NCERT solutions class 12 Business Studies Chapter 4 Planning

Chapter 4: Planning

Part I: Very Short Answer Questions

1. How does planning provide direction? Providing a Roadmap

By stating in advance what is to be done and how it is to be done, planning provides a clear roadmap. It ensures that goals are clearly defined so that all employees and departments coordinate their efforts towards a common objective.

2. A company wants to increase its market share... Which step of the planning process has been performed by Ms Rajni? Step Identified

Ms. Rajni has performed the step of "Identifying alternative courses of action." She has brainstormed and listed various possible options (entering new markets, expanding product range, promotions) to achieve the set organizational objective.

3. Why are rules considered to be plans? Rules as Standing Plans

Rules are considered standing plans because they provide specific, strict statements detailing what is to be done or not done in a given situation. They reflect a managerial decision to enforce absolute discipline, leaving no room for discretion.

4. Rama Stationery Mart has made a decision to make all the payments by e-transfers only. Identify the type of plan adopted. Type of Plan

The type of plan adopted is a Policy. It provides a general guideline representing the organization's customized way of handling financial disbursements and channeling managerial decisions towards digital transactions.

5. Can planning work in a changing environment? Give a reason to justify your answer. Planning in Dynamic Environments

No, rigid planning may fail in a highly dynamic environment. Plans are based on future forecasts. If sudden, unforeseen economic, political, or technological changes occur, rigid plans cannot adapt quickly, rendering them ineffective.

Part II: Short Answer Questions

1. What are the main aspects in the definition of planning? Core Aspects of Planning

Planning encompasses three main aspects:

1. Setting Objectives: Defining clear, measurable goals to be achieved within a specified time frame.
2. Identifying Alternatives: Discovering various courses of action that can be used to reach the desired objectives.
3. Choosing the Best Alternative: Evaluating the pros and cons of each option and selecting the most viable, cost-effective, and efficient course of action to implement.

2. If planning involves working out details for the future, why does it not ensure success? Limitations Preventing Assured Success

Planning relies heavily on assumptions about an uncertain future, which is why it cannot guarantee success:

• Dynamic Environment: Sudden changes in government policies, technology, or competitor strategies can render the best plans useless.
• False Sense of Security: Managers may rely too heavily on previously successful plans, becoming complacent and ignoring current market realities.
• Rigidity: Strict plans make it difficult for employees to take quick, spontaneous actions during unforeseen emergencies.

3. What kind of strategic decisions are taken by business organisations? Scope of Strategic Decisions

Strategic decisions form the long-term blueprint of an organization. They include:

1. Determining the Scope of Business: Deciding which industries, products, or markets the company will operate in.
2. Resource Allocation: Deciding how to distribute critical financial and human resources across various departments or projects.
3. Competitive Strategy: Formulating plans to counter competitors, such as launching new products, entering foreign markets, pricing strategies, or opting for mergers and acquisitions.

4. Planning promotes innovative ideas and planning reduces creativity. Critically comment. The Dual Impact of Planning Promotes Innovative Ideas:

Planning is an intellectual exercise requiring deep foresight and imagination. Since it forces top management to think about the future, it naturally generates highly innovative ideas, solutions, and strategies to achieve goals.

Reduces Creativity:

Once a plan is formulated, middle and lower-level managers are forced to follow it strictly. They are not allowed to deviate or act on their own initiative, which stifles their individual creativity and turns them into mere executors of orders.

5. In an attempt to cope with Reliance Jio’s onslaught in 2018, market leader Bharti Airtel has refreshed its prepaid plan... Name the type of plan. State its three dimensions. Type of Plan and Its Dimensions

The type of plan highlighted is a Strategy.

Three Dimensions of a Strategy:

1. Determining long-term objectives: Deciding the ultimate goal, such as retaining existing market share against a massive competitor.
2. Adopting a particular course of action: Choosing a specific path, like offering 2 GB data per day to directly counter the rival.
3. Allocating necessary resources: Arranging the required financial and technological infrastructure to sustain the newly refreshed data plans.

6. State the type of plan and state whether they are Single use or Standing plan: (a) Controlling device. (b) Based on research and analysis, physical/technical tasks. Classifying Plans

• (a) Budget: It is a statement of expected results expressed in numerical terms, acting as a controlling device. It is a Single-use plan, prepared for a specific period and discarded afterward.
• (b) Method: It provides the prescribed ways in which a task has to be performed. It is a Standing plan, as it provides standardized, repetitive guidance for physical and technical tasks.

Part III: Long Answer Questions

1. Why is it that organisations are not always able to accomplish all their objectives? Internal and External Barriers to Planning

Organizations often fail to accomplish their objectives due to the inherent limitations of the planning process:

1. Organizational Rigidity: Plans create strict frameworks. Managers may lack the flexibility to alter operations when sudden market shifts require immediate adaptation.
2. Dynamic Environment: Business environments are highly volatile. Unpredictable economic crashes, sudden technological obsolescence, or drastic changes in government regulations can instantly destroy the fundamental assumptions of any plan.
3. Time-Consuming and Costly: Detailed planning requires massive data collection, expert analysis, and meetings. Sometimes, the enormous time and costs involved outweigh the actual benefits, delaying critical actions.
4. False Sense of Security: Top management often assumes that a plan that brought success in the past will work again. This complacency prevents them from adapting to new competitor strategies, leading to failure.

2. What are the steps taken by management in the planning process? The Logical Sequence of Planning

The planning process involves a systematic sequence of steps to ensure organizational success:

1. Setting Objectives: Defining clear, measurable goals for the entire organization and each specific department.
2. Developing Premises: Making accurate assumptions about future conditions (economic, political, social) upon which the plans will be built.
3. Identifying Alternative Courses of Action: Brainstorming all possible paths and strategies available to achieve the defined objectives.
4. Evaluating Alternatives: Weighing the pros, cons, costs, and potential risks of each identified option.
5. Selecting an Alternative: Choosing the best, most feasible, and most profitable course of action.
6. Implementing the Plan: Putting the chosen plan into action by allocating resources, assigning duties, and initiating work.
7. Follow-up Action: Continuously monitoring the implemented plan to ensure activities are running according to schedule and making course corrections if necessary.

3. An auto company C Ltd. is facing a problem of declining market share... The company has formed a team with representatives from all the levels... Explain the features of Planning highlighted. Highlighted Features of Planning

The situation highlights the following core features of planning:

1. Planning is Pervasive:

The company has "formed a team with representatives from all the levels of management." This clearly shows that planning is not an exclusive function restricted to top management alone; it is required at all levels and across all departments of the organization.

2. Planning is Futuristic:

C Ltd. realized it needs to take steps immediately to "improve its market standing in the future." Planning always involves looking ahead, anticipating future challenges (like competitor pricing), and preparing the organization to meet upcoming consumer demands.

3. Planning is a Mental Exercise:

The team will "brainstorm and will determine the steps that will be adopted." This highlights that planning requires high intellectual application, logical thinking, deep foresight, and sound judgment rather than mere guesswork to formulate a successful new strategy.