2nd PUC Business Studies Important Questions Chapter 4 Planning

Karnataka 2nd PUC Business Studies Important Questions Chapter 4 Planning

Question 1.
How does planning provide direction?
(a) Planning is goal-oriented.
(b) Continuous process.
(c) Pervasive function.

Question 2.
The planning function of management is conducted at which level of management?
Answer:
At all Three Levels.

Question 3.
One of the functions of management is considered as a base for all other functions. Name that Function.
Answer:
Planning.

Question 4.
Planning strangulates the initiative of the employees and compels them to work in an inflexible manner” Discuss.
Answer:
Planning reduces creativity.

Question 5.
Which limitation of planning suggests that the employees stop thinking and become blind followers of the Plan?
Answer:
Planning reduces creativity.

Question 6.
A company needs a detailed plan for its new project- the construction of a shopping mall. What type of plan Is it?
Answer:
Program.

Question 7.
In which type of plan the sequence to perform a job is determined?
Answer:
Procedure.

Question 8.
Which plans suggest action and non-action of employees?
Answer:
Rules

Question 9.
“No Smoking: the statement is related to which type of plan?
Answer:
Rule.

Question 10.
Me Donald does not give its franchise to any other company which is running a food business. This is related to which type of plan/
Answer:
Policy.

Question 11.
Name the type of plan which serve as a guide for overall business planning and define the future state of affair which the organization strives to realize?
Answer:
Objectives.

Question 12.
In which step of the planning process do the planners make predictions and assumptions regarding the future?
Answer:
Setting up planning premises for all the alternatives.

Question 13.
How should a manager select the best possible course of action?
Answer:
The manager should apply permutation and combination.

Question 14.
Without one function of management, the controlling function is not possible. Name the concerned function.
Answer:
Planning.

Question 15.
Planning is an activity that enables a manager to look ahead and anticipate changes. Mention the Benefit of planning highlighted here.
Answer:
Planning reduces the risks of uncertainty.

Question 16.
Planning ensures clarity in thoughts and actions, works are carried on smoothly without interruptions. Which importance of planning is mentioned here?
Answer:
Planning reduces overlapping and wasteful activities.

Question 17.
It helps the manager to look into the future and make a choice amount various ” alternative courses of action Enumerate the importance of planning indicated here.
Answer:
Planning facilitates decision-making.

Question 18.
Planning lays down the base for other functions of management. Which feature of planning is highlighted here?
Answer:
Planning is a primary function of management.

Question 19.
A plan is framed it is implemented and is followed by another plan and so on. Mention the feature of Planning indicates here?
Answer:
Planning is a continuous process.

Question 20.
Which features of planning are stressed by saying that planning is an intellectual activity of thinking rather than doing?
Answer:
Planning is a mental exercise.

I. One Mark Questions and Answers

Question 1.
What is Planning?
Answer:
It is an intellectual process, which requires a manager to think before doing anything.

Question 2.
State a benefit of Planning.
Answer:
Planning provides direction.

Question 3.
State a limitation of planning.
Answer:
Planning leads to rigidity.

Question 4.
State the function of management which determines the objectives of an organization.
Answer:
Planning.

Question 5.
Mention the first step of the planning process.
Answer:
Setting objectives.

Question 6.
State a type of plan.
Answer:
Strategies.

Question 7.
Give an example of the rule.
Answer:
Wearing identity cards compulsorily at the workplace.

Question 8.
What are the methods under Planning?
Answer:
They are the ways of doing a planned task.

Question 9.
What are programs under planning?
Answer:
It is a plan which lays down operations to be carried out to complete a given task.

Question 10.
Give an example for the budget.
Answer:
Sales Budget, advertising budget, etc.

Question 11.
Which is the first function performed in the process of Management?
Answer:
Planning.

Question 12.
What does planning mainly concentrate on?
Answer:
It concentrates on setting up the objectives of an organization.

Question 13.
Mention any one importance of Planning?
Answer:
It provides direction for the achievement of objectives.

Question 14.
Mention any one objective of Planning?
Answer:
It ensures co-operation and coordination.

Question 15.
Mention any one limitation of Planning.
Answer:
Planning leads to rigidity.

Question 16.
Mention the first step in planning.
Answer:
Setting up objectives.

Question 17.
Give an example for Strategy.
Answer:
Divide and Rule.

Question 18.
Give an example for Policies.
Answer:
Pricing Policy.

Question 19.
Give an example for Procedure.
Answer:
Procedure for admission of a student.

Question 20.
What is the objective under Planning?
Answer:
They have desired goals that the management of an organization would like to reach.

Question 21.
What are strategies under Planning?
Answer:
They are specific programs for achieving objectives.

Question 22.
What are policies under Planning?
Answer:
They provide a framework for decision-making.

Question 23.
What are the procedures under Planning?
Answer:
They are plans prescribing the exact time and sequence of work to be done.

Question 24.
What are the rules under Planning?
Answer:
They have established principles for carrying out activities in an organization.

Question 25.
What is our Budget under Planning?
Answer:
It is a plan for future expenditure.

II. Two Marks Question and Answers

Question 1.
Define Planning.
Answer:
According to Louis Allen ‘Planning involves the development of forecasts objectives, policies, programs, procedures, schedules, and budgets.

Question 2.
State any two disadvantages of planning.
Answer:

1. Planning leads to rigidity
2. Planning may not work in a dynamic environment.

Question 3.
State the first two steps in the planning process.
Answer:

1. Setting objectives
2. Developing premises.

Question 4.
What are planning premises?
Answer:
Planning premises are the assumptions about the future conditions and events like trends in population, changes in the political and economic environment, variations in production cost and prices, government and legal regulations, etc. Plans should be formulated by the management within the framework of the planning premises.

Question 5.
What is decision-making in planning?
Answer:
Decision-making is a process of selecting the best course of action from various available alternatives after evaluating each one of them.

Question 6.
Mention any two types of plans.
Answer:
Budgets, policies.

Question 7.
What are the objectives?
Answer:
Objectives are guidelines laid down by the top management and it serves as a benchmark for measuring the performing of the organization.

Question 8.
Give the meaning of Strategies?
Answer:
It is an elaborate and systematic plan of action, a formal scheme of inducing employees to do a proposed work.

Question 9.
What are Policies?
Answer:
Policies are the method by which any organization is administered. They provide a framework for decision-making.

Question 10.
What are Procedures?
Answer:
Procedures are a particular course of action intended to achieve a specific pre-determined goal.

Question 11.
State the meaning of Budgets?
Answer:
A Budget is a sum of money allocated for a future expenditure. It is also considered a control device.

Question 12.
How rule is different from policy?
Answer:
Policies are general statements that serve as a guide to the decision-making in the organization whereas Rules are the established principles for carrying out the activities in a systematic manner. Policies are guidelines that help in decision making while rules are rigid and specific prescribing a code of behavior.

Question 13.
What do you mean by Planning?
Answer:
It is concerned with establishing specific goals and objectives to be achieved in future. It is also a process of choosing from alternatives.

Question 14.
Mention any two importances of Planning?
Answer:
(a) Planning helps in achieving co-ordination
(b) Planning leads to efficiency in operation.

Question 15.
Mention any two features of planning.
Answer:
(a) Planning is the primary function of management
(b) Planning is a goal-oriented process.

Question 16.
Mention any two limitations of Planning.
Answer:
(a) It is a time-consuming process.
(b) It is a costly process.

Question 17.
Mention any two steps involved in Planning.
Answer:
(a) Setting up of objectives.
(b) Selection of alternatives.

Question 18.
Mention any two types of Plans.
Answer:
(a) Programmes
(b) Budgets

Question 19.
Why Planning is it a costly affair?
Answer:
Collection and analysis of information incur huge expenses, hence planning is known as a costly affair.

Question 20.
What do you mean by follow-up action?
Answer:
It is the process of checking whether the plans are being implemented or not. It is an act of monitoring plans.

Question 20.
What are Methods?
Answer:
It is an orderly process, a regular manner of doing anything. It specifies how each step is to be performed.

Question 21.
What are Rules?
Answer:
Rules are established principles of carrying out planned activities in a systematic manner and their violation attracts disciplinary action.

Question 22.
What are programs?
Answer:
A Programme is a precise plan which lays down the operations to be carried out to complete a given task.

III. Five Marks Questions and Answers

Question 1.
Explain the Importance of Planning.
Answer:
(a) Planning provides guidelines for the decision-making process of managers.
(b) Planning helps the organization in coping up with the changing environment and feeding challenges.
(c) Planning helps organizations to predict and assess future uncertainties and act accordingly.
(d) Planning reduces uncertainty, risk, and confusion in an organization’s operations.
(e) Planning helps in achieving coordination and established standards for controlling.
(f) Planning encourages and promotes innovation and creativity.

Question 2.
Explain the limitations of Planning.
Answer:
The following are the limitations of Planning.
(a) Planning is a predetermined course of action; hence it is rigid in nature and restricts creativity and innovation.
(b) Planning is very expensive, a large pool of money has to be spent on the collection of information and then analyzing it.
(c) Planning predicts the future and if there is any unexpected change, the plans become useless.
(d) Planning is a time-consuming task; it involves a lot of procedures between the collection of information and analysis.
(e) Planning does not guarantee an enterprise’s success, it only provides a base for analysis for future course of action.

Question 3.
What is planning? Explain any two types of plan.
Answer:
It is an intellectual process, which requires a manager to think before doing anything.

Two types of plan.
(a) Objectives: Objectives are guidelines laid down by the top management and it serves as a benchmark for measuring the performing of the organization
(b) Strategies: It is an elaborate and systematic plan of action, a formal scheme of inducing employees to do a proposed work.

IV. Ten Marks Questions and Answers

Question 1.
Explain any five types of plans.
Answer:
The following are the types of plans.
(a) Objectives: Objectives are guidelines laid down by the top management and it serves as a benchmark for measuring the performing of the organization
(b) Strategies: It is an elaborate and systematic plan of action, a formal scheme of inducing employees to do a proposed work.
(c) Policies: Policies are the method by which any organization is administered. They provide a framework for decision-making.
(d) Procedures: Procedures are a particular course of actions intended to achieve a specific predetermined goal.
(e) Methods: It is an orderly process, a regular manner of doing anything. It specified how each step is to be performed.
(f) Rules: Rules are established principles of carrying out planned activities in a systematic manner and their violation attracts disciplinary action.
(g) Programmes: A Programme is a precise plan which lays down the operations to be carried out to complete a given task.
(h) Budgets: A Budget is a sum of money allocated for a future expenditure. It is also considered as a control device.

Question 1.
Bring out the steps involved in Planning while establishing a new business unit.
Answer:

Exercises

Short Answer Type Questions

Question 1.
What are the main points in the definition of planning?
Answer:
The main points in the definition of planning are as follows

1. Planning is deciding in advance what to do and how to do it.’
2. It is one of the basic managerial functions.
3. Planning involves setting objectives and developing an appropriate course of action to achieve these objectives.
4. It bridges the gap between where we are and where we want to reach.

Question 2.
How does planning provide direction?
Answer:
Planning provides direction for action by deciding in advance what has to be done, how to do when to do and who will do it. When we try to seek answers to the above questions, which are well planned then directions are automatically highlighted.

Question 3.
Do you think planning can work in a changing environment?
Answer:
Planning may not work in a changing environment. The environment consists of a number of dimensions, economic, political, social, legal, and technological dimensions. The organization has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment. Planning cannot foresee everything and thus, there may be obstacles to effective planning.

Question 4.
If planning involves working out details for the future, why does it not ensure success?
Answer:
Planning does not guarantee success. The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan 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. This kind of false sense of security may actually lead to failure instead of success

Question 5.
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.

Question 6.
What kind of strategic decisions are taken by business organizations?
Answer:
Major strategic decisions include whether the organization 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.

Long Answer Type Questions

Question 1.
Why is it that organizations are not always able to accomplish all their objectives?
Answer:
Organizations are not always able to accomplish all their objectives due to the following reasons
1. Planning: Leads to Rigidity In an organization a when defined plan is drawn up with specific goals to be achieved, within 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

2. Planning May does 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 to decide in advance what has to be done in future Planning cannot foresee everything and thus there may be obstacles to effective planning.

3. Planning Reduces Creativity Planning is generally done by top: management. Usually, the rest of the members just implement these plans. As a consequence, middle management and other decisions makers are neither allowed to deviate from plans nor are 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.

4. Planning Involves Huge Cost: Planning involves huge costs in its formulation. These may be in terms of time and money. The Costs incurred sometimes may not justify the benefits derived from plans.

5. Planning is a Time-Consuming Process: Sometimes plans to draw take up so much time that there is not much time left for their implementation and the objectives to be achieved.

6. Planning does not Guarantee Success: Any plan needs to translate into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true just because a plan has worked before it will work again.

Question 2.
What are the main features to be considered by management while planning?
Answer:
The main features to be considered by the management while planning is:
1. It Focuses on Achieving Objectives Planning is purposeful. Planning has no meaning unless it contributes to the achievement of predetermined organizational goals.

2. It is the Primary Function: Planning lays down the base for other functions of management. All other managerial functions are performed within the framework of the plans drawn. Thus, planning precedes other functions.

3. Planning is Pervasive: Planning is required at all levels of management as well as in all departments of the organization. The top management undertakes planning for the organization as a whole. Middle management does the departmental planning. At the lowest level, day-to-day operational planning is done by supervisors.

4. Planning is Continuous: Plans are prepared for a specific period of time, maybe for a month, a quarter, or a year. At the end of that period, there is a need for a new plan to be drawn on the basis of new requirements and future conditions. Hence, planning is a continuous process.

5. Planning is Futuristic: The purpose of planning is to meet future events effectively to the best advantage of an organization. It implies peeping into the future, analyzing it, and predicting it.

6. Planning Involves Decision Making: Planning essentially involves a choice among various alternatives and activities. If there is only one possible goal then there is no need for planning. The need only arises when alternatives are available. Planning thus involves

7. Planning is a Mental Exercise: Planning is basically an intellectual activity of thinking rather than doing because planning determines the action to be taken. Planning requires logical and systematic thinking rather than guesswork or wishful thinking.

Question 3.
What are the steps taken by management in the planning process?
Answer:
The planning process involves the following steps:
1. Establishing Objectives: The first step in planning is to determine objectives that must be realistic, specific, and clear so as to specify what is to be accomplished by the network of policies, procedures, strategies, etc.

2. 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.

3. Identifying the Alternative Courses of Action: The next step in planning is to identify the various alternatives available to achieve the objectives.

4. Evaluating Alternative Courses: The merits and demerits of different courses of action 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.

5. 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 organization by maximizing output and profits at the minimum costs.

6. Implement the Plan: At this step, the best alternative chosen is put to use. ,

7. Follow Up: Only putting the best alternative to action is not enough. The future is uncertain and dynamic. Therefore, it becomes important to check back whether the plan is giving results or not.

Question 4.
Is planning actually worth the huge costs involved? Explain.
Answer:
Planning involves huge costs, when plans are drawn up huge costs are involved in their formulation. These are in terms of time, money, effort, etc. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans. There are a number of incidental costs as well (which are indirect) like expenditures on organizing a meeting, consultation fees given to professional experts, market surveys, etc. But despite the high cost, no firm can work without proper planning if used properly.

Multiple Choice Questions

Question 1.
The bottom line of any business plan is
(A) marketing plan
(B) financial plan
(C) personnel plan
(D) production plan
Answer:
(A) marketing plan

Question 2.
Top management works on
(A) strategic plan
(B) corporate plan
(C) budgeting
(D) both A & B
Answer:
(A) strategic plan

Question 3.
A ‘’Strategic plan’ is also called
(A) long term plan
(B) short term plan
(C) BothAandB
(D) none of above
Answer:
(A) long term plan

Question 4.
Plan which is firstly discussed in a business plan is mostly
(A) marketing plan
(B) financial plan
(C) personnel plan
(D) production plan
Answer:
(A) marketing plan

Case Problems:

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. Questions
Question 1.
Prepare a model business plan for C Ltd to meet the existing challenge. You need to be very specific about quantitative parameters. You may specify which type of plan you are preparing.
Answer:
In such a situation, formulating a strategy would be advisable. A strategy is a Single-use plan It is normally made to fight competition in the market.

The model business plan, i.e., the strategy will be:

1. It is objective and its purpose is that how much sales it wants to increase over a specified time.
2. The company should then list down its strengths and weakness. This brings to light what will be easy and what will be difficult.
3. Aggressive, advertising and sales promotion techniques to be adopted.

Question 2.
Identify the limitations of such plans.
Answer:
Limitations of the above strategy can be

1. Shortage of fluids.
2. Shortage of technical professionals.
3. The top-level may not be competent enough to develop a suitable strategy.
4. The company may not be successful in assessing the future plans of the competitors as compared to its own strategy.

Question 3.
How will you seek to remove these limitations?
Answer:
The above limitations can be overcome by

1. Arranging funds in advance.
2. Effective methods of recruitment should be adopted to ensure the availability of effective staff in all departments.
3. The middle level should be encouraged to propose plans in the form of suggestions. After considering all these, a strategy should be planned.
4. The company should be able to assess the moves of the competitors.

2nd PUC Business Studies Important Questions