Important Questions : Planning Class 12 Notes | EduRev

Class 12 : Important Questions : Planning Class 12 Notes | EduRev

 Page 1


 
CHAPTER - 4 
PLANNING 
 
CONCEPT MAPPING 
 
 
Concept : Deciding in advance what to do and how to do it. It involves 
setting objectives and developing an appropriate course of 
action to achieve these objectives. 
 
Importance : (a) provides direction (b) reduces risks of uncertainty (c) 
reduces overlapping and wasteful activities (d) promotes 
innovation (e) facilitates decision making (f) provides standards 
for controlling 
 
Limitations : (a) rigidity (b) reduces creativity (c) huge costs (d) time 
consuming (e) does not guarantee success (f) may not 
work in dynamic environment 
 
Process : (a) setting objectives (b) developing premises (c) identifying 
alternatives (d) evaluating a l t e r n a t i v e s (e) selecting an 
alternative (f) implement the plan (g) follow up action 
 
Types :    (a) objectives (b) strategy (c) policy (d) procedure (e) method  
        (f) rule (g) programme (h) budget 
 
 
KEY CONCEPTS IN NUTSHELL 
 
 
Meaning - It is the process of setting objectives and targets for a given time 
period and formulating an action plan to achieve them effectively and 
efficiently. It concerns itself 
with both ends and means that is what is to be done and how it is to be done. 
 
 
 
 
 
Present 
Position 
Here we 
are 
Planning 
 
Bridges this 
gap 
 
Future position 
where we want 
to reach  
Page 2


 
CHAPTER - 4 
PLANNING 
 
CONCEPT MAPPING 
 
 
Concept : Deciding in advance what to do and how to do it. It involves 
setting objectives and developing an appropriate course of 
action to achieve these objectives. 
 
Importance : (a) provides direction (b) reduces risks of uncertainty (c) 
reduces overlapping and wasteful activities (d) promotes 
innovation (e) facilitates decision making (f) provides standards 
for controlling 
 
Limitations : (a) rigidity (b) reduces creativity (c) huge costs (d) time 
consuming (e) does not guarantee success (f) may not 
work in dynamic environment 
 
Process : (a) setting objectives (b) developing premises (c) identifying 
alternatives (d) evaluating a l t e r n a t i v e s (e) selecting an 
alternative (f) implement the plan (g) follow up action 
 
Types :    (a) objectives (b) strategy (c) policy (d) procedure (e) method  
        (f) rule (g) programme (h) budget 
 
 
KEY CONCEPTS IN NUTSHELL 
 
 
Meaning - It is the process of setting objectives and targets for a given time 
period and formulating an action plan to achieve them effectively and 
efficiently. It concerns itself 
with both ends and means that is what is to be done and how it is to be done. 
 
 
 
 
 
Present 
Position 
Here we 
are 
Planning 
 
Bridges this 
gap 
 
Future position 
where we want 
to reach  
 
Definition - 
 
“Planning seeks to bridge the gap between where we are and where we want 
to go. Planning is a trap to capture the future. 
 
Importance of planning. 
 
i) Provides direction- By stating in advance the future course of action of what is to 
be done and how it is to be done. By stating in advance it facilitates unity of 
direction. 
 
ii) Reduces the risk of uncertainty- By predicting future events and preparing 
the organization to anticipate the future and face unexpected events. 
 
iii)  Facilitates decision making-planning helps the manager to look into the future 
and make a sound judgment or choice from among the various alternatives. 
 
iv)  Reduces overlapping and wasteful activities-Through elimination and 
minimization of useless and redundant activities facilitating clarity. 
 
v)  Promotes innovative ideas- Through better new methods, ideas and procedures 
to reach the objectives and goals of the enterprise. It induces the management to 
predict the changes in the environment and accordingly plan the strategies for 
the same . 
 
vi. E s t a b l i s h e s standard for controlling- “control is blind without planning”. 
It helps provide standard against which the actual performance are compared 
and evaluated to estimate the deviations. 
 
Limitations of planning: 
 
i. Planning does not work in a dynamic environment - Planning also has to 
work amidst the influence of external environment which can render even the 
most effective plan inoperative. 
 
ii. Planning is a time consuming process as it requires collection of information, 
its analysis and interpretation. It becomes a difficult exercise in times of 
unexpected emergencies. 
 
iii. I t involves huge cost in its formulation. As a lot of money needs to be expended 
in the collection, analysis and interpretation of data 
 
iv. I t creates rigidity in the mode of functioning. As the employees are required 
to function as per the dictates of the predetermined policy. 
 
v. It does not guarantee success, as a wrong or a misconceived plan or a well 
drawn plan when not implemented can lead to failure. 
 
vi.  It reduces creativity as the middle level managers and the other decision 
makers have to only follow and are not allowed to deviate from the plans. 
 
vii. The human element can give way to errors or mistakes through wrong 
assumptions. 
 
Page 3


 
CHAPTER - 4 
PLANNING 
 
CONCEPT MAPPING 
 
 
Concept : Deciding in advance what to do and how to do it. It involves 
setting objectives and developing an appropriate course of 
action to achieve these objectives. 
 
Importance : (a) provides direction (b) reduces risks of uncertainty (c) 
reduces overlapping and wasteful activities (d) promotes 
innovation (e) facilitates decision making (f) provides standards 
for controlling 
 
Limitations : (a) rigidity (b) reduces creativity (c) huge costs (d) time 
consuming (e) does not guarantee success (f) may not 
work in dynamic environment 
 
Process : (a) setting objectives (b) developing premises (c) identifying 
alternatives (d) evaluating a l t e r n a t i v e s (e) selecting an 
alternative (f) implement the plan (g) follow up action 
 
Types :    (a) objectives (b) strategy (c) policy (d) procedure (e) method  
        (f) rule (g) programme (h) budget 
 
 
KEY CONCEPTS IN NUTSHELL 
 
 
Meaning - It is the process of setting objectives and targets for a given time 
period and formulating an action plan to achieve them effectively and 
efficiently. It concerns itself 
with both ends and means that is what is to be done and how it is to be done. 
 
 
 
 
 
Present 
Position 
Here we 
are 
Planning 
 
Bridges this 
gap 
 
Future position 
where we want 
to reach  
 
Definition - 
 
“Planning seeks to bridge the gap between where we are and where we want 
to go. Planning is a trap to capture the future. 
 
Importance of planning. 
 
i) Provides direction- By stating in advance the future course of action of what is to 
be done and how it is to be done. By stating in advance it facilitates unity of 
direction. 
 
ii) Reduces the risk of uncertainty- By predicting future events and preparing 
the organization to anticipate the future and face unexpected events. 
 
iii)  Facilitates decision making-planning helps the manager to look into the future 
and make a sound judgment or choice from among the various alternatives. 
 
iv)  Reduces overlapping and wasteful activities-Through elimination and 
minimization of useless and redundant activities facilitating clarity. 
 
v)  Promotes innovative ideas- Through better new methods, ideas and procedures 
to reach the objectives and goals of the enterprise. It induces the management to 
predict the changes in the environment and accordingly plan the strategies for 
the same . 
 
vi. E s t a b l i s h e s standard for controlling- “control is blind without planning”. 
It helps provide standard against which the actual performance are compared 
and evaluated to estimate the deviations. 
 
Limitations of planning: 
 
i. Planning does not work in a dynamic environment - Planning also has to 
work amidst the influence of external environment which can render even the 
most effective plan inoperative. 
 
ii. Planning is a time consuming process as it requires collection of information, 
its analysis and interpretation. It becomes a difficult exercise in times of 
unexpected emergencies. 
 
iii. I t involves huge cost in its formulation. As a lot of money needs to be expended 
in the collection, analysis and interpretation of data 
 
iv. I t creates rigidity in the mode of functioning. As the employees are required 
to function as per the dictates of the predetermined policy. 
 
v. It does not guarantee success, as a wrong or a misconceived plan or a well 
drawn plan when not implemented can lead to failure. 
 
vi.  It reduces creativity as the middle level managers and the other decision 
makers have to only follow and are not allowed to deviate from the plans. 
 
vii. The human element can give way to errors or mistakes through wrong 
assumptions. 
 
 
viii. It is prone to external influences which can reduce its impact like natural 
calamity, technology changes, policy changes, competition. 
 
 
 
Steps in planning process 
 
i. Setting up objectives: The process begins with identifying and setting up of 
objectives. 
It determines where to reach. The organizational objectives arrived at should 
be measurable, understandable, clear and attainable. 
ii. Developing planning premises - Premises involve making assumptions 
relating to future conditions. It provides relevant facts and information relating to 
future conditions. Hence sound estimates or forecast need to be made. 
 
iii.  Identifying alternative course of action : The planner now arrives at the 
various alternatives for performance of a task and evaluate the probable 
consequence of each option. 
 
iv.  Evaluating the alternative course - The positive and negative impact of each 
option in light of cost, risk and benefits is worked out. 
 
v. Selecting the best alternative - This is actually the stage of decision making 
where the most suitable course of action is selected .The selected alternative is 
obviously the one which is most feasible, profitable and has least negative 
impact. 
 
vi.  Implementing the plan : The plan is transformed into action by activating the 
other managerial function involving organizing various resources and securing 
cooperation and participation of other members of the organization. 
vii. Follow up plan : This final culminating step involves reviewing the existing 
plan for its relevance and effectiveness. 
 
Page 4


 
CHAPTER - 4 
PLANNING 
 
CONCEPT MAPPING 
 
 
Concept : Deciding in advance what to do and how to do it. It involves 
setting objectives and developing an appropriate course of 
action to achieve these objectives. 
 
Importance : (a) provides direction (b) reduces risks of uncertainty (c) 
reduces overlapping and wasteful activities (d) promotes 
innovation (e) facilitates decision making (f) provides standards 
for controlling 
 
Limitations : (a) rigidity (b) reduces creativity (c) huge costs (d) time 
consuming (e) does not guarantee success (f) may not 
work in dynamic environment 
 
Process : (a) setting objectives (b) developing premises (c) identifying 
alternatives (d) evaluating a l t e r n a t i v e s (e) selecting an 
alternative (f) implement the plan (g) follow up action 
 
Types :    (a) objectives (b) strategy (c) policy (d) procedure (e) method  
        (f) rule (g) programme (h) budget 
 
 
KEY CONCEPTS IN NUTSHELL 
 
 
Meaning - It is the process of setting objectives and targets for a given time 
period and formulating an action plan to achieve them effectively and 
efficiently. It concerns itself 
with both ends and means that is what is to be done and how it is to be done. 
 
 
 
 
 
Present 
Position 
Here we 
are 
Planning 
 
Bridges this 
gap 
 
Future position 
where we want 
to reach  
 
Definition - 
 
“Planning seeks to bridge the gap between where we are and where we want 
to go. Planning is a trap to capture the future. 
 
Importance of planning. 
 
i) Provides direction- By stating in advance the future course of action of what is to 
be done and how it is to be done. By stating in advance it facilitates unity of 
direction. 
 
ii) Reduces the risk of uncertainty- By predicting future events and preparing 
the organization to anticipate the future and face unexpected events. 
 
iii)  Facilitates decision making-planning helps the manager to look into the future 
and make a sound judgment or choice from among the various alternatives. 
 
iv)  Reduces overlapping and wasteful activities-Through elimination and 
minimization of useless and redundant activities facilitating clarity. 
 
v)  Promotes innovative ideas- Through better new methods, ideas and procedures 
to reach the objectives and goals of the enterprise. It induces the management to 
predict the changes in the environment and accordingly plan the strategies for 
the same . 
 
vi. E s t a b l i s h e s standard for controlling- “control is blind without planning”. 
It helps provide standard against which the actual performance are compared 
and evaluated to estimate the deviations. 
 
Limitations of planning: 
 
i. Planning does not work in a dynamic environment - Planning also has to 
work amidst the influence of external environment which can render even the 
most effective plan inoperative. 
 
ii. Planning is a time consuming process as it requires collection of information, 
its analysis and interpretation. It becomes a difficult exercise in times of 
unexpected emergencies. 
 
iii. I t involves huge cost in its formulation. As a lot of money needs to be expended 
in the collection, analysis and interpretation of data 
 
iv. I t creates rigidity in the mode of functioning. As the employees are required 
to function as per the dictates of the predetermined policy. 
 
v. It does not guarantee success, as a wrong or a misconceived plan or a well 
drawn plan when not implemented can lead to failure. 
 
vi.  It reduces creativity as the middle level managers and the other decision 
makers have to only follow and are not allowed to deviate from the plans. 
 
vii. The human element can give way to errors or mistakes through wrong 
assumptions. 
 
 
viii. It is prone to external influences which can reduce its impact like natural 
calamity, technology changes, policy changes, competition. 
 
 
 
Steps in planning process 
 
i. Setting up objectives: The process begins with identifying and setting up of 
objectives. 
It determines where to reach. The organizational objectives arrived at should 
be measurable, understandable, clear and attainable. 
ii. Developing planning premises - Premises involve making assumptions 
relating to future conditions. It provides relevant facts and information relating to 
future conditions. Hence sound estimates or forecast need to be made. 
 
iii.  Identifying alternative course of action : The planner now arrives at the 
various alternatives for performance of a task and evaluate the probable 
consequence of each option. 
 
iv.  Evaluating the alternative course - The positive and negative impact of each 
option in light of cost, risk and benefits is worked out. 
 
v. Selecting the best alternative - This is actually the stage of decision making 
where the most suitable course of action is selected .The selected alternative is 
obviously the one which is most feasible, profitable and has least negative 
impact. 
 
vi.  Implementing the plan : The plan is transformed into action by activating the 
other managerial function involving organizing various resources and securing 
cooperation and participation of other members of the organization. 
vii. Follow up plan : This final culminating step involves reviewing the existing 
plan for its relevance and effectiveness. 
 
 
 
Types of plans: 
 
(A)  Standing or Repeatedly used Plans: As their name indicates that these plans are 
formulated once and they are repeatedly used.  These plans continuously guide 
the managers.  That is why it is said that a standing plan is a standing guide to 
recurring problems.  These plans include : 
 
1. Objectives 
2. Strategies 
3. Policies 
4. Procedures 
5. Methods  and 
6. Rules 
 
(B)    Single –use or Special or Adhoc Plans:  These plans are connected with some 
special problem.  These plans end the moment the problems are solved.  After 
having been used once there is no importance of these plans and in future, 
whenever they are needed they are re-created.  These plans include  
 
1. Budget   and  
2. Programme. 
Differences between Standing and Single-use Plans 
 
Basis Standing Plans Single-use Plans 
1. Period 
These plans are formulated for a 
long period 
These plans are for a short period 
and are repeatedly formulated in 
case of need. 
2. Object 
These plans are formulated to bring 
uniformity in decisions 
These plans are designed to run 
successfully some particular 
activities 
Page 5


 
CHAPTER - 4 
PLANNING 
 
CONCEPT MAPPING 
 
 
Concept : Deciding in advance what to do and how to do it. It involves 
setting objectives and developing an appropriate course of 
action to achieve these objectives. 
 
Importance : (a) provides direction (b) reduces risks of uncertainty (c) 
reduces overlapping and wasteful activities (d) promotes 
innovation (e) facilitates decision making (f) provides standards 
for controlling 
 
Limitations : (a) rigidity (b) reduces creativity (c) huge costs (d) time 
consuming (e) does not guarantee success (f) may not 
work in dynamic environment 
 
Process : (a) setting objectives (b) developing premises (c) identifying 
alternatives (d) evaluating a l t e r n a t i v e s (e) selecting an 
alternative (f) implement the plan (g) follow up action 
 
Types :    (a) objectives (b) strategy (c) policy (d) procedure (e) method  
        (f) rule (g) programme (h) budget 
 
 
KEY CONCEPTS IN NUTSHELL 
 
 
Meaning - It is the process of setting objectives and targets for a given time 
period and formulating an action plan to achieve them effectively and 
efficiently. It concerns itself 
with both ends and means that is what is to be done and how it is to be done. 
 
 
 
 
 
Present 
Position 
Here we 
are 
Planning 
 
Bridges this 
gap 
 
Future position 
where we want 
to reach  
 
Definition - 
 
“Planning seeks to bridge the gap between where we are and where we want 
to go. Planning is a trap to capture the future. 
 
Importance of planning. 
 
i) Provides direction- By stating in advance the future course of action of what is to 
be done and how it is to be done. By stating in advance it facilitates unity of 
direction. 
 
ii) Reduces the risk of uncertainty- By predicting future events and preparing 
the organization to anticipate the future and face unexpected events. 
 
iii)  Facilitates decision making-planning helps the manager to look into the future 
and make a sound judgment or choice from among the various alternatives. 
 
iv)  Reduces overlapping and wasteful activities-Through elimination and 
minimization of useless and redundant activities facilitating clarity. 
 
v)  Promotes innovative ideas- Through better new methods, ideas and procedures 
to reach the objectives and goals of the enterprise. It induces the management to 
predict the changes in the environment and accordingly plan the strategies for 
the same . 
 
vi. E s t a b l i s h e s standard for controlling- “control is blind without planning”. 
It helps provide standard against which the actual performance are compared 
and evaluated to estimate the deviations. 
 
Limitations of planning: 
 
i. Planning does not work in a dynamic environment - Planning also has to 
work amidst the influence of external environment which can render even the 
most effective plan inoperative. 
 
ii. Planning is a time consuming process as it requires collection of information, 
its analysis and interpretation. It becomes a difficult exercise in times of 
unexpected emergencies. 
 
iii. I t involves huge cost in its formulation. As a lot of money needs to be expended 
in the collection, analysis and interpretation of data 
 
iv. I t creates rigidity in the mode of functioning. As the employees are required 
to function as per the dictates of the predetermined policy. 
 
v. It does not guarantee success, as a wrong or a misconceived plan or a well 
drawn plan when not implemented can lead to failure. 
 
vi.  It reduces creativity as the middle level managers and the other decision 
makers have to only follow and are not allowed to deviate from the plans. 
 
vii. The human element can give way to errors or mistakes through wrong 
assumptions. 
 
 
viii. It is prone to external influences which can reduce its impact like natural 
calamity, technology changes, policy changes, competition. 
 
 
 
Steps in planning process 
 
i. Setting up objectives: The process begins with identifying and setting up of 
objectives. 
It determines where to reach. The organizational objectives arrived at should 
be measurable, understandable, clear and attainable. 
ii. Developing planning premises - Premises involve making assumptions 
relating to future conditions. It provides relevant facts and information relating to 
future conditions. Hence sound estimates or forecast need to be made. 
 
iii.  Identifying alternative course of action : The planner now arrives at the 
various alternatives for performance of a task and evaluate the probable 
consequence of each option. 
 
iv.  Evaluating the alternative course - The positive and negative impact of each 
option in light of cost, risk and benefits is worked out. 
 
v. Selecting the best alternative - This is actually the stage of decision making 
where the most suitable course of action is selected .The selected alternative is 
obviously the one which is most feasible, profitable and has least negative 
impact. 
 
vi.  Implementing the plan : The plan is transformed into action by activating the 
other managerial function involving organizing various resources and securing 
cooperation and participation of other members of the organization. 
vii. Follow up plan : This final culminating step involves reviewing the existing 
plan for its relevance and effectiveness. 
 
 
 
Types of plans: 
 
(A)  Standing or Repeatedly used Plans: As their name indicates that these plans are 
formulated once and they are repeatedly used.  These plans continuously guide 
the managers.  That is why it is said that a standing plan is a standing guide to 
recurring problems.  These plans include : 
 
1. Objectives 
2. Strategies 
3. Policies 
4. Procedures 
5. Methods  and 
6. Rules 
 
(B)    Single –use or Special or Adhoc Plans:  These plans are connected with some 
special problem.  These plans end the moment the problems are solved.  After 
having been used once there is no importance of these plans and in future, 
whenever they are needed they are re-created.  These plans include  
 
1. Budget   and  
2. Programme. 
Differences between Standing and Single-use Plans 
 
Basis Standing Plans Single-use Plans 
1. Period 
These plans are formulated for a 
long period 
These plans are for a short period 
and are repeatedly formulated in 
case of need. 
2. Object 
These plans are formulated to bring 
uniformity in decisions 
These plans are designed to run 
successfully some particular 
activities 
 
3.Types 
They are of six types i. Objectives ii. 
Strategies iii. Policies iv. Procedures 
v. Methods and vi. Rules 
They are of two types i. Budgets 
and ii. Programmes 
4.Scope 
They guide the managers in 
particular matters like price policy 
and sales policy 
These plans guide in matters of 
daily routine. 
5. Basis 
They are based on the main 
objectives of the organisaton 
They are based on the standing 
plans of the oorganisation. 
 
 
1) Objectives - Are the ends which the management seeks to achieve by its operation. 
 
• Represent the end point of management. 
 
• Set by top management. 
 
• Defines the future state of affairs. 
 
• Guides the overall business planning. 
 
• Can be expressed in specific terms. They can be measured . 
2) Strategy - Provides broad shape of organization’s business, refers to the future 
decisions defining the organization’s directions and scope in the long run. 
 
• It involves a comprehensive plan which covers the determination of long term 
objectives, adoption of a particular course of action and allocation of resources. 
 
3) Policies - are general statements which guide thinking in decision making. 
 
• They are based on objectives. 
 
• They guide managerial action and decisions. 
 
• They exist at all levels and departments of the organization. 
 
4) Procedures - Are a chronological sequence of routine steps on how to carry an 
activity. 
They detail the exact manner in which the work is to be performed. 
 
• It is meant for the insiders to follow. 
 
• Policies and procedures are interlinked. 
 
5) Rules - Are specific statements that inform what is to be done. 
 
• Reflects managerial decision. 
 
• Simplest plan. 
 
• They are to be enforced rigidly. 
 
6) Methods - Are standardized ways or manners in which a task has to be 
performed considering the objectives. 
 
• Selection of a proper method saves time, money and effort. 
 
7) Programmes - Detailed statements which are combination of goals, policies, 
procedures, rules tasks, human and physical resources required and the budget to 
implement any course of action.. All these plans together form a programme. 
 
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