BUSINESS STUDIES MASTER

MORE 100 MCQS ON Chapter 4: Planning

CBSE BOARD 2023

1. Which function of management bridges the gap between where we are and where we want to go?

A) Organizing

B) Planning

C) Controlling

D) Directing

Correct Answer: B) Planning.
Board Tip: This is the exact textbook definition of Planning. It involves setting objectives and developing appropriate courses of action.

COMPETENCY BASED

2. 'Apex Motors' set a target of selling 10,000 cars in the current quarter. The management carefully outlined the steps and allocated budget to the sales team to ensure this target is met. Which feature of planning is highlighted here?

A) Planning is pervasive

B) Planning focuses on achieving objectives

C) Planning is futuristic

D) Planning involves decision making

Correct Answer: B) Planning focuses on achieving objectives.
Logic: The entire plan revolves around achieving a specific, pre-determined target (10,000 cars).

PREDICTIVE

3. Planning provides the base for all other functions of management. Therefore, it is referred to as the:

A) Continuous function

B) Pervasive function

C) Primary function

D) Mental exercise

Correct Answer: C) Primary function.
Note: Also known as the "Primacy of Planning," meaning it precedes all other managerial functions.

ASSERTION-REASON

4. Assertion (A): Planning is required at all levels of management as well as in all departments of the organization.
Reason (R): Top management undertakes strategic planning, middle management does departmental planning, and lower management plans day-to-day operations.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
Logic: This perfectly describes the feature: "Planning is pervasive."

CBSE BOARD 2024

5. The management of a company always prepares a backup plan (Plan B) in case their primary strategy fails due to changes in government policy. Which importance of planning is highlighted?

A) Planning reduces the risk of uncertainty

B) Planning promotes innovative ideas

C) Planning establishes standards for controlling

D) Planning provides direction

Correct Answer: A) Planning reduces the risk of uncertainty.
Board Tip: By anticipating changes and keeping backup plans ready, management minimizes risks associated with an unpredictable future.

CBSE SAMPLE PAPER 2025

6. Planning involves setting targets and predicting future conditions. Thus, it is essentially:

A) A backward-looking function

B) A forward-looking function

C) A static function

D) A post-mortem of past activities

Correct Answer: B) A forward-looking function.
Note: This refers to the feature: "Planning is futuristic."

COMPETENCY BASED

7. To launch a new product, a company evaluated three different advertising agencies. After comparing their costs and reach, they selected "MediaPro Ltd." Which feature of planning is highlighted?

A) Planning is continuous

B) Planning is pervasive

C) Planning involves decision making

D) Planning is a mental exercise

Correct Answer: C) Planning involves decision making.
Analysis: Whenever there is an evaluation of alternatives and a final choice is made, it involves decision making.

TRICKY QUESTION

8. Planning requires logical and systematic thinking rather than guess work or wishful thinking. This highlights that planning is:

A) Continuous

B) Pervasive

C) Futuristic

D) A mental exercise

Correct Answer: D) A mental exercise.
Logic: It is an intellectual process involving foresight, imagination, and sound judgment.

CBSE BOARD 2022

9. Once a plan is framed, it is implemented, and is followed by another plan, and so on. This proves that planning is:

A) Futuristic

B) Continuous

C) A primary function

D) Pervasive

Correct Answer: B) Continuous.
Board Tip: Plans are prepared for a specific period. At the end of that period, a new plan has to be drawn based on new requirements.

ASSERTION-REASON

10. Assertion (A): Planning ensures clarity in thoughts and actions.
Reason (R): Planning provides direction by stating in advance what is to be done and how it is to be done.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

CBSE BOARD 2021

11. By stating in advance what work is to be done, planning helps to coordinate the efforts of different departments, thus reducing:

A) Innovative ideas

B) Decision making

C) Overlapping and wasteful activities

D) Standards of controlling

Correct Answer: C) Overlapping and wasteful activities.
Note: Clear plans prevent confusion and duplication of effort among departments.

CASE SCENARIO

12. The CEO of 'SmartTech' encourages his managers to think outside the box while setting departmental goals. As a result, the marketing team came up with a viral AI campaign. Which importance of planning is seen here?

A) Provides direction

B) Promotes innovative ideas

C) Reduces overlapping of activities

D) Establishes standards for controlling

Correct Answer: B) Promotes innovative ideas.
Logic: Since planning is the first function, it provides the best opportunity to introduce new, creative ideas to achieve goals.

PREDICTIVE

13. Which of the following is NOT a feature of planning?

A) It is continuous

B) It is pervasive

C) It is a one-time process

D) It is a mental exercise

Correct Answer: C) It is a one-time process.
Board Tip: Planning is never a one-time event; it is an ongoing, continuous cycle.

CBSE BOARD 2024

14. Planning provides the goals or standards against which actual performance is measured. Which importance of planning is highlighted?

A) Facilitates decision making

B) Establishes standards for controlling

C) Reduces the risk of uncertainty

D) Promotes innovative ideas

Correct Answer: B) Establishes standards for controlling.
Logic: Controlling is blind without planning. Planning sets the benchmark (standard) to compare actual results.

ASSERTION-REASON

15. Assertion (A): Planning cannot eliminate risks completely.
Reason (R): Planning is essentially forward-looking and the future is highly uncertain and unpredictable.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
Note: Planning can only *anticipate* and *reduce* the impact of risks, it cannot eliminate them.

TRICKY QUESTION

16. If a manager does not have alternative courses of action available, then planning:

A) Becomes easier

B) Is not required

C) Becomes highly innovative

D) Focuses purely on control

Correct Answer: B) Is not required.
Logic: The need for planning arises *only* when alternatives are available. If there is only one way to do a task, there is no need to plan or make decisions.

CBSE SAMPLE PAPER 2025

17. "It requires application of the mind involving foresight, intelligent imagination, and sound judgment." Identify the feature of planning.

A) Pervasive

B) Continuous

C) Mental exercise

D) Futuristic

Correct Answer: C) Mental exercise.

COMPETENCY BASED

18. During the annual meeting, the General Manager observed that last year's operations were chaotic because the production and sales departments were not working in sync. He emphasized strict adherence to the new business plan. The GM is focusing on which importance of planning?

A) Reduces risk of uncertainty

B) Reduces overlapping and wasteful activities

C) Facilitates decision making

D) Promotes innovative ideas

Correct Answer: B) Reduces overlapping and wasteful activities.
Analysis: Synchronizing departments eliminates chaos and duplication.

CBSE BOARD 2020

19. Which of the following statements is TRUE about the pervasiveness of planning?

A) It is the exclusive function of top management.

B) It is required only in business organizations.

C) It is required at all levels and in all types of organizations.

D) It is required only at the operational level.

Correct Answer: C) It is required at all levels and in all types of organizations.

ASSERTION-REASON

20. Assertion (A): Planning is a primary function of management.
Reason (R): Other managerial functions like organizing, staffing, directing, and controlling are performed within the framework of the plans drawn.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

PREDICTIVE

21. Before taking any action, the manager maps out the "What, When, How, and Who". This describes planning as a:

A) Mechanism to provide direction

B) Way to promote innovation

C) Backward-looking process

D) Tool to eliminate risk

Correct Answer: A) Mechanism to provide direction.
Note: Knowing "what to do" provides clear direction to employees.

CASE SCENARIO

22. An entrepreneur is starting a new eco-friendly packaging company. She lists down three different eco-materials, calculates the cost of each, assesses market demand, and finally chooses Bamboo fiber as the primary material. This highlights that planning:

A) Is pervasive

B) Involves decision making

C) Is continuous

D) Is a post-mortem

Correct Answer: B) Involves decision making.

CBSE BOARD 2023

23. Comparing actual performance with planned targets is part of controlling. However, the benchmark for this comparison is provided by:

A) Organizing

B) Staffing

C) Planning

D) Directing

Correct Answer: C) Planning.

TRICKY QUESTION

24. "Even if a plan is made perfectly, an organization must continuously scan the environment to make necessary adjustments." This statement relates to which feature of planning?

A) Planning is a mental exercise

B) Planning focuses on objectives

C) Planning is continuous

D) Planning is the primary function

Correct Answer: C) Planning is continuous.
Logic: Planning doesn't stop once a plan is made. It must be continuously reviewed and adapted.

FINAL MASTER QUESTION

25. A manager decides the objective of increasing sales by 10%. He then thinks of all the creative strategies like bulk discounts, social media campaigns, and referral codes to achieve this. This shows that planning:

A) Promotes innovative ideas & Focuses on objectives

B) Reduces risk & Is continuous

C) Is a mental exercise & Eliminates risk

D) Pervasive & Backward looking

Correct Answer: A) Promotes innovative ideas & Focuses on objectives.
Analysis: "Increasing sales" = Focuses on objectives. "Creative strategies" = Promotes innovative ideas.

CBSE BOARD 2024

26. Once a well-defined plan is drawn up, managers may not be in a position to change it. This highlights which limitation of planning?

A) Planning reduces creativity

B) Planning leads to rigidity

C) Planning is time-consuming

D) Planning involves huge costs

Correct Answer: B) Planning leads to rigidity.
Board Tip: A specific plan creates a rigid framework. Managers are often required to strictly adhere to it, leaving little room for spontaneous changes.

COMPETENCY BASED

27. 'MobileTech Ltd.' had a brilliant sales plan for 2024. However, a sudden change in government import policies on electronic chips made their plan fail completely. Which limitation is evident here?

A) Planning does not guarantee success

B) Planning leads to rigidity

C) Planning may not work in a dynamic environment

D) Planning reduces creativity

Correct Answer: C) Planning may not work in a dynamic environment.
Logic: The business environment is highly volatile. Unforeseen changes in political, economic, or legal factors can derail even the best plans.

PREDICTIVE

28. The first step in the planning process is:

A) Developing premises

B) Evaluating alternative courses

C) Identifying alternative courses of action

D) Setting objectives

Correct Answer: D) Setting objectives.
Note: Every plan starts with determining what the organization wants to achieve (the end goal).

CBSE BOARD 2023

29. What are 'Planning Premises'?

A) The physical building where planning takes place

B) The assumptions made about the future environment on which plans are based

C) The final results expected from a plan

D) The evaluation of different alternatives

Correct Answer: B) The assumptions made about the future environment on which plans are based.

ASSERTION-REASON

30. Assertion (A): Planning reduces creativity in an organization.
Reason (R): Top management does most of the planning, and middle/lower managers are simply expected to implement these plans without deviating.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
Logic: Because operational managers are just following orders, their own initiative and creativity are stifled.

CASE SCENARIO

31. A company hired a team of top-tier consultants to formulate their 5-year strategic plan. They paid millions of rupees for market research, data analysis, and board meetings. This highlights that planning:

A) Is time-consuming

B) Involves huge costs

C) Does not guarantee success

D) Leads to rigidity

Correct Answer: B) Involves huge costs.
Analysis: Hiring experts, conducting research, and holding lengthy meetings consume a significant amount of financial resources.

CBSE SAMPLE PAPER 2025

32. After identifying various alternatives, the next logical step in the planning process is to:

A) Implement the plan

B) Select an alternative

C) Evaluate the alternative courses

D) Follow-up action

Correct Answer: C) Evaluate the alternative courses.
Board Tip: You must weigh the pros and cons (evaluate) of each option before making a final selection.

TRICKY QUESTION

33. "Just because a plan worked well in the past, it does not mean it will work again in the future." This statement points to which limitation?

A) Planning reduces creativity

B) Planning does not guarantee success

C) Planning leads to rigidity

D) Planning involves huge costs

Correct Answer: B) Planning does not guarantee success.
Logic: Managers often rely on previously tested successful plans, creating a false sense of security.

CBSE BOARD 2022

34. Which step in the planning process is considered the real point of decision making?

A) Identifying alternatives

B) Setting objectives

C) Evaluating alternatives

D) Selecting an alternative

Correct Answer: D) Selecting an alternative.
Note: This is the moment where a choice is actually made and the plan is officially adopted.

COMPETENCY BASED

35. During a sudden factory fire, the manager didn't have time to hold a meeting and formulate a detailed plan. He had to act immediately to save lives. This shows that planning:

A) Is time-consuming

B) Involves huge costs

C) Leads to rigidity

D) Fails in a dynamic environment

Correct Answer: A) Is time-consuming.
Analysis: Planning takes a lot of time to collect data and think. In emergencies, prompt action is needed, making planning impractical.

CBSE BOARD 2021

36. Putting the plan into action and doing what is required is covered under which step?

A) Selecting an alternative

B) Implementing the plan

C) Follow-up action

D) Developing premises

Correct Answer: B) Implementing the plan.
Note: This is the step where other managerial functions (organizing, directing) step in to execute the plan.

ASSERTION-REASON

37. Assertion (A): Follow-up action is a critical step in the planning process.
Reason (R): It involves monitoring the plans to ensure that activities are performed according to the schedule.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

PREDICTIVE

38. Sometimes, managers tend to rely on previously tried and tested successful plans, but it may cause failure because:

A) Planning reduces creativity

B) The business environment is dynamic

C) It is too costly

D) Both A and B

Correct Answer: B) The business environment is dynamic.
Logic: Past success was based on past environmental conditions. If those conditions change, the old plan won't work.

CASE SCENARIO

39. 'Green Energy Ltd.' decided to expand its operations. To do so, they considered setting up a new plant, acquiring a smaller company, or partnering with a foreign firm. This step is known as:

A) Setting objectives

B) Identifying alternative courses of action

C) Evaluating alternative courses

D) Implementing the plan

Correct Answer: B) Identifying alternative courses of action.
Analysis: They are currently listing out the different ways (options) to achieve their expansion objective.

CBSE BOARD 2024

40. In which step of the planning process do managers forecast factors like future interest rates, inflation, and changing consumer tastes?

A) Setting objectives

B) Developing premises

C) Selecting an alternative

D) Follow-up action

Correct Answer: B) Developing premises.
Board Tip: Forecasting is a major part of building 'premises' (assumptions about the future).

TRICKY QUESTION

41. Which of the following is an EXTERNAL limitation of planning?

A) It involves huge costs

B) It leads to rigidity

C) Changes in government policies

D) It is time-consuming

Correct Answer: C) Changes in government policies.
Logic: Costs, rigidity, and time are *internal* limits inherent to the process. Environmental factors (like policies, natural disasters) are *external* limits.

CBSE SAMPLE PAPER 2025

42. When a manager allocates resources, assigns duties, and procures machinery to start production according to the plan, which step is being performed?

A) Evaluating alternatives

B) Selecting an alternative

C) Implementing the plan

D) Developing premises

Correct Answer: C) Implementing the plan.

ASSERTION-REASON

43. Assertion (A): Evaluating alternative courses is an easy and objective process.
Reason (R): Evaluating requires assessing the positive and negative aspects of each proposal in light of the objective to be achieved.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: D) (A) is false, but (R) is true.
Logic: Evaluating alternatives is highly complex and difficult, not easy, because it involves assessing uncertain future variables.

COMPETENCY BASED

44. A software developer had a great idea to improve an app's interface. However, his manager rejected it, saying they must strictly follow the blueprint finalized by the top management last month. Which limitation is highlighted?

A) Does not guarantee success

B) Involves huge cost

C) Reduces creativity

D) Is time-consuming

Correct Answer: C) Reduces creativity.
Analysis: Middle and lower-level employees lose their initiative and creativity because they are forced to adhere to pre-determined plans.

CBSE BOARD 2023

45. An ideal plan is one which is the most feasible, profitable, and with least negative consequences. Identifying such a plan happens in which step?

A) Identifying alternatives

B) Developing premises

C) Selecting an alternative

D) Follow-up action

Correct Answer: C) Selecting an alternative.

PREDICTIVE

46. The step "Setting Objectives" involves establishing goals for:

A) The entire organization only

B) Each department or unit within the organization

C) Only the production department

D) Both the entire organization and each department

Correct Answer: D) Both the entire organization and each department.

CBSE BOARD 2020

47. Sometimes plans fail due to unexpected natural calamities like earthquakes or floods. This falls under:

A) Internal limitations of planning

B) External limitations of planning

C) Rigidity of planning

D) Costliness of planning

Correct Answer: B) External limitations of planning.

CASE SCENARIO

48. A garment manufacturer sets a target to increase sales by 20%. The management assumes that the government export subsidies will continue and raw cotton prices will remain stable. This assumption-making process is called:

A) Setting objectives

B) Evaluating alternatives

C) Developing premises

D) Implementing the plan

Correct Answer: C) Developing premises.

TRICKY QUESTION

49. Planning does not guarantee success because:

A) It is easy to make plans

B) Managers may rely on previously successful plans that may not work in changing conditions

C) It is a mental exercise

D) It involves decision making

Correct Answer: B) Managers may rely on previously successful plans that may not work in changing conditions.

FINAL MASTER QUESTION

50. Arrange the following steps of the planning process in the correct chronological sequence:
(i) Evaluating alternatives
(ii) Setting objectives
(iii) Implementing the plan
(iv) Developing premises
(v) Identifying alternative courses
(vi) Selecting an alternative
(vii) Follow-up

A) (ii), (iv), (v), (i), (vi), (iii), (vii)

B) (ii), (v), (iv), (i), (vi), (iii), (vii)

C) (i), (ii), (iv), (v), (vi), (iii), (vii)

D) (ii), (iv), (i), (v), (vi), (iii), (vii)

Correct Answer: A) (ii), (iv), (v), (i), (vi), (iii), (vii).
Final Analysis: This exact sequencing question is a high-probability board question. Always remember: Objectives -> Premises -> Identify -> Evaluate -> Select -> Implement -> Follow-up.

CBSE BOARD 2024

51. A plan that is developed for a one-time event or project and is discarded after its completion is known as a:

A) Standing Plan

B) Single-use Plan

C) Strategic Plan

D) Operational Plan

Correct Answer: B) Single-use Plan.
Board Tip: Examples of single-use plans include Budgets and Programmes. They are not used again in their exact form.

COMPETENCY BASED

52. 'Alpha Ltd.' has a strict guideline: "We only sell goods on a cash basis; no credit will be extended to any distributor." This statement is an example of a:

A) Procedure

B) Rule

C) Policy

D) Objective

Correct Answer: C) Policy.
Logic: A policy is a general guide to managerial action and decision-making. It defines the boundaries within which decisions are made.

PREDICTIVE

53. The ends towards which all activities of an organization are directed are called:

A) Strategy

B) Objectives

C) Rules

D) Methods

Correct Answer: B) Objectives.
Note: Objectives are the end results that management seeks to achieve by its operations.

CBSE BOARD 2023

54. Which of the following is an example of a 'Standing Plan'?

A) Budget for the annual sports day

B) Construction of a new factory building

C) Procedure for hiring new employees

D) A specific marketing campaign

Correct Answer: C) Procedure for hiring new employees.
Logic: Standing plans are used over and over again for recurring activities (like hiring). Policies, procedures, rules, and methods are standing plans.

ASSERTION-REASON

55. Assertion (A): A Strategy is a comprehensive plan for accomplishing an organization's objectives.
Reason (R): It involves determining long-term objectives, adopting a particular course of action, and allocating resources necessary to achieve the objective.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

TRICKY QUESTION

56. "No smoking in the factory premises." This is an example of a:

A) Policy

B) Procedure

C) Rule

D) Method

Correct Answer: C) Rule.
Board Tip: A rule is a specific statement that dictates what is to be done or not done. It allows for ZERO flexibility and usually carries a penalty if broken.

CBSE SAMPLE PAPER 2025

57. A plan which details the exact chronological steps to be followed for performing a specific task is a:

A) Policy

B) Procedure

C) Objective

D) Programme

Correct Answer: B) Procedure.
Note: Procedures are routine steps on how to carry out activities.

CASE SCENARIO

58. The finance manager expresses the planned sales and expenses for the upcoming year in numerical terms (rupees). This type of plan is called a:

A) Programme

B) Strategy

C) Budget

D) Method

Correct Answer: C) Budget.
Analysis: A budget is a statement of expected results expressed in numerical/quantifiable terms. It acts as a control device.

CBSE BOARD 2022

59. Which type of plan provides the prescribed ways or manner in which a task has to be performed considering the objective?

A) Method

B) Rule

C) Policy

D) Procedure

Correct Answer: A) Method.
Logic: Method deals with a specific task (one step of a procedure), ensuring standardization and efficiency.

PREDICTIVE

60. 'Objectives' and 'Strategies' are technically classified as:

A) Standing Plans only

B) Single-use Plans only

C) Neither Single-use nor Standing Plans

D) Both Single-use and Standing Plans

Correct Answer: C) Neither Single-use nor Standing Plans.
Board Tip: Objectives and Strategies do not fit neatly into single-use or standing categories; they are the foundation upon which all other plans are built.

COMPETENCY BASED

61. A school has decided a set sequence of steps for student admission: (1) Issue of forms, (2) Written Test, (3) Interview, (4) Final list. This sequence represents a:

A) Policy

B) Procedure

C) Method

D) Rule

Correct Answer: B) Procedure.

ASSERTION-REASON

62. Assertion (A): A budget is both a planning and a controlling device.
Reason (R): It plans out the future figures and then actual figures are compared against it to find deviations.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

CBSE BOARD 2021

63. 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 is known as a:

A) Strategy

B) Programme

C) Method

D) Budget

Correct Answer: B) Programme.
Note: A programme is a comprehensive, single-use plan that incorporates almost all other types of plans.

TRICKY QUESTION

64. "Employees must punch in their attendance before 9:00 AM." This is a __________, whereas "The company hires only MBA graduates for managerial roles" is a __________.

A) Rule, Policy

B) Policy, Rule

C) Procedure, Policy

D) Rule, Procedure

Correct Answer: A) Rule, Policy.
Logic: Punching in is a strict mandate (Rule). Hiring preference is a general guideline for decision making (Policy).

CASE SCENARIO

65. During a training session, workers were instructed to use a specific motion to assemble machine parts to save time and reduce fatigue. This specific way of doing the task is a:

A) Procedure

B) Rule

C) Method

D) Policy

Correct Answer: C) Method.
Analysis: 'Method' focuses on the "how" of a single specific step to improve efficiency.

CBSE BOARD 2024

66. Which of the following defines the broad contours of an organization's business?

A) Method

B) Rule

C) Strategy

D) Budget

Correct Answer: C) Strategy.
Board Tip: Strategy looks at the big picture and responds to the changes in the business environment.

PREDICTIVE

67. If a manager creates a plan for constructing a shopping mall, this plan will be classified as a:

A) Standing Plan

B) Single-use Plan

C) Rule

D) Policy

Correct Answer: B) Single-use Plan.
Logic: Once the mall is constructed, that specific plan has achieved its purpose and won't be reused.

COMPETENCY BASED

68. An organization's decision to "Always purchase raw materials from local suppliers to support the community" is an example of:

A) Objective

B) Strategy

C) Procedure

D) Policy

Correct Answer: D) Policy.

CBSE SAMPLE PAPER 2025

69. 'To increase the market share from 10% to 15% in the next financial year' is an example of a/an:

A) Policy

B) Objective

C) Procedure

D) Rule

Correct Answer: B) Objective.
Note: Objectives should be clear, measurable (10% to 15%), and time-bound (next financial year).

ASSERTION-REASON

70. Assertion (A): Rules are rigid and do not allow any flexibility.
Reason (R): They are formulated to maintain discipline in the organization.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

TRICKY QUESTION

71. While a 'Policy' provides a broad parameter for decision-making, a 'Procedure' lays down the __________.

A) Financial limits

B) Step-by-step way to implement that policy

C) Penalties for violation

D) Long-term goals

Correct Answer: B) Step-by-step way to implement that policy.

CASE SCENARIO

72. A cosmetic company decides to launch a new anti-aging cream to counter a rival brand. They decide the pricing, the advertisement channel, and the target audience. This comprehensive plan is a:

A) Strategy

B) Rule

C) Method

D) Budget

Correct Answer: A) Strategy.
Analysis: Formulating a comprehensive plan taking the competitors into consideration is the core of business strategy.

CBSE BOARD 2020

73. A plan representing expected cash inflows and outflows for the next quarter is a:

A) Policy

B) Procedure

C) Cash Budget

D) Rule

Correct Answer: C) Cash Budget.

PREDICTIVE

74. "Selection of the best possible way out of several available ways." This statement refers to which type of plan?

A) Method

B) Objective

C) Policy

D) Strategy

Correct Answer: A) Method.
Logic: Methods are specifically chosen to save time, money, and effort by standardizing tasks.

FINAL MASTER QUESTION

75. Match the following concepts correctly:
(i) Strict action if not followed
(ii) Expressed in numbers
(iii) Routine steps

With:
(a) Procedure
(b) Budget
(c) Rule

A) (i)-(c), (ii)-(a), (iii)-(b)

B) (i)-(b), (ii)-(c), (iii)-(a)

C) (i)-(c), (ii)-(b), (iii)-(a)

D) (i)-(a), (ii)-(b), (iii)-(c)

Correct Answer: C) (i)-(c), (ii)-(b), (iii)-(a).

CBSE BOARD 2024

76. "We do not sell our products on credit." This statement is an example of a:

A) Rule

B) Policy

C) Procedure

D) Strategy

Correct Answer: B) Policy.
Board Tip: Policies are general statements that guide thinking and channel energies towards a particular direction (e.g., pricing policy, credit policy).

COMPETENCY BASED

77. A manager noticed that the wastage of raw materials was very high in the production department. To standardize the task and reduce wastage, he specified the exact chronological sequence of actions to be taken by the workers. This plan is a:

A) Method

B) Rule

C) Procedure

D) Programme

Correct Answer: C) Procedure.
Logic: A sequence of routine steps on how to carry out activities is defined as a procedure.

PREDICTIVE

78. Which of the following is an example of a 'Single-use Plan'?

A) Disciplinary rules of a school

B) The annual sales budget of a company

C) Recruitment policy for employees

D) Steps to process a customer refund

Correct Answer: B) The annual sales budget of a company.
Note: Budgets are prepared for a specific period and are not reused in their exact form.

ASSERTION-REASON

79. Assertion (A): Planning cannot foresee everything.
Reason (R): The business environment is dynamic and nothing is constant.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

CBSE BOARD 2023

80. "To manufacture 10,000 units of a product in a month." Which type of plan does this statement indicate?

A) Strategy

B) Objective

C) Policy

D) Rule

Correct Answer: B) Objective.

TRICKY QUESTION

81. Developing premises is an essential step in planning. 'Premises' basically refer to:

A) The physical workplace where planning is done

B) Historical records of the company

C) Assumptions about the future conditions

D) The final outcome of the plan

Correct Answer: C) Assumptions about the future conditions.

CASE SCENARIO

82. A top multinational corporation has a detailed document that outlines how it will respond to a sudden drop in market share, including pricing adjustments, marketing changes, and cost-cutting measures. This document represents a:

A) Procedure

B) Strategy

C) Rule

D) Objective

Correct Answer: B) Strategy.
Analysis: Responding to market changes and competitor actions requires a comprehensive strategy.

CBSE BOARD 2021

83. Planning is required at all levels of management and in all departments of the enterprise. Which feature of planning is highlighted?

A) Continuous

B) Futuristic

C) Pervasive

D) Primary function

Correct Answer: C) Pervasive.

COMPETENCY BASED

84. The management of an airline company decided to upgrade its software. However, the exact cost ran into crores of rupees, and they had to hire foreign experts, which took 6 months. By the time they finished, the software was already outdated. Which limitation of planning is seen here?

A) Planning reduces creativity & leads to rigidity

B) Planning involves huge costs & is time-consuming

C) Planning creates false security

D) Planning fails in a static environment

Correct Answer: B) Planning involves huge costs & is time-consuming.

CBSE SAMPLE PAPER 2025

85. Which of the following statements about 'Rules' is incorrect?

A) They reflect a managerial decision that a certain action must or must not be taken.

B) They allow for a lot of flexibility and discretion.

C) They are usually the simplest type of plans.

D) They do not allow for any compromise.

Correct Answer: B) They allow for a lot of flexibility and discretion.
Board Tip: Rules are rigid and inflexible. Policies are what allow for discretion.

ASSERTION-REASON

86. Assertion (A): Planning promotes innovative ideas.
Reason (R): Since planning is the first function of management, new ideas can take the shape of concrete plans.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

PREDICTIVE

87. While identifying alternative courses of action, a manager must:

A) Only look at previously used plans

B) Discover new, innovative alternatives alongside routine ones

C) Immediately implement the first option that seems okay

D) Delegate this task to lower-level workers

Correct Answer: B) Discover new, innovative alternatives alongside routine ones.

CASE SCENARIO

88. 'TechVision Inc.' wants to capture 30% of the smartphone market in India. To do this, they have formulated a comprehensive plan covering their marketing, production, pricing, and distribution models. This comprehensive plan is their:

A) Strategy

B) Rule

C) Procedure

D) Budget

Correct Answer: A) Strategy.

CBSE BOARD 2022

89. Which step in the planning process requires the manager to carefully monitor whether the plans are being implemented and activities are performed according to schedule?

A) Evaluating alternatives

B) Implementing the plan

C) Follow-up action

D) Developing premises

Correct Answer: C) Follow-up action.

TRICKY QUESTION

90. "Planning reduces overlapping and wasteful activities." How does it achieve this?

A) By making rules very strict

B) By coordinating the efforts of different divisions and departments

C) By firing inefficient employees

D) By halting production during uncertain times

Correct Answer: B) By coordinating the efforts of different divisions and departments.
Logic: Clear plans clarify who is supposed to do what, eliminating confusion and duplication.

COMPETENCY BASED

91. The HR manager of a bank has prepared a detailed statement showing the number of new tellers required, the training modules they will undergo, the trainers assigned, and the total cost of the training for the next 6 months. This detailed plan is a:

A) Programme

B) Rule

C) Strategy

D) Policy

Correct Answer: A) Programme.
Analysis: A programme is a detailed statement about a project covering objectives, policies, procedures, and budgets all rolled into one.

CBSE BOARD 2024

92. Planning is basically an intellectual activity of thinking rather than doing. Which feature is this?

A) Continuous

B) Mental exercise

C) Futuristic

D) Pervasive

Correct Answer: B) Mental exercise.

ASSERTION-REASON

93. Assertion (A): Planning establishes standards for controlling.
Reason (R): Without planning, there would be no benchmark to measure actual performance against.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

PREDICTIVE

94. The limitation "Planning leads to rigidity" implies that:

A) Managers cannot make plans

B) Once a plan is made, managers may not have the flexibility to change it

C) Top management is too strict

D) Plans are made out of rigid materials

Correct Answer: B) Once a plan is made, managers may not have the flexibility to change it.

CASE SCENARIO

95. An organization has a plan that simply states: "Employees will be promoted based on merit and performance, not seniority." This statement is their promotion:

A) Procedure

B) Rule

C) Policy

D) Programme

Correct Answer: C) Policy.
Logic: It guides the decisions of the HR managers when evaluating promotions.

CBSE SAMPLE PAPER 2025

96. Which of the following is NOT an element of planning?

A) Policy

B) Rule

C) Staffing

D) Budget

Correct Answer: C) Staffing.
Board Tip: Staffing is a separate primary function of management, not a type of plan.

TRICKY QUESTION

97. Are 'Methods' considered Single-use plans or Standing plans?

A) Single-use plans

B) Standing plans

C) Both

D) Neither

Correct Answer: B) Standing plans.
Logic: A method provides the prescribed way to perform a recurring task, so it is used repeatedly.

ASSERTION-REASON

98. Assertion (A): Planning reduces the risk of uncertainty.
Reason (R): Planning shows the way to deal with changes and uncertain events by anticipating them.

A) Both (A) and (R) are true and (R) is the correct explanation.

B) Both (A) and (R) are true but (R) is NOT the explanation.

C) (A) is true, but (R) is false.

D) (A) is false, but (R) is true.

Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.

CBSE BOARD 2023

99. Before selecting an alternative, managers must:

A) Implement the plan

B) Evaluate the pros and cons of all identified alternatives

C) Set new objectives

D) Follow up

Correct Answer: B) Evaluate the pros and cons of all identified alternatives.

FINAL MASTER QUESTION

100. Mr. Rohan, a manager, created a highly detailed and costly plan for the year. However, consumer preferences shifted drastically halfway through the year, rendering the plan useless. This scenario best highlights which two concepts?

A) Features: Continuous & Mental exercise

B) Limitations: Huge costs & May not work in a dynamic environment

C) Importance: Provides direction & Promotes innovation

D) Process: Setting objectives & Follow-up

Correct Answer: B) Limitations: Huge costs & May not work in a dynamic environment.
Final Analysis: The plan was "costly" (huge costs) and failed because "consumer preferences shifted" (dynamic environment).

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Chapter 4 Mastered!

Excellent work! You have completed all 100 MCQs for Planning.
Mastering these steps and limitations is crucial for scoring high in case studies.