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					         Chapter ---Planning, Class XII commerce, Subject Business Studies

                                       NAME OF THE TEACHER –SHIKHA(PGT COMMERCE)

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 O’donnell,” Planning is deciding in advance What to do , how to do it, when to
do it, and who is to do it.”

Characteristics of planning

1 Planning focuses on achieving the objectives: Management begins with planning and planning begins
with the determining of objectives. In the absence of objectives no organization can ever be thought

2 Planning is the primary function of Management: Planning is the first important function of
management. The other functions –organising, staffing, directing and controlling come later. In the
absence of planning no other function of management can be performed.

3 planning is continuous: Planning is the process which begins with the beginning of business itself and
ends with the ending of the business. It means that as long a business exists, the planning process
is continuous.

For example , a company plans to sell one lakh units in the coming year. Suddenly, many
competing companies enter the market. This will naturally affect the previous position of the
company and , therefore ,it shall have to revise its planning.

4. Planning is Futuristic: Planning decides the plan of action-What is to be done, how is to be
done, when is to be done, by who is to be done, all the questions are related to future. Under
the planning, answer to these questiona is found out. While an effort is made to find out these

5. Planning is mental exercise: planning is known as a mental exercise as it is related to thinking
before doing something. A planner has mainly to think about the following questions:

(1) What to do? ,             (2) how to do it? , (3)When to do it? , (4) Who is to do it?
Importance of planning
Planning is the first and most important function of the management. It is needed at every level
of the management. In the absence of planning all the business activities of the organization
will become meaningless. The importance of planning has increased all the more in view of the
increasing size of organizations In the absence of planning, it may not be impossible but
certainly difficult to guess the uncertain events of future.

1 Planning facilitates Decision making: Decision making means the process of taking decision.
Under it, a variety of alternatives are discovered and the best alternative is chosen. But it is
important to determine the objectives before the discovery of alternatives. Objectives are
determined under the process of planning. So. it can be said that planning facilitates decision

2 Planning reduce risk of Uncertainty: planning is always done for future and future is
uncertain. With the help of planning possible changes in future are anticipated and various
activities are planned in the best possible way.

3. Planning reduces overlapping and wasteful activities: Under planning, future activities are
planned in order to achieve objectives. the problems of when, where ,what and almost
decided. This puts an end to disorder. In such situation coordination is established among
different activities and departments. It puts an end ot overlapping and wasteful activities.

4. Planning provides Direction: Under the process of planning the objectives of the
organization are defined in simple and clear words. The outcome of this is that all the
employee’s important role in the attainment of the objectives of the organization.

5 Planning establishes Standards for controlling: By determining the objectives the objectives
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. Standards are laid down
about their work, time and cost. Under controlling ,at the time of completing the work,the
actual work done is compared with the standard work and deviations 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. Some people think that
planning is based on the future and nothing can be said certainty about future. Therefore, it is

for all the situations before and which now requires immediate decision. In such situation if the
useless process. If planning has to be successful and purposeful, the managers should be aware
of these difficulties and limitations of planning.Following are the limitations of planning.

1 Planning does not work in Dynamic Environment: Planning is based in the future happenings.
Since future is uncertain and dynamic. Generally, a longer period of planning makes it less
effectives. Therefore, it can be said that planning does not work in dynamic environment.

2 Planning reduce creativity: Under the planning

All the activities connected with the attainment of objectives of the organization are pre-
determined. Everybody works as they have been directed to do and it has been made clear in
the plans. it means that they do not think about appropriate ways of discovering new

3 Planning involves huge costs: Planning is small work but its process is really big. Planning
becomes meaningful after a long path. It takes a lot of time to cover this path. During this entire
period the managers remain busy in collecting a lot of information and analyzing it. In this way
the organization is bound to face huge costs.

4 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. Sudden emergencies can be in the
form of unforeseen problems or some opportunity of profit is and there has been no planning
manager thinks of completing the planning process before taking some decision. Thus, planning
is time consuming process.

5Planning does not guarantee of success: Some times the manager think that planning solves all
their problems. Such a think makes them neglect their real work and adverse effect of such an
attitude has to be faced by the organization. In this way, planning planning offers the managers
a false sense of security and makes them careless. So, we can that mere planning does not
ensure successs,rather efforts have to be made for it.
                                           Planning process
When we look at planning in the context of management process, it is called activity , it is being
a part of management. But on the other hand, when it is studied separately it is called a
process because to complete one has to clear many steps one after the other. So far as the
number of steps included in the planning process is concerned it depends on the size of the
organization. Different organization can have different planning process.The following steps are
generally taken in the business organization during the planning process.

1 Setting the objectives; Objectives are those end points for whose attainment all the activities
are taken. In the planning process objectives are determined and defined first of all so that all
the employees concerned can be informed about them to get their complete cooperation.
Objectives have a hierarchy of their own organizational objectives, departmental objectives,
and individual objectives.

2 Developing the premises: the basis of planning is those factors which influence the possible
results of different alternatives. Before taking a final decision about any alternative a forecast
of this assumption is made. The rate of success of planning will be in direct proportion to the
rate of the success of forecasting. The assumption of planning is two types:

   (1) Internal premises: capital, labour, raw material, machinery ect.
   (2) External premises; Government polices, business competition, taste of customer rate of
       taxes. ect.

3 Identifying alternative course of action: Generally, there is no work which has no alternative
method of doing it. On the basis of the objectives of the organization and limitations of
planning, alternative course of doing a particular work can be discovered.

4 Evaluating alternative courses: All those alternative courses which are up to the expectations
of the minimum preminary criteria are selected for intensive study. it will be seen as to what
extent a particular alternative course can help in the attainment of the objectives of the
organizations. There is however, one problem which confronts us while analysing these
alternative courses. Every alternatives course has its merits and demerits.

5 Selecting an alternative: alternative a careful analysis of different alternatives the best one is
selected. Sometimes the analysis yields more than one alternative course with similar merits.

Keeping in view the uncertainties of future it is justifiable to select more than one good
alternative course One of such alternative is adapted and other is kept in reserve.
6 Implementing the plan: After having decided the chef plan and the subsidiary plans, they are
to be implemented. After implementing the plans the sequence of different activities has to be
decided. In other words, it is decided as to who will do a particular job and at what time.

 7. Follow up Action: the process of planning does not end with the implementation of plans.
   plans are formulated for future which is uncertain. It is of great importance that there is a
  constant review of plans so as to ensure success in the uncertain future. The moment there
appears to be changes in the plans also. In this way we can say planning is Continuously moving

                                     Types of plans
Planning is a process and plan is its outcome. Plan is a sort of commitment to accomplish all the
activities needed for the attainment of special results, from this point of view there are many
plans. The following study will help in understanding different kinds of plans.

1Objectives: objectives are those end points for the attainment of which all the activities are


Following are the examples of objectives:

(I )To improve the communication system to hold regular staff meeting and publish a

   (2)To cross the 20,0 00 crore mark in turnover of soaps.

   (3) To make available the employment to 100 people every year.
   (4) To reduce quality rejects to 3%

2 Strategies: Strategies refer to those plans which are prepared in view of the move of the
competitors and whose objective is to make possible the optimum utilization of resources.

3. Policies; Polcies are those general statements which are decided for the guidance of the
employees while taking decision. Their purpose is laying down a limit within which a particular
work can be done or decision taken. Objectives decide what is to be achieved and the policies
tell us how it can be achieved.

4Procedures : Procedures are those plans which determine the sequence of any work
performance. For example, the recovery of money from the debtors can be done in the
following order:
(a) Writing letters, (b) connecting on telephone, (c) Meeting personally,(d0 taking legal

This is the procedure of collecting money from all the debtors. There is a difference
between policies and procedures.. There can be two policies of the organization regarding
the recovery of money from the debtors. (A) Tight collection policy, and (B) Lenient
collection policy. Under the first policy an effort is made to recover money from debtors is
by treating him harshly. Under the second policy the debtors will be given enough time for
the payment of money while treating him leniently.

5 methods. Methods is that plan which determines how different activities of the procedure
are completed. Methods is not related to all steps but only to one step of the procedure . it
is more detailed than procedure . there may be many methods to do a particular work.
After extensive study, a method has to be selected from which a worker feels minimum
fatique, increase in productivity and there is reduction in costs.

6 Rules: Rules till us what is to be done and what is not to be done in particular situation. In
the absence of rules there is no need to take any decision. Whatever is said in the rules has
to be followed without any thinking. For example, the rule “ No smoking in the factory “is
applicable to everybody and it must be observed. Provision for punishment in case of non-
observing of the rule can also be made.

7Budget: Budgets describe the desired results in numerical terms. A budget is that planning
which provides detailers about estimated money, material time and other resources for the
achievement of pre determined objectives of various departments. For example, the sales
departmen’sbudget gives estimated figures about the type of material that will be
purchased, its quantity, the time of purchase and the amount to be spent on it. Similarly,
budget of other departments are also prepared.

8 Programmers: a programme means a single-use comprehensive plan laying down the
what, how who and when of accomplishing a specific job. through program me the
managers are informed in advance about various needs so that there is no problem in
future. The programmers can be different types-production programme, Training
programme Sales promotion programme management developing programme.etc.

                       SUBJECT BUSINESS STUDIES

M.T 3 Hours                                                            M.M 100

General Instruction;

A answer to questions carrying 1 mark may be from one word to one sentence.

B answer to questions carrying 3 marks may be from 50-75 words .

C Answer to questions carrying 4-5 marks may be about 150 words.

D Answer to questions carrying 6 marks may be about 200 words.

E Attempt all parts of a question together.

1 Q. Why planning is known as ‘futuristic’?                                          1

2 Q. State any two points of the importance of the planning.                         1

3 Q. how the happening of ‘overlapping and wasteful activities’ can be reduced?      1

4 Q. At which level management is considered a base for all other functions. Name that

function.                                                                            1

   5 Q. What is method?                                                                  1

   6 Q. How does planning restrict creativity?                                           3

7 Q. How does planning provides direction                                            3

8 Q. Explain briefly any three limitations of planning.                              3

9 Q. Explains the programme with the example.                                        3

10 Q. “planning is continuous process.” Comment.                                     3

11 Q. What is budget? Give an example of a sales budget.                             4

12 Q “No smoking in the factory “ is rule. Comment on it.                            4

13 Q. Clarify the meaning of objectives with the help of an example.                 4

14 Qdo you think planning can work in a changing environment?                        4
15.Q. What is meant by policy as a type of plan?                                       5

16. Q.Differentiate between the rule and policy through an example.                    5

17 Q. What is the meaning of planning? Explain any five Characteristics of planning.   5

18 Q. What is the difference between policy and procedure?                             5

19 Q. What is procedure? Explain it with the example?                                  5

20 Q.What are the qualities or requirements of objectives?                             5

21 Q. What steps are taken by management in the planning?                              6

22 Q. Explain, in brief any six types of plans.                                        6

23 Q. “Planning is not a guarantee of success if business.” Comment.                   6

24 Q. What is the relationship between planning and controlling?                       6

25What are the techniques of good planning?                                            6
                             SAMPLE PAPERS FOR XII COMMERCE

                       SUBJECT BUSINESS STUDIES

M.T 3 Hours                                                            M.M 100

General Instruction;

A answer to questions carrying 1 mark may be from one word to one sentence.

B answer to questions carrying 3 marks may be from 50-75 words .

C Answer to questions carrying 4-5 marks may be about 150 words.

D Answer to questions carrying 6 marks may be about 200 words.

1 What is meant by singal use plan.?                                             1

2 is planning a mental exercise?                                                 1

3how does planning helps in controlling?                                         1

4Define policy.?                                                                 1

5What is an ideal plan?                                                          1

6How does planning promote innovative ideas?                                     3

7 How does planning focus on achieving objectives? Explain.                      3

8Why planning regarded as a continuous process.                                  3

9 Enumerate the features of planning.                                            3

10 ‘ planning is forward looking” Explain.                                       3

11 give any six limitations of planning.                                         4

12 What are the qualities of objectives?                                         4

13 What is budget? Explain with example.                                         4

14 How does planning establish standards for controlling? Explain.               4

15 Give the difference between rules and methods.                                5

16 What is the meaning of planning? give the importance of planning.             5
17 planning reduces overlapping and wasteful activities. Explain.   5

18 Distinguish between objectives and policy.                       5

19What are the characteristics of sound policy.                     5

20 Planning is not the guarantee of success. Explain.               5

21 Give the process of planning.                                    6

22 Explain. any six importance of planning.                         6

23Discuss the essential elements of planning.                       6

24.Define policy. How do policies differ from rules.                6

25 planning is the basic function of management. Explain.           6
                                            CASS XII COMMERCE
                          MODEL TEST PAPER BUSSINESS STUDIES

Time Allowed; 3 Hours                                       M.M:100
1. Answer to questions carrying 1 mark may be from one word to one sentence.
2 answer to question carrying 3 marks may be from 50 to 75 words
3 Answer to question carrying 4-5 marks may be about 150 words
4 Answer to questions carrying 6 marks may be about 200 marks
5 Attempt all parts of a question together.

.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
5Which plan helps in analyzing competitor’s policy?                                      1
6Planning provide the basis of all other functions’. Comment.                            3
7Hoe does planning reduce the risk of uncertainty?                                       3
8 Planning restrict creativity. Explain                                                  3
9Explain the meaning of planning premiums with the help of suitable example.             3
10 Why are rules considered to be plans?                                                 3
11Planning is not the guarantee of success.                                              4
12 Do you think planning can work in changing environments                               4
13 Describe the meaning of policies, procedures and budget.                              4
14What kind of strategic decision is taken by business organization?                     4
15 Is planning necessary for effective management? Give reasons in support of your answer5
16 Explain why planning is necessary for effective management?                           5
17 Give the difference between policy and procedure .                                    5
18 What is budget? Give the importance of budget                                         5
19 What is planning? Give the characteristics of planning.                               5
20Explain the Difference between the policy and objectives.                              5
21 Explain, in brief any six types of plans.                                             6
22What do you mean by strategy? Explain its characteristics                              6
23What are the steps taken by management in the planning process?                        6
24Is planning actually worth the huge costs involved? Explain.                           6
25How does planning facilitate control? Justify your answer with the help of suitable example 6

                               SUBJECT BUSINESS STUDIES

M.T 3 Hours                                                                                       M.M 100

General Instruction;

A answer to questions carrying 1 mark may be from one word to one sentence.

B answer to questions carrying 3 marks may be from 50-75 words .

C Answer to questions carrying 4-5 marks may be about 150 words.

D Answer to questions carrying 6 marks may be about 200 words.


1 Q Is planning is mental exercise?                                                                                  1

2 Q. Define Policy?                                                                                                  1

3 Q.State any two points of the importance of the planning.                                                          1

4 Q. What is meant by signal use plan?                                                                               1

5 Q.Why planning is known as ‘futuristic’?                                                                           1

6 Q.Hoe does planning helps in controlling ?                                                                         1

7 Q Give one example of budget.                                                                                      1

8 Q. Why is planning prevasive?                                                                                      1

9 Q. At what level of management the function of planning is considered?                                             1

10.Q Name the first or primary function of management.                                                               1

11Q “Planning is forward looking .” explain                                                                          3

12Q Why planning regarded as a continuous process?                                                                   3

13Q what is meant by programme as a type of plan?                                                                    3

14Q how does planning focus on achieving objectives. Explain.                                                        3

15 Q what kind of strategic decisions are taken by business organizations?                                           3
16Q How does planning establish standards for controlling?.Explain.                      4

17Q Planning provides direction. Explain.                                                4

18.Q Planning involves decision making. Explain.                                         4

19.Q Enumerate the features of planning.                                                 4

20 Q What is budget? Give the types of budget.                                           4

21What is the meaning of planning? Explain any five limitations of planning.             5

22 Q. What is the difference between policy and objectives                               5

23 Q. What is procedure? Explain it with the example?                                    5

24 Q Define policy. Hoe does policy differ from rules.                                   5

25 Q What is the relationship between planning and controlling                           5

26 Q Discuss in brief the components of planning.                                        6

27Q Discuss in brief the steps in a planning process.                                    6

28 Q What are the techniques of a good planning.                                         6

29 qExplain why planning is necessary for effective management.                          6

30Q Explain the various types of planning.                                               6

                             ENRICHMENT MATERIAL

A Techniques of good planning
1 Keep aims reasonable and attainable.

2keep aims in balance by correct assessment of priorities of both basic planning and
supporting action.

3keep aims flexible and related to overall changes, which are either likely or certain to take

4 keep a carefully daily check on progress against time and cost schedules.
5Get and keep problems involved in planning in clear perspective both in its individual
importance and in its relation to the whole conduct of an operation or of the business.

B various types of planning
   1   Financial and non financial planning
   2   Specific or routine planning.
   3   Formal or informal planning.
   4   Short term and long term planning.
   5   Profit planning.

       C.Functions of a sound policy
       sund policies are considerable value in the smooth running of a business. Its principal
       contribution as, suggested by Ralph. Davis. Are as follows;

1Its tends to prevent devotions from planned course of action.

2it promotes intelligent co-operation.

3It facilitates co- ordination of action.

4It provides a guide for determining equitable personnel relations.

5It provides a guide for thinking in future planning.

                    REMEDIAL MATERIAL
AProcess of planning:
1Setting the objectives

2Developing the premises

3Identifying Alternative course of action.

4 evaluating alternative course of action

   6 Selecting an alternative.
   7 Implementing the plan
   8 Follow up action.
B Limitations of planning
1 Planning reduce creativity:

2 planning involves huge costs.

3Planning is a time consuming process.

4Planning does not guarantee of success.

5Planning does not work in a dynamic environment.

C .Importance of planning

1Planning provides direction.

2Planning reduce risk of uncertainity.

3 planning reduce overlapping and wasteful activities.

4 planning facilitates decision making.

5planning establishes standards for controlling.

           D Types of plan
1 objectives








                   DIFFICULT CONCEPT
A Techniques of good planning

B various types of planning

C Conceot of policy.

D concept of strategy.

E concept of strategies.

                         TEACHING STRATEGIES

Following are the some teaching strategies:

1 Providing for face to face interaction

2 providing as many simple examples as possible to explain the

3 promoting active involvement of the student

4 observing students’ response to probing questions as well as his
behavior to ensure continuous learning.

5Giving assignment on the corrected learning difficulty to strengthen


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