CBSE Important Questions Class 12 Business Studies Chapter 4

Important Questions Class 12 Business Studies Chapter 4

Important Questions for CBSE Class 12 Business Studies Chapter 4 – Planning: 

Chapter 4 Class 12 Business Studies Important Questions outlines Planning as a task that allows management to look ahead and foresee changes. Changes and occurrences cannot be avoided, but managers can anticipate them and modify their strategy accordingly by planning and strategizing ahead of time.

With these Business studies Class 12 Chapter 4 Important Questions, students will come to know that planning is the foundation for coordinating the actions and efforts of multiple divisions, departments, and personnel. It removes inefficient and superfluous activities, avoids misunderstandings, and ensures clarity of thought and action.

Moreover, with these Class 12 Business studies Chapter 4 Important Questions, Extramarks will provide students with detailed and authentic solutions to important questions. 

CBSE Class 12 Business Studies Chapter-4 Planning

Study Important Questions for Class 12 Business Studies Chapter 4 – Planning

Very Short Answer Questions (1 mark)

• Explain what “Method” means as a form of plan.

The method is the prescribed strategy or way in which work should be accomplished.

• How does planning lead to rigidity? 

By limiting managers’ freedom to take initiative, planning enforces rigidity.

• Name the basis to create a future course of action. 

Forecasting

• List any one limitation of planning. 

It does not guarantee success. 

Short Answer Questions (3 or 5 marks): 

• Define planning. 

Making decisions on what to do and how to do it in advance constitutes planning. It is an essential managerial task.

• What qualifications are necessary for planning?

Planning is one of the basic managerial functions which involves deciding in advance what to do and how to do it. It requires a number of qualities, including intelligence, creativity, foresight, and sound judgement.

“Planning does not ensure a company’s success.” Comment.

The planning function depends on a number of future assumptions, and nobody is willing to promise that these assumptions will be accurate within 1 %. Thus, it is true to argue that planning does not ensure the success of a corporation. The planning function has certain drawbacks, such as poor precision, budgetary issues, action delay, etc.

• Planning does not ensure a company’s success.” Comment.

The planning function depends on a number of future assumptions, and nobody is willing to promise that these assumptions will be accurate within 1 %. Thus, it is true to argue that planning does not ensure the success of a corporation. The planning function has certain drawbacks, such as poor precision, budgetary issues, action delay, etc.

• List any three restrictions on managing the management functions. 

Every aspect has its own limitations. The limitations of planning are:

• Planning leads to rigidity: In an establishment, a defined plan is outlined with a specific goal to be achieved within a predefined time frame; however, the managers may not be in a situation to change it. As the business environment is, effective managers need to be provided with some amount of flexibility to manage the varied situations.
• Planning may not work in a dynamic  environment: Planning is purely based on the prediction of future trends and occurrences. It can’t foresee future trends if the policies are modified or political conditions or a natural disaster strikes and since the future is indefinite, hence the establishment requires it to adapt itself to the changes.
• Planning reduces creativity: The top-level management takes the responsibility of planning and middle management implements the plan, but they are not allowed to deviate, and as a result, the managers’ inventiveness and skill sets are diminished. There is no room for creativity or innovativeness.

• List the top six reasons why planning is essential. 

The main advantages of planning are given below: 

Planning provides direction:  It provides guidance for action by

• Defining how the task will be done in advance. Planning ensures that goals are clearly specified so that the best course of action may be devised. Once the strategies are in place, the department and individuals may work together.
• Planning reduces the risk of uncertainty: Planning is a task that allows the management to foresee  the future and predict changes. Changes and occurrences cannot be avoided, but managers may anticipate them and adapt their strategies accordingly by deciding plans and courses of action ahead of time.
• Planning encourages creative thinking: Management’s first responsibility is planning. Managers are given a chance to come up with original concepts that can later be developed into workable strategies. It guides all future operations that will promote the expansion and prosperity of the business. 
• Setting goals and predicting future circumstances are both aspects of planning that help people make decisions by allowing them to compare possibilities logically. 

• Planning creates standards for controlling: Planning creates the criteria that actual performance is measured. Planning is therefore essential for regulating. It also reduces overlapping and wasteful activities. 
• Planning gives managers the ability to foresee the future and anticipate changes. It is impossible to prevent changes and occurrences, but managers can prepare for them in advance and adjust their tactics accordingly.
• What are the initial three steps in the planning process? 

The first three steps in the planning process are as follows. 

2. Determining the objectives: The first step in the planning process is to determine the objectives for any commercial enterprise. For them to be able to take the proper action to accomplish the goals, managers must clearly identify the objectives. 
3. Setting the foundation: Specific future assumptions form the basis of planning. These presumptions are referred to as premises. The planning process is built on future estimates, which are the subject of the assumptions. Forecast accuracy is necessary for successful strategies. 

3. The next stage is to find alternatives to the current path of action. To accomplish the goals of the organisation, managers must determine all possible alternative courses of action. This calls for originality and imagination.

• Explain the features of planning. 

The next paragraph emphasises the characteristics of planning. 

Planning is primarily focused on achieving goals: Organisations develop broad and specific goals, as well as the plans and methods to achieve them. Plans should be made by management with definite goals in mind. These tactics must guarantee that the desired outcome is obtained. 

Basis: All other management tasks are built upon planning. In other words, planning occurs before organising, directing, staffing, and managing. This is so because the plans contain the objectives, and all other tasks are completed in line with those objectives. The roles of numerous interconnected functions are given after the plans are made.

The pervasiveness of Organization: Planning is needed at all levels of management and in all departments. The scope of planning varies at different levels and for different departments. Top-level managers, for example, must establish policies for general management, whereas middle-level managers must define the authority to be transferred to subordinates. Lower-level managers, on the other hand, establish insignificant objectives for day-to-day operations.

• Why is planning so important? 

Planning is important for the following reasons. It decreases the risk of uncertainty: 

• Planning is a task that allows management to look ahead and foresee changes. Changes and occurrences cannot be avoided, but managers can anticipate them and modify their strategy accordingly by planning and strategising ahead of time. 
• Planning eliminates duplicate and unnecessary activities: Planning serves as the foundation for coordinating the actions and efforts of multiple divisions, departments, and personnel. It removes inefficient and superfluous activities, avoids misunderstandings, and ensures clarity of thought and action. 
• Planning fosters fresh ideas: Management’s initial responsibility is planning. Managers are given the opportunity to produce new ideas, which can subsequently be transformed into concrete strategies. It directs all future actions that will result in the company’s success.
• Elaborate on the features of planning. 

The following point emphasises the characteristics of planning. 

• Goal-oriented planning: Organisations define general and specific goals, as well as strategies and activities to achieve these goals. Management should develop plans with precise goals in mind. These tactics must guarantee that the desired outcome is obtained. 
• Planning serves as the foundation for all other management responsibilities. That is, planning comes first, followed by organising, directing, staffing, and managing. This is due to the fact that the goals are defined in the plans, and all other functions are carried out in accordance with the stated goals. Following the establishment of the plans, the roles of many interconnected functions are assigned. As a result, planning acts as the foundation for everything else.
• The pervasiveness of the Organization: Planning is needed at all levels of management and in all departments. The scope of planning varies at different levels and for different departments. Top-level managers, for example, must establish policies for general management, whereas middle-level managers must define the authority to be transferred to subordinates. Lower-level managers, on the other hand, establish minute objectives for day-to-day operations.
• “Management’s fundamental duty is planning.” Comment

Management is built on the foundation of planning. All other operations, including organising, staffing, directing, and controlling, are supported by planning. It takes precedence over all other managerial responsibilities, allowing managers to better organise their teams, direct and regulate activities, and achieve corporate goals. All of the activities are organised in such a way that following the plan  is straightforward.

• Somnath Ltd. is involved in the garment export sector. In the past, the company’s performance had been satisfactory. The corporation chose to modernise its machines to keep up with the latest technologies. Dalmia, the Finance Manager, estimated the budget  needed and the timing. This will assist the organisation in continuously linking investment and financing decisions. As a result, Dalmia began by developing a sales prediction for the following four years. He also gathered crucial information on earnings projections for the following years. By doing so, he hoped to ensure the availability of finances from the company’s internal sources. He is attempting to raise the remaining cash.

Justify the financial idea mentioned in the preceding paragraph. Also, indicate the objectives to be attained through the application of the identified financial concept.

The stated premise is Financial Planning. It entails creating a blueprint for a company’s overall financial operations so that the appropriate  fund  is available for various operations at the right  moment. That is, it forecasts how much money will be needed and when based on the company’s growth and performance.

• Differentiate between objectives and goals.

Long Answer Questions (5 or 6 marks): 

• Is it really worth the high costs of planning? Explain.

Planning is expensive in terms of both time and money. It entails extensive analysis, research, and scientific computations at a high expense. Despite the fact that it is an expensive activity, it is a very basic and necessary function of any company.

Despite the exorbitant costs, we can state that planning is necessary  due to the following reasons: .

• Renders Direction: The planning clearly states the goals and objectives that must be reached. As a result, it can be used to influence future activities. It oversees the operations of numerous departments inside the company. They advise managers on what has to be done, the best path to take, and how to achieve the objectives. It ensures that the path taken to attain goals is the correct one. Planning also guarantees that the organization’s many departments collaborate to achieve the intended results. 
• Risk Mitigation: By directing a company in the right direction, it enables its leaders to assess and predict changes. As a result, the likelihood of the anticipated events decreases. Planning demonstrates how to cope with circumstances that may develop over the course of management, but it does not completely remove problems. 
• Reduce Overlapping and wasteful activities: Because managers are well-versed in the organization’s policies and strategies, they coordinate actions to achieve the goals. Work overlap is reduced as a result.Useless and redundant activities are minimised or eliminated. Additionally, any resource waste that happens as a result of overlapping is reduced. Planning ahead of time guarantees that there are no misunderstandings and that the task is properly done.
• Encourages Creativity: Planning is a critical component of any organization’s success. It requires developing tactics and plans, which necessitates imagination. It is a critical task that requires managers to think creatively and promotes innovativeness.. It encourages management to come up with new ideas to meet the goals. 
• Assists in Decision Making: Decisions are made on the basis of planning. Planning comprises assessing alternative courses of action and selecting the optimal choice depending on the aim. As a result of following a proper planning strategy, managers can make more rational decisions.

• Controlling Requires Preparation: Planning establishes the objectives that must be met. As a result, it provides the standards by which performance is measured. It also aids in discovering deviations from stated objectives, making corrective action easier. As a result, we may conclude that, despite the costs, planning is an important role in management that is well worth the effort.

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