We have completed the NCERT/CBSE Solutions chapter-wise for Class 12 Business Studies Chapter 4 Planning with Answers by expert subject teacher for latest syllabus and examination. Prepare effectively for the exam taking the help of the Class 12 Business Studies NCERT Solutions PDF free of cost from here. Students also can take a free NCERT Solutions of Planning. Each question has right answer Solved by Expert Teacher. Download the Business Studies NCERT Solutions with Answers for Class 12 Business Studies Pdf and prepare to help students understand the concept very well.
NCERT Solutions for Class 12 Business Studies Chapter wise
Exercises
Very Short Answer Type:
Q1. How does planning provide direction?
Answer: Planning provide direction by stating in advance how work is to be done. It ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals.
Q2. A company wants to increase its market share from the present 10% to 25% to have a dominant position in the market by the end of the next financial year. Ms Rajni, the sales manager has been asked to prepare a proposal that will outline the options available for achieving this objective.
Her report included the following options – entering new markets, expanding the product range offered to customers, using sales promotion techniques such as giving rebates, discounts or increasing the budget for advertising activities. Which step of the planning process has been performed by Ms Rajni?
Answer: The step that has been undertaken by Ms Rajni is identifying alternative courses of action. In this process Ms. Rajni has noted down all possible course of action that can be used for increasing the market share.
Q3. Why are rules considered to be plans?
Answer: Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. They are usually the simplest type of plans because there is no compromise or change unless a policy decision is taken.
Q4. Rama Stationery Mart has made a decision to make all the payments by e-transfers only. Identify the type of plan adopted by Rama Stationery Mart.
Answer: The type of plan used is a policy. Rama Stationery Mart has adopted a payment policy that requires all payments to be made via e-transfers only.
Policy is a broad statement that defines the boundaries within which decisions are made and directs decisions toward the achievement of goals.
Q5. Can planning work in a changing environment? Give a reason to justify your answer.
Answer: Planning has a less chance of working correctly in a changing environment. Nature of business is dynamic and it continuously changes. For example, factors like social, political, rules and regulations are prone to changes on a continuous basis. Planning cannot detect such changes and therefore prove not that effective. For example, a company has planned to make white bread but the market demand shifted to brown bread due to people becoming more health conscious. Here the company needed to change its previous plan as market factors were not as per the plan.
Short Answer Type:
Q1. What are the main aspects in the definition of planning?
Answer: The main points in the definition of planning are:
- It means deciding in advance what to do and how to do.
- A basic managerial function.
- It requires taking decisions since it involves making a choice from alternative courses of action.
- It involves setting objectives and developing appropriate courses of action to achieve these objectives.
- It has to have a given time frame.
Q2. If planning involves working out details for the future, why does it not ensure success?
Answer: Planning is based on certain external factors on which management may have no control, thus, though imperative, planning does not guarantee success. Planning means to think in advance thus it is a looking ahead activity which is never done for the past. It involves thinking in advance what and how the work is to be done in future. It anticipates opportunities and threats in the environment. Thus, planning involves forecasting.
Q3. What kind of strategic decisions are taken by business organisations.
Answer: A strategy provides the broad contours of an organisation’s business. It will also refer to future decisions defining the organisations direction and scope in the long run. Thus, we can say a strategy is a comprehensive plan for complishing an organisation objectives.
Whenever a strategy is formulated the business environment needs to be taken into consideration. The changes in the economic, policital, social, legal and technological environment will affect an organisations strategy. Strategies usually take the course of forming the organisations identity in the business environment.
Major strategic decisions will include decision like whether the organisation will continue to be in the same line of business or combine new lines of activity with the existing business or seek to acquire a dominant position in the same market.
Q4. Planning reduces creativity. Critically comment. (Hint: both the points – Planning promotes innovative ideas and planning reduces creativity – will be given).
Answer: Planning is a critical and difficult function because it provides direction and reduces the risk of uncertainty through forecasting. It is an intellectual process that entails coming up with better ideas and methods to accomplish a specific task. And the top management level is in charge of the planning process, with the rest of the members simply carrying it out.
They are not permitted to participate in the planning process or to act on their own. As a result, creativity and innovation suffer.
Q5. In an attempt to cope with Reliance Jio’s onslaught in 2018, market leader Bharti Airtel has refreshed its ₹ 149 prepaid plan to offer 2 GB of 3G/4G data per day, twice the amount it offered earlier. Name the type of plan is highlighted in the given example.? State its three dimensions also.
Answer: The type of plan that is adopted by Bharti Airtel is Strategy. Strategy is devised by keeping the business environment prevalent at the time.
The three dimensions of strategy are:
- It helps determine long term objectives
- It helps to determine a particular course of action
- It guides on allocating resources which are necessary for achieving the objective.
Q6. State the type of plan and state whether they are Single use or Standing plan:
a. A type of plan which serves as a controlling device as well. (budget)
Answer: The budget plan is a one-time use plan. Budge is a numerically expressed statement of expected results. It is a projection intended to define the anticipated cost and results of a single project in numerical terms.
b. A plan based on research and analysis and is concerned with physical and technical tasks. (Method)
Answer: This is a pre-existing strategy known as method. Method specifies the prescribed ways or manner in which a task must be completed while keeping the objectives in mind. It deals with a task, which could be a step in a procedure, and specifies how that step should be carried out.
Long Answer Type:
Q1. Why is it that organisations are not always able to accomplish all their objectives?
Answer: Organisations are not always able to accomplish all their objectives due to the following reasons
(i) Planning Leads to Rigidity In an organisation a well defined plan is drawn up with specific goals to be achieved, with in a specific time frame. These plans then decide how the work will progress in the future and managers may not be in a position to change it. This creates a problem as flexibility is very important. Always adhering to the plan may not give us the desired results always.
(ii)Planning May not Work in a Dynamic Environment The business environment is dynamic, nothing is constant. The business environment is a totality of external forces, where in some changes or the other keep on taking place. Plans decide in advance what has to be done in future. Planning cannot foresee everything and thus there may be obstacles to effective planning.
(iii) Planning Reduces Creativity Planning is generally done by the top management. Usually the rest of the members just implements these plans. As a consequence, middle management and other decisions makers are neither allowed to deviate from plans nor are they permitted to act on their own, thus planning in a way reduces creativity since people tend to think along the same lines as others, there is nothing new or innovative.
(iv) Planning Involves Huge Cost Planning involves huge cost in their formulation. These may be in terms of time and money. The costs incurred sometimes may not justify the benefits derived from the plans.
(v) Planning is a Time Consuming Process Sometimes plans to be drawn take up so much of time that there is not much time left for their implementation and the objectives to be achieved.
(iv) Planning does not Guarantee Success Any plans needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again.
Q2. What are the steps taken by management in the planning process?
Answer: The planning process involves the following steps
(i) Establishing Objectives The first step in planning is to determine objectives which must be realistic, specific and clear so as to specify what is to be accomplished by the network of policies, procedures, strategies etc.
(ii) Developing Premises They include assumptions or forecasts of the future and unknown conditions that will affect the operations of the plans. They provide an idea about the future which facilitates the work of planning.
(iii) Identifying the Alternative Courses of Action The next step in planning is to identify the various alternatives available to achieve the objectives.
(iv) Evaluating Alternative Courses The merits and demerits of different courses of actions are evaluated in the light of objectives to be achieved and their feasibility is judged i.e., how far they will be successful in helping to achieve the objective.
(v) Selecting an Alternative The next step is to find out the most suitable course to be followed. The efforts are directed towards selecting that course. Which increases efficiency in the organisation by maximising output and profits at the minimum costs.
(vi) Implement the Plan At this step the best alternative chosen is put to use.
Q3. An auto company C Ltd. is facing a problem of declining market share due to increased competition from other new and existing players in the market. Its competitors are introducing lower priced models for mass consumers who are price sensitive. For quality conscious consumers, the company is introducing new models with added features and new technological advancements.
The company has formed a team with representatives from all the levels of management. This team will brainstorm and will determine the steps that will be adopted by the organisation for implementing the above strategy. Explain the features of Planning highlighted in the situation given below.(Hint: Planning is pervasive, Planning is futuristic and Planning is a mental exercise).
Answer: Planning is all pervasive: The need for planning arises in all types of organizations, at all the levels of management as well as in all departments of the organization. It is not a top-level function; rather, it is performed by managers at all levels. Whereas top-level management creates organizational plans, the middle level creates departmental plans, and the lower level creates plans for the organization’s day-to-day operations.
Planning is futuristic: Planning is based on forecasting and is prepared for the future. The primary goal of planning is to effectively meet future events to the best advantage of an organization. It implies looking into the future, analyzing it, and making predictions about it. Thus, planning is a forward-thinking process.
Planning is a mental exercise: Planning is a mental exercise because it necessitates creativity, imagination, and higher-order thinking skills, as well as sound judgment. It is a mental intellectual activity. It necessitates logical and systematic thinking as opposed to guesswork or wishful thinking.
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