Chapter ---Planning

Meaning of Planning Deciding about all the aspect is called planning. A problem about
taking decision on these matters rises when there are more than one possible answers.. therefore it can be said to be a process of choosing . Definition of planning : According ot koontz and Odonnell ! Planning is deciding in ad"ance #hat to do how to do it when to do it and who is to do it.! $haracteristics of planning % Planning focuses on achie"ing the ob&ecti"es: Management begins with planning and planning begins with the determining of ob&ecti"es. 'n the absence of ob&ecti"es no organization can e"er be thought about. ( Planning is the primar) function of Management: Planning is the first important function of management. *he other functions organising staffing directing and controlling come later. 'n the absence of planning no other function of management can be performed. + planning is continuous: Planning is the process which begins with the beginning of business itself and ends with the ending of the business. 't means that as long a business e,ists the

planning process is continuous. -or e,ample a compan) plans to sell one lakh units in the coming )ear. .uddenl) man) competing companies enter the market. *his will naturall) affect the pre"ious position of the compan) and therefore it shall ha"e to re"ise its planning. /. Planning is -uturistic: Planning decides the plan of action0#hat is to be done how is to be done when is to be done b) who is to be done all the 1uestions are related to future. 2nder the planning answer to these 1uestiona is found out. #hile an effort is made to find out these answer. 3. Planning is mental e,ercise: planning is known as a mental e,ercise as it is related to thinking before doing something. A planner has mainl) to think about the following 1uestions: 4%5 #hat to do6 4(5 how to do it6 4+5#hen to do it6 4/5 #ho is to do it6

Importance of planning

Planning is the first and most important function of the management. 't is needed at e"er) le"el of the management. 'n the absence of planning all the business acti"ities of the organization will become meaningless. *he importance of planning has increased all the more in "iew of the increasing size of organizations 'n the absence of planning it ma) not be impossible but certainl) difficult to guess the uncertain e"ents of future. % Planning facilitates Decision making: Decision making means the process of taking decision. 2nder it a "ariet) of alternati"es are disco"ered and the best alternati"e is chosen. 7ut it is important to determine the ob&ecti"es before the disco"er) of alternati"es. Ob&ecti"es are determined under the process of planning. .o. it can be said that planning facilitates decision making. ( Planning reduce risk of 2ncertaint): planning is alwa)s done for future and future is uncertain. #ith the help of planning possible changes in future are anticipated and "arious acti"ities are planned in the best possible wa). +. Planning reduces o"erlapping and wasteful acti"ities: 2nder planning future acti"ities are planned in order to achie"e ob&ecti"es. the problems of when where what and almost decided. *his puts an end to disorder. 'n such situation coordination is established among different acti"ities and departments. 't puts an end ot o"erlapping and wasteful acti"ities. /. Planning pro"ides Direction: 2nder the process of planning the ob&ecti"es of the organization are defined in simple and clear words. *he outcome of this is that all the emplo)ees important role in the attainment of the ob&ecti"es of the organization. 3 Planning establishes .tandards for controlling: 7) determining the ob&ecti"es the ob&ecti"es of the organisation through planning all the people working in the organization and all the departments are informed about when what and how to do things. .tandards are laid down about their work time and cost. 2nder controlling at the time of completing the work the actual work done is compared with the standard work and de"iations are found out and if the work has been done as desired the person concerned is held responsible.

Limitations of planning
Planning is needed both in the business and non business organizations. .ome people think that planning is based on the future and nothing can be said certaint) about future. *herefore it is for all the situations before and which now re1uires immediate decision. 'n such situation if the useless process. 'f planning has to be successful and purposeful the managers should be aware of these difficulties and limitations of planning.-ollowing are the limitations of planning. % Planning does not work in D)namic 8n"ironment: Planning is based in the future happenings. .ince future is uncertain and d)namic. 9enerall) a longer period of planning makes it less effecti"es. *herefore it can be said that planning does not work in d)namic en"ironment. ( Planning reduce creati"it): 2nder the planning All the acti"ities connected with the attainment of ob&ecti"es of the organization are pre0 determined. 8"er)bod) works as the) ha"e been directed to do and it has been made clear in the plans. it means that the) do not think about appropriate wa)s of disco"ering new alternati"es. + Planning in"ol"es huge costs: Planning is small work but its process is reall) big. Planning becomes meaningful after a long path. 't takes a lot of time to co"er this path. During this entire period the managers remain bus) in collecting a lot of information and anal)zing it. 'n this wa) the organization is bound to face huge costs. / Planning is time consuming process: Planning is blessing in facing a definite situation but because of long process it can not f ace sudden emergencies. .udden emergencies can be in the form of unforeseen problems or some opportunit) of profit is and there has been no planning manager thinks of completing the planning process before taking some decision. *hus planning is time consuming process. 3Planning does not guarantee of success: .ome times the manager think that planning sol"es all their problems. .uch a think makes them neglect their real work and ad"erse effect of such an attitude has to be faced b) the organization. 'n this wa) planning planning offers the managers a false sense of securit) and makes them careless. .o we can that mere planning does not ensure successs rather efforts ha"e to be made for it.

Planning process
#hen we look at planning in the conte,t of management process it is called acti"it) it is being a part of management. 7ut on the other hand when it is studied separatel) it is called a process because to complete one has to clear man) steps one after the other. .o far as the number of steps included in the planning process is concerned it depends on the size of the organization. Different organization can ha"e different planning process.*he following steps are generall) taken in the business organization during the planning process. % .etting the ob&ecti"es: Ob&ecti"es are those end points for whose attainment all the acti"ities are taken. 'n the planning process ob&ecti"es are determined and defined first of all so that all the emplo)ees concerned can be informed about them to get their complete cooperation. Ob&ecti"es ha"e a hierarch) of their own organizational ob&ecti"es departmental ob&ecti"es and indi"idual ob&ecti"es. ( De"eloping the premises: the basis of planning is those factors which influence the possible results of different alternati"es. 7efore taking a final decision about an) alternati"e a forecast of this assumption is made. *he rate of success of planning will be in direct proportion to the rate of the success of forecasting. *he assumption of planning is two t)pes: 4%5 'nternal premises: capital labour raw material machiner) ect. 4(5 8,ternal premises: 9o"ernment polices business competition taste of customer rate of ta,es. ect. + 'dentif)ing alternati"e course of action: 9enerall) there is no work which has no alternati"e method of doing it. On the basis of the ob&ecti"es of the organization and limitations of planning alternati"e course of doing a particular work can be disco"ered. / 8"aluating alternati"e courses: All those alternati"e courses which are up to the e,pectations of the minimum preminar) criteria are selected for intensi"e stud). it will be seen as to what e,tent a particular alternati"e course can help in the attainment of the ob&ecti"es of the organizations. *here is howe"er one problem which confronts us while anal)sing these alternati"e courses. 8"er) alternati"es course has its merits and demerits. 3 .electing an alternati"e: alternati"e a careful anal)sis of different alternati"es the best one is selected. .ometimes the anal)sis )ields more than one alternati"e course with similar merits.

;eeping in "iew the uncertainties of future it is &ustifiable to select more than one good alternati"e course One of such alternati"e is adapted and other is kept in reser"e. < 'mplementing the plan: After ha"ing decided the chef plan and the subsidiar) plans the) are to be implemented. After implementing the plans the se1uence of different acti"ities has to be decided. 'n other words it is decided as to who will do a particular &ob and at what time. =. -ollow up Action: the process of planning does not end with the implementation of plans. plans are formulated for future which is uncertain. 't is of great importance that there is a constant re"iew of plans so as to ensure success in the uncertain future. *he moment there appears to be changes in the plans also. 'n this wa) we can sa) planning is $ontinuousl) mo"ing process.

Types of plans
Planning is a process and plan is its outcome. Plan is a sort of commitment to accomplish all the acti"ities needed for the attainment of special results from this point of "iew there are man) plans. *he following stud) will help in understanding different kinds of plans. %Ob&ecti"es: ob&ecti"es are those end points for the attainment of which all the acti"ities are 2ndertaken. -ollowing are the e,amples of ob&ecti"es: 4' 5*o impro"e the communication s)stem to hold regular staff meeting and publish a newsletter. 4(5*o cross the (> > >> crore mark in turno"er of soaps. 4+5 *o make a"ailable the emplo)ment to %>> people e"er) )ear. 4/5 *o reduce 1ualit) re&ects to +? ( .trategies: .trategies refer to those plans which are prepared in "iew of the mo"e of the competitors and whose ob&ecti"e is to make possible the optimum utilization of resources. +. Policies: Polcies are those general statements which are decided for the guidance of the emplo)ees while taking decision. *heir purpose is la)ing down a limit within which a particular work can be done or decision taken. Ob&ecti"es decide what is to be achie"ed and the policies tell us how it can be achie"ed.

/Procedures : Procedures are those plans which determine the se1uence of an) work performance. -or e,ample the reco"er) of mone) from the debtors can be done in the following order: 4a5 #riting letters 4b5 connecting on telephone 4c5 Meeting personall) 4d> taking legal action. *his is the procedure of collecting mone) from all the debtors. *here is a difference between policies and procedures.. *here can be two policies of the organization regarding the reco"er) of mone) from the debtors. 4A5 *ight collection polic) and 475 @enient collection polic). 2nder the first polic) an effort is made to reco"er mone) from debtors is b) treating him harshl). 2nder the second polic) the debtors will be gi"en enough time for the pa)ment of mone) while treating him lenientl). 3 methods. Methods is that plan which determines how different acti"ities of the procedure are completed. Methods is not related to all steps but onl) to one step of the procedure . it is more detailed than procedure . there ma) be man) methods to do a particular work. After e,tensi"e stud) a method has to be selected from which a worker feels minimum fati1ue increase in producti"it) and there is reduction in costs. < Aules: Aules till us what is to be done and what is not to be done in particular situation. 'n the absence of rules there is no need to take an) decision. #hate"er is said in the rules has to be followed without an) thinking. -or e,ample the rule B Co smoking in the factor) Bis applicable to e"er)bod) and it must be obser"ed. Pro"ision for punishment in case of non0obser"ing of the rule can also be made. =7udget: 7udgets describe the desired results in numerical terms. A budget is that planning which pro"ides detailers about estimated mone) material time and other resources for the achie"ement of pre determined ob&ecti"es of "arious departments. -or e,ample the sales departmensbudget gi"es estimated figures about the t)pe of material that will be purchased its 1uantit) the time of purchase and the amount to be spent on it. .imilarl) budget of other departments are also prepared. D Programmers: a programme means a single0use comprehensi"e plan la)ing down the what how who and when of accomplishing a specific &ob. through program me the managers are informed in ad"ance about "arious needs so that there is no problem in future. *he programmers can be different t)pes0production programme *raining programme .ales promotion programme management de"eloping programme.etc.

SAMPLE PAPERS FOR XII COMMERCE S !"ECT ! SI#ESS ST $IES M.* + Eours 9eneral 'nstruction: A answer to 1uestions carr)ing % mark ma) be from one word to one sentence. ! ans%er to &'estions carrying ( mar)s may *e from +,--+ %or.s / C Ans%er to &'estions carrying 0-+ mar)s may *e a*o't 1+, %or.s/ $ Ans%er to &'estions carrying 2 mar)s may *e a*o't 3,, %or.s/ E Attempt all parts of a &'estion together/ 1 4/ 5hy planning is )no%n as 6f't'ristic78 3 4/ State any t%o points of the importance of the planning/ 1 ( 4/ ho% the happening of 6o9erlapping an. %astef'l acti9ities7 can *e re.'ce.8 1 0 4/ At %hich le9el management is consi.ere. a *ase for all other f'nctions/ #ame that f'nction/ + 4/ 5hat is metho.8 2 4/ :o% .oes planning restrict creati9ity8 ( - 4/ :o% .oes planning pro9i.es .irection ( ; 4/ E<plain *riefly any three limitations of planning/ ( = 4/ E<plains the programme %ith the e<ample/ ( 1, 4/ >planning is contin'o's process/? Comment/ ( 1 1 1 M.M %>>

11 4/ 5hat is *'.get8 @i9e an e<ample of a sales *'.get/ 0 13 4 >#o smo)ing in the factory > is r'le/ Comment on it/ 0 1( 4/ Clarify the meaning of o*Aecti9es %ith the help of an e<ample/ 0 10 4.o yo' thin) planning can %or) in a changing en9ironment8 0 1+/4/ 5hat is meant *y policy as a type of plan8 + 12/ 4/$ifferentiate *et%een the r'le an. policy thro'gh an e<ample/ + 1- 4/ 5hat is the meaning of planning8 E<plain any fi9e Characteristics of planning/ + 1; 4/ 5hat is the .ifference *et%een policy an. proce.'re8 + 1= 4/ 5hat is proce.'re8 E<plain it %ith the e<ample8 + 3, 4/5hat are the &'alities or re&'irements of o*Aecti9es + 31 4/ 5hat steps are ta)en *y management in the planning8 2 33 4/ E<plainB in *rief any si< types of plans/ 2 3( 4/ >Planning is not a g'arantee of s'ccess if *'siness/? Comment/ 2 30 4/ 5hat is the relationship *et%een planning an. controlling8 2 3+5hat are the techni&'es of goo. planning8 2 8

SAMPLE PAPERS FOR XII COMMERCE S !"ECT ! SI#ESS ST $IES M.* + Eours 9eneral 'nstruction: A answer to 1uestions carr)ing % mark ma) be from one word to one sentence. ! ans%er to &'estions carrying ( mar)s may *e from +,--+ %or.s / C Ans%er to &'estions carrying 0-+ mar)s may *e a*o't 1+, %or.s/ $ Ans%er to &'estions carrying 2 mar)s may *e a*o't 3,, %or.s/ 1 5hat is meant *y singal 'se plan/8 3 is planning a mental e<ercise8 1 (ho% .oes planning helps in controlling8 1 0$efine policy/8 +5hat is an i.eal plan8 2:o% .oes planning promote inno9ati9e i.eas8 ( - :o% .oes planning foc's on achie9ing o*Aecti9es8 E<plain/ ( ;5hy planning regar.e. as a contin'o's process/ ( = En'merate the feat'res of planning/ 1, 6 planning is for%ar. loo)ing? E<plain/ ( 11 gi9e any si< limitations of planning/ 0 13 5hat are the &'alities of o*Aecti9es8 0 ( 1 1 1 M.M %>>

1( 5hat is *'.get8 E<plain %ith e<ample/ 0 10 :o% .oes planning esta*lish stan.ar.s for controlling8 E<plain/ 0 1+ @i9e the .ifference *et%een r'les an. metho.s/ + 12 5hat is the meaning of planning8 gi9e the importance of planning/ + 1- planning re.'ces o9erlapping an. %astef'l acti9ities/ E<plain/ + 1; $isting'ish *et%een o*Aecti9es an. policy/ + 1=5hat are the characteristics of so'n. policy/ + 3, Planning is not the g'arantee of s'ccess/ E<plain/ + 31 @i9e the process of planning/ 2 33 E<plain/ any si< importance of planning/ 2 3($isc'ss the essential elements of planning/ 2 30/$efine policy/ :o% .o policies .iffer from r'les/ 2 3+ planning is the *asic f'nction of management/ E<plain/ 2

CASS XII COMMERCE MODEL TEST PAPER BUSSINESS STUDIES Time Allowed; 3 Hours M.M !"" #e$.I$s%ru&%io$s! !. A$swer %o 'ues%io$s &(rr)i$* ! m(r+ m() ,e -rom o$e word %o o$e se$%e$&e. . ($swer %o 'ues%io$ &(rr)i$* 3 m(r+s m() ,e -rom /" %o 0/ words 3 A$swer %o 'ues%io$ &(rr)i$* 12/ m(r+s m() ,e (,ou% !/" words 1 A$swer %o 'ues%io$s &(rr)i$* 3 m(r+s m() ,e (,ou% ."" m(r+s / A%%em4% (ll 4(r%s o- ( 'ues%io$ %o*e%5er.

.1Define policy. 1 2 State any two type of plan. 1 3 Which plan suggests actions and non actions of employees? 1 4Which function of management is considered as the base of all other functions? 1 Which plan helps in analy!ing competitor"s policy? 1 #$lanning pro%ide the basis of all other functions". Comment. 3 &'oe does planning reduce the ris( of uncertainty? 3 ) $lanning restrict creati%ity. *+plain 3 ,*+plain the meaning of planning premiums with the help of suitable e+ample. 3 1- Why are rules considered to be plans? 3 11$lanning is not the guarantee of success. 4 12 Do you thin( planning can wor( in changing en%ironments 4 13 Describe the meaning of policies. procedures and budget. 4 14What (ind of strategic decision is ta(en by business organi!ation? 4 1 /s planning necessary for effecti%e management? 0i%e reasons in support of your answer 1# *+plain why planning is necessary for effecti%e management? 1& 0i%e the difference between policy and procedure . 1) What is budget? 0i%e the importance of budget 1, What is planning? 0i%e the characteristics of planning. 2-*+plain the Difference between the policy and ob1ecti%es. 21 *+plain. in brief any si+ types of plans. # 22What do you mean by strategy? *+plain its characteristics # 23What are the steps ta(en by management in the planning process? # 24/s planning actually worth the huge costs in%ol%ed? *+plain. # 2 'ow does planning facilitate control? 2ustify your answer with the help of suitable e+ample #

4 ESTIO# !A#C FOR XII COMMERCE AS PER C/!/SE/ PATTER# S !"ECT ! SI#ESS ST $IES M.* + Eours 9eneral 'nstruction: A answer to 1uestions carr)ing % mark ma) be from one word to one sentence. ! ans%er to &'estions carrying ( mar)s may *e from +,--+ %or.s / C Ans%er to &'estions carrying 0-+ mar)s may *e a*o't 1+, %or.s/ $ Ans%er to &'estions carrying 2 mar)s may *e a*o't 3,, %or.s/ -----------------------------------------------------------------------------------------------------------------------------% F 's planning is mental e,ercise6 % ( F. Define Polic)6 + F..tate any t%o points of the importance of the planning/ 1 0 4/ 5hat is meant *y signal 'se plan8 1 + 4/5hy planning is )no%n as 6f't'ristic78 1 2 4/:oe .oes planning helps in controlling 8 1 - 4 @i9e one e<ample of *'.get/ 1 ; 4/ 5hy is planning pre9asi9e8 1 = 4/ At %hat le9el of management the f'nction of planning is consi.ere.8 1 1,/4 #ame the first or primary f'nction of management/ 1 % M.M %>>

114 >Planning is for%ar. loo)ing /? e<plain ( 134 5hy planning regar.e. as a contin'o's process8 ( 1(4 %hat is meant *y programme as a type of plan8 ( 104 ho% .oes planning foc's on achie9ing o*Aecti9es/ E<plain/ ( 1+ 4 %hat )in. of strategic .ecisions are ta)en *y *'siness organiDations8 ( 124 :o% .oes planning esta*lish stan.ar.s for controlling8/E<plain/ 0 1-4 Planning pro9i.es .irection/ E<plain/ 0 1;/4 Planning in9ol9es .ecision ma)ing/ E<plain/ 0 1=/4 En'merate the feat'res of planning/ 0 3, 4 5hat is *'.get8 @i9e the types of *'.get/ 0 315hat is the meaning of planning8 E<plain any fi9e limitations of planning/ + 33 4/ 5hat is the .ifference *et%een policy an. o*Aecti9es + 3( 4/ 5hat is proce.'re8 E<plain it %ith the e<ample8 + 30 4 $efine policy/ :oe .oes policy .iffer from r'les/ + 3+ 4 5hat is the relationship *et%een planning an. controlling +

32 4 $isc'ss in *rief the components of planning/ 2 3-4 $isc'ss in *rief the steps in a planning process/ 2 3; 4 5hat are the techni&'es of a goo. planning/ 2 3= &E<plain %hy planning is necessary for effecti9e management/ 2 (,4 E<plain the 9ario's types of planning/ 2

E#RIC:ME#T MATERIAL A Techni&'es of goo. planning

1 Ceep aims reasona*le an. attaina*le/ 3)eep aims in *alance *y correct assessment of priorities of *oth *asic planning an. s'pporting action/ ()eep aims fle<i*le an. relate. to o9erall changesB %hich are either li)ely or certain to ta)e place/ 0 )eep a caref'lly .aily chec) on progress against time an. cost sche.'les/ +@et an. )eep pro*lems in9ol9e. in planning in clear perspecti9e *oth in its in.i9i.'al importance an. in its relation to the %hole con.'ct of an operation or of the *'siness/

! 9ario's types of planning

1 Financial an. non financial planning 3 Specific or ro'tine planning/ ( Formal or informal planning/ 0 Short term an. long term planning/ + Profit planning/

C/F'nctions of a so'n. policy

s'n. policies are consi.era*le 9al'e in the smooth r'nning of a *'siness/ Its principal contri*'tion asB s'ggeste. *y Ralph/ $a9is/ Are as follo%sE 1Its ten.s to pre9ent .e9otions from planne. co'rse of action/ 3it promotes intelligent co-operation/ (It facilitates co- or.ination of action/ 0It pro9i.es a g'i.e for .etermining e&'ita*le personnel relations/ +It pro9i.es a g'i.e for thin)ing in f't're planning/

REME$IAL MATERIAL
AProcess of planningF
1Setting the o*Aecti9es 3$e9eloping the premises (I.entifying Alternati9e co'rse of action/ 0 e9al'ating alternati9e co'rse of action 2 Selecting an alternati9e/ - Implementing the plan ; Follo% 'p action/

! Limitations of planning
1 Planning re.'ce creati9ityF 3 planning in9ol9es h'ge costs/ (Planning is a time cons'ming process/ 0Planning .oes not g'arantee of s'ccess/ +Planning .oes not %or) in a .ynamic en9ironment/

C /Importance of planning
1Planning pro9i.es .irection/ 3Planning re.'ce ris) of 'ncertainity / ( planning re.'ce o9erlapping an. %astef'l acti9ities / 0 planning facilitates .ecision ma)ing/ +planning esta*lishes stan.ar.s for controlling /

$ Types of plan
1 o*Aecti9es 3Strategy (Polices

0proce.'re +metho.s 2R'les -*'.get ;Programme

$IFFIC LT CO#CEPT

A Techni&'es of goo. planning ! 9ario's types of planning C Conceot of policy/ $ concept of strategy/ E concept of strategies/

TEAC:I#@ STRATE@IES Follo%ing are the some teaching strategiesF 1 Pro9i.ing for face to face interaction 3 pro9i.ing as many simple e<amples as possi*le to e<plain the concept ( promoting acti9e in9ol9ement of the st'.ent 0 o*ser9ing st'.ents7 response to pro*ing &'estions as %ell as his *eha9ior to ens're contin'o's learning/ +@i9ing assignment on the correcte. learning .iffic'lty to strengthen Learning/