NCERT Solutions - Planning

Very Short Answer Type Questions

Q2: A company wants to increase its market share from the present 10% to 25%  to have a dominant position in the market by the end of the next financial year. Ms Rajni, the sales manager has been asked to prepare a proposal that will outline the options available for achieving this objective. Her report included the following options - entering new markets, expanding the product range offered to customers, using sales promotion techniques such as giving rebates, discounts or increasing the budget for advertising activities. Which step of the planning process has been performed by Ms Rajni? 
Ans: Ms Rajni has performed the step of identifying alternative courses of action. By listing options such as entering new markets, expanding the product range and using sales promotions, she has presented different possible ways to achieve the objective. These alternatives can now be evaluated and compared to select the most suitable course of action.

Q3: Why are rules considered to be plans? 
Ans: Rules are considered plans because they are standing plans that specify what must or must not be done in particular situations. They guide behaviour by setting fixed standards, ensure uniformity and discipline across the organisation, and remove discretion in routine matters so that similar situations are handled consistently.

Q4: Rama Stationery Mart has made a decision to make all the payments by e-transfers only. Identify the type of plan adopted by Rama Stationery Mart. 
Ans: Rama Stationery Mart has adopted a policy. A policy is a standing plan that provides a broad guideline for decision-making and actions - here it standardises the mode of payment (e-transfers) to ensure consistency, control and efficiency in payment procedures.

Q5: Can planning work in a changing environment? Give a reason to justify your answer.
Ans: Yes, planning can work in a changing environment provided it is flexible and reviewed regularly. Effective planning includes making forecasts, developing contingency plans, and allowing for periodic revision so that plans can be adjusted when circumstances change. Rigid plans that are not updated may fail in dynamic conditions.

Short Answer Type Questions

1. Setting Objectives: Identifying clear and specific goals to be achieved.
2. Developing Strategies: Deciding the broad methods and approaches to reach those objectives.
3. Course of Action: Selecting concrete steps and alternatives to implement the strategies.
4. Decision-making for the Future: Making choices now to deal with future opportunities and uncertainties.

Q2: If planning involves working out details for the future, why does it not ensure success?
Ans: Planning does not ensure success because:

1. Uncertainty of Future: External factors such as market changes, economic shifts or new technologies can disrupt plans despite careful preparation.
2. Rigidity: Strict adherence to plans can make an organisation inflexible and slow to respond to unforeseen events.
3. Implementation Issues: Even well-designed plans can fail if they are poorly executed, if there is lack of resources, or if employees do not carry them out effectively.

Q3: What kind of strategic decisions are taken by business organisations?
Ans: Strategic decisions taken by business organisations include:

1. Entering New Markets: Deciding to expand into new geographic areas or customer segments.
2. Product Diversification: Launching new products or services to broaden the company's offerings.
3. Technological Advancements: Investing in new technologies to improve products or processes.
4. Competitive Strategy: Choosing pricing, promotion, alliances or other actions to meet competitive challenges.

Q4: Planning reduces creativity. Critically comment.
Ans:

• Planning Promotes Innovative Ideas: The planning process often includes analysis and brainstorming which can generate new ideas and structured innovation. It gives a framework where creative options are compared and selected.
• Planning Reduces Creativity: Excessive formalisation and strict controls imposed by detailed plans may restrict individual initiative and spontaneous problem-solving, thereby limiting creativity.

Comment: A balanced approach is best: plans should provide direction and structure while leaving room for individual initiative and experimentation so creativity is not stifled.

Q5: In an attempt to cope with Reliance Jio's onslaught in 2018, market leader Bharti Airtel refreshed its ₹ 149 prepaid plan to offer 2 GB of 3G/4G data per day, twice the amount it offered earlier. Name the type of plan highlighted in the given example? State its three dimensions also.
Ans: Type of Plan: Strategy.
Three Dimensions of the Plan:

1. Competitive Response: The move was a direct action to meet the competitive threat by matching or improving the rival's offering.
2. Market Retention: It aimed to retain existing customers and prevent loss of market share by offering greater value.
3. Customer Attraction: By increasing the data benefit, the plan sought to attract price-sensitive as well as value-seeking customers to the network.

Q6: State the type of plan and state whether they are Single-use or Standing plan:
(a) A type of plan which serves as a controlling device as well (Budget):

• Type of Plan: Budget
• Plan Type: Single-use plan - A budget is prepared for a specific period and purpose and is used to control and measure performance for that period.

(b) A plan based on research and analysis and is concerned with physical and technical tasks (Method):

• Type of Plan: Method
• Plan Type: Standing plan - A method prescribes a standard procedure to be followed repeatedly and serves as a continual guide for performing technical or routine tasks.

Long Answer Type Questions

1. Rigidity Caused By Planning: When plans are too rigid and insist on strict adherence, managers and employees may be unable to respond flexibly to changing situations. This lack of adaptability can prevent achievement of objectives.
2. Dynamic Environment: The external business environment keeps changing - market conditions, technology, regulations and competitors' actions can alter the feasibility of plans. Planners cannot foresee every change.
3. Restricted Creativity and Initiative: If planning is centralised and detailed instructions come only from top management, lower-level staff may have little scope to innovate or take initiative, which can reduce organisational effectiveness.
4. High Cost of Planning: Preparing detailed plans may require considerable time, money and specialised skills. Sometimes the cost of planning may outweigh the expected benefits.
5. Time-consuming Process: Thorough planning can take a long time, delaying implementation. If plans are outdated by the time they are applied, objectives may not be met.
6. No Guaranteed Success: A plan is only a guide; success depends on effective implementation, monitoring and corrective action. Past success does not ensure future success because conditions and assumptions may change.

Q2: What are the steps taken by management in the planning process? 
Ans: The planning process involves the following steps 

1. Establishing Objectives: Decide clear, specific and realistic goals that the organisation intends to achieve.
2. Developing Premises: Make forecasts and assumptions about future conditions that will affect the plans. These premises form the basis for planning.
3. Identifying Alternative Courses of Action: List different possible ways to achieve the objectives.
4. Evaluating Alternatives: Compare the advantages, disadvantages and feasibility of each alternative in relation to the objectives.
5. Selecting an Alternative: Choose the most suitable course of action that offers the best balance of benefits and feasibility.
6. Implementing the Plan: Put the chosen plan into action by allocating resources, assigning responsibilities and executing tasks.
7. Follow-up and Review: Monitor progress, compare actual results with planned results, and revise the plan as necessary to respond to changes or correct deviations.

Q3: An auto company C Ltd. is facing a problem of declining market share due to increased competition from other new and existing players in the market. Its competitors are introducing lower priced models for mass consumers who are price sensitive. C Ltd. realized that it needs to take steps immediately to improve its market standing in the future. For quality conscious consumers, C Limited plans to introduce new models with added features and new technological advancements. The company has formed a team with representatives from all the levels of management. This team will brainstorm and will determine the steps that will be adopted by the organisation for implementing the above strategy. Explain the features of Planning highlighted in the situation given below.(Hint: Planning is pervasive, Planning is futuristic and Planning is a mental exercise).
Ans: The features of planning highlighted in the given situation are:

1. Planning is Pervasive: C Ltd. has involved representatives from all levels of management in the planning team. This shows that planning is required at every level - top, middle and lower - and applies to the whole organisation.
2. Planning is Futuristic: The company is preparing for future market conditions by deciding to introduce technologically advanced models for quality-conscious consumers. This demonstrates planning's forward-looking nature.
3. Planning is a Mental Exercise: Forming a brainstorming team to examine options and decide steps emphasises that planning involves thinking, analysis and judgement rather than merely following routines. It requires reasoning and decision-making to arrive at effective courses of action.