NCERT Solutions for class 12 Business studies Chapter 4 Planning
NCERT Solutions for class 12 Business studies Chapter 4 Planning
Very Short Answer Type
Q. 1. How does planning provide direction?
Ans.
Planning provides direction by setting clear objectives, guiding decision-making, and coordinating activities, ensuring that all efforts are aligned towards achieving common goals.
Q. 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?
Ans.
Ms. Rajni has performed the step of “Identifying alternative courses of action” in the planning process.
Q.3. Why are rules considered to be plans?
Ans.
Rules are considered plans because they provide specific guidelines for actions and behavior, ensuring consistency and order within an organization.
Q. 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.
Ans.
Rama Stationery Mart has adopted a policy plan.
Q. 5. Can planning work in a changing environment? Give a reason to justify your answer.
Ans.
Yes, planning can work in a changing environment because it helps businesses anticipate changes, adapt strategies, and remain flexible, ensuring they stay on course despite uncertainties.
Short Answer Type
Q. 1. What are the main aspects in the definition of planning?
Ans.
The main aspects in the definition of planning are:
- Setting Objectives: Defining clear and specific goals that the organization aims to achieve.
- Identifying Resources: Determining the necessary resources, such as finances, personnel, and materials, required to meet the objectives.
- Developing Strategies: Formulating detailed action plans and strategies to achieve the set goals.
- Coordinating Activities: Ensuring that all departments and teams work harmoniously towards the common objectives.
- Monitoring and Evaluation: Establishing benchmarks and milestones to measure progress and make necessary adjustments to stay on course.
These aspects collectively ensure that an organization has a clear direction and can effectively navigate toward its goals.
Q. 2. If planning involves working out details for the future, why
does it not ensure success?
Ans.
While planning provides a structured approach to achieving objectives, it does not guarantee success due to several factors:
- Unpredictable Changes: External factors such as economic shifts, technological advancements, and political changes can disrupt plans.
- Implementation Challenges: Even the best plans can fail if not executed properly due to lack of resources, skills, or commitment.
- Unforeseen Risks: Unexpected events like natural disasters, pandemics, or market crashes can derail plans.
- Incomplete Information: Plans are often based on assumptions and available data, which may be incomplete or inaccurate.
Thus, flexibility and adaptability are crucial alongside planning to navigate uncertainties and ensure success.
Q. 3. What kind of strategic decisions are taken by business organisations?
Ans.
Business organizations take several strategic decisions to ensure long-term success and competitiveness:
- Market Entry: Deciding which new markets to enter, whether domestically or internationally, to expand their customer base and increase revenue.
- Product Development: Investing in research and development to innovate and introduce new products or improve existing ones.
- Mergers and Acquisitions: Engaging in mergers, acquisitions, or strategic alliances to strengthen market position and achieve growth.
- Resource Allocation: Allocating resources effectively to different departments or projects to optimize performance and achieve strategic goals.
- Competitive Strategy: Developing strategies to differentiate from competitors, such as cost leadership, differentiation, or focus strategies.
These decisions help organizations navigate their business environment and achieve their long-term objectives.
Q. 4. Planning reduces creativity. Critically comment.(Hint: both the points – Planning promotes innovative ideas and planning reduces creativity – will be given).
Ans.
Planning can both promote and reduce creativity, depending on the approach taken:
Promotes Innovative Ideas: Planning provides a structured framework that can help identify clear goals, allocate resources effectively, and anticipate challenges. This structure enables individuals and teams to focus on creative problem-solving and innovation within a defined context, leading to the development of new ideas and solutions.
Reduces Creativity: On the other hand, rigid planning can stifle creativity by imposing strict guidelines and limiting flexibility. Excessive emphasis on adhering to predefined plans can discourage spontaneous and unconventional thinking, thereby constraining creative exploration and experimentation.
In conclusion, while planning provides direction and focus, maintaining a balance between structure and flexibility is essential to foster creativity.
Q. 5. 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.
Ans.
The type of plan highlighted in the given example is a strategy.
Three dimensions of a strategy:
- Determining long-term objectives
- Adopting a particular course of action
- Allocating resources necessary to achieve the objective
Does this help clarify your understanding?
Q. 6. 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)
Ans.
a. Budget: It is one type of plan that serves as a controlling device. A budget is a single-use plan developed specifically for a one-time project or similar event.
b. Method: It is a type of plan based on analysis and research. It is mostly concerned with technical and physical tasks. A method is a standing plan that occurs at regular intervals.
Long Answer Type
Q. 1. Why is it that organisations are not always able to accomplish all their objectives?
Ans.
Organizations may face various challenges that prevent them from accomplishing all their objectives. Some key reasons are as follows:
1. Uncertain External Environment
The business environment is subject to constant changes and uncertainties, such as economic fluctuations, technological advancements, political instability, and regulatory changes. These external factors can disrupt plans and strategies, making it difficult for organizations to achieve their objectives.
Example: A sudden economic recession can lead to decreased consumer spending, affecting a company’s sales and profitability, and preventing it from achieving its revenue targets.
2. Resource Constraints:-
Organizations often face limitations in terms of resources, including financial, human, and material resources. Insufficient resources can hinder the execution of plans and strategies, leading to unmet objectives.
Example: A startup may have innovative ideas but may lack the necessary funding and skilled workforce to implement those ideas effectively.
3. Internal Organizational Issues:-
Internal factors such as poor leadership, inefficient processes, lack of coordination, and employee resistance to change can impact an organization’s ability to meet its objectives. Effective management and organizational alignment are crucial for success.
Example: A company with a rigid hierarchical structure may struggle to adapt to market changes and innovate, leading to missed opportunities and unmet objectives.
4. Unrealistic Goals:-
Setting overly ambitious or unrealistic goals can set organizations up for failure. Objectives should be achievable and based on a realistic assessment of the organization’s capabilities and market conditions.
Example: A company that aims to double its market share within a year without considering competitive pressures and market dynamics may find it impossible to achieve such a target.
5. Inadequate Planning and Execution:-
A lack of thorough planning or poor execution of plans can result in failure to achieve objectives. Detailed planning, clear communication, and effective implementation are essential for success.
Example: A company that launches a new product without conducting adequate market research and planning may face low customer acceptance and poor sales, failing to meet its objectives.
6. Market Competition:-
Intense competition in the market can pose significant challenges to achieving objectives. Competitors’ actions, such as aggressive pricing, innovation, and marketing strategies, can impact an organization’s performance.
Example: A technology company may struggle to maintain its market share if competitors continuously introduce advanced products and technologies.
7. External Shocks:-
Unpredictable events such as natural disasters, pandemics, and geopolitical conflicts can disrupt business operations and impact the achievement of objectives.
Example: The COVID-19 pandemic forced many businesses to shut down or significantly alter their operations, making it challenging to meet their pre-pandemic objectives.
Conclusion
Organizations operate in a dynamic and complex environment where various internal and external factors influence their ability to achieve objectives. To improve the likelihood of success, organizations need to be adaptable, resourceful, and proactive in addressing challenges and uncertainties. Effective planning, realistic goal-setting, and continuous monitoring are essential for navigating the complexities of the business environment and achieving desired outcomes.
Q. 2. What are the steps taken by management in the planning
process?
Ans.
The planning process is a systematic approach taken by management to define the goals of an organization and develop strategies to achieve them. Here are the key steps involved in the planning process:
1. Setting Objectives:-
Description: This is the first step in the planning process where management defines the clear, specific, and measurable goals that the organization aims to achieve. Objectives provide direction and serve as the foundation for all subsequent planning activities.
Example: A company might set an objective to increase market share by 15% within the next year.
2. Developing Premises:-
Description: In this step, management identifies and analyzes the assumptions and forecasts that form the basis of the plan. This involves assessing internal and external factors that could impact the achievement of objectives.
Example: Assessing economic trends, market conditions, competitor actions, and technological advancements.
3. Identifying Alternative Courses of Action:-
Description: Management identifies different strategies and approaches that can be taken to achieve the set objectives. This step involves brainstorming and evaluating various options.
Example: Considering alternatives such as entering new markets, launching new products, or increasing advertising efforts.
4. Evaluating Alternative Courses of Action:-
Description: In this step, management assesses the feasibility, advantages, and disadvantages of each alternative. This involves analyzing the potential outcomes, risks, and resource requirements of each option.
Example: Evaluating the potential return on investment, market acceptance, and competitive impact of each alternative.
5. Selecting the Best Alternative:-
Description: Based on the evaluation, management selects the most suitable and effective course of action that aligns with the organization’s objectives and resources.
Example: Deciding to launch a new product line as the best alternative to achieve the desired market share increase.
6. Implementing the Plan:-
Description: Once the best alternative is selected, management develops a detailed action plan to implement it. This involves allocating resources, assigning responsibilities, and setting timelines.
Example: Creating a project plan, assigning tasks to team members, and setting deadlines for product development and marketing activities.
7. Monitoring and Evaluating Progress:-
Description: In this final step, management continuously monitors the implementation of the plan and measures progress against the set objectives. This involves tracking performance, identifying deviations, and making necessary adjustments to stay on course.
Example: Regularly reviewing sales data, customer feedback, and market trends to assess the effectiveness of the plan and make adjustments as needed.
Conclusion
The planning process is a critical function of management that provides direction, reduces uncertainty, and enhances organizational effectiveness. By following these systematic steps, management can develop and implement effective plans that align with the organization’s goals and ensure long-term success.
Planning helps organizations navigate the complexities of the business environment, anticipate challenges, and seize opportunities, ultimately leading to the achievement of desired outcomes.
Q. 3. 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).
Ans.
The situation described for C Ltd. highlights several key features of planning:
1. Planning is Pervasive
Description: Planning is an essential activity that is required at all levels of management and in all departments of an organization. It is not limited to top management but involves input and participation from various levels and functions.
Example from Situation: C Ltd. has formed a team with representatives from all levels of management to brainstorm and determine the steps for implementing the strategy. This demonstrates that planning is being carried out across the organization, involving top management, middle management, and operational levels.
2. Planning is Futuristic
Description: Planning involves looking ahead and preparing for the future. It is concerned with anticipating future events, trends, and conditions, and devising strategies to achieve desired outcomes.
Example from Situation: C Ltd. is taking steps to improve its market standing in the future by introducing new models with added features and technological advancements for quality-conscious consumers. This shows that the company is focusing on future market trends and customer preferences to stay competitive.
3. Planning is a Mental Exercise
Description: Planning is an intellectual activity that requires careful analysis, critical thinking, and creativity. It involves evaluating various options, forecasting future scenarios, and making informed decisions.
Example from Situation: The team formed by C Ltd. is engaged in brainstorming to determine the steps for implementing the strategy. This highlights the intellectual effort and mental exercise involved in analyzing the current situation, evaluating alternatives, and developing a coherent plan to address the challenges.
Conclusion
The situation at C Ltd. illustrates the key features of planning:
- Planning is Pervasive: Involves all levels of management in the planning process.
- Planning is Futuristic: Focuses on preparing for future market conditions and customer preferences.
- Planning is a Mental Exercise: Requires careful analysis, brainstorming, and critical thinking to develop effective strategies.
By recognizing and leveraging these features, C Ltd. can effectively address its declining market share and enhance its competitiveness in the market.
