Question 1

How does planning provide direction?

Accepted Answer

Planning provides direction by setting objectives and outlining the steps to achieve them. It guides managers and employees on what needs to be done, when, and how, ensuring coordinated efforts towards common goals. — Planning defines clear goals and the path to reach them, which directs the activities of the organization and its members, reducing uncertainty and providing a framework for decision-making.

Question 2

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?

Accepted Answer

Ms Rajni has performed the 'Developing Premises' step of the planning process. This step involves identifying the assumptions or premises on which the plan will be based, such as market conditions, customer preferences, and competitive strategies. By outlining options like entering new markets and sales promotions, she is establishing the premises for planning. — In planning, after setting objectives, the next step is to develop premises or assumptions about the environment and resources. Ms Rajni's report listing options reflects this step, as it sets the basis for deciding how to achieve the objective.

Question 3

Why are rules considered to be plans?

Accepted Answer

Rules are considered to be plans because they provide specific guidelines for action in recurring situations. They help in standardizing behavior and decisions, ensuring consistency and control, which are key aspects of planning. — Since rules lay down what is permitted or prohibited, they act as standing plans that guide employees on how to act in particular circumstances, thus serving the purpose of planning.

Question 4

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.

Accepted Answer

The type of plan adopted by Rama Stationery Mart is a 'Rule'. This is because the decision to make all payments by e-transfers is a specific guideline that must be followed consistently. — Rules are standing plans that specify what must or must not be done. Since the payment method is fixed and must be followed, it qualifies as a rule.

Question 5

Can planning work in a changing environment? Give a reason to justify your answer.

Accepted Answer

Yes, planning can work in a changing environment because it helps organizations anticipate changes and prepare alternative courses of action. Although plans may need to be revised, having a plan provides a framework to respond effectively to change. — Planning is a continuous process that involves forecasting and adapting to environmental changes. It reduces uncertainty by preparing the organization for possible future scenarios.

Question 6

What are the main aspects in the definition of planning?

Accepted Answer

The main aspects in the definition of planning are: (i) Planning is goal-oriented; it focuses on achieving specific objectives. (ii) It is a primary function of management. (iii) It involves looking ahead and preparing for the future. (iv) It involves decision-making about what is to be done, how, when, and by whom. — Planning involves setting objectives and deciding in advance the appropriate actions to achieve them. It is a continuous process that guides other managerial functions.

Question 7

If planning involves working out details for the future, why does it not ensure success?

Accepted Answer

Planning does not ensure success because it is based on assumptions and forecasts which may not always be accurate. External factors such as market conditions, competition, and unforeseen events can affect outcomes despite good planning. — While planning reduces uncertainty, it cannot control all variables. Hence, even the best plans may fail due to changes in environment or poor implementation.

Question 8

What kind of strategic decisions are taken by business organisations?

Accepted Answer

Business organisations take strategic decisions related to long-term goals, overall direction, resource allocation, market positioning, product lines, diversification, mergers, and acquisitions. These decisions affect the entire organisation and are made by top management. — Strategic decisions set the foundation for the organisation's future and involve high risk and uncertainty. They determine the scope and objectives of the business.

Question 9

Planning reduces creativity. Critically comment.(Hint: both the points - Planning promotes innovative ideas and planning reduces creativity - will be given).

Accepted Answer

Planning promotes creativity by encouraging managers to think ahead and explore new ideas to achieve objectives. However, excessive planning or rigid plans may limit creativity by restricting flexibility and spontaneity. Thus, while planning can foster innovation, it can also constrain creativity if not managed properly. — Planning provides a framework for innovation but should allow room for creative thinking and adaptability to avoid stifling new ideas.

Question 10

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.

Accepted Answer

The type of plan highlighted is a 'Tactical Plan'. The three dimensions of tactical plans are: (i) Specificity - they are more specific than strategic plans, focusing on particular departments or activities. (ii) Time Frame - they cover a shorter period, usually a few months to a year. (iii) Flexibility - they are more flexible to adapt to changing circumstances. — Tactical plans translate strategic plans into specific actions. Bharti Airtel's adjustment of its prepaid plan is a tactical response to competition.

Question 11

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)
b. A plan based on research and analysis and is concerned with physical and technical tasks. (Method)

Accepted Answer

a. Budget is a Single Use Plan because it is prepared for a specific period and purpose, and it also serves as a controlling device by comparing actual performance with planned figures.
b. Method is a Standing Plan because it provides a standard procedure or technique to be followed repeatedly in performing tasks. — Budgets are single use as they are prepared for a particular time frame and discarded after use. Methods are standing plans as they guide routine activities continuously.

Question 12

Why is it that organisations are not always able to accomplish all their objectives?

Accepted Answer

Organisations are not always able to accomplish all their objectives due to various reasons such as: (i) Changing environment - market conditions, technology, and competition may change unexpectedly.
(ii) Inadequate resources - lack of financial, human, or material resources can hinder achievement.
(iii) Poor planning or implementation - unrealistic plans or ineffective execution can cause failure.
(iv) Resistance to change - employees or other stakeholders may resist new plans.
(v) Unforeseen events - natural calamities, political instability, or economic downturns can affect outcomes. — Despite careful planning, external and internal factors beyond control can prevent organisations from achieving all objectives. Flexibility and continuous monitoring are essential to cope with such challenges.

Question 13

What are the steps taken by management in the planning process?

Accepted Answer

The steps in the planning process are:
1. Setting Objectives - defining clear, specific goals.
2. Developing Premises - making assumptions about the environment.
3. Identifying Alternatives - listing possible courses of action.
4. Evaluating Alternatives - assessing pros and cons of each alternative.
5. Selecting the Best Alternative - choosing the most suitable option.
6. Formulating Derivative Plans - preparing supporting plans.
7. Implementing the Plan - putting the plan into action.
8. Reviewing and Controlling - monitoring progress and making necessary adjustments. — Planning is a systematic process that involves defining goals, analyzing the environment, choosing the best course of action, and ensuring effective implementation and control.

Question 14

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. C Ltd. realized that it needs to take steps immediately to improve its market standing in the future. For quality conscious consumers, C Limited plans to introduce 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).

Accepted Answer

The features of planning highlighted are:
1. Planning is Pervasive: The formation of a team with representatives from all levels of management shows that planning is done at all levels of the organisation.
2. Planning is Futuristic: C Ltd. is taking steps to improve its future market position by introducing new models and technological advancements.
3. Planning is a Mental Exercise: The team brainstorming and determining steps reflects that planning involves thinking, analysis, and decision-making before action. — Planning involves all levels of management (pervasive), focuses on future goals (futuristic), and requires intellectual effort (mental exercise) to devise strategies and actions.

Question 15

Which of the following best defines 'Strategy' in the context of business planning?

Accepted Answer

A comprehensive plan by top management outlining long-term direction and resource allocation — Strategy is a comprehensive plan formulated by top management that outlines the long-term direction and scope of an organisation, including objectives, resource allocation, and consideration of the business environment.

Planning

Planning — Study Notes

Introduction

Concept

Importance of Planning

Practice Questions — Planning

All 8 Chapters in Business Studies-I