NCERT Solutions Class 12 Business Studies Chapter 4 Planning

NCERT Solutions for Class 12 Business Studies Chapter 4 Planning Short Answer Type Questions
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Question. What are the main points in the definition of planning?
Answer: Planning means to think in advance thus it is a looking ahead activity which is never done for the past. It involves thinking in advance what and how the work is to be done in future.

Question. How does planning provide direction?
Answer: Planning defines the goals to be achieved. This gives direction to the managers about the course of action to be followed for achieving these goals. With planning every department knows what is to be done. Planning starts with the setting of goals and objectives to be achieved. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.

Question. Do you think planning can work in a changing environment?
Answer: Business environment is dynamic as there are continuous changes in economic, political and legal environment. It becomes difficult to forecast the future changes. Plans may fail, if the changes are frequent.

Question. If planning involves working out details for the future, why does it not ensure success?
Answer: Planning is based on certain external factors on which management may have no control, thus, though imperative, planning does not guarantee success. Planning means to think in advance thus it is a looking ahead activity which is never done for the past. It involves thinking in advance what and how the work is to be done in future. It anticipates opportunities and threats in the environment. Thus, planning involves forecasting.

Question. Why are rules considered to be plans?
Answer: The specific and definite action to be taken with respect to specified situations are called Rules. Rules are based upon procedures. There cannot be exception to rules. Planning is thinking about the futuristic course of action and rules also decide what is to be done and what is not to done. But rules are rigid in nature and noncompliance leads to disciplinary action and fines.

Question. What kind of strategic decisions are taken by business organisations.
Answer: Strategy is a comprehensive plan for achieving an organisation’s objectives. Whenever a strategy is formulated, the business environment needs to be taken into consideration. Some of the strategic decisions that are taken by business organizations are:

1. Deciding on whether a new product line should be adopted or not.
2. Selecting the new product line
3. Deciding the pricing policy that should be adopted by the company.
4. Deciding promotion policy and methods to be used for a new product line.

NCERT Solutions for Class 12 Business Studies Chapter 4 Planning Long Answer Type Questions

Question. Why it is that organisations are not always able to accomplish all their objectives?
Answer: Planning involves predicting the future which is uncertain. If future is not predicted with reasonable accuracy, planning may become useless in the changed environment. Organisations are not always able to accomplish all their limitations as planning also have some of the limitations such as:

1. Time consuming: Planning is time consuming process as it involves a lot of time in identifying, analysing and selecting the alternatives which sometimes lead to delay in decision making.
2. Creates rigidity: Planning involves the determination of a course of action in advance. It may lead to internal inflexibility and procedural rigidity.
3. Involves huge cost: Formulation of plans involves too much cost which is in the form of time spent, money spent etc. but sometimes there is little benefit from planning, and instead it becomes a burden for the institution.
4. May not work in dynamic environment: Business environment is dynamic as there are continuous changes in economic, political and legal environment. It becomes difficult to forecast the future changes.

Question. What are the main features to be considered by the management while planning?
Answer: Planning means to think in advance thus it is a looking ahead activity which is never done for the past. It involves thinking in advance what and how the work is to be done in future. It anticipates opportunities and threats in the environment.

Features to be considered by management while planning are:

1. Planning is pervasive: Pervasive simply refers to the tendency to spread throughout. In the same way planning, spreads throughout in any enterprise. Planning process is common to all organisations. It is required at all levels of management.
2. Planning is always forward looking: There is no doubt that planning is always forward looking. We always plan for future. We anticipate future requirements and availability of resources while determining the future demands. Planning in this way is looking ahead.
3. Planning helps in decision-making: Planning essentially involves choice from among various alternatives and activities. Planning, thus, involves thorough examination and evaluation of each alternative and choosing the most appropriate one.
4. Planning pervades all managerial activities: Planning is essential for every sort of business activities. Every department whether Purchase, Sales, Accounts, Auditing, Marketing etc. needs systematic planning. Co-ordination of different departmental plans and direction of their integrated energies towards the desired goal of the business depends on planning.
5. Planning help to achieve the objectives: It anticipates future demands and evaluates existing and prospective resources. It brings about effective co-ordination between physical and human efforts and helps to achieve the desired goal of the business.

Question. What are the steps taken by management in the planning process?
Answer: Steps involved in the process of planning are as follows:

1. Setting Objectives: Planning starts with the setting of goals and objectives to be achieved. Objectives should be stated in a clear, precise and unambiguous language; otherwise the activities undertaken are bound to be ineffective.
2. Developing Premises: Planning premises are the assumptions about the future. Establishment of planning premises is concerned with taking such steps to avoid obstacles to a great extent. Planning premises may be internal or external.
3. Identifying alternative courses of action: When forecast is available and premises are established, a number of alternative courses of actions may be available. All such alternatives have to be identified.
4. Evaluating alternative courses: Each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organisation. The merits, demerits as well as the consequences of each alternative must be examined before the choice is made.
5. Selecting an alternative: After evaluating all the available alternatives, next step is to select the best course of action which will be most feasible, profitable and with least negative consequences.
6. Implementing the plan: This step is concerned with putting the plan into action, i.e., doing what is required. For putting plans into action the manager has to communicate the plans to all the employees very clearly.
7. Follow-up: After the selected plan is implemented, it is important to appraise its effectiveness. This is done on the basis of feedback or information received from the departments or persons concerned.

Question. Is planning actually worth the huge costs involved? Explain.
Answer: Formulation of plans involves too much cost which is in the form of time spent, money spent etc. but sometimes there is little benefit from planning, and instead it becomes a burden for the institution. If the plan is not useful then the amount or time spent in its formulation is a waste.

But planning has following advantages:

1. Planning helps in achieving business objective: Planning anticipates future demands and evaluate existing and prospective resources. It makes effective co-ordination between physical and human efforts and channelizes them towards the desired goal of the business.
2. Planning reduces future uncertainties and enables us to face it: It is planning which pre-assesses the future uncertainties and also enables the organization to fact these uncertainties with minimum wastage of resources.
3. Planning enables the best possible use of resources: Planning evaluates the alternative uses of the available and prospective resources of the business and makes their most appropriate use.
4. Effective co- ordination: Planning determines the activities of different individuals, groups and departments in such a way, that maximum co-ordination between physical and human resources may emerge.
5. Planning facilitates decision making and promotes creativity: In order to avail the opportunities in an appropriate way concentrated efforts are made and as such new ideas, methods and techniques emerge.
6. Helps in development and expansion: Planning tries to avail all the opportunities available by making the effective utilization and integration of resources, which make the expansion of business easy.

NCERT Solutions for Class 12 Business Studies Chapter 4 Planning Case study

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.

Question. Prepare a model business plan for C Ltd. to meet the existing challenge. You need not be very specific about quantitative parameters. You may specify which type of plan you are preparing.
Answer: The type of plan that can be adopted is objective, policy and strategy. Objectives are the ends towards which the activities are directed. Objectives can be said to be the desired future position that the management would like to reach. They are the end result of every activity. An objective should be related to single activity and must be measured in quantitative terms. Policies are general statements that guide thinking or channelize energies of an organisation towards a particular direction. They are guides to managerial actions and decisions in the implementation of strategy. Strategy is a comprehensive plan for achieving an organisation’s objectives. Whenever a strategy is formulated, the business environment needs to be taken into consideration.

Question. Identify the limitations of such plans.
Answer: Limitations of such plans are:

1. Rigid: Such plans bring about rigidity as they discourage new initiative and thinking and employees may not think for new and better ways of doing things.
2. Does not guarantee success: Planning is based on certain external factors on which management may have no control, thus, though imperative, planning does not guarantee success.
3. Huge cost: Formulation of plans involves too much cost which is in the form of time spent, money spent etc. but sometimes there is little benefit from planning, and instead it becomes a burden for the institution. If the plan is not useful then the amount or time spent in its formulation is a waste.

Question. How will you seek to remove these limitations?
Answer: To remove these limitations, following points are to be kept in mind:

1. The plans made should be flexible and should be changed according to situations.
2. Plans must be made keeping in mind the dynamic environment and factors affecting the business.
3. It should be kept in mind that plans do not guarantee success.

NCERT Solutions for Class 12 Business Studies Chapter 4 Planning Objective Type Questions

Question. Which of the following statement is false with respect to planning ?
(a) It is one of the basic managerial functions.
(b) Planning is closely connected with creativity and innovation.
(c) It requires taking decisions
(d) None of these 
Answer: D

Question. Which of the following type of plan provides the broad contours of an organisation’s business.
(a) Strategy
(b) Objective
(c) Policy
(d) Procedure
Answer: A

Question. Which of the following is a feature of planning ?
(a) provides directions.
(b) reduces the risks of uncertainty.
(c) focuses on achieving objectives.
(d) All of the above 
Answer: D

Question. Which of the following step in the process of planning states that the manager is required to make certain assumptions about the future.
(a) Setting Objectives
(b) Developing Premises
(c) Evaluating alternative courses of action
(d) Implementation of plan 
Answer: B

Question. The first step of planning process is :
(a) Setting objectives
(b) Follow up
(c) Implementation of plan.
(d) Developing premises.
Answer: A

Question. Which of the following type of plan reflects a managerial decision that a certain action must or must not be taken.
(a) Method
(b) Rule
(c) Programme
(d) Procedure
Answer: B

Question. ____________is a statement of expected results expressed in numerical terms.
(a) Method
(b) Policy
(c) Budget
(d) Rule 
Answer: C

NCERT Solutions for Class 12 Business Studies Chapter 4 Planning One Word Answer Type Questions

Question. State the type of plan that does not allow any flexibility.
OR
Name the type of plan which tells what is to be done and what is not to be done.
OR Name the type of plan which determines the parameters in which a manager can function. 
Answer: Rule.

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

Question. Name the type of plan which is time bound and linked with measurable outcome. 
Answer: Objective/Budget.

Question. Name the type of plan which is in the form of general statements, that guides thinking towards a particular direction and helps in solving routine problems.
Answer: Policy.

Question. ‘Dreams can be turned into reality only when managers think in advance what to do and how to do it’. Name the function of management indicated by the statement.
Answer: Planning. 

Question. To see whether plans are being implemented and activities are being performed according to the schedule, is a step of planning process. Identify the step.
Answer: Follow up action.

Question. Name the type of plan which provides the broad contours of an organisation’s business.
Answer: Strategy/Objective.

Question. Name the ‘type of plan’ which specifies the steps to carry out different activities in a chronological order.
Answer: Procedure.

Question. A company needs a detailed plan for its new project, ‘Construction of a Shopping Mall’. What type of plan is it ?
Answer: Programme.

Question. Saurabh decided to start a chocolates manufactur-ing business. He set the target of earning 10% prof-it on sales in the first year. As a good businessman, he was concerned about the future of the business, which was uncertain. He gathered information that the demand for chocolates is increasing day-by-day. He used this information as the base for future planning and shared it with his team. On the basis of the gathered information, he scheduled a meeting in the following week to find innovative ways to achieve the objectives. Write the first step, which has been followed by Saurabh that are related to the process of one of the functions of management. 
Answer: Setting objectives.

Question. 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. Arun, an established businessman, attended a few seminars and conferences organised by such experts to familiarise himself with this information. He wanted to use these forecast and conjectures 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.
Answer: Developing Premises.

Question. Name the ‘type of plan’ which is in the form of general statements and channelise energy towards a particular direction. 
Answer: Policy.

NCERT Solutions for Class 12 Business Studies Chapter 4 Planning Short Answer Type Questions

Question. Explain any three features of ‘Planning.’ 
OR State any three features of planning. 
Answer: Features of Planning :
(i) 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. Thus, Planning contributes to the achievement of predetermined organisational goals.
(ii) 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. Thus, planning proceeds other functions. This is also referred to as the primacy of planning.
(iii) Planning is pervasive : Planning is required at all levels of the management as well as in all departments of the organisation. It is not an exclusive function of top management or of any particular department. But the scope of planning differs at different levels and among different departments. For example, the top management undertakes planning for the organisation as a whole, middle management does the departmental planning. At the lowest level, day-to-day operational planning is done by the supervisors.
(iv) 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 a need for a new plan to be drawn on the basis of new requirements and future conditions. Hence, planning is a continuous process. When a plan is framed, it is implemented, and is followed by another plan, and so on.
(v) 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. It implies peeping into the future, analysing it and predicting it. Planning is, therefore, regarded as a forward looking function based on forecasting. Through forecasting, future events and conditions are anticipated and plans are drawn accordingly. Thus, for example, sales forecasting is the basis on which a business firm prepares its annual plan for production and sales.
(vi) Planning involves decision making : Planning essentially involves choice from among various alternatives and activities. If there is only one possible goal or a possible course of action, there is no need for planning because there is no choice. The need for planning arises only when alternatives are available. In actual practice, planning pre-supposes the existence of alternatives. Planning, thus, involves thorough examination and evaluation of each alternative and choosing the most appropriate one.
(vii) Planning is a mental exercise : Planning requires application of the mind involving foresight intelligent imagination and sound judgment. It is basically an intellectual activity of thinking rather than doing. Because, planning determines the action to be taken.

Question. Explain ‘Objectives’ as a type of Plan.
Answer: Objectives are the desired end results towards which organisational activities are aimed. Objectives are statements of results to be achieved in particular areas of business during a specified period of time. They provide a sense of direction, the rationale or justification for the existence of organisation, for example, to raise market share of the product produced by our organisation by 5% over a period of 2 years.

Question. Explain ‘Programme‘ as a type of Plan.
Answer: Programmes are detailed statements about a project which outline entire gamut of activities, the objectives, policies, procedures, rules, strategies, tasks and the budget to implement any course of action. Programme is a concrete scheme of action designed to accomplish a given task. Programme is a single use plan in which minutest details are worked out i.e., procedures, rules, within the broad policy framework.

Question. Explain any three limitations of planning.
OR State any three limitations of planning function of management.
Answer: Limitations of Planning :
(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. Managers need to be given some flexibility to be able to cope up with the changed circumstances. Following a pre-decided plan, when circumstances have changed, may not turn out to be in the organisations interest.
(ii) Planning may not work in a dynamic environment : The business environment is dynamic, 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. Thus, planning, in a way, reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative. (iv) Planning involves huge costs : When plans are drawn up, huge costs are involved in their formulation. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan.
(v) Planning is a time-consuming process : Some-times plans to be drawn up take so much of time that there is not much time left for their implementation.
(vi) 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 it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan had worked before, it will work again. 

Question. Define ‘Planning’. Explain the first two steps in the process of planning.
Answer: (i) Setting Objectives : The first step in planning is to identify certain objectives. The objectives set must
clearly indicate what is to be achieved, where action should take place, who should perform it and when it is to be accomplished. The objectives should be established for the entire organisation and for each and every department. Planning has no utility if it is not related to certain objectives.
(ii) Developing Premises : The next step is the establishment of planning premises. Planning premises are the assumptions and predictions about the future. The assumptions are the basis of planning. Forecasting is important in premising. It helps in making realistic assumptions about sales, costs, prices, products etc., in future. This requires a collection of data on present trends and future possibilities.

Question. Explain ‘Procedure‘ as a type of Plan. 
Answer: A Procedure is a series of steps that make up a chronological sequence, as an established way of performing the work to be accomplished. It gives a sequence of actions to be followed in particular circumstances to complete a work. For example, Procedure for selection of the candidates includes the following steps: Preliminary Screening, Selection Tests, Employment interview, Selection decision, Medical examination, Employment contract, Induction and placement.

Question. Explain any three points of importance of planning.
OR Explain any three points that highlight the importance of planning.
Answer: 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 co-ordinating 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.
(v) Planning facilitates decision making : Planning helps the manager to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternative and select the most viable proposition.
(vi) 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. Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals.

Question. ‘Unforeseen events and changes, rise in costs and prices, environmental changes, governmental interventions, legal regulations, all affect business plan’. In the light of the statement, state any three limitations of planning function of management.
Answer: Limitations of planning :
(i) Planning leads to rigidity because once a well defined plan is drawn, the managers may not be in a position to change it.
(ii) Planning may not work in a dynamic environ-ment as it may not foresee everything.
(iii) Planning reduces creativity since people tend to think on the same lines as others.
(iv) Planning involves huge costs in terms of time and money.
(v) Planning is time consuming and sometimes not much time is left for its implementation.
(vi) Planning does not guarantee success unless it is translated into action.

Question. What are the main points in the definition of planning ?
Answer: The main points in the definition of planning are :
(i) Planning is deciding in advance what to do, how to do and who is going to do it.
(ii) Planning is closely connected with creativity and innovation.
(iii) Planning seeks to bridge the gap between where we are and where we want to go. 

Question. Explain 'Policy' as a type of Plan.
Answer: Policies are the general statements which guide thinking and action of the members of the organisation. A policy serves as a guide to decision makers to channelises the energy in a proper direction. It provides direction to deal with a particular situation. Such a policy is the general response to a particular problem or situation.‘ Policies guide the managerial action and decisions in the implementation of strategy. For example, sales policy, recruitment policy etc.

Question. ‘Indian Drugs and Pharmaceuticals Ltd.’ is engaged in the manufacturing and distribution of this objective the company has decided to diversify into baby health care products. Since the company has already set its objectives and developed premises based on the same, it wants your help for the remaining steps to be taken in this process. Explain briefly these steps.
OR
‘Dr. Rao Pharmaceuticals Ltd.’ is engaged in the manufacturing and distribution of medicines. The company has set up an objective of increasing its sales turnover by 18%. To achieve this objective, the company has decided to diversify into baby health care products. Since the company has already set its objectives and developed premises based on the same, it wants your help for the remaining steps to be taken in this process. Explain briefly these steps.
Answer:
(i) Identifying alternative courses of action : All the alternative courses of action are identified.
(ii) Evaluating alternative courses : The positive and negative aspect of each alternative is evaluated.
(iii) Selecting an alternative : The most feasible, profitable and with least negative consequences
alternative is selected as plan.
(iv) Implementing the plan : The selected plan is put into the action.

Question. Rahul decided to start a desert cooler manufacturing business. He sets the target of earning 20% profit on sales in the first year. He was very much concerned about the future prospects of the business, which were uncertain. For this, he gathered information from the potential market and analysed that the demand for wall mounted coolers is increasing day by day. He used this information as the base for future planning. On the basis of the gathered information, he called a meeting in the following week to find new methods to achieve the objective.
(i) Identify the function of management involved in the above case.
(ii) Enumerate the next two steps, which have been followed by Rahul that are related to the process of one of the functions of management.
Answer: (i) Planning 1
(ii) (a) Identifying alternative courses of action.
(b) Evaluating alternative courses of action.

Question. Explain ‘Method’ as one of the types of Plans.
Answer: Method provides the prescribed ways or manner in which a task has to be performed considering the objectives. It deals with a task comprising one step of a procedure and specifies how the step is to be performed. Methods may vary from task to task.

Question. Explain 'Strategy' as one of the types of plans.
Answer: A strategy provides the broad contours of an organisation’s business. It is a unified comprehensive integrated long-term plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives are achieved through proper execution. Thus a strategy includes three dimensions :
(i) Determining long-term objectives.
(ii) Adopting a particular course of action.
(iii) Allocating resources necessary to achieve the objectives.

Question. Vardan Patel started the business of preparation and supplying sweets through home delivery at a production cum show-room ‘Express Sweets’ at Ahmedabad. He made a plan forecasting the sales of different types of sweets in various localities of Ahmedabad for each month of the year to earn a profit of 20% on Capital employed. He sets a sales target of ₹ 20,00,000 in the current year with a 10% increase every year. He then set the criteria for selecting suppliers from whom he would make purchases of raw material. The planning paid off and the business was able to achieve its targets.
(i) Identify any two types of plans by quoting the lines from the above.
(ii) Also give the meaning of the types of plans identified in part (a) above.
Answer:
(i) The two types of plans are : (a) Objective : ‘He set a sales target of ₹ 20,00,000 in the current year with a 10% increase every year.’
OR ‘He made a plan forecasting the sales of different types of sweets in various localities of Ahmedabad for each month of the year to earn a profit of 20% on Capital employed.’
(b) Policy : ‘He then set the criteria for selecting suppliers from whom he would make purchases of raw material.’
(ii) Objective : An objective is the end which the management seeks to achieve within a given time period, expressed in quantitative terms. Policy : A policy is a general guideline which brings uniformity in decision making for achievement of predetermined objectives.

Question. Having transformed 2500 Kirana stores across eight cities into virtual super markets, the start up Quick Bizz further decided in advance, to collaborate with 15,000-20,000 store owners in top 30 cities of the country by the end of this year. The company has set its eye on digitising over 1,00,000 kirana stores over next 18-24 months.
(i) Identify and explain the step in the process of one of the functions of management discussed above.
(ii) Also explain the last step to be performed by Quick Bizz as part of the process. 
Answer: (i) Following is the step in process of Planning : Setting objectives : The first and foremost step is setting objectives. Objectives may be set for the entire organisation and each department or unit within the organisation. Objectives or goals specify what the organisation wants to achieve. Objectives should be stated clearly. Management must contribute ideas and participate in the objective setting process. If the end result is clear it becomes easier to work towards the goal.
(ii) Following is the last step to be performed by Quick Bizz as part of the process of Planning : Follow up action : To see whether plans are being implemented and activities are performed according to schedule is also part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved.

Question. ’Planning is certainly important as it tells us where to go, it provides direction and reduces the risk of uncertainty by preparing forecasts.’ This statement enumerates some of the points highlighting the importance of planning. State any three points of importance of planning not mentioned in the statement.
Answer: Importance of Planning :
(i) Planning reduces overlapping and wasteful activities by co-ordinating the activities of different divisions.
(ii) Planning promotes innovative ideas requiring application of mind and foresight.
(iii) Planning facilitates decision making by making a choice from among the alternative courses of action.
(iv) Planning establishes standards.

Question. It is deciding in advance what to do and how to do ? It is one of the basic managerial functions. It requires that before doing something, the manager must formulate an idea of how to work on a particular task. This function is closely connected with creativity and innovation. It seeks to bridge the gap between where we are and where we want to go and is performed at all levels of management. In spite of this, the function of management referred above has a number of limitations. Explain any two such limitations.
Answer: Limitations of planning are :
(i) Planning leads to rigidity.
(ii) Planning may not work in a dynamic environ-ment.
(iii) Planning reduces creativity.
(iv) Planning involves huge costs.
(v) Planning is a time consuming process.
(vi) Planning does not guarantee success.

Question. 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 tilling 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 be 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 above case highlights the features of one of the functions of management. By quoting lines from the above identify and explain these features.
Answer: Features of planning are :
(i) Planning focuses on achieving objectives ‘He set out specific goals along with the activities to be performed to achieve the goals’ Planning focuses on achieving objectives as specific goals set out in the plans along with activities to be undertaken to achieve the goals.
(ii) Planning is futuristic ‘He wanted to ensure that the future events meet effectively the best interests of the company’.
OR
‘Through sales forecasting, he prepared an annual plan for production and sales’ Planning is futuristic as it involves looking ahead and preparing for the future.
(iii) Planning involves decision making ‘He not only identified but evaluated various alternatives through which the farms could be utilised for the remaining months of the year’.OR ‘…. all alternatives were examined and evaluated’ Planning involves decision making as it involves a choice from among the various alternative courses of action.
(iv) Planning is a mental exercise ‘Through correct foresight and logical and systematic thinking based on analysis of all facts…’. Planning is a mental exercise as it is intellectual activity of thinking rather than doing.

Question. 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 ‘health food’ at reasonable price. She discussed her idea with her teacher (mentor) who encouraged her. After analysing various options for starting her business venture, they shortlisted the option to sell readymade and ‘ready to make’ vegetable shakes and sattu milk shakes. Then, they both weighed the pros and cons of both the shortlisted options.
(i) Name the function of management being dis-cussed above and give any one of its characteris-tics.
Answer: (i) Function of Management : Planning. Characteristics of planning :
(a) Planning focuses on achieving objectives.
(b) Planning is a primary function of management.
(c) Planning is pervasive.
(d) Planning is continuous.
(e) Planning is futuristic.

NCERT Solutions for Class 12 Business Studies Chapter 4 Planning Long Answer Type Questions

Question. After completing her studies in product design, Sarah 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 and affordable products on “no profit – no loss basis”. The Unique Selling Proposition (U.S.P.) of the products will be sensitivity to challenges and needs of the differently abled. She has to follow a series of steps to attain her predetermined objectives. In the above lines, Sarah has discussed about one of the functions of management. Identify the function and state its steps in chronological order other than the one discussed in the above para. 
Answer:
(i) Developing Premises : Premises refers to making assumptions regarding future. The assumptions are made on the basis of forecasting. Forecast is the technique of gathering information.
(ii) Identifying Alternative Courses of Action: After setting up of objectives the managers make a list of alternatives through which the organisation can
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achieve its objectives.
(iii) Evaluating Alternative Courses : After making the list of various alternatives along with the assumptions supporting them the manager starts evaluating each and every alternative.
(iv) Selecting an Alternative : The best alternative is selected but as such there is no mathematical formula to select the best alternative. Some times instead of selecting one alternative a combination of different alternatives can also be selected.
(v) Implementing the Plan : This is the step where other managerial functions also come in to the picture. The step is concerned with putting the plan into action i.e., doing what is required.
(vi) Follow-up Action : Planning is a continuous process so the manager’s job does not get over simply by putting the plan into action. The manager monitor the plan carefully while it is implemented.

Question. Two years ago, Madhu completed her degree in food technology. She worked for sometime in a company manufacturing chutneys, pickles and murabbas. She was not happy in the company and decided to have her own organic food processing unit for the same. She set the objectives and the targets and formulated action plan to achieve the same. One of her objective was to earn 10% profit on the amount invested in the first year. It was decided that raw materials like fruits, vegetables, spices etc. will be purchased on three months credit from farmers cultivating organic crops only. She also decided to follow the steps required for marketing of the products through her own outlets. She appointed Mohan as a Production Manager who decides the exact manner in which the production activities are to be carried out. Mohan also prepared a statement showing the number of workers that will be required in the factory throughout the year. Madhu informed Mohan about her sales target for different products, area wise for the forthcoming quarter. While working on the production table a penalty of ₹ 100 per day for not wearing the caps, gloves and apron was announced. Quoting lines from the above para identify and explain the different types of plans discussed. 
OR
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 units. 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 be 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, area wise for the forth coming quarter. While working on the production table, a penalty of ` 150 per day was announced for not wearing the helmet, gloves and apron by the workers. Quoting lines from the above para identify and explain the different types of plans discussed.
Answer: The different types of plans are :
(i) Objective : ‘One of her objective is to earn 10% profit 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 fruits, vegetables, spices etc. will be purchased on three months credit from farmers cultivating organic crops only.’ Policy is a general guideline which brings uniformity in decision making for achievement of predetermined objectives.
(iii) Procedure : ‘She also decided to follow the steps required for marketing of the products through her own outlets.’
OR
‘She appointed Mohan as a Production Manager who decides the exact manner in which the production activities are to be carried out’.
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 : ‘Mohan also prepared a statement showing the number of workers that will be required in the factory throughout the year.’
OR
‘Madhu informed Mohan about the sales target for different products, areawise for the forthcoming quarter.’ 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 ₹ 150 per day for not wearing the caps, gloves and aprons was announced.’
A rule is a statement that specifies what is to be done or not to be done.