CBSE Class 12 Business Studies Planning Worksheet Set A

Short Answer Type Questions

Question. How does planning help co-ordination?
Answer:  Planning makes co-ordination of various activities, departments and groups relatively easy, planned programmers 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 coordination 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:
a) Plan should be simple : for a good plan to be effective, it should be simple, to understand and worked upon different individuals and groups. 
b) Plan should be specific : objectives and goals should be clearly defined and explained. Thus planning is purposeful.
c) 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. Why does planning fail sometimes in spite of the best efforts of management? Planning does not guarantee success.” Comment
Answer: 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 & ” Though Planning 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’ Comment
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.

Question. Distinguish between –
Answer: Objectives and policies Basis Objectives Policies Aim Objectives determine the final goal of the enterprose Policies are framed to achieve Level of management Objectives are determined by the owners or the top level management Policies are determined by top,middle and level of management What and how Objectives determine what is to be done. In this way objectives decide the specific job to be done Policies decide how the work is to be done, policies decide the procedures to be adopted for completion of the job.

Question. Distinguish between
Answer: Rules and methods
Objectives: The aim of framing rules is to maintain discipline in the organization. The aim of effective method is to ensure efficiency of operations.
Basis: Rules are based on code of conduct; methods are based on research and analysis Nature: Rules are rigid amend regarded as official and authorative whereas methods are regarded as logical and rational.

Question.. Distinguish between Strategy and policy
Answer:

Question. Distinguish between procedures and
Answer: 

Question. State four features of Planning.
Answer: Following are the features of Planning:
a) Planning contributes to objectives : planning starts with the process of setting up the objectives. We cannot think of planning without objectives. After setting up the objectives various activities are decided which would help in the achievement of the same.For e.g if an organization has an objective of manufacturing 150 units in a month, and if only 100 units are produced then changes are made in the plan to achieve the final objective.
b) Primacy Function : Planing is the first function of the management (primacy).On the basis of planning, the other functions of organizing, staffing, directing and controlling are performed.
c) Forward looking : planningis looking ahead. It is done for the future and not for the past.All the managers try to make assumptions for the future and act accordingly.
d) Continuous : Planning goes on continuously. It does not stop after a particular period. If plAnswer: are made for a month, after one month new plAnswer: are made. So Planning goes on without halt.

Long Answer Type Questions

Question. Discuss the importance of Planning.
Answer: 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 :
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 organization has to do and what they must do to achieve those goals. Departments and individuals in the organization are able to work in coordination Planning keeps the organization on the right path.
If there was no planning, employees would be working in different directions and the organization 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. PlAnswer: 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. Discuss the steps in the process of Planning.
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 plAnswer:
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 plAnswer: 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. Discuss the Limitations 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 plAnswer: 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 environmentconsists 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 plAnswer:.
• 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.
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 plAnswer:
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 plAnswer: 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 plAnswer: 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.
2. Planning is a time consuming process: Planning is a time consuming process. It requires collection.

 MCQs for NCERT Class 12 Business Studies Planning 

Question. What do we call the quantitative details of expected results?
(a) Rule
(b) Programme
(c) Procedure
(d) Budget

Answer :  D

Question. Which of the following is not the internal element of limitation of Planning?
(a) Capital
(b) Raw material
(c) Increase in population
(d) Machine

Answer :  C

Question. What resources are specially kept in view in planning?
(a) Limited
(b) Unlimited
(c) Both (a) and (b)
(d) None of these

Answer :   A

Question. At what managerial level planning is needed?
(a) Top level
(b) Middle level
(c) Lower level
(d) All the levels

Answer :  D 

Question. When can the planning process be ignored?
(a) In ordinary situation
(b) In case of emergency
(c) Both the above
(d) In no situation

Answer :  B

Question.An employee will retire at the age of 60 years. Which type of plan it is?
a.Rule
b method
c policy.
d.objective
Answer : C

Question. Planning of different departments is ________ .
(a) Independent
(b) Individual
(c) Mutually dependent
(d) None of these

Answer :  C

Fill in the blanks

1. Planning seeks to bridge the gap between where we are and where we want to go.
2. Planning involves making a choice from alternative course of action.
3. Planning is a primary function of management.
4. Planning requires systematic and logical thinking rather than guess work.
5. Planning is basically an intellectual activity of thinking.
6. Planning are prepared for a specific period of time.
7. Planning requires taking decision since it involves making a choice from options.
8. One of the basic management function is planning.
9. Planning is mental exercise.
10. Planning means setting objectives and targets and formulating an action plan to achieve
11. Plans can be classified into several types dependent on the use and the length of planning period. .
12. One time event plan is a single use plan. 
13. Efficiency in routine decisions can be enhanced by standing plans. 
14. General forms of standing plans are called policies. .
15. The steps to be followed in the particular circumstances are called procedure.
16. The desired future position that an organisation would like to reach is known as objective. .
17. A statement of expected results expressed in numerical terms is called budget.

TRUE OR FALSE

1. Planning involves choice.  False
2. Planning is a function of Top Level managers.  False
3. Planning gives guarantee of success.  True
4. Planning is time consuming and involves huge cost.  True
5. Supportive plans are derived from main plan.  True
6. Planning is the foundation of other functions of management.  True
8. Planning can be called a guarantee of success.  False

Key points to remember for Chapter 04 Planning

Plans : These plans are formulated to meet the requirements of a particular situation or to accomplish specific objectives. They are non-repetitive in nature.
(a) Programme : It is a detailed statement about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required and the budget to implement any course of action.
(b) Budget : It is a statement of expected results expressed in numerical terms.

• Difference between single use plans or standing plans

• Planning : It means setting objectives and formulating an action plan to achieve them. It includes deciding in advance what to do, how to do, when to do and who is going to do it.

• Features of Planning
(i) Planning focuses on achieving objectives : It defines objectives and prepares action plan to achieve them.
(ii) Planning is primary function of management : It lays down the basis for all other functions of management.
(iii) Planning is pervasive : It is required in all organisations, at all levels and in all departments.
(iv) Planning is continuous : Once a plan is framed and implemented, it is followed by another plan and so on.
(v) Planning is futuristic : It involves looking ahead and preparation for the future.
(vi) Planning involves decision making : It involves choice amongst various alternative courses of action.
(vii) Planning is a mental exercise : It is an intellectual activity of thinking than implementation.

• Importance of Planning
(i) Provides directions : By stating in advance how the work is to be done.
(ii) Reduces the risks of uncertainty : By looking ahead, anticipating changes and developing managerial responses to them.
(iii) Reduces overlapping and wasteful activities : By coordinating the activities and efforts of different divisions, departments and individuals.
(iv) Promotes innovative ideas : By intelligent application of mind and imagination and foresightedness to make a concrete plan.
(v) Facilitates decision making : By making a choice amongst the alternative courses of action.
(vi) Establishes standards for controlling : Against which actual performance is measured.

• Limitations of Planning
(i) Leads to rigidity : Once a plan is drawn, the managers may not be in a position to change it.
(ii) May not work in a dynamic environment : It is difficult to assess future trends accurately, which is essential for effective planning.
(iii) Reduces creativity : Middle level and lower level managers have to just implement the plans framed by top management without any deviations.
(iv) Involves huge costs : Cost is incurred on discussion with professional experts, preliminary investigation, etc.
(v) Time-consuming : A lot of time is consumed in the collection and analysis of data, choice of alternative, etc.
(vi) Planning does not guarantee success : Previous successful plans may not work again in the future. It is not a solution to all the problems.

• Planning Process
(i) Setting objectives : Objectives are set for the entire organisation and its each department.
(ii) Developing premises : Assumptions about future events are established.
(iii) Identifying alternative courses of action : All the alternative courses of action are identified.
(iv) Evaluating alternative courses : The positive and negative aspect of each alternative is evaluated.
(v) Selecting an alternative : The most feasible, profitable and with least negative consequences alternative is selected as plan.
(vi) Implementing the plan : The selected plan is put into the action.
(vii) Follow up action : In case of any deviations, changes are made in the plans.

• Types of Plans
(i) Standing Plans : These plans are formulated once and are used repeatedly over a long period of time.
(a) Objective : It is the end which management seeks to achieve by its operations.
(b) Strategy : It is a comprehensive plan for accomplishing organisational objectives.
(c) Policy : It is a general statement that guides thinking or channelise energies towards a particular direction.
(d) Procedure : It is a chronological sequence in which an activity should be performed.
(e) Method : It is the prescribed way or manner in which a task has to be performed.
(f) Rule : It is a specific statement that informs what is to be done and what is not to be done.
(ii) Single Use

MCQs for NCERT Class 12 Business Studies Planning 

Question. Any work without proper planning will create
a) Confusion
b) Creates doubts
c) Illusion
d) Creativity

Answer D

Question. Method means:
a) Prescribed way to perform a task
b) Routine steps in a chronological order
c) detailed statements about a course of action
d) specific statements of a certain action
Answer: A

Question .Planning is required at all levels of management and in all departments of the organization. This fact illustrates which feature of planning?
Planning is continuous
Planning is futuristic
Planning is pervasive
Planning involves decision making

Answer C

Question. What are certain assumptions about the future on the basis of which the plan will be ultimately formulated
(a)Method premises
(b) Planning Premises
(c)esteem needs
(d) management premises 

Answer: B

Question. An example of policy can be
a) Marketing Strategy
b) Cash Management
c) Production method
d) RecruitmentMethology
Answer: D

Question. One of the following is a feature of planning
a) It is a lengthy process
b) It is costly process
c) It is time consuming process
d) It is a mental exercise.
Answer: D

Question. Planning is a
a) Mental process
b) Physical process
c) Guesswork process
d) Physical process

Answer A

Question. Planning is the ---------- function of management.
(a) First
(b) Second
(c) Third
(d) Fourth
Answer :  (a) First

Question. Planning results in decreasing -----------------.
(a) Coordination
(b) Proper use of resources
(c) Future Uncertainties
(d) Control
Answer :   (c) Future Uncertainties

Question. Planning is
(a) Routine Activity
(b) Mental exercise
(c) None of the above
(d) All of the above

Answer :  C

Question. This function of management decides what to do and how to do.
(a) Organising
(b) Planning
(c) Directing
(d) Controlling
Answer :  (b) Planning

Question. After implementation of plan
(a) Planning ends
(b) New plan is made
(c) Follow up is done
(d) None of the above

Answer :  A

Question. Controlling device from which deviations can be taken care of is
(a) Procedure
(b) Strategy
(c) Policy
(d) Budget

Answer :  A

Question. Standing Plan
(a) Stands as an example for other planner
(b) Recurring plans
(c) Discarded after use
(d) All of the above

Answer :  B

Question. The composite plan which involves setting up of long term objective finding course of action and allocation of resources is called
(a) Policy
(b) Strategy
(c) Programme
(d) Procedure

Answer :  B

Question. The plan which includes objective, policy, procedure and rule is called
(a) Strategy
(b) Budget
(c) Programme
(d) All of the above

Answer :  B

Read the following text and answer question.

Ajeet is an energetic manager who makes plans and policies for his Department. He tries to make best plans, for this he uses foresightedness and imagination. He has delivered many successful projects because of his good plans. He always makes alternative plans and selects the best out of them after evaluating their pros and cons. However, he knows all plans cannot be successful and requires a lot of time and energy. He also knows that the business environment is dynamic, it can change. One of his friend, suggested him to take suggestions from others when he makes his plans and also consider plans made by others.

Question. At which level of Mannagement, does Ajeet works:
(a) Top Level Management
(b) Middle Level Management
(c) Lower Level Management
(d) none of these
Answer. B

Question. “Planning involves foresightedness and imagination”. Which feature of Planning is highlighted here?
(a) Mental exercise
(b) Forward looking
(c) Decision making
(d) None of these
Answer. A

Question. “He always makes alternative plans and selects the best out of them after evaluating their pros and cons.” Which feature of planning is being highlighted here?
(a) Forward Looking
(b) Decision Making
(c) Both (a) and (b)
(d) None of these
Answer. B

Question. “Planning requires lot of time and cost”. This is one of ___________ of planning.
(a) Advantages
(b) Disadvantages
(c) It can be both (a) and (b)
(d) None of these
Answer. B

Question. __________is the process of setting objectives,formulating various courses of action in order to achieve them, and selecting the best possible alternative from the various courses of action available in order to ensure completion of organisational goals.
(a) Organising
(b) Controlling
(c) Planning
(d) Directing
Answer. C

Question. Amit is a CEO of the bookmybus.com. here planning is mainly done by top management. He did not involve middle level and operational level in the strategy and policies formulation and even they can’t act on their own. The limitation of planning mentioned here is_____
(a) Planning may not guarantee success
(b) Planning may not work in a dynamic environment
(c) Planning involves huge cost
(d) Planning reduces creativity
Answer. D

Question. ABC Ltd. is a reputed company. They had devoted a lot of time and money to its plan. The limitation of planning mentioned here is___________
(a) Planning may not guarantee success
(b) Planning may not work in a dynamic environment
(c) Planning involves huge cost
(d) Planning is a time-consuming process
Answer. C

Question. Planning requires logical and systematic thinking rather than guess work or wishful thinking. The feature of planning given here is___________
(a) Planning is futuristic.
(b) Planning is a mental exercise.
(c) Planning establishes standards for controlling.
(d) Planning focuses on achieving objectives.
Answer. B

Question. “Planning provides _________________ and reduces the risk of uncertainty. Planning helps managers in many other ways.”
(a) actions
(b) directions
(c) coordination
(d) none of these
Answer. B

Question. Planning cannot be done in the absence of _________?
(a) strategies
(b) objectives
(c) controlling
(d) policies
Answer. B

Question. “Planning is required in all types of organisations and at all levels of management.” Identify the statement and choose the correct answer.
(a) Planning is futuristic
(b) Planning is pervasive
(c) Planning is a mental process
(d) Planning focuses on achieving objectives
Answer. B

Question. Planning is a (i)______activity but not a (ii)________ activity.
(a) (i) mental  (ii) physical
(b) (i) physical (ii) mental
(c) (i) physical (ii) subjective
(d) (i) subjective (ii) objective
Answer. A

Question. Match Column-I (major benefits of planning) with Column- II (Respective Meaning) , then select the correct answers from the option given below

     (A) (B) (C) (D)
(a) (ii) (i) (iii) (iv)
(b) (i) (iii) (iv) (ii)
(c) (i) (ii) (iii) (iv)
(d) (iv) (iii) (ii) (i)
Answer. B

Question. Match Column A (Certain logical steps for every manager) with Column B ( Certain meaning/ activity) then select the correct answers from the option given below

    (A) (B) (C) (D)
(a) (iii) (iv) (ii) (i)
(b) (i) (iii) (iv) (ii)
(c) (iv) (iii) (ii) (i)
(d) (i) (ii) (iii) (iv)
Answer. A

Question. Match Column-I (Types of Plans) with Column- II (Respective Meaning) then select the correct answers from the option given below :

    (A) (B) (C) (D)
(a) (ii) (iii) (iv) (i)
(b) (i) (iii) (iv) (ii)
(c) (iii) (i) (iv) (ii)
(d) (i) (ii) (iii) (iv)
Answer. A

Directions: In the following questions, a statement of assertion is followed by a statement of reason. Mark the correct choice as:
(a) If both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).
(b) If both assertion (A) and reason (R) are true, but reason (R) is not the correct explanation of assertion (A).
(c) If assertion (A) is true, but reason (R) is false.
(d) If assertion (A) is false but reason (R) is true.

Question. Assertion: Planning is primary function of management.
Reason: Planning is required at all levels of management.
Answer. B

Question. Assertion: Planning does not work on natural calamities.
Reason: It does not include planning for disaster management and earthquake.
Answer. C

Question. Assertion: Planning is activity done by top management.
Reason: Most of the time subordinates not even try to formulate plans they only carry out orders.
Answer. A

Question. Assertion:Management helps the organization to achieve their goals by proper planning.
Reason: Planning is straight and follow up action is not necessary in proper planning.
Answer. C

Question. Assertion: Standing plans is designed for particular situation.
Reason: It Required for recruitment of employees.
Answer. C

Question. Assertion: Planning provides base for controlling and organizing.
Reason: Planning states the objectives in advance so they act as guide for deciding future actions.
Answer. B

Question. Assertion: Planning does not include alternatives.
Reason: Management should focus on achieving targets according to pre decided planning.
Answer. D

Question. Assertion: Policies may be expressed or Implied.
Reason: only expressed policies are required in writing while implied policies are followed by actions.
Answer. A

 Fill in the blanks for NCERT Class 12 Business Studies Planning 

1. Specific statements to tell what is to be done is called as rule. 
2. ‘No smoking’ is an example of rule. 
3. The detailed description of the manner in which a task is to be performed is called method.
4. Projects are similar to Programs but differ in scope and complexity. .
5. Standing plan is used for activities that occur regularly over a period of time. .
6. Policies and Procedures are interlinked with each other. .
7. The social, legal, economical and technological environment will effect an organisation’s Strategy. 
8. The simplest of all plans is Rules. 
9. People don’t Plan to fail but they fail to Plan.
10. By stating in advance how work is to be done planning provides Direction for action.
11. If there was no planning, employees would be working in different Directions and the organization would not be able to achieve its desired goals.
12. Planning is an activity which enables a manager to look ahead and anticipate changes.
13. Useless and redundant activities are minimized or Eliminiated by Planning.
14. Since Planning is the first function of management, new Ideas can take shape of concrete plans.
15. In Planning, the manager has to evaluate each Alternative and select the most viable proposition.
16. Planning involves setting Targets and predicting future conditions.
17. Planning is a/an Prerequisite for controlling.
18. The nature of corrective action required depends upon the extent of Deviations from the standard.