CBSE Class 12 Business Studies Planning Worksheet Set B

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 ? 
Answer: Yes ,it is worth every amount spent on its .A company needs to plan because of the following benefits.
(a) Provides Directions
(b) Reduce risk of uncertainity
(c) Promotes innovative ideas.
(d) Faciliate 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? 
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;
(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 programme

MCQs for NCERT Class 12 Business Studies Planning 

Question. ‘Smoking is prohibited in the factory’ what element of planning does it exemplify?
(a) Policy
(b) Rule
(c) Procedure
(d) Method

Answer :  B

Question. Rules are ________ details.
(a) Special
(b) General
(c) Uncommon
(d) None of these

Answer :  A

Question. What out of the following is the focus of planning?
(a) Budget
(b) Objectives
(c) Programme
(d) Rules

Answer :  B

Question. Sulochna Maliwal is working as the Production Manager in the ‘Rakshit Medicines Pvt. Ltd.’ She is to prepare the Production Budget for the calendar year 1.1.2020 to 31.12.2020. While preparing the budget for her department, she considered it proper to mainly keep in view the Corona virus spreading world-wide. Keeping this fact in mind, in the beginning months, in order to face the virus, she gave preference to preparing the necessary material rather than the other items. Due to the planning done in this manner, the company got a big success.
Which particular point of importance of planning do you learn about from the event described above?
(a) Planning provides direction.
(b) Planning reduces the risk of uncertainty.
(c) Planning reduces overlapping and wasteful activities.
(d) Planning promotes innovative ideas

Answer : B

Question. “If the end result is clear it becomes easier to work towards the goal.” Identify the step of one of the functions of management highlighted above.
a. Developing premises
b. Implementation of plan
c. Follow up action
d. Setting of objectives

Answer : D

Question. Rahul, sales executive of mankind Pharma ltd. Put forth the idea of using artificial intelligence in the marketing of its products which will help in saving time, cost and energy for both ends. The marketing manager appreciated him but suggested to continue with the already developed marketing strategy. which limitation of planning is reflected in the above case.
a. Planning is time consuming
b. Planning reduces creativity
c. Planning leads to rigidity
d. Planning does not guarantee success 

Answer : C

Question. Name the step in the process of planning which is considered “the real point of decision making”.
a. Setting objectives
b. Developing premises
c. Evaluating alternatives
d. Selecting the best alternative

Answer : D

Question. Name the function of management which bridges the gap between where we are and where we want to go.
a. Planning
b. Staffing
c. Organising
d. Directing

Answer : A

Question. “Following a pre-determined plan, when circumstances have changed, it may not turn out to be in the organization’s interest.” Identify the limitation of planning highlighted above.
a. planning leads to rigidity
b. planning may not work in the dynamic environment
c. planning does not guarantee success
d. planning reduces creativity

Answer : A

Question. Which one of the following is not an element of planning:
(a) Rules
(b) Programme
(c) Object
(d) Staffing

Answer :  D

Question. Which one is not the characteristic of rules:
(a) Rules are rigid
(b) Violation of rules is punishable
(c) Following rule is voluntary
(d) Rule is a sort of order

Answer :   C

Question. Which one of the following is not a step of planning:
(a) To forecast
(b) Establishing objectives
(c) Valuation of objectives
(d) Induction of employees on the job

Answer :  D

ASSERTION – REASON BASED MCQ’S

There are two statements marked as Assertion (A) and Reason(R). Read the statements and choose the appropriate option from the options given below;
(a) Both Assertion (A) and Reason(R) are true and Reason (R) is correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason(R) are true but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason(R) is false
(d) Assertion (A) is false but Reason(R) is true

Question. Assertion (A) : Planning may not work in a dynamic environment
Reason (R) : Planning cannot foresee everything and thus, there may be obstacles to effective planning.
Answer : A

Question. Assertion (A) : Monitoring the plan is equally important to ensure that objectives are achieved.
Reason(R) : To see whether plans are being implemented and activities are performed according to schedule is also part of planning process.
Answer : B

Question. Assertion (A) : Sales forecast is the basis on which a business firm prepares its annual plan for production and sales
Reason(R) : Planning is the primary function of management
Answer : B

Question. Assertion (A) : Middle management and other decision makers are neither allowed to deviate from the plan nor they are permitted to act on their own.
Reason(R) : Planning in a way reduces creativity since people tend to think along the same lines as others
Answer : A

Question. Assertion (A) : Planning leads to rigidity.
Reason(R) : The well-defined plan already drawn decide the future course of action and managers may not be in a position to change it.
Answer : A

Question. Assertion (A) : Planning is pervasive.
Reason (R) : It is an exclusive function of top management or of some particular department or manager.
Answer : C

Question. Assertion (A):The various functions of planning are inter related, however planning provides the basis of all other functions.
Reason (R) : Planning is a continuous activity.
Answer : B

Source Based/ Case Study Based Answers

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 : Planning.
Steps in the process of Planning are:
(i) Developing Premises which involves making assumptions about future, upon which plans are to be withdrawn.
(ii) Identifying alternative courses of action which may be used to achieve the set objectives.
(iii) Evaluating alternative courses of action and selecting the best alternative which involves
scrutinizing the feasibility and consequences of each alternative before a choice is made.
(iv) Implementing the plan which involves seeing whether plans are put into action.
(v) Follow up which involves seeing that activities are performed according to plans

Question. Two years ago, Vrinda completed her degree in food technology. She worked for sometime in a company that manufactured 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 an action plan to achieve the same. One of her objectives 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 only organic crops.
She also decided to follow the steps required for marketing of the products through her own outlets. She appointed Midhun as the Production Manager who decided the exact manner in which the production activities were to be carried out. Midhun also prepared a statement showing the number of workers that will be required in the factory throughout the year.
Virnda informed Midhun about her area wise sales target for different products for the forthcoming quarter. While working on the production table, a penalty of Rs.100 per day for not wearing caps, gloves and apron was announced. Quoting lines from the above paragraph identify and explain the different types of plans discussed.
Answer : The different types of plans discussed above are listed below:
(a) Objectives:
Objectives are the end results of the activities that-an organisation seeks to achieve through its existence. All other activities within the organisation are directed towards achieving these objectives.
“One of her objectives was to earn 10% profit on the amount invested in the first year.”
(b) Policy:
A policy is a set of general guidelines that helps in managerial decision making and action. .
“It was decided that the raw materials like fruits, vegetables, spices, etc. will be purchased on three months credit from farmers cultivating only organic crops”
(c) Procedure:
A procedure contains a series of specific steps to be performed in a chronological order to carry out the routine activities.
“She also decided to follow the steps required for marketing of the products through her own outlets”
“The exact manner in which the production activities are to be carried out.”
(d) Rule:
A rule is a specific statement relating to the general norms in terms of Do‘s and Don‘ts that guide the behaviour of people. It commands strict obedience and a penalty is likely to be imposed on its violation. “While working on the production table, a penalty of Rs. 100 per day for not wearing caps, gloves and aprons was announced”
(e) Budget:
A budget refers to a financial plan that is expressed in numerical terms.
“Mohan also prepared a statement showing the number of workers different products for the forthcoming quarter”

True or False

1. Planning is closely connected with creativity and innovation. True
2. Objectives does not provide direction for all managerial decisions and actions. False
3. Time factor should not taken into consideration during planning. False
4. Planning is an exclusive function of top management. False
5. Planning provides the basis of all other function. True
6. Planning is regarded as forward looking function. True
7. Planning requires application of the mind involving foresight, intelligent, imagination and sound judgement.True
8. The need for planning doesn’t arises when alternatives are available. False
9. The scope for planning are same at all levels. False
10. Planning has no meaning unless it contributes to achievement of predetermined organisational goals.
11. Strategy defines the direction and scope of an organisation in long run. True
12. The details statements about a project which gives the outline of objectives are called procedures. False
13. Standing plan is used for activities that occur regularly over a period of time. True
14. Routine steps to carry out activities are called programs. False 
15. Statement of expense and income for a specified period is called budget. True
16. Organising a workshop on preparation of boutique used in business studies is an example of single use plan. True
17. Broad parameters within which a manager functions are defined as strategies. False
18. A comprehensive plan to achieve long-term objectives is called strategy. True
19. Objectives provide a general guideline to the managerial action and decision in the implementation of strategy. False

MCQ Questions for NCERT Class 12 Business Studies Planning 

Question. Identify the incorrect statement(s) .
Statement 1: Planning is concerned with both ends and means.
Statement 2: Planning helps in selecting the best possible alternative from available courses of action to achieve desired objectives.
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: D

Question. Under which of the following steps of planning process, resources are organized and plans are put into action?
(a) Evaluating alternatives
(b) Follow up
(c) Implementation of plans
(d) Setting objectives

Answer: C

Question. Under which of the following situations, need for planning arises?
(a) Only one way available
(b) Alternatives available
(c) No choice
(d) All of these

Answer: B

Question. Identify the correct statement.
Statement 1: If plans are properly drawn, then success of the organization is guaranteed.
Statement 2: In terms of time, money and others, huge cost is involved in the process of planning.
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: B

Question. Identify the correct statement.
Statement 1: Adhering of plans is not always possible, therefore planning function should be avoided by the management.
Statement 2: Once made, plans cannot be modified even if any unforeseen event arises.
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: D

Question. Ram works as manager in a top company. In his company plans are based on guesswork of his boss and does not involve any rational thinking process. The plans are framed in a random manner. This results in non-achievement of targets. Which of the following changes should be introduced in the way of planning in this case?
(a) Orderly
(b) Logical and systematic thinking
(c) Rule of thumb
(d) Both A and B

Answer: D

Question. Assertion (a) - All other functions of management except planning i.e., organizing, staffing, directing, controlling etc. are performed within the framework of plans drawn.
Reason (R) - Planning is primary function of management
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is correct, but R is incorrect.
(d) A is incorrect, but R is correct.

Answer: A

Question. Sam works as manager in a software company. He is responsible for performing the planning function of management in the organization. Therefore, Sam and his team followed the planning process and plans were implemented. But, after that he did not bother to check the implementation and this lead to non-achievement of targets. Which of the following step of planning process is missed by Sam?
(a) Evaluation of alternatives
(b) Developing premises
(c) Setting of objectives
(d) Follow-up action

Answer: D

Question. A rational approach for achieving predetermined targets is provided by which of the following function of management?
(a) Organizing
(b) Directing
(c) Planning
(d) Controlling

Answer: C

Question. Planners need various materials that act as a base for their plans. Which of the following provide base to the plans?
(a) Past experience
(b) Logical thinking
(c) Guess work
(d) Both A and B

Answer: D

Question. Planning cycle ensures that planning remains a continuous process. Which of the following is /are step(s)under planning cycle?
(a) Plan is implemented
(b) Deviations are measured
(c) New plan is made
(d) Both A and C

Answer: D

Question. Identify the statement is true or false.
If heavy cost is incurred on planning process, then results derived will definitely justify the burden of cost incurred by the management.
(a) False
(b) True
(c) Can’t say
(d) Inadequate data

Answer: A

Question. The planning function of management involves making decisions. For this purpose which of the following step(s) are undertaken by management for choosing among various alternatives present?
(a) Identification of alternatives
(b) Evaluation of alternatives
(c) Implementation of decision
(d) Both A and B

Answer: D

Question. Assertion (a) – A business firm prepares its annual plan for production and sales on the basis of sales forecasting.
Reason (R) - Planning is futuristic in nature.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is correct, but R is incorrect.
(d) A is incorrect, but R is correct.

Answer: A

Question. Sam worked as an operation manager in a firm. He received plans from the top management which he was to implement . the plans couldn’t be implemented as it was , because of some changes in related laws .But he couldn’t modify them due to one of limitation of planning.Identify the limitation highlighted here .
(a) Reduces creativ
(b) Planning is rigid
(c) Flexible process
(d) Involves huge cost

Answer: B

Question. Which of the following component of business can be anticipated with the help of planning and though it cannot be completely eliminated, but can be reduced?
(a) Objectives
(b) Business risk
(c) Loss
(d) Theft

Answer: B

Question. According to which of the following aspect basically, the alternatives are evaluated so as to achieve desired objectives?
(a) Feasibility
(b) Profit
(c) Risk
(d) Revenue

Answer: A

Question. Reema works in a corporate firm. There work is done randomly, as per the mood and preferences of their boss. This leads to ineffective performance and lethargy on part of workers as well. Which of the following function of management is ignored by the firm?
(a) Controlling
(b) Motivation
(c) Setting of objectives
(d) Planning

Answer: D

Question. If employees do not bother to understand the plans and just go on implementing it, then which of the following component will be lacking in the plans?
(a) Logic
(b) Rationality
(c) Creativity
(d) Science

Answer: C

Question. Sheena was planning the next project of her company. She had time span of 30 days for this project. She estimated that around 10 days will be required in planning. She kept this big slot for planning, due to which of the following limitation of planning function?
(a) No guarantee of success
(b) Costly process
(c) Reduces creativity
(d) Time consuming process

Answer: D

Meaning: - Planning is deciding in advance what is to do,when and whereis to do, how is to do and by whom it should be done. It bridges the gap between where we are standing and where we want to go.

Features:

1. Planning is purposeful 2.Planning is the primary function

3. Planning is pervasive:

4. Planning is forward looking

5. Planning is a mental exercise

6. Planning is continuous

Importance/benefits of planning

1. Planning provides direction

2. Planning reduces the risk of uncertainty

3. Planning reduces overlapping and wasteful activities

4. Planning facilitates decision making

5. Planning promotes innovation

6. Planning establishes standards for controlling

Planning process/steps involved in planning:

Limitations of planning:

Planning leads to rigidity: The plans are well defined and decide future course of action. Thus managers may not be in a position to change them. Hence, there is rigidity and blind following of plans.
Planning may not work in a dynamic environment: Business environment is dynamic and constantly adopt itself to these changes. It becomes difficult to make plans where policies of a country and economic conditions are not stable.
Planning reduces creativity: Middle level managers are not allowed to deviate from plans or act on their own. They only carry out order which leads to reduction of creativity and new ideas in the manager.
Planning involves huge cost: When plans are drawn, costs are involved in their formation in terms of effort, time and money. The cost incurred sometimes may not justify the benefits derived from the plans.
Types of plan
(i) Single use plan
(ii) Standing plan

Objectives: Objectives are the end towards which the activities are directed. They are the end result of every activity.

Strategy: It is a comprehensive plan to achieve the organizational objectives.

Policy: It can be defined as organization’s general response to a particular problem or situation.
In simple words, it is the organization’s own way of handling the problems.

Procedures: Procedures are required steps established in advance to handle future conditions.

Rules: Rules are norms regarding actions and non-actions of employees.

Programme: Programmes are the combination of goals, policies, procedures and rules. All these plans together form a programme.

Methods: Methods are formalized way of doing routine and repetitive jobs.

Budgets: It is the statement of expected result expressed in numerical terms.

Very Short Answer Questions

Question. How does planning provide direction?
Answer: Planning provide directions by stating in advance what to do, how to do, when to do, and who is to do it.

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. 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. What is meant by single use plan?
Answer: It is a plan developed for a one-time event or project.

Question. What is meant by standing plan?
Answer: It is used for activities that occur regularly over a period of time.

Short Answer Questions

Question. Differentiate between Objective and strategy as types of plans?
Answer: 

Question. How does planning restrict creativity?
Answer: Planning in an activity which is done by top management 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. Thus planning restricts creativity.

Question. State how planning leads to rigidity?
Answer: Planning can become limiting or restriction for the business during some changes in circumstances, which require quick decision that may go against the set rules and procedure of a business. It can restrict an individual’s freedom, initiative and desire to be creative.

Question. Planning provide directions and reduces the risk for uncertainty. Explain?
Answer: The planning process clearly defines and maps out the guidelines for smooth operations of a business in order to achieve their main goals / objective. By stating in advance how work is to be done, planning provides direction to action. It ensures that objectives /goals are clearly stated so that they act as a guide for deciding what action should be taken and in which direction.
Planning enables a manager to look ahead and anticipate changes. By deciding in advance the task to be performed, planning shows the way to deal with changes and uncertain events. Thus, planning helps to reduce the risks of uncertainty by preparing forecasts.

Question. Planning facilitates decision-making and establishes standards for controlling. Explain how?
Answer: Planning means deciding the most feasible course of action and resources (Human and physical) required to reach a goal, in advance. Planning is a prerequisite for controlling because planning suggests ways or a controlled design for attaining future goals through controlling. For example, car manufacturers decide to control the production of cars for consumers depending upon the calendar dates of festivals and accordingly control the purchasing coasts of auto-components and raw materials, human resources, etc., by planning ahead.

Question. XYZ ltd. has a plan of increasing profits by 20%. It has devoted a lot of time and money to this plan. But the competition starts increasing, so it could not change its plan to beat its competitors because huge amount of money had already been devoted to the predecided plan. It caused losses to the company.
Explain any two limitations of planning highlighted in the above case. Also, quote the lines from it.
Answer: (i) ‘XYZ ltd. has devoted a lot of time and money to its plan.’
Planning is a time consuming process. It also involves huge costs.
(ii) ‘The competition starts increasing, so it could not change its plan to beat its competitors because huge amount of money had already been devoted to the predecided plan.’
Planning leads to rigidity. Following a pre-decided plan, when circumstance change, may not turn out to be in the organisation’s interest.

Question. In ‘Chak de India’ movie, Shahrukh Khan becomes the coach of the girls’ hockey team.
He knows that he has to prepare the girls for the international hockey matches and bring the world cup after the winning. For this he prepares a long- team plan and thinks the ways how to beat the competitors. He coaches the girls to play in different ways like defensive, offensive, etc. At the outsets of a match he explains who will open the match, and how the ball will be passed by one player to another step by step.
Identify four types of plans that are highlight in the above case, quoting the lines from it.
Answer:
1. Objective -‘….bring the world cup after winning.’
2. Strategy-‘For this he prepares a long-term plan and thinks the ways how to beat the competitors.’
3. Method -‘He coaches the girls to play in different ways like defensive, offensive, etc.’
4. Procedure-‘At the outset of a match he explains who will open the match, and how the ball will be passed by one player to another step by step.’

Question. Zyesha ltd. is a company which manufactures leather bags. The CEO of the company wants to increase their sales and earn more profits. They consulted with a management consultant who suggested the top management of the company to work hard in thinking about the future in making business predictions and achieve the targets since the business environment keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competitors in the market.
(a) Identify and state the concept of management discussed in the above para.
(b) State the characteristics feature of business environment highlighted in the above para.
Answer: a) Planning -It involves setting objective and developing appropriate courses of action to achieve these objectives. Dreams (e.g. increase sales, earn more profits, etc.) can be turned into reality only if business managers think in advance on what to do and how to do it.
(c) Business environment is dynamic as it keeps on changing.

Long Answer Questions

Question. Suhani 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 ‘healthy food’ responsible price. She discusses her idea with her teacher (mentor) who encouraged her.
After analyzing various options for starting her venture, they shortlisted the option to sell readymade and ‘ready to make’ vegetable shakes and sattu milkshakes. Then, they both weighed the pros and cons of both the shortlisted option.
(a) Name the function of management being discussed above and give any of its characteristic.
(b) Discuss any three limitations of the function discussed in the case.
Answer: (a) Planning
Characteristic of planning
Planning focuses on achieving objective as specific goals are set out in the plans along with activities undertaken to achieve them. Planning has no meaning unless it contributes to the achievement of pre –determined organizational goals /objectives.
(b) Limitations of planning
(i) Planning leads to rigidity- once a well-defined plan is drawn, managers may not be able to change it. They do not have flexibility to be able to cope with the changed circumstances.
(ii) Planning reduces creativity – planning is done by top management. Middle and lower management neither allowed to deviate from plans not are they permitted to act on their own. They only carry out orders. Thus, much of the initiative or creativity inherent in them gets lost or reduced.
(iii) Planning is a time- consuming process-sometimes plans to be drawn up takes so much of time that there is not much time left for their implementation.

Question. Two years ago Mohit 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 unit. For this he decided the objectives and targets and formulated action plan to achieve the same. One of his objectives was to earn 50% profits 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 requirements of workers in the factory throughout the year. Mohit informed Harsh about his sales target for different products, area wise for the fourth coming quarter.
While working on the production table a penalty of Rs.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 his objectives was to earn 50% 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 material like flour, sugar, salt etc. will be purchased on two month credit’.
Policy is a general guideline which brings uniformity in decision making for achievement of predetermined objectives.
(iii) Procedure ‘He also decided follow the steps required for marketing the products through his own outlets’. OR
‘He appointed Harsh as a Production who decided the exact manner in which the production activities are to be carried out’.
It consists of sequence of routines steps on how carry out activities. It details the exact manner in which any work is to be performed.
(iv) Budget -‘Harsh also prepared a statement showing the requirement of workers in the factory throughout the year. OR
‘Mohit inform Harsh about his sales target for different products, area wise for the forth coming quarter’.
A budget is a plan which state expected results of a given future period in numerical terms. It may be expressed in time, money or physical units.
(iv) Rule ‘ while working on the production table a penalty of Rs. 150 per day was announced for not wearing the helmet, gloves and apron by the worker.’
A rule is a statement that specifies what is to be done or not to be done.

Question. Pan Parag and sons is a manufacturer of tobacco products. It decided to increase profits by at least 25% in the next quarter. It has many options:
(i) To increase the working hours of laboures without additional payment.
(ii) To employ children from the local community.
(iii) To sell its product outside the school and colleges.
(i) It opted the (ii) and (iii) options to achieve the target.
(a) Identify the function of management described in the above para.
(b) State the steps of the process involved in the function of management identified in
(a) quoting the lines from the above para.
(c) State any two values neglected by the organization.
Answer: (a) Planning.
(b)Steps involved in planning process:
(i) Setting organisational objectives: ‘…increase profits by at least 25% in the next quarter.’
(ii) Identifying and evaluating alternatives courses of action: ‘It has many options: to increase the working hours of labourers without additional payment, or to employ from the local community, or to sell its products sell outside the schools and colleges.’
(iii) Selecting the best possible alternatives: ‘It opted to employ children from the local community, and to sell products outside the schools and colleges.’
(c) Values neglected:
• Child labour is banned. • Bad effect on student’s health. • Moral values.

Question. Lira Ltd. Is a company manufacturing designer sock. While making its plan, the company takes into consideration the business environment. It constantly adapts itself to changing environment by making changes in its plan, however it become difficult for the managers of the company to accurately foresee future trends in the changing environment.
Competition in the market upsets its financial plans; then sales targets have to be revised and, accordingly cash budgets also need to be modified since they are based on sales figure.
(a) What characteristic features of business environment are highlighted in the above lines? State any two.
(b) State and explain the limitation of planning highlighted in the above lines.
(c) Identify any two types of plans mentioned in the above para by quoting the lines from it.
Answer: (a)
(i) Business environment is dynamic as it keeps on changing.
(ii) Business environment is uncertain as it is difficult for the managers to accurately foresee future trends in the environment.
(b) Planning may not work in a dynamic environment.
The organization has to constantly adapt itself to change in environment by making changes in its plans. However, since planning cannot foresee everything, there may be obstacles to effective planning.
(c) (i) Strategy – ‘While making its plan, the company takes into consideration the business environment.’
(ii) Budget – ‘Competition in the market upsets its financial plans; then sales targets have to be revised … accordingly cash budgets also need to be modified since they are based on sales figures.’

MCQs for NCERT Class 12 Business Studies Planning 

Question. Name the function of management which involves setting objectives and developing appropriate courses of action to achieve these objectives.
(a) Directing
(b) Organising
(c) Planning
(d) Staffing
Answer. C

Question. Which of the following is not the benefit of planning?
(a) Planning reduces overlapping and wasteful activities.
(b) Planning is a mental exercise.
(c) Planning provides directions.
(d) Planning reduces the risks of uncertainty.
Answer. B

Question. Which of the following is a benefit of planning?
(a) Helps in avoiding confusion and misunderstanding.
(b) Ensures clarity in thought and action.
(c) Useless and redundant activities are minimised or eliminated.
(d) All of the above.
Answer. D

Question. Which of the following statements is not true with reference to planning?
(a) Planning is a pre-requisite for controlling.
(b) Planning does not lead to rigidity.
(c) Planning enables a manager to look ahead and anticipate changes.
(d) Planning facilitates co-ordination among departments and individuals in the organisation.
Answer. B

Question. What is known as the primary function of management?
(a) Controlling
(b) Organising
(c) Planning
(d) Staffing
Answer. C

Question. Which of the following is not a feature of planning?
(a) Planning is futuristic.
(b) Planning is pervasive.
(c) Planning establishes standards for controlling.
(d) Planning focuses on achieving objectives.
Answer. C

Question. All other managerial functions are performed within the framework of the plans drawn. Identify the related feature of planning.
(a) Planning focuses on achieving objectives.
(b) Planning is pervasive.
(c) Planning is futuristic.
(d) Planning is primary function of management.
Answer. D

Question. Planning requires logical and systematic thinking rather than guess work or wishful thinking. Identify the related feature of planning.
(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 cannot foresee everything in future, and thus, there may be obstacles to effective planning.Identify the limitation of planning.
(a) Planning leads to rigidity.
(b) Planning may not work in a dynamic environment.
(c) Planning does not guarantee success.
(d) Planning reduces creativity.
Answer. B

Question. It is not always true that just because a plan has worked before it will work again. Identify the related limitation of planning.
(a) Planning leads to rigidity.
(b) Planning reduces creativity.
(c) Planning may not work in a dynamic environment.
(d) Planning does not guarantee success.
Answer. D

Question. Identify the correct sequence of steps involved in the planning process.
(a) Evaluating alternative courses, Identifying alternative course of actions, Setting objectives,Developing premises
(b) Setting objectives, Identifying alternative course of actions, Evaluating alternative courses, Developing premises
(c) Setting objectives, Developing premises,Identifying alternative course of actions, Evaluating alternative courses
(d) Setting objectives, Developing premises,Identifying alternative course of actions, Evaluating alternative courses
Answer. C

Question. A strategy is a comprehensive plan which will not include this dimension:
(a) Determining long term objectives
(b) Adopting a particular course of action
(c) The ends which the management seeks to achieve by its operations
(d) Allocating resources necessary to achieve the objective
Answer. C

Question. A plan is framed, implemented and followed by another plan and so on. Which feature of planning is highlighted in the above case?
(a) Planning focuses on achieving objectives
(b) Planning is a continuous process
(c) Planning is the primary function of management
(d) Planning is pervasive
Answer. B

Question. Prateek has given a detailed statement of expected results in numerical terms. This plan is conveyed to the subordinates by him in a special meeting. State the type of plan mentioned here.
(a) Objective
(b) Rule
(c) Budget
(d) Method
Answer. C

Question. Which limitation of planning suggests that the employees stop thinking and become the blind followers of the plan?
(a) Planning reduces creativity
(b) Planning does not work in dynamic nature
(c) Planning does not guarantee success
(d) Planning involves huge costs
Answer. A

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

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

Question. ABC Ltd. is a reputed company. They had devoted a lot of time and money to its plan. Identify the limitation of planning mentioned here.
(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. D

Question. Name the type of plan which provides the broad contours of an organisation’s business.
(a) Programme
(b) Strategy
(c) Rule
(d) Policy
Answer. A

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.
(a) Implement the plan
(b) Choosing an alternative
(c) Identifying alternatives
(d) Follow up action
Answer. D

Question. Planning is actually worth the huge costs involved.Do you agree?
(a) Yes
(b) No
(c) Maybe
(d) Not sure
Answer. A

Question. Name 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) Planning
(b) Dirction
(c) Coordination
(d) Staffing
Answer. A

Question. Sanjay runs a Chinese food chain. He conducted a meeting with his employees. He informed all the chefs, that there is a penalty of ` 100 per day for not wearing caps, gloves, and aprons. Identify the concept of management used here.
(a) Staffing
(b) Coordination
(c) Delegation
(d) Planning
Answer. D

Question. Pervasiveness of planning indicates that planning:
(a) is a top management function
(b) extends throughout the organisation
(c) is a future-oriented activity
(d) is the first element of management process
Answer. B

Question. In this step of planning process the pros and cons, positives, and negatives of all these alternatives should be properly considered. Identify the step of planning process.
(a) Setting objectives
(b) Developing premises
(c) Identifying alternative courses of action
(d) Evaluating alternative courses
Answer. B

Question. Adarsh wants to start a business of opening a fast food chain Arti his friend, told him to perform planning as a function of management, as it precedes all functions of management, i.e., organising, staffing, directing, and controlling. Identify the feature of planning referred to here.
(a) Planning is a primary function
(b) Planning is pervasive
(c) Planning is continuous
(d) Planning is futuristic
Answer. A

Question. Departments and individuals in the organization are able to work in coordination. Which importance of planning is highlighted in the above statement?
(a) Planning provides direction
(b) Planning reduces overlapping and wasteful activities
(c) Planning reduces the risk of uncertainty
(d) Planning facilitates decision making
Answer. A

Question. Changes and events cannot be eliminated but they can be anticipated and managerial response to them can be developed which importance of plannign is highlighted in the above statement?
(a) Plannign provides direction
(b) Planning reduces overlapping and wasteful activities
(c) Planning reduces the risk of uncertainty
(d) Planning facilitates decision making
Answer. C

Question. It is the thinking process, the organised foresight, the vision based on fact and experience that is required for intelligent action. Identify the function of management.
(a) Planning
(b) Organizing
(c) Controlling
(d) Directing
Answer. A

Question. Which one of the following is not a step of planning:
(a) To forecast
(b) Establishing objectives
(c) Valuation of objectives
(d) Induction of employees on the job
Answer. D

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. “It is difficult for an organisation to access future trends, taste of customers, natural calamity, competitors’ policies, and effects of changes in the different components of environment.” Identify the statement and choose the correct answer.
(a) Planning may not work in dynamic environment
(b) Planning reduces creativity
(c) Planning involves huge cost
(d) Planning is a time consuming process
Answer. A

Question. Which limitation of planning suggests that the employees stop thinking and become the blind followers of the plan?
(a) Planning reduces creativity
(b) Planning does not work in dynamic environment
(c) Planning does not guarantee success
(d) Planning involves huge costs
Answer. A

Question. To see whether plans are being implemented and activities are being performed according to schedule, is a step of planning process. Identify the step.
(a) Choosing an alternative
(b) Implement the plan
(c) Identifying alternatives
(d) Follow-up action
Answer. D

Question. A plan is framed, it is implemented and followed by another plan and so on. Which feature of planning is highlighted in the above case?
(a) Planning focuses on achieving objectives
(b) Planning is continuous
(c) Planning is the primary function of management
(d) Planning is pervasive
Answer. B

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. Planning requires logical and systematic thinking rather than genuine work. Which feature of planning is highlighted here?
(a) Pervasive
(b) Futuristic
(c) Psychological activity
(d) Continuous
Answer. C

Question. Zantar Ltd., made its annual plan for the following year on the assumption that the sales of the product A, will rise in near future. However, that same year a major technological development occurred in the production of the Product a and new competitors entered the market using that technology. These two incidences led to entry of low-priced and good quality products of Product A into the market.
Which function of management is considered above? Should Zantar Ltd., continue with the same plan?
Which limitation of management function is reflected in the aforementioned case study?
(a) Planning is rigid
(b) Planning does not work in dynamic environment
(c) Planning redue creation
(d) Planning involves huge cost
Answer. B

Question. The top management of Phospher Ltd., is engaged in organisation planning but they do not involve middle and supervisory level of management. These two levels of management are neither allowed to deviate from their plans nor are they permitted to act on their own. They keep thinking along the same lines as others so that nothing new or innovative gets added to the process.
Which limitation of planning is reflected in above case? What remedial steps will Phospher Ltd. take to overcome this limitation?
(a) Planning is rigid
(b) Planning reduce creating
(c) Planning does not work in dynamic environment
(d) Planning involves huge cost
Answer. C

Question. Santo Ltd., has to develop its organisational plan for the current year and for this purpose they hired professional consultants from United States. These consultants incurred a lot of money in collection of facts, figures, surveys, etc. including the salaries of the consultants. This whole process of planning has already proved to be a very costly affair and the eventual total cost may exceed the gains expected from the plan.
Should Santo Ltd. continue with existing planning ?
Explain with reasons. Also explain, which limitation of planning is reflected in this case?
(a) Planning is rigid
(b) Planning reduces creativity
(c) Planning does not work in dynamic environment
(d) Planning involves huge cost
Answer. D

Question. The manager Mr. Rehman strictly adheres to the plan that lays down maximum of 10% discount to be offered to customer on salt of goods. But Mr. Rehman could not provide a 10.5% discount on a large order to an old customer Mr. ‘Ram when he demanded a discount. The firm lost the large order and hence incurred losses.
Which limitation of planning is reflected here ? How can this limitation be overcome?
(a) Planning is rigid
(b) Planning does not work in dynamic environment
(c) Planning reduces creativity
(d) Planning involves huge cost.
Answer. A

Question. Brij wants to start a business of tour and travels. His friend Suman told him to perform planning as a function of management as it precedes all functions of management i.e., organizing, staffing, directing & controlling. Identify the feature of planning referred here.
(a) Planning is a primary function
(b) Planning is pervasive
(c) Planning is continuous
(d) Planning is futuristic
Answer. A

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. Planning involves setting targets and predicting future conditions, thus helping in making a choice.Which importance of planning is highlighted in the above statement?
(a) Planning provides direction
(b) Planning recues overlapping and wasteful activities
(c) Planning reduces the risk of uncertainty
(d) Planning facilitates decision making
Answer. D

Question. Sales forecasting is the basis on which a business firm prepares its annual plan for production and sales which features of planning is highlighted in the above case?
(a) Planning focuses on achieving objectives
(b) Planning is continuous
(c) Planning is the primary function of management
(d) Planning is futuristic
Answer. D

Question. Planning requires logical and systematic thinking rather than queswork or wishful thinking which features of planning is highlighted in the above case?
(a) Planning focuses on achieving objectives
(b) Planning is a mental exercise
(c) Planning is the primary function of management
(d) Planning is pervasive
Answer. B

Question. Which of the following is an assumption of rationality to rationale decision making?
(a) Preferences are clear
(b) Final choice will maximise payoff
(c) The problem is clear and unambiguous
(d) All of the above
Answer. B

Question. Planning is:
(a) Flexible
(b) Stable
(c) Rigid
(d) None of these
Answer. A

Question. Suresh is giving a speech to the workers of his factory.He is the owner of a toy manufacturing factory and has 123 workers. He tells them that this year’s target of production is 7.5 lakh toys. Which step in planning process is highlighted in the case?
(a) Implementing the plan
(b) Setting objectives
(c) Comparing alternative plans
(d) None of these
Answer. B

Question. Indian Drugs and Pharmaceuticals Ltd.’ is engaged in the manufacturing and distribution of medicines. The company has set-up an objective of increasing its sales turnover by 20%. To achieve this objective the company has decided to diversify into baby health care products. Accordingly, the company has identified various alternative courses of actions for the diversification process. They divided this process by determining the positives and the negatives and selected the ideal plan which is the most feasible and profitable. Which steps of planning have been followed in the above case:
(a) Identifying alternatives
(b) Following up action
(c) Selecting an alternative
(d) Both (a) and (c)
Answer. D

Question. Which limitations highlighted here, Once plans decided the future course of action and managers may not be in a position to change it.
(a) Does Not Work in a Dynamic Environment
(b) Reduces morality
(c) Creates Rigidity
(d) time-consuming process 

Answer: C

Question. Planning is the function of the
a) Manager
b) Accountant
c) Organization
d) Government

Answer A

Question. The simplest of all plans is
a) Policy
b) Rule
c) Method
d) Programme

Answer: B

Question. Rahim wanted to start with a stationery app to help students of schools and college to provide stationery to them. He felt that students were not able to get the needed stationer at easy and hence wanted to provide the stationery directly to students in the school. He list out the various ways of setting up this business and finally selected the best way to set up this business is by developing an app. Suggest what should be the next step of him:
a) Developing premises
b) Identifying the alternative course of action.
c) Implementation of plan
d) Follow up action.

Answer: C

Question. “Planning is deciding in advance what to do, when to do it, and who is to do it.” This is described by
a) Koontz and O’Donnell
b) Haimann
c) Allen
d) Terry

Answer A 

Question. Planning is an activity which usually lowers down middle level management?
(a)Creativity
(b) significance
(c)salary
(d) worth 

Answer: A

Question. A Comprehensive plan includes:
a) Determining long term objectives
b) Adopting a particular course of action
c) allocating resources
d) all the above.

Answer: D

Question. What should be stated clearly for all departments, units and employees
(a)Methods
(b) objectives
(c)Values
(d) options 

Answer: B

Question. In which step of planning process the best and most feasible plan will be chosen to be implemented
(a) Selecting an alternative
(b) Developing Premises:
(c) Evaluating alternative courses:
(d) Setting Objectives 

Answer: A

Question. Why does planning as the basis of success is like a leap in the dark.
(a) Does Not Work in a Dynamic Environment
(b) Reduces morality
(c) Creates Rigidity
(d) Planning is a mental exercise

Answer: A

Question. In which step of planning process Pros and cons of each alternative is examined
(a) Selecting an alternative
(b) Developing Premises:
(c) Evaluating alternative courses:
(d) Setting

Answer: C

Fill in the Blanks

1. Planning contributed to Objectives.
2. Planning involves Decision Making or Choice.
3. Once plans are made, it is difficult to change them, so planning leads to Rigidity.
4. Employees become blind followers of plans, so planning reduces Creativity.
5. Plans work successfully in past, may not work successfully in future also as planning does not give Guarantee of success.
6. The blue print of business is called Strategy.
7. Rules spell out actions and non actions of employees.
8. Programme includes entire gamut of activities.
9. Planning bridges the gap between where we are standing and where we want to Reach.
10. Repeat use plans are known as Standing plans.