Chapter - 4 Planning

CH 4 PLANNING
A MULTIPLE CHOICE QUESTIONS

1. “Planning is deciding in advance what to do, when to do it, and who is to do it.’’ This has
been described by
(a) Koontz and O’Donnell
(b) Haimann
(c) Allen
(d) Terry
2. The government of India faced problem of spreading the coronavirus. The government
had two options, either to strengthen MSME or to ask the public to use ordinary clothes
surrounding the neck to cover the face. The public decided to use second alternative.
Which function of the management has been used here in the above case?
(a) Planning
(b) Organizing
(c) Staffing
(d) directing
3. Planning is a
(a) mental Process
(b) physical Process
(c) guess work Process
(d) none of these
4. Planning is the function of the
(a) Manager
(b) accountant
(c) organisation
(d) none of these
5. Planning as a function of management is performed by
(a) Top level management
(b) Middle level management
(c) Lower level management
(d) All of the above
Explanation: All managers working at different levels of management have to plan in as per
their job profiles to guide their subordinates.
6. Any work without proper planning will create
(a) confusion
(b) create doubts
(c) illusion
(d) all of these
7. Planning is a
(a) continuous process
(b) intellectual process
(c) parameter of managerial efficiency
(d) all of these
8. Planning is required at all levels of management and in all departments of the
organisation. This fact illustrates which feature of planning?
(a) Planning is continuous
(b) Planning is futuristic
(c) Planning is pervasive
(d) Planning involves decision making.
9. Which one of the following is not a feature of planning?
(a) Planning focuses on achieving objectives
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(b) Planning is a continuous process
(c) Planning leads to rigidity
(d) Planning involves decision making
10. ‘Planning 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’. From the above
statement, which merit of planning is reflected here?
(a) Planning reduces the risk of uncertainty
(b) Planning reduces overlapping and wasteful activities
(c) Planning provides directions
(d) Planning facilitates decision making
11. Sun Pharmacy planned to sell 1 crore ‘Covicare’ tablets in a year. The company received
good response from the market and sold 1.5 crores tablets in a year. Seeing the progress,
the company decided to increase sales target to 2 crores tablets in a year. Which major
benefit of planning has the company achieved?
(a) Planning provides directions
(b) Planning facilitates decision making
(c) Planning reduces the risk of uncertainty
(d) Planning establishes standards for controlling
12. Reliable Communication Limited scans the business environment and adapts itself to the
changes in the environment, yet it becomes difficult to foresee the future trends.
Which limitation of planning is related to the above statement?
(a) Planning may not work in the dynamic environment
(b) Planning reduces creativity
(c) Planning is a time consuming process
(d) Planning does not guarantee success
13. Sales executive of a ‘Swatch Jal Water Purifiers’ suggested the marketing manager to sell
the products with the help of artificial intelligence. He suggested a pre-recorded message
may be sent to the prospective buyers and it will help save time, cost and energy for both
ends. The marketing manager liked the idea but suggested him to continue with the
strategy the company was already adopting. Which limitation of planning is reflected in
the above case?
(a) Planning is time consuming
(b) Planning leads to rigidity
(c) Planning reduces creativity
(d) Planning does not guarantee success
14. Which combination of the following plans is neither standing nor single use?
(a) Objective and strategy
(b) Strategy and policy
(c) Budget and objective
(d) Objective and policy
15. Mr Kapil, an educationist found that the teachers have to travel long to attend the
workshops and they lose the opportunity to gain the knowledge on updates. He listed
various alternatives and finally developed an app which could work on mobiles and
laptops to launch online sessions. Suggest which next step should he follow?
(a) Developing premises
(b) Identifying the alternative course of action.
(c) Implementation of plan
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(d) Follow up action
16. A sales manager was required to make a forecast of sales post Covid 19 impact for Q4,
2020. He considered the sales of Q1 and Q3 of current year and previous year. Which
step of planning process he followed?
(a) setting objectives
(b) identifying alternative courses of action
(c) follow up action
(d) developing premises
17. Certain steps in the process of planning are listed below:
(1) Developing premises
(2) Identifying alternatives
(3) Setting objectives
(4) Evaluating alternative courses
Order of the above steps will be
(a) 3, 1, 2, 4
(b) 1, 2, 3, 4
(c) 1, 3, 4, 2
(d) 4, 2, 3, 1
18. The Chinese companies launched ‘Vivo’ and ‘Oppo’ phones in the Indian market with
high end features to tap low segment population of India. It remained successful but later
the Indians in order to show patriotism, decided to boycott Chinese products. dWhich
step of planning process Chinese firms could not perform properly while launching their
products?
(a) Setting objectives
(b) Setting objectives
(c) Developing premises
(d) Identifying alternative courses of action
(e) Implementing the plans
19. Method is a
(a) prescribed way or manner in which a task has to be performed
(b) routine step in a chronological order
(c) detailed statement about a course of action
(d) specific statements of a certain action
B FILL IN THE BLANKS

1. _____ is closely connected with creativity and innovation.
2. Planning seeks to _____ the gap between where we are and where we want to go. bridge
3. ______ means the assumptions, basis or ideas about the future.
4. Planning requires ______ and ______ thinking rather than guess work.
5. Planning requires taking ______ since it involves making a choice from options.
6. Planning means setting ______ and to formulate course of action.
7. People don’t plan to fail but they fail to _______.
8. By stating in advance how the work is to be done. planning provides _________ for
action.
9. If there is no planning, employees would be working in different_________.
10. Planning as an activity enables a manager to look ahead and anticipate _______.
11. With the help of planning function of management, new _______ can take shape of
concrete plans.
12. Under planning function, the manager has to evaluate each __________ and select the
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most viable proposition.
13. The business environment is ________ in nature, so planning may not work in such an
environment.
14. The positive and negative aspects of each proposal need to be _____ in the light of the
objective to be achieved. Evaluated
15. To see whether plans are being implemented and activities are performed according to
schedule is known as _____.
C TRUE AND FALSE

1. Planning is an exclusive function of top management.
2. If there are no alternatives, there is no need for planning function of management.
3. Planning shows the way to deal with changes and expected events.
4. Planning premises means systemic and logical estimate for the future factors affecting
planning
5. Planning involves decision making, it is a limitation of planning.
6. Planning helps in maintaining cooperation between different divisions, departments and
individuals.
7. Planning focuses on achieving objectives rather than goals.
8. Planning focuses on achieving objectives rather than goals.
9. A manager has to evaluate each alternative and select the most viable proposition.
10. Planning is a prerequisite for controlling.
11. All business firms follow a different set pattern of planning.
12. All functions are performed within the framework of plans drawn, it is called as primacy
of planning.
13. Planning presupposes the existence of alternatives.
14. Planning is not required as most of the organisations function based on rule of thumb.
15. Managers should be given some flexibility to implement plans in the changed
circumstances.
16. As planning is done rationally and scientifically, there may not be obstacles to effective
planning.
17. Planning reduces creativity as the people in an organisation are not permitted to deviate
from the plans.
18. Many a times cost incurred in planning do not justify the benefits from the plans.
19. Sometimes plans to be drawn up, take so much of time that there is not much time left for
their implementation.
20. Goals provide direction for all managerial decisions and actions.
21. Development of premises may be in the form of forecasts, existing plans or any past
information about policies.
22. Assumptions must be the same for all and there should be total agreement on them.
ONE WORD ANSWER QUESTIONS

1. Which level of management is primarily engaged in policy formation?
2. One of the functions of the management is considered as the base for all the other
functions. Name that function.
3. Name the function of management which establishes standards for controlling.
4. Name the function of management, which involves setting of objectives and
developing appropriate course of action to achieve these objectives. .
5. One of the functions of management is closely connected with creativity and
innovation. Identify the function of management.
6. ‘Dreams can be turned into reality only when managers think in advance what to do
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and how to do it: Name the function of management indicated by the statement.
(Delhi Compartment 2014)
7. Planning is related with other functions of management but one of the functions is
closely related with planning. Name the function.
.
8. At which level of management more time is consumed on planning function as
compared to other levels?
9. At which level of management is planning function conducted?
10. What is the basis for creating future course of action?
11. Name the feature of planning which states that planning is a forward looking
function?
12. Name the feature of planning which helps managers know whether they have
actually been able to attain goals and correct the deviation, if any.
13. Which aspect of planning states that planning helps to make a choice amongst
various alternative courses of action?
14. Which is the most crucial step in the planning process?
15. Name the step in the process of planning which is considered the “real point of
decision making”. (CBSE Sample Paper 2019-20)
16. A company wants to increase sales; the alternatives may be reducing prices,
improving packaging, offering trade discount, cash discount after sales due to credit
sales, free samples etc. Which step of planning process relates with the above
example?
17. “To see whether plans are being implemented and activities are being performed
according to schedule,” is a step of planning process. Identify the step. (Outside
Delhi 2013)
18. “These are also known as aims of the organisation and may be long-term or short
term in nature. These are expressed in general non-measurable terms.” What is being
referred here?
19. Increasing output by 10% or earning profits of 5% is an important type of plan.
Identify the type of plan.
20. “Holding weekly meetings to improve communication is one type of plan.” Name
the type of plan is referred here.
21. Name the step in the planning process that is being discussed in the above paragraph.
(Compartment Delhi/Outside Delhi 2017)
22. ‘Bawa Cycles’ was in the business of manufacturing racing cycles and had a
monopoly in the market. The business was doing well and the company was
consistently meeting its objective of 10% increase in sales every year. Encouraged by
the good track record, the Managing Director of the company kept an ambitious
target of 15% increase in sales for the next year. The same year, two competitors also
entered the market and because of this the company was not able to meet target.
Identify the limitation of one of the functions of management because of which the company
was not able to achieve its target. (Outside Delhi 2015)
23. Gautama, Product Head at Ashok Leyland Limited, plans to make his company of the
decade. For this purpose, he sets objectives, prepares strategies and other action plans
keeping the internal as well as external forces in mind so that departments and
individuals working in the organisation are able to decide what action should be
taken and in which direction.
(a) Identify one point of importance of planning function is reflected in the above
case.
(b) Identify one point of limitation mentioned in the above case.
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24. The vice president of a company formulates specific goals along with the activities to
be undertaken to achieve goals. It is not limited to top level of management, whereas
planning is done by departmental heads and supervisors by peeping into the future
while analyzing and predicting the future.
Identify a feature of planning referred to in the above paragraph.
25. Rozana deals in convenience products (daily use items). It decided to increase sales
by 15% for a year and spent a substantial time on research to give the best packaging
to its products. It resulted the financial budget to increase considerably. After the
products with innovative packaging were launched, the competitors followed the suit
and started selling the products below the standard price.
Identify one limitation of planning highlighted in the above case.
26. Having transformed 2,500 Kirana stores across eight cities into virtual super markets,
the start-up ‘Quick Bizz’ further decided in advance, to collaborate with 15,000–
20,000 store owners in top 30 cities of the country by the end of this year.
Identify the step in the process of one of the functions of management discussed above.
27. 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 had 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 teachings such as giving rebates, discounts or increasing the budget for
advertising activities.
Which step of the planning process has been performed by Ms Rajni? [NCERT]
QUESTIONS BASED ON INCORRECT STATEMENT

1. Rewrite the following statement after correcting
General goals are set up in the plans along with the activities to be undertaken to
achieve the goals.
2. Rewrite the following statement after correcting.
Top management undertakes planning for the organization as a whole, middle
management does day to day operational planning and lower level does the
departmental planning.
Planning, being a mental exercise involves foresight and intelligent imagination; hence
leads to guess work and wishful thinking.
Planning guarantees success as it is based on previously tried and tested successful
plans.
There should be total agreement on premises or assumptions; however, they may not be
same for all.
The manager will have to apply permutation and combination to evaluate the different
types of plans.
A programme may also be prepared to show the number of workers required in the
factory at peak production times.
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Policies and procedures are interlinked with each other and policies are framed within a
broad framework framed by procedure.
A strategy is a general response to a particular problem or situation.
Policy detail the exact manner in which any work is to be performed.
QUESTIONS BASED ON REASON AND ASSERTION

1. Assertion (A): Through planning, the uncertain events or changes can be anticipated
and eliminated.
Reason (R): Planning reduces the risks of uncertainty.
Find the correct option:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
Explanation: The changes or events can not be eliminated but they can be anticipated
2. Assertion (A): Managers need to be given some flexibility to be able to cope with the
changed circumstances.
Reason (R): Planning reduces creativity.
Explanation: The correct explanation to A is that planning leads to rigidity as managers
follow a pre- decided plan and may not be in a position to change when circumstances
change.
3. Assertion (A): The various functions of management are interrelated and equally
important. However, planning provides the basis for all other functions.
Reason (R): Planning is a continuous activity
Explanation: The correct explanation to A is that planning is a primary function of
management and provides a framework for rest of the function.
4. Assertion (A): Planning is the most challenging activity for the management as it
guides all future actions leading to growth and prosperity of the business
Reason (R): Planning promotes innovative ideas.
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5. Assertion (A): Sales forecasting is the basis on which a business firm prepares its
annual plan for production and sales.
Reason (R): Planning is a primary function of management.
Explanation: Both the statements are true but correct explanation to A is the planning
essentially involves looking forward and preparing for the future.
6. Assertion (A): A plan is framed; it is implemented and is followed by another plan, and
so on.
Reason (R): Planning is a continuous process.
7. Assertion (A): Middle management of ’Soni Ltd.’ and other decision makers are
neither allowed to deviate from plans not they are permitted to act on their own.
Reason (R): Planning leads to rigidity.
Explanation: The reason for A is that panning is usually done by top management and it
reduces initiative and creativity at middle and lower level.
8. Assertion (A): False sense of security and complacency lead to failure of planning
instead of success.
Reason (R): Planning, if implemented properly, guarantees success.
Explanation: There are so many unknown factors to be considered; hence at times even
properly implemented plans do not guarantee success.
9. Assertion (A): Competition in the market can upset financial plans.

Reason (R): Planning leads to rigidity.
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Explanation: The correct explanation to the above assertion is that business environment is
dynamic and planning may not work is dynamic environment.
10. Assertion (A): Managers need to be given some flexibility to be able to cope with the
changed circumstances.
Reason (R): Planning reduces creativity.
Explanation: The correct explanation to A is that planning leads to rigidity as managers
follow a pre- decided plan and may not be in a position to change when circumstances
change.
11. Assertion (A): the nature of corrective action required depends upon the extent of
deviation from the standards.
Reason (R): Controlling is a prerequisite for planning.
Explanation: Planning is a pre requisite for controlling.
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Chapter - 4 Planning

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Chapter - 4 Planning

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CH 4 PLANNING

A MULTIPLE CHOICE QUESTIONS

B FILL IN THE BLANKS

C TRUE AND FALSE

ONE WORD ANSWER QUESTIONS

QUESTIONS BASED ON INCORRECT STATEMENT

QUESTIONS BASED ON REASON AND ASSERTION

9. Assertion (A): Competition in the market can upset financial plans.

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