CBSE Class 12 Case Studies In Business

Studies – Planning
PLANNING

Planning: Definition

Planning is deciding in advance what to do, how to do, when to do and who has
to do it. Thus, it involves setting objectives and developing an appropriate course
of action to achieve those objectives.

Features of Planning

● Planning focuses on achieving objectives by deciding upon the activities

to be undertaken.
● Planning is a primary function as it precedes all functions of management
i.e. organising, staffing, directing& controlling.
● Planning is pervasive as it is required at all the levels of management but
its scope may vary.
● Planning is continuous as plans need to be made on a continuous basis till
an organisation exists.
● Planning is futuristic as it seeks to meet future events effectively to the
best advantage of an organisation. Planning is, therefore, called a forward
looking function.
● Planning involves decision-making as it involves rational thinking to
choose the best alternative among the various available alternatives in
order to achieve the desired goals efficiently and effectively.
● Planning is a mental exercise as it is based on intellectual thinking
involving foresight, visualisation and judgement rather than guess work.

Importance of Planning

● Planning provides direction as it acts as a guide for deciding what course

of action should be taken to attain the organisational goals.
 ● Planning reduces the risk of uncertainty arising due to the dynamic nature
of business environment as it enables a manager to anticipate and meet
changes effectively.
● Planning reduces overlapping & wasteful activities as it serves as the
basis for coordinating the activities and efforts of different divisions and
individuals.
● Planning promotes innovation as it encourages new ideas that can take
shape of concrete plans.
● Planning facilitates decision making as it enables a manager to choose
the best alternative course ‘of action among the various available
alternatives in light of present and future conditions.
● Planning establishes standards for controlling. Planning provides
standards against which the actual performance is measured and timely
corrective actions the taken.

TYPES OF PLANNING

On the basis of use and duration

● Single use plans are the ones that are formulated to deal with new or
non-repetitive situations that may arise in an organisation from
time-to-time. For example- programmes, budgets and projects.
● Standing plans refer to the another type of plans which once formulated
may be used for a long period of time in similar or repetitive situations that
may prevail in an organisation. For example—objectives, strategies,
policies, methods, procedures and rules.

On th basis of what a plan seeks to achieve

● Objectives are the end results of the activities that an organisation seeks
to achieve through its existence.
● A strategy is a comprehensive plan for achieving the objectives of the
organisation.
● Policy is a set of general guidelines that help in managerial decision
making and action.
 ● Method refers to the prescribed ways or manner in which a task has to be
performed considering the objective.
● Procedure refers to a series of specific steps to be performed in a
chronological order to carry out the routine activities.
● Budget refers to a financial plan that is expressed in numerical terms.
● Rule is a specific statement relating to the general norms in terms of Do’s
and Don’ts that guide the behaviour of people. It commands strict
obedience and a penalty is likely to be imposed on its violation.
● Programme is a comprehensive plan that contains detailed statements
about a project which outlines the objectives, policies, procedures, rules
and method and the budget to implement any course of action.

Steps Involved in the Planning Process

● Setting clear, specific and measurable objectives for the entire

organisation and each department or unit within the organisation.
● Developing Premises which reflect the assumptions about the future that
the manager is
required to make since the future is uncertain.
● Identifying alternative courses of action through which the desired goals
can be achieved.
● Evaluating alternative courses to analyse the relative pros and cons of
each alternative in light of their feasibility and consequences.
● Selecting an alternative or a combination of plans which appears to be
most feasible.
● Implement the plan with the help of a strategy.
● Follow up action in order to monitor the plans to ensure that the desired
objectives are achieved efficiently and effectively.

Limitations of Planning

● Planning leads to rigidity as plans are drawn in advance and managers

may not be in a position to change them in the light of changed conditions.
● Planning may not work ina dynamic environment as through planning,
everything cannot be foreseen.
 ● Planning reduces creativity as the top management undertakes planning
of various activities whereas the middle managers are neither allowed to
deviate from plans nor are they permitted to act on their own.
● Planning involves huge costs in terms of time and money required to
undertake scientific calculations and sometimes it may not justify the
benefits derived from it.
● Planning is a time consuming process and sometimes there is not much
time left for implementation of the plans.
● Planning does not guarantee success because it is not always essential
that if a plan has worked before, it will work again, as things may change.
This kind of complacency and false sense of security may actually lead to
failure instead of success of a business.

MIND MAP

LATEST CBSE QUESTIONS

Question 1.

State any three points of importance of planning function of management.

(CBSE, Delhi 2017)

Answer:

The three points indicating the importance of planning is described below:

1. Reduces the risk of uncertainty: Planning relates to deciding in advance

about the tasks to be performed in future. This enables a manager to
anticipate changes and devise the way to deal with changes and uncertain
events effectively.
2. Planning promotes innovative ideas: Planning is one of the basic
managerial functions. Before doing something, the manager must
formulate an idea of how to work on a particular task. Thus, planning is
closely connected with creativity and innovation. It is the most challenging
activity for the management as it guides all future actions leading to
growth and prosperity of the business.
3. Avoiding overlapping and wasteful activities: Planning ensures clarity in
thought and action and serves as the basis of coordinating the activities
and efforts of different individuals and departments. Therefore, by
curtailing useless and redundant activities it helps in smooth working of
the organisations work is without interruptions. Moreover, it makes
detection of inefficiencies easier so that timely corrective measures may
be taken to avoid them in future.

Question 2.

Give the meaning of ‘objectives’ and ‘budget’ as types of plans. (CBSE, Delhi
2017)

Answer:

1. Objectives: Objectives are the end results of the activities that an

organisation seeks to achieve through its existence. All other activities
 within the organisation are directed towards achieving these objectives.
Objectives are based on the mission or philosophy of the organisation.
Objectives are determined by top level management. For example, the
objectives of a newly started business is to earn 30% profit gn the amount
invested in the first year.
2. Budget: A budget refers to a financial plan that is expressed in numerical
terms. For example, the marketing manager prepared an area wise sales
target for different products for the forthcoming quarter. It is a type of
single use plan.

Question 3.

State any three limitation of planning. (CBSE, Delhi 2017)

Answer:

The three limitations of planning are described below:

1. Planning may not work in a dynamic environment: The business

environment is dynamic in nature. Every organisation has to constantly
adapt itself to changes in its environment in order to survive and grow.
However, it difficult to anticipate all the likely future changes in the
environment with utmost accuracy. Hence, even with planning everything
cannot be foreseen.
2. Planning reduces creativity: The top management undertakes planning of
various activities whereas the other members are expected to merely
implements these plans. This restricts the creativity of the middle
managers as they are neither allowed to deviate from plans nor are they
permitted to act on their own.
3. Planning involves huge costs: The process of planning involves huge cost
in terms of time and money as detailed planning is based on a series of
scientific calculations. Moreover it may include a number of related costs
as well, like expenses on boardroom meetings, discussions with
professional experts and preliminary investigations to find out the viability
of the plan. As a result the expenses on planning may turn out to be much
more than benefits derived from it.
Question 4.

Give the meaning of ‘procedure’ and ‘rule’ as types of plans. (CBSE, Delhi 2017)

Answer:

1. Procedure: A procedure contains a series of specific steps to be

performed in a chronological order to carry out the routine activities. It is
determined by lower and middle level management. It is a specific
statement. There is no scope for managerial discretion. Procedure is
framed to implement a policy. It is a type of standing plan.
2. Rule: A rule is a specific statement relating to the general norms in terms
of Do’s and Don’ts that guide the behaviour of people. It commands strict
obedience and a penalty is likely to be imposed on its violation. Rules help
to maintain discipline. Rules are both specific and rigid. For example, No
smoking, No Parking. It is a type of standing plan.

Question 5.

State any three features of planning. (CBSE, Delhi 2017)

Answer:

The three features of planning are described below:

1. Planning is pervasive: Planning is not an special function, is equally

essential at all levels of management. But the scope of planning varies at
different levels and among different departments.
2. Planning involves decision-making: Planning essentially
involves*-application of rational thinking to choose the best alternative
among the various available alternatives in order to achieve the desired
goals efficiently and effectively.
3. Planning is a primary function: Planning precedes all the functions of
management i.e. organizing, staffing, directing and controlling. This refers
to primacy of planning. Planning provides basis of all other functions.
Question 6.

Give the meaning of ‘policy’ and ‘strategy’ as type of plans. (CBSE, Delhi 2017)

Answer:

1. Policy: Policy are general statements that guide managerial decision

making. If is determined by top level management. It is a general
statement. It provides scope for managerial discretion. Policies are framed
to achieve the objectives of an organisation. They all guides in
implementing the strategy. It is a type of standing plan.
2. Strategy: A strategy is a comprehensive plan prepared for winning over the
given challenge or problem. A strategy is based on the objectives of the
organisation. A strategy may be determined by top level or middle level
management.

Question 7.

Give the meaning of ‘Objective’ and ‘Procedure’ as types of plans. (CBSE, OD

2017)

Answer:

1. Objectives: Objectives are the end results of the activities that an

organisation seeks to achieve through its existence. All other activities
within the organisation are directed towards achieving these objectives.
Objectives are based on the mission or philosophy of the organisation.
Objectives are determined by top level management. For example, the
objectives of a newly started business is to earn 30% profit on the amount
invested in the first year.
2. Procedure: A procedure contains a series of specific steps to be
performed in a chronological order to carry out the routine activities. It is
determined by lower and middle level management. It is a specific
statement. There is no scope for managerial discretion. Procedure is
framed to implement a policy. It is a type of standing plan.
Question 8.

Give the meaning of ‘Strategy’ and ‘Rule’ as types of plans. (CBSE, OD 2017)

Answer:

1. Strategy: A strategy is a comprehensive plan prepared for winning over the

given challenge or problem. It is based on the objectives of the
organisation. It may be determined by top level or middle level
management.
2. Rule: Rules are specific statements that tell people what should or should
not be done. Violation of Rules may lead to imposition of penalties. Rules
help to maintain discipline. Rules are both specific and rigid. For example,
No smoking, No Parking. It is a type of standing plan.

Question 9.

Super Fine Rice Ltd. has the largest share of 55% in the market. The company’s
policy is to sell only for cash. In 2015, for the first time company’s number one
position in the industry has been threatened because other companies started
selling rice on credit* also. But the managers of Super Fine Rice Ltd. continued to
rely on it’s previously tried and tested successful plans which didn”t work
because the environment is not static. This led to decline in sales of Super Fine
Rice Ltd. The above situation is indicating two limitations of planning which led
to decline in it sales.

Identify these limitations. (CBSE, Sample Paper, 2017)

Answer:

The two limitations of planning which led to decline in it sales are:

● Planning does not guarantee success.

● Planning may not work in dynamic environment.

Question 10.
State the main aspects in the concept of planning. (CBSE, Sample Paper, 2017)

Answer:

The concept of planning primarily involves three aspects namely;

● Setting objectives in clear specific and measurable terms for a given period
of time.
● Identifying the various alternative courses of action which may be adopted
to achieve the objectives.
● Selecting the best possible alternative course of action from among the
various courses of action available.

Question 11.

Laxmi Chemicals Ltd., a soap manufacturing company, wanted to increase its

market share from 30% to 55% in the long-run. A recent report submitted by the
Research & Development Department of the company had predicted a growing
trend of herbal and organic products. On the basis of this report, the company
decided to diversify into new variety of soaps with natural ingredients having
benefits and fragrances of Jasmine, Rose, Lavender, Mogra, Lemon Grass, Green
Apple, Strawberry etc. The Unique Selling Proposition (USP) was to promote
eco-friendly living in the contemporary life style. The company decided to
allocate t 30 crores to achieve the objective.

Identify the type of one of the functions of management mentioned above which
will help the company to acquire dominant position in the market. (CBSE, Sample
Paper 2016)

Answer:

Strategy is the type of plan which will help the company to acquire dominant
position in the market.

Question 12.
Suhasini, a home science graduate from a reputed college, has recently done a
cookery course. She wished to start her own venture with a goal to provide
‘health food’ at reasonable prices. She discussed her idea with her teacher
(mentor) who encouraged her. After analysing various options for starting her
business venture, they short listed the option to sell ready made and ‘ready to
make’ vegetable shakes and sattu milk shakes. Then, they weighed the pros and
cons of both the short listed options.

1. Name the function of management being discussed above and give any
one of its characteristics.
2. Also briefly discuss any three limitations of the function discussed in the
case. (CBSE, Sample Paper 2016)

Answer:

1. Planning is the function of management which is being discussed above.

Planning involves decision-making: Planning essentially involves
application of rational thinking to choose the best alternative among the
various available alternatives in order to achieve the desired goals
efficiently and effectively.
2. The limitations of planning are described below:
○ Planning may not work in a dynamic environment: The business
environment is dy¬namic in nature. Every organisation has to
constantly adapt itself to changes in its environment in order to
survive and grow. However, it is difficult to anticipate all the likely
future changes in the environment with utmost accuracy. Hence,
even with planning, everything cannot be foreseen.
○ Planning reduces creativity: The top management undertakes
planning of various activities whereas the other members are
expected to merely implement these plans. This restricts the
creativity of the middle level managers as they are neither allowed to
deviate from plans nor are they permitted to act on their own.
○ Planning involves huge costs: The process of planning involves huge
cost in terms of time and money as detailed planning is based on a
series of scientific calculations. Moreover, it may include a number
of related costs as well, like expenses on boardroom meetings,
 discussions with professional experts and preliminary investigations
to find out the viability of the plan. As a result, the expenses on
planning may turn out to be much more than benefits derived from it.

Question 13.

Two years ago, Madhu completed her degree in food technology. She worked for
sometime in a company that manufactured chutneys, pickles and murabbas. She
was not happy in the company and decided to have her own organic food
processing unit for the same. She set the objectives and the targets and
formulated an action plan to achieve the same.

One of her objectives was to earn 10% profit on the amount invested in the first
year. It was decided that raw materials like fruits, vegetables, spices, etc. will be
purchased on three months credit from farmers cultivating only organic crops.
She also decided to follow the steps required for marketing of the products
through her own outlets. She appointed Mohan as the Production Manager who
decided the exact manner in which the production activities were to be carried
out. Mohan also prepared a statement showing the number of workers that will
be required in the factory throughout the year. Madhu informed Mohan about her
area wise sales target for different products for the forthcoming quarter. While
working on the production table, a penalty of ? 100 per day for not wearing caps,
gloves and apron was announced.

Quoting lines from the above paragraph, identify and explain the different types
of plans discussed. (CBSE, Delhi 2016)

Answer:

The different types of plans discussed above are listed below:

1. Objectives: Objectives are the end results of the activities that-an

organisation seeks to achieve through its existence. All other activities
within the organisation are directed towards achieving these objectives.
“One of her objectives was to earn 10% profit on the amount invested in the
first year.”
 2. Policy: A policy is a set of general guidelines that helps in managerial
decision making and action.
“It was decided that the raw materials like fruits, vegetables, spices, etc.
will be purchased on three months credit from farmers cultivating only
organic crops.”
3. Procedure: A procedure contains a series of specific steps to be
performed in a chronological order to carry out the routine activities.
“She also decided to follow the steps required for marketing of the
products through her own outlets.”
“The exact manner in which the production activities are to be carried out.”
4. Rule: A rule is a specific statement relating to the general norms in terms
of Do’s and Dont’s that guide the behaviour of people. It commands strict
obedience and a penalty is likely to be imposed on its violation.
“While working on the production table, a penalty of ? 100 per day for not
wearing caps, gloves and aprons was announced.”
5. Budget: A budget refes to a financial plan that is expressed in numerical
terms.
“Mohan also prepared a statement showing the number of workers
different products for the forthcoming quater.”

Question 14.

Two years ago, Mayank obtained a degree in food technology. For some time, he
worked in a company that manufactured bread and biscuits. He was not happy in
the company and decided to have his own bread and biscuits manufacturing unit.
For this, he decided the objectives and the targets, and formulated an action plan
to achieve the same.

One of his objectives was to earn 50% profits on the amount invested in the first
year. It was decided that raw materials like flour, sugar, salt, etc. will be
purchased on two months credit. He also decided to follow the steps required for
marketing the products through his own outlets. He appointed Harsh as the
Production Manager who decided the exact manner in which the production
activities were to be carried out. Harsh also prepared a statement showing the
requirement of workers in the factory throughout the year. Mayank informed
Harsh about his are a wise sales target for different products, for the forthcoming
quarter. While working on the production table, a penalty of ?150 per day was
announced for not wearing the helmet, gloves and apron by the workers.

Quoting lines from the above paragraph, identify and explain the different types
of plans discussed. (CBSE, OD 2016)

Answer:

The different types of plans discussed above are listed below:

1. Objectives: Objectives are the end results of the activities that an

organisation seeks to achieve through its existence. All other activities
within the organisation are directed towards achieving these objectives.
“One of her objectives was to earn 50% profit on the amount invested in the
first year.”
2. Policy: A policy is a set of general guidelines that help in managerial
decision making and action.
“It was decided that the raw materials like flour, wheat, sugar, etc. will be
purchased on two months credit.”
3. Method: A method refers to the prescribed ways or manner in which a task
has to be performed considering the objective.
“..decided the exact manner in which production activities were to be
carried out.”
4. Procedure: A procedure contains a series of specific steps to be
performed in a chronological order to carry out the routine activities.
“He also decided to follow the steps required for marketing of the products
through his own outlets.”
5. Rule: A rule is a specific statement relating to the general norms in terms
of Do’s and Dont’s that guide the behaviour of people. It commands strict
obedience and a penalty is likely to be imposed on its violation.
“While working on the production table, a penalty of Rs. 150 per day was
announced for not wearing helmets, gloves and aprons by the workers.”

Question 15.
Rahul, a worker, is given a target of assembling two computers per day. Due to
his habit of doing things differently, an idea struck him which would not only
reduce the assembling time of computers but would also reduce the cost of
production of the computers. Instead of appreciating him, Rahul’s supervisor
ordered him to complete the work as per the methods and techniques decided
earlier as nothing could be changed at that stage. The above paragraph
describes one of the limitations of the planning function of management. Name
and explain that limitation. (CBSE, Delhi Comptt. 2011)

Answer:

The limitation of the planning function of management described in the above

paragraph is that ‘planning reduces creativity.’ The top management undertakes
planning of various policies and procedures whereas the other members are
expected to merely implement these plans. This restricts the creativity of the
middle level managers as they are neither allowed to deviate from plans, nor
permitted to act on their own.

ADDITIONAL QUESTIONS

Question 1.

Josh Ltd. is a one of the largest two-wheeler manufacturer in India. It has a

market share of about 42% in the two-wheeler category. The company had
witnessed almost a 35% drop in the booking as the currency crunch was
prompting people to withhold new purchases due to demonetisation. Therefore,
the production manager of the company had decided to align production to
factor in slower sales in the market.

In context of the above case:

1. Identify and explain the function of management being discussed in the

above lines.
2. Which limitations of the function of management as identified in part (a) of
the question was the production manager trying to overcome due to
demonetisation?
Answer:

1. Planning is the function of management which is being discussed in the

above lines.
Planning is deciding in advance what to do, how to do, when to do and who
has to do it. Thus, it involves setting objectives and developing an
appropriate course of action to achieve these objectives.
2. The production manager is trying to overcome the following limitations of
planning:
○ Rigidity
○ Planning may not work in dynamic environment

Question 2.

The term demonetisation has become a household name since the government
pulled the old Rs. 500 and Rs. 1,000 notes out of circulation in November 2016.
Prior to the year 2016, the Indian government had demonetised bank notes on
two prior occasions—once in the year 1946 and then again in the year 1978. In
both cases, the purpose was to combat tax evasion by ‘black money’. Identify the
types of one of the functions of management being discussed in the above lines.

Answer:

Objective and Strategy

Question 3.

The arrangement to demonetise the ? 500 and ?1000 bank notes began six to ten
months prior to the public announcement and was kept highly confidential. The
cabinet was informed about the demonetisation on 8th November 2016 in a
meeting called by the Prime Minister of India, Narendra Modi. This was followed
by Modi’s public announcement about the demonetisation in a televised address
where he announced that currency notes with the denomination of ? 500 and ?
1000 would cease to be the legal tender from 9th of November 2016. The most
interesting thing regarding the demonetisation is that people were devising
various unique ways for transforming their black money in to white one by
depositing money in the accounts of their poor relatives and friends, converting
black money in to gold, paying a few months salaries in advance and so on.

In context of the above case:

Identify and explain the types of plans being discussed in the above lines with
regard to demonetisation.

Answer:

The various types of plans being discussed in the above lines with regard to
demonetisation are detailed below:

● Procedure: It is a series of chronological steps which are performed to do

a particular activity.
● Rule: A rule is a specific statement relating to the general norms in terms
of Do’s and Don’ts that guide the behaviour of people.

Question 4.

Flipkart is an e-commerce company founded in the year 2007 by Sachin Bansal

and Binny Bansal. The company is registered in Singapore, but has its
headquarters in Bangaluru, India. The company seeks to increase traffic (more
clicks on their products) and boost sales and revenue through integration of
Mobile Apps, Display, Pay Per Click and Search Engine Optimization. In order to
dispel the fear of people related to shopping online, Flipkart was the first
company to implement the popular ‘Cash on Delivery’ facility. All the products
sold by the company under a particular category may have different
return/replacement period. Flipkart allows multiple payment options such as
cash on delivery, credit or debit card transactions, net banking, e-gift voucher and
card swipe on delivery. The company operates both ways when an order is
received. The products for which it holds inventory are dispatched by it directly.
For the products they do not store in inventory, they just send the order received
by them to the supplier who ships it. The company plans to spend about ? 75
crores on e-Commerce advertising in the year 2016. Flipkart reserves the right to
terminate your membership and/or refuse to provide you with access to the
website if it is brought to Flipkart’s notice or if it is discovered that you are under
the age of 18 years. This is because as per the Indian Contract Act, 1872, the
minors, un-discharged insolvents, etc. are not eligible to use the website.

In context of the above case, identify and explain the different types of plans
being used by Flipkart by quoting lines from the paragraph.

Answer:

The different types of plans being used by Flipkart are listed below:

1. Objectives: Objectives are the end results of the activities that an

organisation seeks to achieve through its existence. All other activities
within the organisation are directed towards achieving these objectives.
“The company seeks to increase traffic (more clicks on their products) and
boost sales and revenue through integration of Mobile Apps, Display, Pay
Per Click and Search Engine Optimization.”
2. Strategy: A strategy is a comprehensive plan for achieving the objectives
of the organisation. This comprehensive plan involves:
○ determining long term objectives
○ adopting a particular course of action
○ allocating resources necessary to achieve the objective.
“In order to dispel the fear of people related to shopping online,
Flipkart was the first company to implement the popular ‘Cash On
Delivery’ facility.”
3. Policy: A policy is a siet of general guidelines that help in managerial
decision making and action.
“All the products sold by the company under a particular category may
have different return/replacement period.”
4. Method: A method refers to the prescribed ways or manner in which a task
has to be performed considering the objective.
“Flipkart allows multiple payment options such as cash on delivery, credit
or debit card transactions, net banking, e-gift voucher and card swipe on
delivery.”
5. Procedure: A procedure contains a series of specific steps to be
performed in a chronological order to carry out the routine activities.
 “The company operates both ways when an order is received. The products
for which it holds inventory are dispatched by it directly. For the products
they do not store in inventory, they just send the order received by them to
the supplier who ships it.”
6. Budget: A budget refers to a financial plan that is expressed in -numerical
terms.
“The company plans to spend about ? 75 crores on e-commerce
advertising in the year 2016.”
7. Rule: A rule is a specific statement relating to the general norms in terms
of Do’s and Don’ts that guide the behaviour of people. It commands strict
obedience and a penalty is likely to be imposed on its violation.
“Flipkart reserves the right to terminate your membership and/or refuse to
provide you with access to the Website if it is brought to Flipkart’s notice or
if it is discovered that you are under the age of 18 years. This is because as
per the Indian Contract Act, 1872, the minors, un-discharged insolvents etc.
are not eligible to use the Website.”

Question 5.

Rajender has been running a successful business of manufacturing traditional

wedding wear for women including sarees and lehengas. His friend Surinder who
is engaged in the business of providing web designing solutions to his clients,
suggests him to explore the option of selling his products online. Rajender
agrees to his suggestion and decides to venture into online business, keeping in
view the various e-commerce regulations in order to avoid imposition of any
penalty. In order to facilitate the sale of his products, Rajender decides to offer
multiple payment options such as cash on delivery, credit or debit card
transactions, net banking to the buyers etc.

In context of the above case:

1. Identify the two different types of plans mentioned in the above paragraph
that relate to the online portal that Rajinder intends to startby quoting lines
from the paragraph.
2. Distinguish between the two types of plans as identified in part (a).
Answer:

1. Rule and Method are the two different types of plans that relate to the
online portal that Rajender intends to start.
○ Rule: “Rajender agrees to his suggestion and decides to venture into
online business keeping in view the various e-commerce regulations
in order to avoid imposition of any penalty.”
○ Method: “However, he decides to offer multiple payment options
such as cash on delivery, credit or debit card transactions, net
banking to the buyers etc.”
2. The difference between rule and method is as follows:

B Rule Method

M Rules are specific Methods define the

statements that tell way of doing routine
people what or respective job.
should or should
not be done.

V Violation of rules may Method does not

lead to imposition involve any
of penalties. penalties on
violation.
 P Rules help to maintain Methods help in
discipline. carrying out the job
efficiently.

N Rules are both Methods are specific

specific and rigid. (well defined) but
flexible.

E No smoking, No Method of payment of

Parking etc. fee-cheque, cash,
online etc.

Question 6.

Wazir Ahmed joins ‘Ashiyana Ltd.’ a company dealing in real estate, as a human
resource manager. Through a series of interactions with his team during lunch
breaks, he comes to know that quite a few managers at middle and senior levels
have recently left the organisation as their promotions were overdue. Therefore,
in order to reinstate the confidence of the staff, he lays out a clear cut plan
consisting of a set of general guidelines for both time bound and performance
related appraisals of the mangers at all levels. Moreover, he develops
standardized processes containing a series of steps specified in a chronological
order for its implementation.

In context of the above case:

1. Identify the two different types of plans that Wazir Ahmed proposes to
implement in order to reinstate the confidence of the staff by quoting lines
from the paragraph.
2. Distinguish between the two types of plans as identified in part (a).

Answer:

1. Policy and Procedure are the two different types of plans that Wazir Ahmed
proposes to implement in order to reinstate the confidence of the staff.
Policy: “… he lays out a clear cut plan consisting of a set of general
guidelines for both time bound and performance related appraisals of the
mangers at all levels.”
Procedure: “Moreover, he develops standardized processes containing a
series of steps specified in a chronological order for its implementation.”
2. The difference between Policy and Procedure is outlined below:

Basis Policy Procedure

Meani Policies are general It is a series of

ng statements that chronological steps which
guide managerial are performed to do a
decision making. particular activity.

Level It is determined by It is determined by lower

of top level and middle level
ma management. management.
nag
 em
ent

Expres It is a general It is a specific statement.

sion statement.

Manager’s It provides scope for There is no scope for

managerial managerial discretion.
Discretion discretion.

Purpos Policies are framed A procedure is framed to

e to achieve the implement a policy.
objectives of an
organisation.
They all guide in
implementing the
strategy.

Question 7.

‘Apna Ghar/ a company dealing in consumer durables, plans to increase the sale
of its products by 25% around Diwali this year. Moreover, in order to cash on the
implementation of the seventh pay commission by that time, which is likely to
raise the income of 47 lakh serving employees of the Central government and 52
lakh pensioners, the company has created 30 advertisement films which will be
aired across 85 national and regional channels until Diwali.

In context of the above case:

1. Identify the two different types of plans that ‘Apna Ghar’ proposes to
implement by quoting lines from the paragraph.
2. Distinguish between the two types of plans as identified in part(i).
Answer:

1. Objective and Strategy are the two different types of plans that ‘Apna Ghar’
proposes to implement.
Objective: “Apna Ghar’, a company dealing in consumer durables, plans to
increase the sale of its products by 25% around Diwali this year.”
Strategy: “Moreover, in order to cash on the implementation of the seventh
pay commission by that time which is likely to raise the income of 47 lakh
serving employees of the Central government and 52 lakh pensioners, the
company has created 30 advertisement films which will be aired across 85
national and regional channels until Diwali.”
2. The difference between objectives and strategy is outlined below:

B Objectives Strategy
a
s
i
s

M Objectives A strategy is a comprehensive

e are the plan prepared for winning over
a end the given challenge or problem.
results of
the
activities
g that an
organisati
on seeks
to achieve
through its
existence.
 S Objectives A strategy is based on the
o are based objectives of the organisation.
on the
mission or
c philosoph
e y of the
organisati
on.

L Objectives A strategy may be determined

e are by top level or middle level
v determine management.
e d by top
level
o managem
f ent.

s
o

v
o

v
e
d

Question 8.
After completing a diploma in Bakery and Patisserie, Payai sets up a small outlet
at Goa Airport to provide a healthy food option to the travellers. To begin with,
she has decided to sell five types of patties, three types of pizzas and low sugar
muffins in four flavours. Thus, by deciding in advance what to do and how to do,
she is able to reduce the risk of uncertainty and avoid overlapping and wasteful
activities. But sometimes her planning does not work due to some unavoidable
circumstances like cancellation of flights due to bad weather conditions,
government alert etc. which adversely affects her clientele.

In context of the above case:

1. Identify and explain the points highlighting the importance of planning

mentioned in the above paragraph.
2. Describe briefly the limitation of planning which adversely affects Payal’s
business

Answer:

1. The points highlighting the importance of planning mentioned in the above

paragraph are described below:
○ Reduces the risk of uncertainty: Planning relates to deciding in
advance about the tasks to be performed in future. This enables a
manager to anticipate changes and devise the ways to deal with
changes and uncertain events effectively.
○ Avoiding overlapping and wasteful activities: Planning ensures
clarity in thought and action and serves as the basis of coordinating
the activities and efforts of different individuals and departments.
Therefore, by curtailing useless and redundant activities, it helps in
the smooth working of the organisation’s work without interruptions.
Moreover, it makes detection of inefficiencies easier so that timely
corrective measures may be taken to avoid them in future.
2. The limitation of planning which adversely affects Payal’s business is:
○ Planning may not work in a dynamic environment: The business
environment is dynamic in nature. Every organisation has to
constantly adapt itself to changes in its environment in order to
survive and grow. However, it difficult to anticipate all the likely future
 changes in the environment with utmost accuracy. Hence, even with
planning, everything cannot be foreseen.

Question 9.

‘Agile Ltd.’ is a well-known automobile manufacturing company in India. The

company plans to increase the sale of its sedan cars by 20% in the next quarter.
In order to achieve the desired target, the marketing team of the company
considers the impact of policy of the government towards diesel vehicles and the
level of competition in this segment of cars. They explore the various available
options like offering more discount to dealers and customers, providing more
customer friendly finance options, lucky draws on test drives, increasing
advertising, offering more of free accessories on the purchase of the car, etc. A
thorough analysis of the various available options is done keeping in view the
relative viability of each option. The company decides to pursue the option of
offering more discount to dealers and customers in order to boost the sale of
sedan cars. In order to implement the plan, they determine the various discount
packages and communicate the same to their product dealers. To make the
prospective consumers aware about the new available benefits, advertisements
are made through various sources of print and electronic media. The market
analysts of the company keep a close watch on the revenue from the sedan cars
to study the effect of new initiatives by the company to promote its sales.

In context of the above case:

1. Name the function of management described in the above paragraph.

2. Identify and explain the various steps involved in process the function of
management as identified in part (a) by quoting lines from the paragraph.

Answer:

1. Planning is the function of management which is being described in the

above paragraph.
2. The various steps involved in the planning process are explained below:
○ Setting objectives: The planning process is initiated by setting the
objectives in clear, specific and measurable terms. The objectives
 may be set for the organization as a whole and for each department
or unit within the organization.
“The company plans to increase the sale of its sedan cars by 20% in
next quarter.”
○ Developing Premises: Planning process is carried out keeping in
view the assumptions related to the future, which is uncertain. These
assumptions are called premises and may relate to government
policy, interest rate, inflation, etc. Accurate forecasts are therefore
essential for successful planning.
“In order to achieve the desired target the marketing team of the
company considers the impact of policy of the government towards
diesel vehicles and level of competition in this segment of cars.” .
○ Identifying alternative courses of action: The next step in the
planning process involves identification of the various ways in which
the goals can be achieved.
“They explore the various available options like offering more
discount to dealers and customers, providing more customer
friendly finance options, lucky draws on test drives, increasing
advertising, offering more of free accessories on the purchase of the
car, etc.”
○ Evaluating alternative courses: In order to select the best option, the
relative positive and negative aspects of each alternative should be
evaluated in the light of their feasibility and consequences.
“A thorough analysis of the various available options is done keeping
in view the relative viability of each option.”
○ Selecting an alternative: The best plan is adopted to achieve the
desired goals. Sometimes, a combination of plans may be selected
instead of one best course of action.
“The company decides to pursue the option of offering more
discount to dealers and customers in order to boost the sale of
sedan cars.”
○ Implement the plan: This step is concerned with putting plans into
action.
“In order to implement the plan, they determine the various discount
packages and communicate the same to their product dealers. To
make the prospective consumers aware about the new available
 benefits, advertisements are made through various sources of print
and electronic media.”
○ Follow up action: Monitoring of plans is equally important to ensure
that objectives are achieved efficiently and effectively.
“The market analysts of the company keep a close watch on the
revenue from the sedan cars to study the effect of new initiatives by
the company to promote its sales.”

Question 10.

Arush joins as a sales manager of a company dealing in naturotherapy products.

Being proficient in his work, he knew that without good planning he will not be
able to organise, direct, control or perform any of the other managerial functions
efficiently and effectively. Only on the basis of sales forecasting, he would assist
in the preparation of the annual plans for its production and sales. Besides, he
will have to prepare sales plans regularly on weekly, monthly, quarterly and half
yearly basis. While preparing the sales forecasts, he undertakes intellectual
thinking involving foresight, visualization and issued judgement rather than
wishful thinking or guess work. Most importantly, all these planning activities will
be meaningful only if they will coincide with the purpose fob which the business
is being carried out.

In context of the above case, identify the various features of planning highlighted
in the above paragraph by quoting lines from it.

Answer:

The features of planning highlighted in the above paragraph are explained below:

1. Planning is a primary function: Planning precedes all the functions of

management i.e. organizing, staffing, directing and controlling. This refers
to primacy of planning. Planning provides the basis of all other functions.
“… without good planning he will not be able to organise, direct, control or
perform any of the other managerial functions efficiently and effectively. “
2. Planning is futuristic: Planning is called a forward looking function as it
enables an organization to meet future events effectively.
 “Only on the basis of sales forecasting, he would assist in the preparation
of the annual plans for its production and sales.”
3. Planning is continuous: Plans need to be continuously made, implemented
and followed by another plan and so on till an organization exists
“Besides, he will have to prepare sales plans regularly on weekly, monthly,
quarterly and half yearly basis.”
4. Planning is a mental exercise: Planning is done on the basis of rational
thinking involving foresight, visualization and issued judgement rather than
wishful thinking or guess work.
“While preparing the sales forecasts, he undertakes intellectual thinking
involving foresight, visualisation and issued judgement rather than wishful
thinking or guess work.”
5. Planning focuses on achieving objectives: Planning is a purposeful activity
as it contributes to the achievement of predetermined goals of the
organisation both efficiently and effectively.
“Most importantly, all these planning activities will be meaningful only if
they will coincide with the purpose for which the business is being carried
out.”

Question 11.

Holistic Education Public School in Bahadurgarh decides to implement the

literacy programme of the government in the school. It is decided that within the
year, the forty five support staff employees of the school will be made literate by
the school counsellors and social workers. In order to enhance the learning
process, the school decides to use audio-visual aids. To start the programme, the
school has to first procure the literacy books from State Resource Centre at
Jamia. Besides the curriculum, each literacy book contains a series of nine tests
which the volunteers have to get completed by the learners during the
programme. Moreover, by implementing the plan of ‘each one teach one’, each
student of the school from classes fifth to tenth will be encouraged to make one
person literate. The student volunteers may select a learner by adopting any one
of the two ways; either from the slum areas adopted by the school or on their
own within the vicinity of their residence. As per the norms of the Delhi
Government, it is mandatory for the volunteers to send back the filled copy of
only the ninth test paper in the series to the authorities as a conclusive proof of
the completion of the course, else the certificate of commendation will not be
awarded to them. Considering the implementation of the programme to be a part
of its corporate social responsibility initiative, the school has decided to spend
around Rs. 50,000 on the distribution of free stationery items, refreshments of
the learners, etc.

In context of the above case:

1. Identify the various types of plans being used by Holistic Education Public
School in order to implement the literacy programme in their school by
quoting the lines from the paragraph.
2. Categorise the various types of plans as identified in part (a) into single
use plans and standing plans.

Answer:

1. The various types of plans being used by the school to implement the
literacy programme in the school are:
○ Objectives: “It is decided that within the year, all the forty five
support staff employees of the school will be made literate by the
school counsellors and social workers.”
○ Strategy: “In order to enhance the learning process, the school
decides to use audio visual aids.”
○ Policy: “Moreover, by implementing the plan of ‘each one teach one,’
each student of the school from classes fifth to tenth will be
encouraged to make one person literate.”
○ Procedure: “To start the programme the school has to first procure
the literacy books from State Resource Centre at Jamia. Besides the
curriculum, each literacy book contains a series of nine tests which
the volunteers have to get completed by the learners during the
programme.”
○ Method: “The student volunteers may select a learner by adopting
any one of the two ways; either from the slum areas adopted by the
school or on their own within the vicinity of their residence.”
○ Rule: “As per the norms of the Delhi Government, it is mandatory for
the volunteers to send back the filled copy of only the ninth test
 paper in the series to the authorities as a conclusive proof of the
completion of the course, else the certificate of commendation will
not be awarded to them.”
○ Budget: “Considering the implementation of the programme to be a
part of its corporate social responsibility initiative, the school has
decided to spend around ? 50,000 on the distribution of free
stationery items, refreshments of the learners, etc.”
2. Single use plans are the ones that are formulated to deal with new or
non-repetitive situations that may arise in an organisation from time to
time. This includes programmes, budgets and projects.
Standing plans refer to the types of plans which once formulated may be
used for a long period of time in similar or repetitive situations that may
prevail in an organisation. These include objectives, strategies, policies,
procedures, methods and rules.