must be flexible and not rigid. It should enable the management to take care of the changes in the environment.

 

Question. Write features of planning.

Answer: Planning is essential for a business organisation. It is difficult to manage operations without formal planning. it is important for the organisation to move towards achieving goals. But often things to not always go according to plan. Unforeseen events and changes, rise in costs and prices, environmental changes, government interventions, legal regulations, all affect our business plans. Plans then need to be modified. Therefore, planning might fail due to the following limitations : 

1. Planning does not work in dynamic environment : The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions—economic, political, technological, legal and social dimensions. The organisation has to constantly adapt itself to the changes in business environment. However, it is not always possible to accurately assess future trends in the environment.

• Competition in the market can upset financial plans.

• Sales targets have to be revised and according is cash budgets also need to be modified since then are based on sales figures.

Thus, planning cannot foresee everything and thus these are obstacles to effective planning. 

2. Planning is a time consuming process : Planning is a time consuming process. It requires collection of information, its analysis and interpretation. These activities may take considerable time. Sometimes plans to be drawn up take so much of time that there is not much time left for implementation of plans. 

3. Planning involves huge costs : Planning is an expensive process in terms of money. When plans are drawn up, huge costs are involved in the formulation of plans. If the costs are not justified by the benefits derived from the plan, it may have adverse effect on the enterprise. There are a number of incidental costs as well, like expenses on Board’s meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan. 

4. Planning creates rigidity : Planning leads to rigid mode of functioning for managers. This has adverse effect on the initiative to be taken by them. 

5. Planning does not guarantee success : The success of an enterprise is possible only when plans are properly drawn up implemental. Managers have a tendency to rely on previously tried and tested successful plans. But it is not always true that a plan which has worked before, will work effectively again.

 6. Planning reduces creativity : Planning is an activity which is done by top management. Usually the rest of the organisation just implements 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. They only carry out orders. Thus, planning in a way reduces creativity. There is nothing new or innovative.

 

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

Answer: Planning does not guarantee success. The success of enterprise is possible only when plans are properly drawn up and implemented. The business environment is dynamic, nothing is constant. the organisation has to constantly adapt itself, to the changes of in business environment. I agree with the statement & ”Thought business is an important tool of management, yet it is not a remedy in business environment. Planning can’t prevent problem. It can only product them to prepare contingency plans to deal with them if and when they occur. Planning fail inspire of efforts of management because of its imitation.

 

Question. Planning involves choice. Explain.

Answer: Planning essentially involves choice from among various alternatives and objectives of there is one possible goal or only one possible course of action, there is no need of planning because thee is no choice. The need for planning arises only when alternative are available. In actual practice, planning presuppose the existence of alternatives, planning, thus, involves through examination and evaluation for each afternative and choosing the most appropriate one.

 

 

Long Answer Type Questions Chapter Planning Class 12 Business Studies

 

Question. Explain briefly any six points which highlighted the importance of planning.

Planning is of vital importance in the managerial process. No enterprise can achieve its objectives without systematic planning. “Planning is the heart of management” The following points highlight the importance of planning function of management :

Answer: 1. Planning provides directions : By stating in advance how work is to be done, planning provide direction for action. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals. Departments and individuals in the organisation are able to work in coordination Planning keeps the organisation on the right path. If there was no planning, employees would be working in different directions and the organisation would not be able to achieve its goals efficiently. 

2. Planning reduces the risks of uncertainty : Business enterprises operate in an uncertain environment and face several types of risks. Planning enables these enterprises to predict future events and prepare to face the unexpected events. With the help of planning, managers can identify potential dangers and take steps to overcome them. Thus, planning helps risk and uncertainty. 

3. Planning facilitates decision-making : Decision-making involves searching for various alternative courses of action, evaluating them and selecting the best course of action. Under planning, targets are laid down. With the help of these targets, managers can better evaluate alternative courses of action and select the best alternative. Plans lay down in advance what is to be done and how it is to be done. Therefore, decisions can be taken with greater confidence. 

4. Planning reduces overlapping and wasteful activities : Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions. There is no confusion and misunderstanding. Useless and redundant activities are minimized or eliminated. It is easier to detect inefficiencies and take corrective measures to deal with them. 

5. Planning promotes innovative ideas : Planning is thinking in advance and, therefore, there is scope of finding better ideas and better methods and procedures to reach the objectives/goals of the enterprise.

This forces managers to think differently about the future of the organizations from the present. Thus, planning makes the managers innovative and creative. 

6. Planning establishes standards for controlling : Planning provides the goals or standards against which the actual performance can be measured and evaluated. A comparison of actual performance with the standards helps to identify the deviations and to take corrective action. Planning makes control meaningful and effective. ‘Control is blind without planning.” Thus, planning provides the basis of control.

 

Question. State steps involved in planning process.

Answer: 1. Setting organizational objectives : The first and foremost step in the planning process is setting organizational objectives or goals, which specify what the organisation wants to achieve. For example, an increase in sales by 20% could be the objective of the organisation. Objectives may also be set for each individual department. They give direction to all departments.

2. Developing planning premises : Planning is concerned with the future, which is uncertain. Therefore, the manager is required to make certain assumptions about the future. These assumptions are called premises. Assumptions are made in the form of forecasts about the demand for a particular product, government policy, inerest rates, tax rates, etc. Therefore, accurate forecasts become essential for successful plans.

3. Identifying alternative courses of action : Once objectives are set and assumptions are made, then the next step is to identify all possible alternative courses of action. For example, in order to achieve the organizational objectives of increasing profit, the alternatives may be

a. increase the sales of an existing product, or

b. produce and sell a completely new product.

4. Evaluating alternative courses : The positive and negative aspects of each proposal need to be evaluated in the light of the objective to be achieved, its feasibility and consequences. For example, the risk-return trade-off is very common. The more risky the investment, the higher is the possibility of returns. To evaluate such proposals, detailed calculations of earnings, earnings per share, interest, taxes, dividends are made.

5. Selecting the best possible alternative : This is the real point of decision making. The best/ideal plan has to be adopted, which must be the most feasible, profitable and with least negative consequences. The manager must apply permutations and combinations and select the best possible course of action. Sometimes, a combination of plans may be selected instead of one best plan.

6. Implementing the plan : Once the plans are developed, they are put into action. For this, the managers communicate the plans to all employees very clearly and allocate them resources (money, machinery, etc.).

7. Follow-up action : The managers monitor the plan carefully to ensure that the premises are holding true in the present condition or not. If not, adjustments are made in the plan.

 

Question. Planning is looking ahead and controlling is looking back. Explain.

Answer: Planning is looking ahead and controlling is looking back. Plans proceed the standards/targets against which actual performance is compared. bevlation of actual result from the standards indicate the nature of corrective action needed therefore planning may be said to provide basis of control for example a firm has planned to seel 100 units of its product performance of sales department shall be compared with the planned safe and corrective actions would be taken. Thus planning provides the basis of control.