Section A

1 mark questions:
1. Define Planning.
Planning can be defined as thinking in advance what is to be done, when it is do be done, how
it is to be done and by whom it is to be done.
2. Explain the meaning of ‘Budget’.
Budget is a statement of expected results expressed in numerical terms.
3. Give the meaning of ‘objective’ as a type of plan?
Objectives are very basic to the organisation and they are defined as ends which the
management seeks to achieve by its operations. Therefore, an objective simply stated is what
you would like to achieve, i.e., the end result of activities.
4. Define planning premises.
Planning in concerned with the future which is uncertain and every planner is using
conjecture about what might happen in future. Therefore the manager is required to make
certain assumptions about the future. These assumptions are called Premises.

5. 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 did’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.

1. Planning does not guarantee success.

2. Planning may not work in dynamic environment.
Each question carries 3 marks questions:

6. State any three features of planning.

Following are the highlighted features of planning.
1. Planning focuses on achieving objectives: Planning serves the basis for guidelines
for what goals are to be achieved and how they are to be achieved. Any management
should formulate plans keeping view the specific goals in mind. These plans must
ensure that the desired objective is attained. The managers must make sure that the
plans made are purposeful. For example, if sales target is to be achieved then the plans
must be made in sync with this objective.
2. Planning is primary function of management: Planning serves as the stepping stone
for all other functions of an organisation. That is, planning precedes all other functions
such as organising, directing, staffing and controlling. This is because plans states the
objectives and all other functions are in accordance with the said objectives. Once the

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 plans are determined, the role of other interrelated functions comes into place. Thus,
planning sets the basis for other functions of an organisation.
3. Planning is pervasive: Planning serves as the stepping stone for all other functions of
an organisation. That is, planning precedes all other functions such as organising,
directing, staffing and controlling. This is because plans states the objectives and all
other functions are in accordance with the said objectives. Once the plans are
determined, the role of other interrelated functions comes into place. Thus, planning
sets the basis for other functions of an organisation.

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

(i) Planning provides directions: 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.
(ii) Planning reduces the risks of uncertainty: Planning is an activity which enables a
manager to look ahead and anticipate changes. Changes or events cannot be eliminated but
they can be anticipated and managerial responses to them can be developed.
(iii) Planning reduces overlapping and wasteful activities: Planning serves as the basis of
coordinating the activities and efforts of different divisions, departments and individuals.
Useless and redundant activities are minimized or eliminated.
(iv) Planning promotes innovative ideas: Since, planning is the first function of
management, new ideas can take the shape of concrete plans.
(v) Planning facilitates decision making: Planning involves setting targets and predicting
future conditions, thus helping in taking rational decisions.
(vi) Planning establishes standards for controlling: Planning provides the goals or
standards against which actual performance is measured. The nature of corrective action
required depends upon the extent of deviations from the standard. Therefore, planning
provides the basis of control.

8. What is meant by planning? List any two features of planning

Planning is deciding in advance, what to do and how to do it. It is one of the basic managerial
functions.
Features of planning –
(i)Planning focuses on achieving objectives – Planning contributes to the achievement of
predetermined organizational goals.
(ii)Planning is a primary function of management – Planning lays down a base for all the
other functions of management.

Other features are:

(iii) planning is pervasive
(iv) planning is continuous
(v) planning is futuristic

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 (vi) planning involves decision making
(vii) planning is a mental exercise

Each question carries 6 marks :

9. Explain the step involved in the process of planning.

Planning is deciding in advance what to do and how to do.
The certain logical steps in the process of planning are as under
1.Setting objectives
how the various departments contribute towards the attainment of the broad framework of the
organization’s philosophy is the plan to be drawn up.
The objectives have to percolate down to each unit and employees at all levels, which gives
them the necessary direction to work.
2.Developing premises:
planning is concerned with the future which is uncertain and every planner is using conjecture
about what might happen in future.
Therefore, the manager is required to make certain assumptions about the future. These
assumptions are called premises.
Forecasting is important in developing premises as it is a technique of gathering information.
3.Identifyingalterntive courses of action
if the project is important then more alternatives should be generated and thoroughly discussed
amongst the members of the organization, also an innovative course can be adopted
4.Evaluating alternative courses
the positive and negative aspects of each proposal need to be evaluated using tools such as
calculations and assumptions in the light of the objectives to be achieved.
5.Selecting an alternative
this is the real point of decision making. The best plan has to be adopted and implemented. The
ideal plan would be the most feasible, profitable and with least negative consequences.
Experience, analysis and intuition play an important role in selecting the best plan.
6.Implementing the plan
other managerial functions also come into the picture to put the plan into action by doing what
is required.
7.Follow-up action
plans are being implemented and activities are performed according to schedule. Monitoring
that the activities are performed according to schedule so that goals are achieved
10. Explain the features of planning.
The features of planning are as follows
Planning focuses on achieving objectives
Organizations are setup 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. Planning has no meaning
unless it contributes to the achievement of pre-determined organizational goals.
.Planning is a primary function of Management.
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 Planning lays down the base for other functions of management. All other managerial
functions are performed within the framework of plan drawn. Thus planning precedes other
functions. This is also referred to as the Primacy of Planning. Planning provides the basis of
all other functions.
Planning is pervasive.
Planning is required at all levels of management as well as in all departments of organization.
The scope of planning differs at different levels and among different departments. For
example Top management undertakes planning for the organization as a whole. Middle
management does the departmental planning at the lowest level. Day-to-day operational
planning is done by supervisors.
Planning is continuous
Plans are prepared for a specific period. 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.
Planning is futuristic
Planning essentially involves looking ahead and preparing for the future. It implies peeping
into the future analysis it and predicting it. A plan is therefore regarded as a forward looking
function based on forecasting.
Planning involves decision making
Planning essentially involves choices from among various alternatives and activities. The
need for planning arises only when alternatives are available. In actual practice planning pre
supposes the existence of alternatives.

Section B
1 mark questions:
11. Which type of plan has the least flexibility and why?
Rules are specific statements that inform what is to be done. They do not allow for any
flexibility or discretion because they reflect a managerial decision that a certain action must
or must not be taken.
12. Give one difference between policy and procedure
Policy: Policies are general statements that guide thinking or channelize energies towards a
particular direction.
Procedure: Procedures are routine steps on how to carry out activities
13. Why it is said that planning is pre-requisite for controlling
Planning provides the goals or standards against which actual performance is measured. If
there were no goals and standards then finding deviations which are a part of controlling
would not be possible.
14. State why planning is called a pervasive function in management.
Planning is required at all levels of management as well as in all departments of the
organisation.
15. Planning is the secondary function of management’. Do you agree?
No, planning is the primary function of management .All other managerial functions are

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 performed within the framework of the plans drawn. Thus planning precedes all other
functions. This is also referred to as primacy of planning.
16. ‘It is a comprehensive plan for accomplishing an organization’s objectives’. Mention it.
Strategy
17. ‘Policies are guidelines to managerial action and decisions in the implementation of
strategy’. Support with an example.
Policies are general statements that guide thinking or channelize energies towards a particular
direction. It provides a basis for interpreting strategy which is usually stated in general terms.
For example, the company may have a recruitment policy, pricing policy within which many
objectives are set and decisions are made. If there is an established policy, it becomes easier
to resolve problems or issues
18. Which plan has a limited scope, procedure or method?
Method
19. ‘It provides a base for analyzing future courses of action. But, it is not a solution to all
problems’. Name the function of management referred to.
Planning

3 marks questions:
20. ‘Planning is doing the work for achievement of goals.’ Do you agree? Give reasons in
support of your answer.
Yes, Planning is deciding in advance what to do and how to do. It is one of the basic
managerial function. Organizations are set up with a general purpose in view. Specific goals
are set out in plans along with the activities to be undertaken to achieve goals. Planning is
purposeful. Planning has no meaning unless it contributes in achieving the targeted goals of a
company.
21. “To see whether plans are being implemented and activities are being performed
according to schedule”, is a step of planning process. Identify the step.
To see whether plans are being implemented and activities are preformed according to
schedule is also a part of planning process.
Monitoring the plans is equally important to ensure that the objectives are achieved. This step
is the last in the process of planning known as the Follow-up Action.
22. Define ‘planning’. Explain the first two steps in the process of planning.
Ans. Planning can be defined as thinking in advance what is to be done, when it is do be
done, how it is to be done and by whom it is to be done.
The first two steps in the process of planning:
1. Setting objectives
how the various departments contribute towards the attainment of the broad
framework of the organization’s philosophy is the plan to be drawn up.
The objectives have to percolate down to each unit and employees at all levels, which
gives them the necessary direction to work.
2.Developing premises:

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 planning is concerned with the future which is uncertain and every planner is using
conjecture about what might happen in future.
Therefore, the manager is required to make certain assumptions about the future.
These assumptions are called premises.
Forecasting is important in developing premises as it is a technique of gathering
information.

4 marks questions:

23. ‘Planning is of vital importance in the managerial processes. Explain.

(i) Planning provides directions: 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.
(ii) Planning reduces the risks of uncertainty: Planning is an activity which enables a
manager to look ahead and anticipate changes. Changes or events cannot be eliminated but
they can be anticipated and managerial responses to them can be developed.
(iii) Planning reduces overlapping and wasteful activities: Planning serves as the basis of
coordinating the activities and efforts of different divisions, departments and individuals.
Useless and redundant activities are minimized or eliminated.
(iv) Planning promotes innovative ideas: Since, planning is the first function of
management, new ideas can take the shape of concrete plans.
(v) Planning facilitates decision making: Planning involves setting targets and predicting
future conditions, thus helping in taking rational decisions.
(vi) Planning establishes standards for controlling: Planning provides the goals or
standards against which actual performance is measured. The nature of corrective action
required depends upon the extent of deviations from the standard. Therefore, planning
provides the basis of control
24. Distinguish between Rules and methods .
Basis Rules Method
Definition Rules are specific statements Methods provide the prescribed
that inform what is to be done. ways or manner in which a task has
to be done considering the
objective.

Flexibility They do not allow any
flexibility or discretion.
Objective It ensures discipline
Nature It is regarded as official and
authoritative
They are flexible as method may
vary from task to task.
It ensures efficiency of operations
It is regarded as rational and
logical.

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25. Explain ‘objective’ and ‘policy’ as types of plan using suitable examples.
Objectives are usually set by the top management and serve as a guide for the overall
planning. Each unit then formulates their own objectives keeping in viewing the overall
organizational goals. For example: an organization may have an objective of increasing sales
by 10% or earning a reasonable rate of return on investment, earn a 20% profit from business.

Policies are general forms of standing plans that specifies the organisation’s response to a
certain situation. For example: admission policy of an educational institution.
Policies are general statements that guide thinking or channelise energies towards a particular
direction. Policies define the broad parameters within which a manager may function. The
manager may use his/her discretion to interpret and apply a policy. For example, the decisions
taken under a Purchase Policy would be in the nature of manufacturing or buying decisions.
26. Explain ‘method’ and ‘rule’ as types of plan
Methods provide the prescribed way, or manner, in which a task has to be performed
considering the objective. It deals with a comprising of one step or a procedure and specifies
how this step is to be performed.

Rules are specific statements that inform what is to be done. They do not allow for any
flexibility or discretion. (Usually the simplest type of plans because there is no compromise or
change unless a policy decision is taken.
27. Explain ‘procedure’ and ‘programme’ as types of plan.
Proceduresas a form of standing plans, describe the steps to be followed in particular
circumstances. For example: procedure for reporting progress in production.
Procedures are routine steps on how to carry out activities. They detail the exact manner in
which any work is to be performed. They are specified in a chronological order. Procedures
are specified steps to be followed in particular circumstances. They are generally meant for
insiders to follow. Policies and procedures are interlinked with each other. Procedures are
steps to be carried out within a broad policy framework

Programmesare detailed statements about a project which outlines the objectives, policies,
procedures, rules, tasks, human and physical resources required and the budget to implement
any course of action. Programmes will include the entire gamut of activities as well as the
organisation’s policy and how it will contribute to the overall business plan. The minutest
details are worked out i.e., procedures, rules, budgets, within the broad policy framework.
28. Explain “policy and procedure” as types of plan.
Policy: Policies are general statements that guide thinking or channelize energies towards a
particular direction. Policies provide a basis for interpreting strategy which is usually stated in
general terms. They are guides to managerial action and decisions in the implementation of
strategy. As such, a policy is the general response to a particular problem or situation. There
are policies for all levels and departments in the organisation ranging from major company
policies to minor policies. Major company policies are for all to know i.e., customers, clients,

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 competitors etc., whereas minor polices are applicable to insiders and contain minute details
of information vital to the employees of an organisation. But there has to be some basis for
divulging information to others.
Procedure: Procedures are routine steps on how to carry out activities. They detail the exact
manner in which any work is to be performed. They are specified in a chronological order.
Procedures are specified steps to be followed in particular circumstances. They are generally
meant for insiders to follow. Policies and procedures are interlinked with each other.
Procedures are steps to be carried out within a broad policy framework

29. Explain ‘objective and strategy’ as type of plans

Objectives are very basic to the organisation and they are defined as ends which the
management seeks to achieve by its operations. Therefore, an objective simply stated is what
you would like to achieve, i.e., the end result of activities.

A strategy provides the broad contours of an organisation’s business. It will also refer to
future decisions defining the organisations direction and scope in the long run. Thus, we can
say a strategy is a comprehensive plan for accomplishing an organisation
objectives.Connected with creativity and innovation. That is why planning is necessary for
management

6 marks questions:
30. Explain the process involved in planning?
Ans1. Setting objectives
The first and the foremost steps setting objectives. Every organization must have certain
objectives. Objectives maybe set for the entire organization and each department or unit
within the organization. Objectives or goals specify what the organization wants to achieve. It
could mean an increase in the sales by 20% which could be objective of the entire
organization .How all departments would contribute to the organizational goals is the plan
that is to be drawn up. Objectives should be stated clearly for all departments, units and
employees. They give directions to all departments. Departments then need to set up their
objectives within the broad framework of the organization’s philosophy.

Developing premises
Planning is concerned with the future which is uncertain and every planner is using conjecture
about what might happen in future. Therefore the manager is required to make certain
assumptions about the future. These assumptions are called Premises. Assumptions are the
base material upon which plans are to be drawn. The base material may be in the form of
forecasts, existing plans or any past information about policies. The premises or assumptions
must be the same for all and there should be familiar with and use the same assumptions.

Identifying alternative sources of action

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 Once objectives are set, assumptions are made. The next step would be to act upon them.
There may be many ways to act and achieve objectives .All the alternative courses of action
which may be taken could be either routine or innovative.

Evaluating alternative sources

The next step is to weigh the pros and cons of each alternative .Each course will have many
variables which have to be weighed against each other. The positive and negative aspects of
each proposal need to be evaluated in the light of the objective to be achieved. In financial
plans, for example the risk return trade off is very common. The more risky the investment
the higher the returns it is likely to give. To evaluate such proposals detailed calculations of
earnings, earnings per share, interest, taxes, dividends taken. Accurate forecasts inn
conditions of certainty / uncertainty then become vital assumptions for these proposals.
Alternatives are evaluated in the light of their feasibility and consequences.

Selecting an alternative.
Thus is the real point of decision making .The best plan has to be adopted and implementing.
The ideal plan of course would be the most feasible, profitable and with least negative
consequences. Most plans may not always be subjected to a mathematical analysis. In such
cases, subjectivity and the manager’s experience, judgment and at times intuition play an
important part in selecting the most viable alternative. Sometimes a combination of plans may
be selected instead of one best course. The manager will have to apply permutations and best
combinations and select the best possible course of action.

Implementing the plan

This is the step where other managerial functions also come into the picture. The step is
concerned with putting the plan into action i.e., doing what is required. For example if there is
a plan to increase production then more labour and more machinery will be required. This
step would also involve organizing for labour and purchase of machinery.

Follow up action
To see whether plans are being implemented and activities are performed according to
schedule is also part of the planning process. Monitoring the plans is equally important to
ensure that objectives are achieved.
Section C
1 mark questions:
31. Name the type of plan which is time bound and linked with measurable outcome.
The type of plan which is time bound and linked with measurable outcome is Objective.
32. Name the type of plan which provides the broad contours of an organizational business.
The type of plan which provides the broad contours of an organizational business is
Strategy
33. Name the type of plan which tells what is to be done and what is not to be done
The type of plan which tells what is to be done and what is not to be done is Rule.
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34. Name the type of plan which defines the parameters in which a manager may function.
Policy
35. ‘This function of management means deciding in advance what to do and how to do’.
State the function involved.
The function involved is Planning
36. ‘Planning establishes standards for controlling’. In other words what does this means?
Planning provides the goals or standards against which actual performance is measured. By
comparing actual performance with some standard, managers can know whether they have
actually been able to attain the goals.
37. Which is the most crucial step in the planning process?
Selecting an alternative is the most crucial step in the planning process. This is the real point
of decision making. The best plan has to be adopted and implemented.
38. Name the type of plan which is also a control device from which deviation can be taken
care of.
Budget type of plans
39. While formulating a plan, the manager is required to make certain assumptions about
the future. What are these assumptions called?
These assumptions are called Premises
40. Name and explain the type of plan which decides whether an organization should adapt
functional or divisional structure?
Ans. Policy
41. At what step of planning process the managerial functions came into picture?
Ans. At the 6thstep(implementing the plan), the managerial functions came into picture.
42. ‘No smoking refers to which type of plan?
Ans. Rule.
43. A company has planned its sales for the year 2014-15. Name the type of plan.
Ans. Objective
44. Why are rules considered to be plans?
Ans. Rules considered as the simplest type of plans because there is no change, compromise
or flexibility in following them.
45. 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, Lavendear, 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 Rs.30 crores to achieve the objective.
Identify the management function and the type of plan mentioned above which will help
the company to acquire dominant position in the market.
Ans. Planning -Strategy

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46. As a part of its comprehensive plan 'Neerja Ltd. decided to combine a new line of activity
with its existing footwear business. Identify the type of plan.
Ans. Strategy.
47. "No Smoking in the factory." comes under........
a. Strategy b. Rule c. Policy d. Method
48. Main purpose of Rule is:
a. To decide that when is to be done
b. To choose the best alternative
c. To Maintain Discipline
d. To set the organizational objectives
49. Which of the following is not a feature of planning?
a. To achieve objectives
b. Planning is time consuming
c. Planning is pervasive
d. Planning is futuristic
50. What to do and how to do is concerned with______
a. Organizing b. Planning c. Directing d. Controlling
51. Which of the following is not true about planning?
a. Planning is a mental exercise
b. Planning guarantees success
c. Planning is unwanted expense
d. None of these
52. Hiring only University-trained engineers is an example of ____________
a. Procedure b. Policy c. None of these d. Strategy
53. Choice of advertising media is concerned with___________
a. Procedure b. Strategy c. Policy d. None of these
54. Selection of employees is _____________ of the business
a. Strategy b. Procedure c. Rule d. None of these
55. A fine or penalty can be charged only on the violation of __________
a. Rules b. Strategy c. Method d. None of these
56. Training, lectures and seminars are ____________
a. Method b. Strategy c. Procedure d. Rules
57. Development of a new product is a ___________
a. Strategy b. Programme c. Procedure d. Policy
58. Estimated cash inflows and cash outflows are _________.
a. Programme b. Rules c. Procedure d. Budget
59. Increasing sale by 15% is _______________
a. Method b. Procedure c. Objective d. Rule
60. Which of the following is a limitation of planning?
a. Planning promotes innovative ideas
b. Planning does not guarantee success
c. Planning facilitates decision making

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 d. Planning provides directions
61. The first step of planning is _____________
a. Follow up action
b. Setting objectives
c. Selecting an alternative
d. Implementing the plan
62. What is the last step in planning process?
a. Setting objectives
b. Follow up action
c. Developing premises
d. None of these
63. Planning seeks to bridge the gap between ______
a. Past and Future position
b. Present and Future position
c. Past and present position
d. None of these
64. Planning is concerned with ______________
a. Looking old records b. Looking new records c. Looking forward d. Looking back
65. Which of the following is not correct? a. Planning reduces the profitability b. Planning
focuses on achieving objectives c. Planning is futuristic d. Planning is continuous process
66. Planning is a _______________
a. One time process b. Useless Function c. Mental Exercise d. Obsolete Concept
67. Planning helps in reducing the _______________
a. Risk of uncertainty b. Decision making c. Direction for action d. Memory
68. Which one of the following is a limitation of planning?
a. Planning provides directions
b. Planning helps in decision making
c. Planning reduces risk of uncertainty
d. Planning leads to rigidity
69. Single use plans are designed only ____________
a. To achieve the objectives
b. To use two times
c. To meet the demand of specific situations
d. For an indefinite period
70. If a firm has decided to sell its product on cash basis only, it is part of firm's _________
a. Policy b. Procedure c. Method d. Objectives
71. No fine or penalty for violation is charged under_________________
a. Method b. Law c. Rule d. None of these
72. Programmes are ________________
a. Policies b. Not Detailed Statement c. Rules d. Detailed Statements
73. Actual performance can be compared with standard performance through _________
a. Programme b. Budget c. Staffing d. None of these

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74. There are two types of plans ____________
a. Short Term and Medium term plan
b. Single use plan and Standing plan
c. Traditional Plan and Modern Plan
d. Single use and Double use plan
75. Plans can be implemented after the _______________
a. Developing premises
b. Selecting an alternative
c. Setting objectives
d. Follow up action
3 marks questions:
76. A company needs a detailed plan for its new project ‘Construction of a Shopping Mall’.
What type of plan it is?
Ans. Programme
Prograrmme is a combination of objectives, policies, procedures, rules, tasks and other
elements, which are designed to get a systematic working in the , organization. And lays
down what, how , who and when of accomplishing a specific job.
• Programme involves planning for future events and establishing a sequence of
required actions.
• It gives a step-by-step approach to guide the action necessary to reach a
ore-determined goal.
• Programme can be of different types, like production programme, training
programme, sales promotion programme, etc.
• Example: A company may have programme with respect to 'Construction new
Factory premises'.
• Training programme
• Sales promotion programme
• Production programme.
77. Name the aspect which must be considered while forming business strategies.
A strategy provides the broad contours of an organisation’s business. It is a comprehensive
plan for accomplishing an organisation objectives. This comprehensive plan will include three
dimensions.
(i) Determining long term objectives,
(ii) Adopting a particular course of action, and
(iii) Allocating resources necessary to achieve the objective.
Whenever a strategy is formulated, the business environment needs to be taken into
consideration. The changes in the economic, political, social, legal and technological
environment will affect an organisation’s strategy. Strategies usually take the course of
forming the organisation’s identity in the business environment. Major strategic decisions
will include decisions like 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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78. Which plan has a limited scope, procedure or method?
Method
79. Planning requires logical & systematic thinking rather than guess work. Which feature
of planning is highlighted here? Explain?
The feature highlighted here is – ‘planning is a mental exercise’

Planning requires application of the mind involving foresight, intelligent imagination and
sound 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. Planning must be orderly and based on
the analysis of facts and forecasts
80. ‘Planning is looking ahead’. Explain
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. Planning is, therefore, regarded
as a forward looking function based on forecasting. Through forecasting, future events and
conditions are anticipated and plans are drawn accordingly. Thus, for example, sales
forecasting is the basis on which a business firm prepares its annual plan for production and
sales.
81. Give an example each of any three limitations of planning which are beyond the control
of an organization.
Planning cannot function in a dynamic environment-organisation has to constantly adapt itself
to environment changes such as political instability, rise in competitors etc
Unforeseeable events hinder the process of planning- natural calamities
Planning does not guarantee success. Even a previously successful plan may not be successful
again.
82. Naman, working as a supervisor in Rainbow Ltd. Is given a target of producing 100
shirts a day. Due to his habit of doing things differently, an idea struck him which would
not only give job opportunities to the disabled people but also help in reducing per unit
cost and increasing the production per day. However, Harisingh, the production
Manager, does not give any importance to Namans creativity and hence does not allow
Naman to deviate from the pre-decided methods and techniques.
a. By not allowing Naman from deviating from the pre-decided methods and
techniques, Mr. Hari Singh gave rise to one of the limitations of management
function. Identify the management function and the limitation.
a. Ans. Management function: Planning
The limitation of planning function of management described in the above paragraph
is that ‘Planning reduces creativity’
83. Mr. Ram , Director of ABC Ltd, does the entire planning for the organization.He wants
that the lower and the middle level managers should only implement the plans laid down
by him and does not allow them to deviate from set plans.The lower management only
carries out the order. There is nothing new or innovative in the organization.

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 a. Name the limitation of planning referred to above.
b. State any other two limitations of planning.
Ans.
a. Planning reduces creativity
b. Planning involves huge cost.
Planning is a time consuming process.
84. The business environment is dynamic, nothing is constant. The environment consists of a
number of dimensions, economic,political, physical,legal and social dimensions.
a. In the above paragraphs, one of the limitation of planning has been described.
Identify it.
b. State any two more limitations of planning.
c. Name the values that can be emphasized by removing the above limitation of
planning.
Ans.
a. Planning may not work in dynamic environment.
b. Planning leads to rigidity.
Planning involves huge cost.
c. Adaptability: By constantly adapting itself to the changes.
85. Nylon Ltd. Laid down one type of plan in the organization by announcing that nobody
would smoke in the organization premises. The type of plan laid down by the company
was specific as it reflects a managerial decision that a certain action must or must not be
taken.
a. Identify and briefly explain the type of plan mentioned in the above paragraph.
b. Name the value being emphasized in the Nylon ltd. By laying down the plan
mentioned in the paragraph.
Ans.
a. Rule.
Rules are specific statements that inform what is to be done. They do not allow for any
flexibility or discretion.
b. Respect towards environment-By keeping the environment pollution free.
Respect of order- By obeying the order for not smoking in the organization.
86. Name the simplest types of plans. Why are they the simplest?
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 the simplest because there is no
compromise or change unless a policy decision is taken
87. ITCompany’ Polaris Software’ is planning to set up a new unit in Mumbai with a
capacity for 800 professionlas. The company currently has 1200 professionals across its
centres in Mumbai, and the new unit is expected to come up in the next six months. The
companys chairman and CEO said that the company was well on the track to meet its
earlier announcements to increase the head count by 1500-2000 professionals in the
current year.

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 a) Which function of management is present here?
Ans.
a) Planning function of management is discussed above which tells us in advance
what is to be done, when it is do be done, how it is to be done and by whom it is to be
done.It bridges the gap between where we are and where we want to go.
88. Narayan Ltd. Laid down strictly ‘Only graduates and experienced candidates will be
recruited’. As from past many years, company is recruiting freshers due to which the
performance has declined constantly.
a) Identify and briefly explain the type of plan mentioned in the above para.
Ans.
a) Policy: Policies are general statements that guide thinking or channelize energies
towards a particular direction. Policies provide a basis for interpreting strategy which
is usually stated in general terms. They are guides to managerial action and decisions
in the implementation of strategy. As such, a policy is the general response to a
particular problem or situation. There are policies for all levels and departments in the
organisation ranging from major company policies to minor policies. Major company
policies are for all to know i.e., customers, clients, competitors etc., whereas minor
polices are applicable to insiders and contain minute details of information vital to the
employees of an organisation. But there has to be some basis for divulging
information to others.
4 marks questions:
89. Rajeev, the owner of Pathways constructions decided to start a campaign to create
awareness among people for developing clean surroundings in their area. He formed a
team of 10 members to list the different ways for cleaning the surroundings. One
suggested to take the help of local residents, another suggested that they may involve
school going children in their venture. One more suggestion was to take the help of
unemployed youth. On evaluation of different ways, it was decided to take the help of
local residents. To achieve the desired goal various activities were identified like
a) Purchase of necessary items like dustbins, garbage bags, brooms, etc.;
b) Collection of garbage;
c) Disposal of garbage, etc.
After identification of different activities the work was allocated to different members.
i. Identify the concepts of management involved in the above situation and quote the
lines which help in their identification.
ii. Also identify the values which the company wants to communicate to the society
Ans.(i) Concepts involved – Planning and Organising
Lines for planning–
‘one suggested…….unemployed youth’
‘on evaluation……. local residents’
‘campaign to create awareness……surroundings’
Lines for organizing –
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 ‘To achieve………disposal of garbage etc.’
‘after identification of different activities….. different members’
90. Which type of plan is referred through in each of the following statements:
a. They are defined as ends which the management seeks to achieve by its
operations.
b. They are general statements that guide thinking or channelize energies towards a
particular direction.
c. They provide details in the exact manner in which any work is to be performed.
d. They provide the prescribed ways or manner in which a task has to be performed
considering the objective.
Ans.
a. Objectives
b. Policies
c. Procedures
d. methods
6 marks questions:
91. ‘No enterprise can achieve its objectives without systematic planning’. Do you agree
with this statement? Give any six reasons in support of you answer.
Yes, It is true that no enterprise can achieve its objectives without systematic planning.
Planning is an essential function of management as it enables managers to decide in advance
what is to be done and how to do it. The following are the some of the importance of planning.
i)Planning Provides Direction: Planning clearly states the goals and objectives to be
achieved.
ii) Planning Reduces Risk: By guiding an organisation in the right direction to follow, it
accredits its managers to analyse and anticipate changes. This helps in reducing the
uncertainty of the foreseen events.
iii) Planning Reduces Overlapping and Wasteful Activities: The managers coordinate the
different activities together to reach the objectives, thereby, help in reducing overlapping of
work.
iv) Helps in Decision Making: Planning involves analysing the future, evaluating the various
courses of action and choosing best alternative as per the objective.
v) Planning Promotes Innovative Ideas:- Since planning is the first function of management
new ideas can take the shape of concrete plans.
vi)Planning establishes standards for controlling:- Planning involves setting of goals. The
entire managerial process is concerned with accomplishing predetermined goals through
planning
92. ‘Though planning is an important tool of management, yet it is not a remedy for all
types of problems’. Do you agree with this statement? Give any five reasons in support
of your answer.
Yes , Though planning is an important tool of management, yet it is not a remedy for all types
of problems. Organisations are not always able to accomplish all their objectives due to the
following reasons:-

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 i. Planning leads to rigidity, in an organizations a well defined plan is drawn up with
specific goals to be achieved with specific time frame. In future managers may not be
in position to change it.
ii. Planning may not work in a Dynamic environment:-The business environment is
dynamic, nothing is constant. Plans decide in advance what has to be done in future.
Planning cannot foresee everything and thus there may be obstacles in effective
planning.
iii. 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 the plans.
iv. Planning is time consuming: - Sometimes plans to be drawn takes up so much of
time that there is not much time left for their implementation.
v. Planning does not guarantee success: The success of an enterprise is possible only
when plans are properly drawn up. Planning only provides a base for analyzing
future. It is not a solution for future course of action.
93. Two years ago Mayank obtained degree in food technology. For some time he worked in
a company manufacturing 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 action plan to achieve the same.
One of his objectives was to earn 50% profit 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 a Production Manager who decided the
exact manner in which the production activities are to carried out. Harsh also prepared
a statement showing the requirement of workers in the factory throughout the year.
Mayank informed Harsh about his sales target for different products, area wise for thee
forth coming quarter. While working on the production table a penalty of Rs. 150 per
day was announced for not wearing the helmet, gloves and apron by the workers.
Quoting lines from the above para identify and explain the different types of plans
discussed.
Ans.
Objectives:‘One of his objectives was to earn 50% profit on the amount invested in the first
year.’
Objectives therefore can be said to be the desired future position that the management would
like to reach.
Policy: ‘Raw materials like flour, sugar, salt etc. will be purchased on two months credit.’
Policies are general statements that guide thinking or channelise energies towards a particular
direction.
Procedure: ‘Decided to follow the steps required for marketing the products through his own
outlets.’
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 Procedures are routine steps on how to carry out activities.
Rule: ‘A penalty of Rs. 150 per day was announced for not wearing the helmet, gloves and
apron by the workers.’
Rules are specific statements that tell what is to be done.
Method: ‘The exact manner in which the production activities are to carried out.’
Methods provide the prescribed ways or manner in which a task has to be performed
considering the objective.
Budget: ‘Harsh also prepared a statement showing the requirement of workers in the factory
throughout the year.’
A budget is a statement of expected results expressed in numerical terms. It is a plan which
quantifies future facts and figures.
94. 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 price. She discussed her idea with her teacher (mentor) who encouraged her.
After analyzing various options for starting her business venture, they shortlisted the
option to sell readymade and ‘ready to make’ vegetable shakes and sattu milk shakes.
Then, they both weighed the pros and cons of both the shortlisted options.
a) Name the function of management being discussed above and give any one of its
characteristics.
b) Also briefly discuss any three limitations of the function discussed in the case.
Ans.(a) Planning.
Characteristics of planning (any one)
(i) Planning focuses on achieving objectives.
(ii) Planning is a primary function of management
(iii) Planning is pervasive
(iv) Planning is continuous
(v) Planning is futuristic
(vi) Planning involves decision making
(vii) Planning is a mental exercise

(b) Any three limitations of planning:

(i) Planning leads to rigidity
(ii) Planning may not work in a dynamic environment
(iii) Planning reduces creativity
(iv) Planning involves huge cost
(v) Planning is a time consuming process
(vi) Planning does not guarantee success
95. A company is manufacturing baby garments. The mangers wants to increase the profits
by purchasing new high speed machines or increasing the sale price or using waste
material in manufacturing soft toys.
He decided that using waste material to increase the profit is the best solution for him.
a) Identify the concept of management involved.
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 b) Mention the steps involved in the above process by quoting the lines from the
question.
c) To complete the process of concept identified, what further steps the manager has
to take.
Ans.
a) The concept of management involved in a given situation is planning.
b.The mangers wants to increase ………new high speed machines or increasing the sale
price or using waste ……soft toys.
1. Identifying alternative sources of action
2. Evaluating alternative sources
He decided that using waste ………………the best solution
3. Selecting an alternative.
c) To complete the process of planning, the manager have to take the following steps:
4. Implementing the plan
5. Follow up action
96. ‘Diamond Logistics Company' had a turnover of ₹25 lakh during the year ended 31st
March, 2022. In a board meeting held on 15th April, 2022, it was decided to achieve a
turnover off ₹45 lakh for the next year. To accomplish this objective after taking into
consideration the business environment, a comprehensive plan was drawn. The Chief
Executive Officer (CEO) of the company also released a plan that would not only guide
the thinking of the managers and their decision-making but also channelise their
energies towards achievement of this target.
Identify and explain the three types of plans discussed in the above para.
Types of Plans:
(i) Objective- “In a board meeting held on 15th April, 2022, it was decided to
achieve a turnover off ₹45 lakh for the next year.”
Objectives therefore can be said to be the desired future position that the
management would like to reach.
(ii) Strategy- “To accomplish this objective after taking into consideration the
business environment, a comprehensive plan was drawn.”
Strategy is a comprehensive plan for accomplishing an organisation
objectives. This comprehensive plan will include three dimensions,
(i) determining long term objectives, (ii) adopting a particular course of
action, and (iii) allocating resources necessary to achieve the objective
(iii) Policy- “The Chief Executive Officer (CEO) of the company also released a
plan that would not only guide the thinking of the managers and their
decision-making but also channelise their energies towards achievement of
this target.”
Policies are general statements that guide thinking or channelise energies towards a
particular direction.

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