CHAPTER – 4 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. organizing, 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 organization exists.
 Planning is futuristic as it seeks to meet future events effectively to the best advantage of an
organization. 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, visualization
and judgment 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 organizational 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 organization from time-to-time. For example- programs, budgets and
projects.
 Standing plans refer to the other 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 organization. For example—
objectives, strategies, policies, methods, procedures and rules.
On the basis of what a plan seeks to achieve

 Objectives are the end results of the activities that an organization seeks to achieve through
its existence.
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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
  A strategy is a comprehensive plan for achieving the objectives of the organization.
 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 behavior 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 organization and each
department or unit within the organization.
 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 analyze 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.

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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 organization. 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 organization. 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 organization seeks to achieve
through its existence. All other activities within the organization are directed towards achieving
these objectives. Objectives are based on the mission or philosophy of the organization.
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.

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
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 its 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 analyzing various options for starting
her business venture, they short listed the option to sell readymade and ‘ready to make’ vegetable
shakes and sattu milk shakes. Then, they weighed the pros and cons of both the short listed options.

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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 dynamic in
nature. Every organization 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 some time 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 Rs. 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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 1. Objectives: Objectives are the end results of the activities that-an organization seeks to achieve
through its existence. All other activities within the organization 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 Don’ts that
guide the behavior 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. 100 per day for not wearing caps, gloves
and aprons was announced.”
5. Budget: A budget refers 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 quarter.”

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 Rs. 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 organization seeks to achieve
through its existence. All other activities within the organization 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.”

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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 behavior 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 demonetization. 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 demonetization?
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

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
Question 2.
The term demonetization 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 demonetized 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 demonetize the Rs. 500 and Rs. 1000 bank notes began six to ten months prior to
the public announcement and was kept highly confidential. The cabinet was informed about the
demonetization 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 demonetization in a televised address
where he announced that currency notes with the denomination of Rs. 500 and Rs. 1000 would cease to
be the legal tender from 9th of November 2016. The most interesting thing regarding the
demonetization 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
demonetization.
Answer:
The various types of plans being discussed in the above lines with regard to demonetization 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.

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
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 organization seeks to achieve
through its existence. All other activities within the organization 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 organization.
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 Rs. 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 behavior 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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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:
Basis Rule Method

Rules are specific statements that tell Methods define the way of doing
Meaning
people what should or should not be done. routine or respective job.

Violation of rules may lead to imposition of Method does not involve any
Violation
penalties. penalties on violation.

Methods help in carrying out the

Purpose Rules help to maintain discipline.
job efficiently.

Methods are specific (well

Nature Rules are both specific and rigid.
defined) but flexible.

Method of payment of fee-

Example No smoking, No Parking etc.
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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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

It is a series of chronological
Policies are general statements that guide
Meaning steps which are performed to
managerial decision making.
do a particular activity.

It is determined by lower and

Level of management It is determined by top level management.
middle level management.

Expression It is a general statement. It is a specific statement.

Manager’s There is no scope for

It provides scope for managerial discretion.
Discretion managerial discretion.

Policies are framed to achieve the

A procedure is framed to
Purpose objectives of an organization. They all guide
implement a policy.
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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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:
S. No. Basis Objectives Strategy

Objectives are the end results of

A strategy is a comprehensive
the activities that an organisation
1. Meaning plan prepared for winning over
seeks to achieve through its
the given challenge or problem.
existence.

Objectives are based on the

A strategy is based on the
2. Source mission or philosophy of the
objectives of the organisation.
organisation.

A strategy may be determined

Level of persons Objectives are determined by top
3. by top level or middle level
involved level management.
management.

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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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 organization’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 organization 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

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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 organize, 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
judgment 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:
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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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 judgment rather than wishful thinking or guess work.
“While preparing the sales forecasts, he undertakes intellectual thinking involving foresight,
visualization and issued judgment 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 organization 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:

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA
 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 Rs. 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 organization 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 organization. These include
objectives, strategies, policies, procedures methods and rules.

================================================================THANK YOU============

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DEEPAK KUMAR SONI (PGT – COMMERCE) K.V. ITARANA