2nd PUC Business Studies Question Bank Chapter 4 Planning

You can Download Chapter 4 Planning Questions and Answers, Notes, 2nd PUC Business Studies Question Bank with Answers Karnataka State Board Solutions help you to revise complete Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Business Studies Question Bank Chapter 4 Planning

2nd PUC Business Studies Planning Text Book Exercises

2nd PUC Business Studies Planning Short Answer Type Questions With Answers

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.
  2. It is one of the basic managerial function.
  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. 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 organisation 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. A 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 had 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 organisations?
Answer:
Major strategic decisions include 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.

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2nd PUC Business Studies Planning Long Answer Type Questions With Answers

Question 1.
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.
1. Planning leads to Rigidity: In an organisation, a well 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. Adhering to the plan may not always give us the desired results.

2. 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, wherein 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.

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 decision 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 cost in their 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 so drawn take up so much of 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 translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It 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 are as follows :
1. It focuses on achieving objectives : Planning is purposeful. Planning has no meaning unless it contributes to the achievement predetermined organisational 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 organisations. The top management undertakes planning for the organisation 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, may be for a month, a quarter or a year. At the end of that period, there is 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 organisation. It implies peeping into the future, analysing it and predicting it.

6. Planning involves decision making: Planning essentially involves choice from 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.

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Question 3.
What are the steps taken by management in the planning process?
Answer:
Planning is concerned with determination of the objectives of the organization and formulating strategies, policies, rules and programmes to accomplish the objectives.
Steps in planning:
(a) Setting objectives: This is a first function in the process of planning. Objectives are the goals which determine what the organization wants to achieve. They must be specific, realistic and measurable.

(b) Developing premises: Planning premises are the assumptions about the future conditions and events like trends in population, changes in political and economic environment, variation in production cost and prices etc. plans should be framed within the framework of the planning premises.

(c) Identification of alternative course of action: Once the objectives are set and assumptions are made then alternative course of action should be identified. The management should know all the alternative course of action to achieve the objectives.

(d) Evaluating alternative courses: The next step is to analyze the strengths and weakness of each alternative. There is a need to evaluate each and every course of action in the light of objectives to be achieved.

(e) Selecting an alternative: After examining each and every possible course of action, the best is to be selected which is feasible, profitable for attainment of the objectives of the organization.

(f) Implementing the plan: This step is concerned with putting the plan into action to achieve the objectives. Implementation requires the formulation of policies, procedures, Budgets and programmes. It requires delegation of authority and responsibility to the subordinates.

(g) Follow up action: To see whether plans are being implemented are also a part of planning process. Monitoring the plan is equally important to ensure that objectives are achieved

Question 4.
Is planning actually worth the huge costs involved? Explain.
Answer:
Planning involves huge cost, 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 organising a meeting, consultation fees given to professional experts, market survey etc. But despite the high cost no firm can work without proper planning if used properly.

2nd PUC Business Studies Planning 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 maket. Its competitiors 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.

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., strategy will be the following:

  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 in light as to 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 the following :

  1. Shortage of funds.
  2. Shortage of technical professionals.
  3. 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 these actions.

  1. Arranging funds in advance.
  2. Effective methods of recruitment should be adopted to ensure availability of effective staff in all manageent.
  3. 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.

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2nd PUC Business Studies Planning Additional Questions

2nd PUC Business Studies Planning One Mark Questions and Answers

Question 1.
What is planning?
Answer:
Planning is concerned with deciding in advance the future course of action.

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

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

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

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

Question 6.
State a type of plan.
Answer:
Standing plan or repeated use plan is a type of plan.

Question 7.
What is a method under planning.
Answer:
The prescribed way of doing planned task for achieving objectives is known as method under plan.

Question 8.
What is programme under planning.
Answer:
A programme is a precise plan laying down the operations to be carried out to complete a given task within a specified period of time.

Question 9.
Give an example for budget.
Answer:
Sales budget is an example for budget.

Question 10.
What is planning?
Answer:
Planning is deciding in advance what to do, when to do, how to do, when to do it and who is to do it.

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Question 11.
What are objectives?
Answer:
Objectives are the goals, aims or purpose that organization wish to achieve by its operations over a period of time.

Question 12.
Give one example for procedures.
Answer:
Procedure for the admission of student in the college

Question 13.
Give one example for rule.
Answer:
No smoking

Question 14.
Give one example for strategy.
Answer:
Divide and rule

Question 15.
Give one example for methods.
Answer:
Remunerating sales personnel under commission method

Question 16.
What are methods under planning?
Answer:
The prescribed way or manner of doing each planned task for accomplishing the objectives is known as method

Question 17.
Give one example for programmes.
Answer:
Programme for sale of 300 cars in the month of December.

Question 18.
What is programme under planning?
Answer:
A programme is a precise plan which lays down the operations to be carried out to accomplish a given task within a specified period of time.

Question 19.
State the functions of management that determines the objectives of an organisation.
Answer:
Planning

Question 20.
Give one example for policies.
Answer:
Pricing Policy

Question 21.
State any one Importance of Planning.
Answer:
Planning acts as a guide.

Question 22.
State any one features of planning.
Answer:
Planning is a Goal – oriented.

Question 23.
What is rule under Planning.
Answer:
Rules are the established principles for carrying out the activities in a systematic manner.

Question 24.
Give the meaning of policy.
Answer:
They are the general statements which serve as guideline in the decision making process.

Question 25.
Give the meaning of Budget.
Answer:
Budget is a statement of expected results expressed in numerical terms.

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2nd PUC Business Studies Planning Two Marks Questions and Answers

Question 1.
Define planning?
Answer:
According to Koontz and O’Donnell “Planning is deciding in advance what to do, how to do, when to do it and who should do it. Planning bridges the gap from where we are & where we want to go”
OR
According to Louis Allen “Planning involves a development of forecast, objectives, polices, programs procedures, schedules and budgets.

Question 2.
State the first two steps in planning process.
Answer:

  • Setting objectives or goals, the organization wants to achieve.
  • Developing planning premises which are the assumption of the future conditions of the business.

Question 3.
What are Objectives?
Answer:
Objectives are the ends towards which the activities of an organization are directed. Objectives are usually set by the management. They decide future state of affairs which the organization strives to realize. Objectives lay down the guidelines for activities and bench mark for measuring the performance of the organization.

Question 4.
Give the meaning of strategy.
Answer:
They are specific programs of action for achieving the objectives of an organization by using resources efficiently and economically. Strategies are formulated by the top management. Examples: Divide & Rule, Strike while iron is hot, Time is a great healer.

Question 5.
What are policies?
Answer:
Policies are the general statements which serve as a guideline to the decision making in the organization. It is a frame work with in which the decision makers are expected to act while making decisions.

Question 6.
What is planning premises?
Answer:
Plans are formulated with certain assumptions about the future condition and events like changes in political and economic environment, government and legal regulations, variation in prices etc. these assumptions are known as planning premises.

Question 7.
What is decision making under planning?
Answer:
Decision making in planning refers to selecting best alternative course of action for accomoplishment of the objectives of an organisation.

Question 8.
Give the meaning of budget
Answer:
A budget is a statement of expected results expressed in numerical terms, it is a plan which quantifies future facts and figures.

Question 9.
What are rules?
Answer:
Rules are the specific statement which prescribes code of behaviour to the people of and organization and specifies what is to be done and what is not to be done.

Question 10.
What are procedures?
Answer:
Procedures are plan prescribing the exact chronological sequence of specific task. It provides details about series of steps to be followed in a regular order for accomplishing any work.

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Question 11.
Mention any two types of plan.
Answer:
a.Objectives
b. Strategy

Question 12.
Mention any two limitations of planning
Answer:
a. Planning leads to rigidity
b. Planning does not guarantee success

Question 13.
How rule is different from policy?
Answer:
2nd PUC Business Studies Question Bank Chapter 4 Planning - 1

Question 14.
What is Single-use Plan?
Answer:
A single-use plan is developed for a one-time event or project. Such a course of action is not likely to be repeated in future, i.e., they are for non-recurririg situations. These plans include budgets, programmes and projects. It is also called adhoc plan.

Question 15.
What is Standing Plan?
Answer:
A standing plan is used for activities that occur regularly over a period of time. It is designed to ensure internal operations of an organisation run smoothly. Standing plans include policies, procedures, methods and rules.

Question 16.
Give the meaning of procedure under planning.
Answer:
They are the plans prescribing the exact time sequence for the work to be done. Procedures are the guidelines to action and they are suited to the works which are repetitive in nature.
Examples: Procedure for execution of the customer’s order for supply of goods, Procedure for the admission of students in a college.

Question 17.
What is follow up action under planning?
Answer:
Follow up action refers to see whether plans are being implemented it is also a part of planning process. Monitoring the plan is equally important to ensure that objectives are achieved.

Question 18.
What is Adhoc Plan?
Answer:
Adhoc plan are also called as single use plan. Adhoc plan are non repetitive in nature. They are designed for a specific situation and for short duration.

Question 19.
What do you mean by standing plan?
Answer:
Standing plan are also called as repeated use plAnswer: These types of plan are used in organizations again & again. They are long term in nature & act as a ready guide for action.

Question 20.
What is method under planning?
Answer:
The prescribed way or the manner of doing each planned task to achieve the goals is known as method. It tells how each step of the procedure should be performed. Selection of proper method saves time, money and effort and increases the efficiency.

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2nd PUC Business Studies Planning Four Marks Questions and Answers

Question 1.
Explain the importance of planning.
Answer:
Importance or advantages of planning:
1. Planning provides direction: It provides direction for action by stating in advance how a work is to be done. It ensures that the goals and objectives are clearly stated so that the workers are aware of what they must do to achieve the goals.

2. Planning reduces the risk of uncertainty: A business organization has to work in an environment which is uncertain and ever changing. Planning helps to assess the future uncertainties and helps the organizations to face it.

3. Planning reduces wastages: Planning serves as the basis for coordinating the activities . and the efforts of the different individuals and departments of the organization. It helps to detect the inefficiency and to take corrective measures to minimize the wasteful activities.

4. Planning provides innovative ideas: Planning is basically the thinking function of management. It encourages the managers for innovative creative thinking. Many ideas come to the minds of the managers when they are planning.

5. Planning facilitates decision making: Decision making is a process of selecting the best course of action from various available alternatives after evaluating each one of them. Planning provides guidelines for evaluation of the alternatives in taking rational decisions.

6. Planning establishes standards for controlling: Planning helps in controlling. It determines goals and standards for every individuals and departments of the organization and makes it easy to compare the actual performance of the individuals and departments with the standards fixed.

Question 2.
Explain any five limitations of planning.
Answer:
Limitations of planning are:
1. Rigidity: In organizations a well-defined plan is drawn up with specific goals to be achieved with a time limit. This leads to rigidity in the activities of the managers which restricts the individual freedom, creativity and initiative.

2. Environmental constraints: The business environment is dynamic in nature, nothing is constant. Planning do not take into consideration the possible changes in economic, political, legal and social dimensions.

3. Lack of creativity: Planning is done by top management and the subordinates just implement the plAnswer: As a result the middle management are not allowed to deviate the plans and also not permitted to act on their own. Thus, their creativity is reduced.

4. Expensive: It is a costly process. Collection and analysis of information, evaluation of best course of action involves huge expenses.

5. Time consuming: Planning process is time consuming. Collection of facts and figures, selection courses of action involves much time.

Question 3.
What is planning? Explain any two types of plAnswer:
Answer:
Planning is concerned with determination of the objectives of the organization and formulating strategies, policies, rules and programmes to accomplish the objectives.

Repeated use plans or standing plans: It is a type of plan which is used in the organization again and again. It is long term in nature. They act as a ready guide for actions.

Standing plans are of different types as follows:
1. Objectives- Objectives are the end towards which the activities of an organization are directed. They are set up by the top management. They lay down guidelines for the activities and serves as a bench mark for measuring the performance of the organization. Usually the objectives are put in the form of written statement.

2. Strategies- Strategies are the specific programmes of action for achieving the objectives of the organization by employing the resources efficiently and economically. It is formulated by the top management for successful accomplishment of the objectives in the organization. Formulation of strategy involves three aspects:

  1. Determination of the long term objectives
  2. Adopting a course of action to achieve the objectives
  3. Allocating resources necessary to achieve the objectives.

Examples of strategies: Strike iron while it is hot Divide and rule Time is a great healer.

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Question 4.
Explain any five characteristics of planning?
Answer:
Planning is the basic function of management. It’s important features or characteristics are:
a.Goal Oriented
b. Universal function
c. Continuous process
d.Flexible
e. Future oriented

Goal Oriented: Planning start with the setting of objectives and then developing policies, procedures & strategies to achieve the goal. It gives directions to the activities.

Universal Function: Planning is done at all the levels of management. The scope of management differs from one level to another level.

Continuous Process: Planning is an ongoing and never ending process. Planning should be flexible enough to changes according to the changing circumstances.

Flexible: Planning is a dynamic function. It is should be adaptable both the external & internal changing environment.

Future Oriented: Planning is concerned with looking forward. It is always future oriented as it involves forecasting & making provision to tackle future events.

2nd PUC Business Studies Planning Eight Marks Questions and Answers

Question 1.
Explain the importance and limitations of planning.
Answer:
Importance or advantages of planning are:
1. Planning provides direction: It provides direction for action by stating in advance how a work is to be done. It ensures that the goals and objectives are clearly stated so that the workers are aware of what they must do to achieve the goals.

2. Planning reduces the risk of uncertainty: A business organization has to work in an environment which is uncertain and ever changing. Planning helps to assess the future uncertainties and helps the organizations to face it.

3. Planning reduces wastages: Planning serves as the basis for coordinating the activities and the efforts of the different individuals and departments of the organization.
It helps to detect the inefficiency and to take corrective measures to minimize the wasteful activities.

4. Planning provides innovative ideas: Planning is basically the thinking function of management. It encourages the managers for innovative creative thinking. Many ideas come to the minds of the managers when they are planning.

5. Planning facilitates decision making: Decision making is a process of selecting the best course of action from various available alternatives after evaluating each one of them. Planning provides guidelines for evaluation of the alternatives in taking rational decisions.

6. Planning establishes standards for controlling: Planning helps in controlling. It determines goals and standards for every individuals and departments of the organization and makes it easy to compare the actual performance of the individuals and departments with the standards fixed.

Limitations of planning:
1. Rigidity: In organizations a well-defined plan is drawn up with specific goals to be achieved with a time limit. This leads to rigidity in the activities of the managers which restricts the individual freedom, creativity and initiative.

2. Environmental constraints: The business environment is dynamic in nature, nothing is constant. Planning do not take into consideration the possible changes in economic, political, legal and social dimensions.

3. Lack of creativity: Planning is done by top management and the subordinates just implement the plans As a result the middle management are not allowed to deviate the plans and also not permitted to act on their own. Thus, their creativity is reduced.

4. Expensive: It is a costly process. Collection and analysis of information, evaluation of best course of action involves huge expenses.

5. Time consuming: Planning process is time consuming. Collection of facts and figures, selection courses of action involves much time.

6. Success not guaranteed: The success of an enterprise us possible only when the plans. are properly drawn up and implemented. Managers have a tendency to depend upon the previously tested and successful plans which may not be a success again.

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Question 2.
Explain any five types of plan.
Answer:
Repeated use plans or standing plans: It is a type of plan which is used in the organization again and again. It is long term in nature. They act as a ready guide for actions.
Standing plansare of different types as follows:
1. Objectives- Objectives are the end towards which the activities of an organization are directed. They are set up by the top management. They lay down guidelines for the activities and serves as a bench mark for measuring the performance of the organization. Usually the objectives are put in the form of written statement.

2. Strategies- Strategies are the specific programmes of action for achieving the objectives of the organization by employing the resources efficiently and economically. It is formulated by the top management for successful accomplishment of the objectives in the organization. Formulation of strategy involves three aspects:

3. Determination of the long term objectives

4. Adopting a course of action to achieve the objectives

5. Allocating resources necessary to achieve the objectives.
Examples of strategies: Strike iron while it is hot, Divide and rule Time is a great healer.

(k) Policies: They are the general statements which serve as guideline in the decision making process. It helps the organization to deal with a particular situation in a systematic manner. An established policy helps to resolve the problems and issues easily.

(l) Procedures: They are the plans prescribing the exact time sequence for the work to be done. Procedures are the guidelines to action and they are suited to the works which are repetitive in nature.
Examples: Procedure for execution of the customer’s order for supply of goods Procedure for the admission of students in a college.

(m) Methods: The prescribed way or the manner of doing each planned task to achieve the goals is known as method. It tells how each step of the procedure should be performed. Selection of proper method saves time, money and effort and increases the efficiency.
Examples: Training employees under, on job training method.
Remunerating sales personnel under commission method.

(n) Rules: Every organization likes to operate in an orderly way. Rules are the established principles for carrying out the activities in a systematic manner. Rules are rigid and do not permit any deviations.
Examples: Wear identity cards compulsorily at work place
No Smoking
No admission without permission.

Question 3.
Explain the features of planning.
Answer:
1. Planning focuses on achieving objectives: Organisations are set up with a general purpose in view. Specific goals are set out in the plans along with the activities to be undertaken to achieve the goals. Thus, planning is purposeful. Planning has no meaning unless it contributes to the achievement of predetermined organisational goals.

2. Planning is a primary’ function of management: 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. This is also referred to as the primacy of planning.

3. Planning is pervasive: Planning is required at all levels of management as well as in all departments of the organisation. It is not an exclusive function of top management nor of any particular department. But the scope of planning differs at different levels and among different departments.

4. Planning is continuous: Plans are prepared for a specific period of time, may be for a month, a quarter, or a year. At the end of that period there is 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: Planning essentially involves looking ahead and preparing for the future. The purpose of planning is to meet future events effectively to the best advantage of an organisation. It implies peeping into the future, analysing it and predicting it. Plan¬ning is, therefore, regarded as a forward looking function based on forecasting.

6. Planning involves decision making: Planning essentially involves choice from among various alternatives and activities. If there is only one possible goal or a possible course of action, there is no need for planning because there is no choice. The need for planning arises only when alternatives are available.

7. Planning is a mental exercise: Planning requires application of the mind involving foresight, in judgement. It is basically an intellectual activity of thinking rather than doing, because planning determines the action to be taken. However, planning requires logical and systematic thinking rather than guess work or wishful thinking.

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2nd PUC Business Studies Planning Five Marks Questions and Answers

Question 1.
Bring out the steps involved in planning while establishing a new business unit.
Answer:
The following are the steps involved in planning while establishing a new business unit:

  • Setting objectives
  • Developing premises
  • Identification of alternative course of action
  • Evaluating alternative courses
  • Selecting an alternative
  • Implementing the plan
  • Follow up action

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