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CBSE Class 12 Business Studies Case Studies – Planning

CBSE Class 12 Business Studies Case Studies – Planning

ESSENTIAL POINTS TO SOLVE CASE STUDIES
Meaning of Planning
Planning is the process of setting objectives, formulating various courses of action in order to achieve them, and selecting the best possible alternative from the various courses of action available in order to ensure completion of organisational goals.
“Planning is the thinking process, the organised foresight, the vision based on fact and experience that is required for intelligent action.” — Afford and Beatt
“Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action for further attempting to achieve a consistent coordinate structure of operations aimed at the desired results.” — Theo Haimann
Planning aims at bridging the gap between where we are and where we want to go.

Features of Planning

  1. Planning focuses on achieving objectives. Objectives are set in planning and all the means, resources and courses of action to achieve these objectives are formulated in planning.
  2. Planning is the primary function of management. Planning is the base of (and guide to) all the remaining functions of management.
  3. Planning is pervasive. It is present everywhere, in all departments and at all levels.
  4. Planning is continuous. One plan is followed by another plan after its completion.
  5. Planning is futuristic. Planning is a forward looking, forecast involving futuristic function of management.
  6. Planning involves decision making. Decision making involves chalking out several options, evaluating and chosing the best out of them.
  7. Planning is a mental exercise. Planning is a thinking function which involves foresightedness, imagination and good judgement. Planning involves the ability to imagine the future and making the best choice possible.

Importance of Planning

  1. Planning provides direction. Once the goals of all employees and departments are set they are properly guided in the required direction.
  2. Planning reduces the risk of uncertainty. A good plan cannot eliminate uncertainties of future. However it can reduce unnecessary risks.
  3. Planning reduces overlapping and wasteful activities. Every person and department is assigned an objective and direction which rules out possible confusion.
  4. Planning involves innovative ideas. Planning is all about thinking in a unique and improved way so it involves innovation.
  5. Planning helps in decision making. Decision making involves choosing the best among the identified options.
  6. Planning sets standards for controlling. Controlling only tries to meet the objectives set at the stage of planning.

Limitations of Planning

  1. Planning leads to rigidity. Once a plan is formed by the top management and is conveyed to the whole team, it is very difficult to alter it.
  2. Planning may not work in a dynamic environment. Planning cannot accurately forecast the future changes that occur in various dimensions of business environment. Even a very good plan may fail in the dynamic environment.
  3. Planning reduces creativity. Once a plan made by the top management is communicated to the middle and lower levels of management, it is difficult to change it for them. The creativity of the lower and middle level employees is thus hampered.
  4. Planning is a time-consuming process. Planning in itself is a time-consuming process which sometimes reduces the time of its implementation, especially in case of annual plans.
  5. Planning does not guarantee success. Though the plans formed may be very good on paper yet when it comes to their outcomes they may fail due to everchanging business situations. There is no guarantee that previously tried and tested plans will lead to success in each and every situation.

Planning Process

  1. Setting objectives. When the organisational objectives are set they are followed by the setting of departmental objectives. Finally individual objectives are set.
  2. Developing premises. Premises are developed on the basis of forecasts and previous plans. It is also important to have consensus of all the managers before opting for a plan.
  3. Identifying alternative courses of action. At this stage it is advisable to identify as many courses of action as possible.
  4. Evaluating alternative courses. The pros and cons, positives and negatives of all these alternatives should be properly considered.
  5. Selecting an alternative. The best course of action should be chosen. A single option or a combination of the best options should be finalised.
  6. Implementing the plan. The chosen plan should be put into action.
  7. Follow up action. The effectiveness of the plans after their implementation, should be checked through proper follow up.

Types of Plans
Plans may be:
I. Single use plans;
II. Standing plans

I. Single use plans. Single use plans are used for a specific period or for a particular objective only. They are also known as specific plans as they are meant to solve a particular non-recurring proble.
These includes:

  • Budget
  • Programme

II. Standing plans. Standing plans are drawn for use time and again. They are formulated to guide managerial decisions on problems which are repetitive in nature:
These include:

  • Policies
  • Procedure
  • Method
  • Rule

TYPES OF PLANS

BASIS OBJECTIVE STRATEGY POLICY
1. Definition Objectives are the aimed future positions. They are the end points. Strategies are voluminous plans involving analysis of competitors on the basis of their strengths and weak­nesses. Policies are the guidelines whieh are broad and they guide the whole team on behaviour and finalisation of decisions. They are in the form of general statements.
2. Example (i) Capturing 20% of market share.
(ii) Increasing sales to 20,000 units.		 Strategy of one company to meet the technical challenge of another company. Recruitment policy of a com­pany to hire only graduates.
3. Nature Specific and Quantified Comprehensive Flexible
4. Single Use or Standing Plan Neither Neither Standing Plan
5. Importance Objectives are the basis for the formation of an organisation. Strategy involves:
(i) Objectives;
(ii) Course of action;
(iii) Means or resources.		 Policies broadly guide an organisation and its employ­ees.
BASIS PROCEDURE METHOD RULE
1. Definition A sequence following series of actions taken to complete a group of tasks. It is a way of doing a task. Method is a component of procedure. Rules are strict Dos and Don’ts which help in implementation of decisions taken by the management.
2. Example Procedure of packaging biscuits in a factory. Method of heating an iron bar in the procedure of steel manufacturing. (i) Everybody should wear a particular dress in the assembly on every Saturday. (ii) Workers should not talk near the furnace.
BASIS PROCEDURE METHOD RULE
1. Nature Rigid, Chronological Logical, flexible, precise, open to improvement. Shortest plans, Rigid.
2. Single Use or Standing Plan Standing Plan Standing Plan Standing Plan
3. Importance Routine activities are carried out in a strict manner leading to predictable results. Through proper focus on improvement of methods organisations have become more efficient. The effectiveness of
manage­ment ultimately rests on the strict following of prescribed rules.
BASIS PROGRAMME BUDGET
1. Definition They are the plans which cover the entire outline of a particular project encompassing objectives, policies, methods, procedures, rules and the budget connected with it. Budget is a quantitative or numerical financial plan for a definite period of time related to a project.
2. Example Programme of starting a new steel plant in Russia. Research and Development Budget of ?50 crore for 3 years for the new steel plant.
3. Nature Widest plans Numerical, Based on estimation.
4. Single Use or Standing Plan Single Use Plan Single Use Plan
5. Importance Programme Covers the entire gamut of activities concerned with a project. Though Budget is a type of plan yet it can be used as a controlling device making it useful.

SINGLE USE VS. STANDING PLAN

SINGLE USE PLAN STANDING PLAN
1. Definition The type of plans made for non-recurring situations. The type of plans made for recurring situations.
2. Types (a) Programme; (b) Budget (a) Policy; (b) Procedure; (c) Method; (d) Rule
3. Formation Basis Standing Plans Goals of the organisation
4. Importance They help in achieving success in a non- repetitive situation by covering it in entirety. For example: Programme They bring uniformity in the functioning of an organisation.

CASE STUDIES

Question 1.
A shoe manufacturing company wants to become a market leader. For this a detailed planning is required. The first step taken by the firm is to set targets for the three months duration for selling maximum number of shoes in the market which they set as 2,50,000. The team doesn’t want to make any mistake so they decide to do proper planning. They decide to chalk out alternative plans so that they can arrive at the best possible plan. However the team is surrounded with doubts. To remove doubts it goes for judging the plans to get the most profitable one. The plan is taken to the whole organisation and the concerned persons. Ultimately it is put into action. Without much caring for the results the company starts working on the other project simultaneously.
Identify the steps in the planning process which have been applied by the organisation in the above case?
Answer:
In the above case the steps of planning which are applied are:

  1. Setting Objectives. The first step taken by the firm is to set targets for the three months duration for selling maximum number of shoes in the market which they set as 2,50,000.
  2. Identifying alternative courses of action. They decide to chalk out alternative plans so that they can arrive at the best possible plan.
  3. Evaluating the different courses of action. To remove doubts it goes for selecting the plan which can be considered as the most profitable.
  4. Selection of the best plan. The best plan is finalised.
  5. Implementation of the plan. Ultimately it is put into action.

Question 2.
‘Indian Drugs and Pharmaceuticals Ltd.’ is engaged in the manufacturing and distribution of medicines. The company has set-up an objective of increasing its sales turnover by 20%. To achieve this objective the company has decided to diversify into baby health care products. Since the company has already set its objectives and developed the premises based on the same, it wants your help for the remaining steps to be taken in this process. Explain briefly these steps. [2016 Comptt. D]
Answer:
Following are the remaining steps in the planning process.

  1. Identifying alternatives. In this step various alternative courses of action are identified. The identified course of action can either be routine or innovative in nature. An innovative course of action involves sharing of ideas by more and more people.
    In important projects more and more alternatives should be generated and discussed.
  2. Evaluating alternative courses. In this step the positive as well as negative aspects associated with each and every alternative course of action is evaluated and analysed. In other words, the pros and cons of each alternative is studied.
  3. Selecting an alternative. In this step the best plan is adopted and implemented. That plan is selected which has minimum negative aspects. The ideal plan should be the one which is most feasible and profitable.
  4. Implementing the plan. In this step plans are put into action. All other managerial functions come into picture in this step. It involves doing what is required for the purpose of implementation of plan.
  5. Follow-up action. This step involves monitoring of the plans. This step ensures that plans are being implemented and activities are performed as per schedule.

Question 3.
In the above case identify the steps of the planning process which are not indicated?
Answer:
The steps of the planning process which are not indicated in the above case are:

  • Developing premises
  • Follow up

Question 4.
‘Serious Business’ is a balloon manufacturing firm. With the arrival of foreign firms it is feeling the pressure of improving its business strategy. Because of the firm’s advance planning it could not suddenly bring changes in its plans as the whole organisation had started implementing the decided plan. But this year the organisation wants to ensure success. However, the firm knows that the external environment is changeable and continues to vary in a fast manner. The organisation wants to prepare in advance for a better future. It has decided to allocate a portion of its budget specifically for proper planning as it knows there are going to be expenses like Expert’s fee, survey charges, etc.
Which limitations of planning have been identified in the above case?
Answer:
The limitations of planning highlighted in the above case are:

  1. Planning leads to rigidity. Because of the firm’s advance planning it could not suddenly bring changes in its plans as the whole organisation had started implementing the decided plan.
  2. Planning may not work in a dynamic environment. However, the firm knows that the external environment is changeable and continues to vary in a fast manner.
  3. Planning involves huge costs. It has decided to allocate a portion of its budget specifically for proper planning as it knows that there are going to be expenses like Expert’s fee, survey charges, etc.

Question 5.
‘Flows Technology’ deals in bulb manufacturing business. It plans for a successful year of production and sale this year. It has in advance given targets to all its departments and employees. The departments and employees are happy about this. They know that now they won’t have to do unconcerned activities thus leading to more focused approach resulting in saving of resources. The company is thinking of starting two new plants in the southern portion of India. For this some concrete plan has to be made. The main core team of the company has decided to weigh all the options and then choose the best one. The road might be long but the company is geared to face all the challenges.
In the above case identify importance of planning highlighted.
Answer:
The importance of planning indicated in the above case are:

  1. Planning provides directions. It has in advance given targets to all its departments and employees.
  2. Planning reduces overlapping and wasteful activities. They know that now they won’t have to do unconcerned activities thus leading to more focused approach resulting in saving of resources.
  3. Planning facilitates decision making. The main core team of the company has decided to weigh all the options and then choose the best one.

Question 6.
An established firm has fifty years of experience in shipping industry. The company time and again proves itself as one of the dominant figures in the market. The plan for the whole year is given a lot of importance. According to the owner of the company their plans are the basic structures upon which other important functions of management rest. It is important that the plans are communicated to the employees. The top management ensures that the plans are communicated and implemented at all levels and in all departments. To learn from past mistakes is a habit of this successful company. They prepare plans for short term as well as long term where it can be seen that throughout the year the plans are prepared one after another. Shipping industry needs such dedicated companies. The goals are specific and the activities to achieve these specific goals are undertaken. The company has planned a growth of 20% in revenue this year. Let’s see how much it’s possible for it to achieve it by the end of the year.
In the above case identify the various features of planning highlighted.
Which type of plan is indicated in the above case?
Answer:
The features of planning highlighted above are:

  1. Planning is a primary function of management. According to the owner of the company their plans are the basic structures upon which other important functions of management rest.
  2. Planning is pervasive. The top management ensures that the plans are communicated and implemented at all levels and in all departments.
  3. Planning is continuous. They prepare plans for short term as well as long term where it can be seen that throughout the year the plans are prepared one after the other.
  4. Planning focuses on achieving objectives. Goals are specific and the activities to achieve these specific goals are undertaken.

The type of plan which is indicated in the above case is ‘Objective’. The Company has planned a growth of 20% in revenue this year. Here the plan is precise and quantified. When a goal is quantified it becomes an objective.

Question 7.
Sukumar is an energetic middle level manager. He tries to make best plans. For this he involves foresight and intelligent imagination. Within three years many of his projects have been very successful. His high success rate is due to his good plans. He always makes alternative plans and selects the best out of them after considering relevant aspects. However, he knows it is not necessary that his all plans will be successful. He knows that sometimes his concern for making very good plans eats a lot of time and energy. His friend Jyoti suggests him to take suggestions from others when he makes his plans and also consider plans made by others. Even after so much painstaking Sukumar knows that his plans can yet fail in the uncertain business environment. He has recently decided to plan carefully in future.
Which features of Planning have been highlighted in the above case?
Which limitations of Planning have been highlighted in the above case?
Answer:
The features of Planning which have been highlighted in the above case are:

  1. Planning is a mental exercise. For this he involves foresight and intelligent imagination.
  2. Planning involves decision making. He always makes alternative plans and selects the best out of them after considering relevant aspects.

The limitations of Planning which have been highlighted are:

  1. Planning is a time consuming process. He knows that sometimes his concern for making very good plans eats a lot time and energy.
  2. Planning does not guarantee success. Even after so much painstaking Sukumar knows that his plans can yet fail in the uncertain business environment.

Question 8.
Identify the types of plans:

  1. Ramesh is a senior middle level manager. He is busy in allocating resources to his staff, he has also finalised the objectives and decided the course of action to be followed. He is expecting energy in his staff for the whole season but he will have to be caucious.
  2. Suresh is giving a speech to the workers of his factory. He is the owner of a toy manufacturing factory and has 123 workers. He tells them that this year’s target of production is 7.5 lakh toys.
  3. On the wall of ‘Health is Wealth’ hospital a board is hanging. On this board. It is written ‘We care for the health of senior citizens as our topmost priority’. This hospital is known for treating people aged more than 60 years.
  4. Rakesh calls his new subordinates for a meeting. He is a top level manager. He arranges for a power point presentation to train his subordinates who are all middle level managers. He tells them the way of doing task of treating suppliers through a new software system to be installed within next 30 days.
  5. Dinesh takes a meeting and guides his employees in a type of plan which is chronological in nature and is situation specific. It is a collection of various methods in a step wise sequence.
  6. Amit has given a detailed statement of expected results in numerical terms. This plan is conveyed to the subordinates by him in a special meeting.

Answer:
The different types of plans are:

  1. Strategy
  2. Objective
  3. Policy
  4. Method
  5. Procedure
  6. Budget

Question 9.
Two years ago Madhu completed her degree in food technology. She worked for sometime in a company manufacturing 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 action plan to achieve the same. One of her objective 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 form farmers cultivating organic crops only. She also decided to follow the steps required for marketing of the products through her own outlets. She appointed Mohan as a production Manager who decides the exact manner in which the production activities are 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 sales target for different products, areawise for the forthcoming quarter. While working on the production table a penalty of ?100 per day for not wearing the caps, gloves and apron was announced.
Quoting lines from the above para identify and explain the different types of plans discussed.
Answer:
The different types of plans are:

  1. ‘One of the objective was to earn 10% profit on the amount invested in the first year.’
    Objective. An objective is the end result towards which all managerial efforts and organizational activities are directed.
  2. ‘Raw materials like fruits, vegetables, spices, etc. will be purchased on three months credit from farmers cultivating organic crops only.
    Policy. A policy is a part of the general standing plan of a business. It is the general course of action to be followed in a particular situation.
  3. ‘To follow the steps required for marketing of the products.’
    Procedure. A procedure is a series of related tasks that make up the chronological sequence and establish a way of performing the work.
  4. ‘Statement showing the number of workers that will be required in the factory throughout the year.’
    Programme. A budget is a plan which states expected results of a given future period in numerical terms. It may be expressed in time, money or physical units.
  5. ‘Penalty of f 100 per day for not wearing the caps, gloves and apron.’
    Rule. A rule is a statement that specifies what is to be done or not to be done.

Question 10.
In an annual general meeting a company sets its targets for the year. The manufacturing department has decided to manufacture 2.5 million units of the product and has decided to monitor the performance so as to control it accordingly. The survey done by the company has shown a number of cities in the north which are showing increased demand for the product. The company in its research during the last three months generated various options and decided to follow the best one. The HR team is also concerned about its output. The HR head revealed that there can be shortage of MBA pass outs which can reduce the quality of manpower in the near future so it has decided to arrange HR workshops in different colleges to get the best candidates. The board meeting ends on a positive note.
In the above case identify the importance of planning and the concerned lines.
Answer:
The importance of planning highlighted above:

  1. Planning establishes standards for controlling. The manufacturing department has decided to manufacture 2.5 million units of the product and has decided to monitor the performance so as to control it accordingly.
  2. Planning facilitates decision making. The Company in its research during the last three months generated various options and decided to follow the best one.
  3. Planning reduces the risk of uncertainty. The HR head revealed that there can be shortage of MBA pass outs which can reduce the quality of manpower in the near future so it has decided to arrange HR workshops in different colleges to get the best candidates.

Question 11.
‘Dhulai’ is a washing machine manufacturing company. The company decides to enter into music system manufacturing industry. The company has a committed top management. It knows that there are various challenges in the market where its decisions regarding the new industry might fail. Still the top management doesn’t want to waste a lot of resources on its plans. It knows that sometimes plans take more time in making than getting implemented. However, the company wants to proceed with a positive approach. It has decided to study all the aspects of its competitors, to set all its objectives and to allocate the required resources. The company did well in its previous business. At that time they took planning very seriously as they knew everything the company would do had to be based on concrete plans. The company will start its operations from next month.
Which function of management has been discussed in the above case? Which limitations of planning have been highlighted in the above case? Which type of plan is indicated in the above case? Which feature of planning is highlighted above?
Answer:
The function of management which is discussed in the above case is ‘Planning’. The company decides to enter into music system manufacturing industry.
The various limitations of planning highlighted above are:

  1. Planning does not guarantee success. It knows there are various challenges in the market where its decisions regarding the new industry might fail.
  2. Planning involves huge costs. Still the top management doesn’t want to waste a lot of resources on its plans.
  3. Planning is a time consuming process. It knows that sometimes plans take more time in making than getting implemented.

The type of plan indicate above is ‘Strategy’. It has decided to study all the aspects of its competitors, to set all its objectives and to allocate the required resources.
The feature of planning highlighted above is Planning is a primary function of management. At that time they took planning very seriously as they knew everything the company would do had to be based on concrete plans.

Question 12.
Dheeraj is a very hard working manager. After working for the implementation of his well chalked out plan he, from the start of July, decides to see in what ways and up to what accuracy has his plan been implemented.
Which step of the planning process will be involved by Dheeraj from the starting of July?
Answer:
The step of the planning process involved by Dheeraj will be the last step:
‘Follow through’

Question 13.
Suraj is the CEO of a company. He in accordance with the other board members decides to formulate a general statement which will be guiding the thinking
of the employees. He further goes on to formulate many such statements in the next six months. These statements could be divided into two categories.
Which type of plan is indicated above? What are the two types of this plan? Also give one example of this plan.
Answer:
Suraj is the CEO of a company. He in accordance with the other board members decides to formulate a general statement which will be guiding the thinking of the employees. He further goes on to formulate many such statements in the next six months. These statements could be divided into two categories.
The type of plan highlighted in the above case is ‘Policy’ (He decides to formulate a general statement which will be guiding the thinking of the employees).
The two types of policies are major policies and minor policies.
One example of Policy is ‘Recruitment Policy’.

Question 14.
A specific statement was given by an HR head. This statement had no scope for any flexibility. It was the simplest type of plan. Identify the type of plan. Give one more characteristic of this plan. Which plan is the widest type of plan?
Answer:
The type of plan is ‘Rule’.
One more characteristic of this plan. It tells which action must or must not be taken.
The widest type of plan is ‘Programme’.

Question 15.
Ramesh is a supervisor in a company. He works at the lower level of management. He teaches ‘on the job training’ the ways in which a task is to be done by the workers at the shop floor level. He meets his boss on ce a week day and gives him a numerical statement quantifying the numbers needed in various activities at the shop floor for next 6 months. The boss approves his requirements and gives him a job to set targets in figures about the next plan he thinks is good for the manufacturing unit. Ramesh’s dedication is noticed by all.
In the above case which types of plans have been highlighted? 2
Which step of planning process is highlighted in the above case?
Answer:
The types of plans which have been highlighted above are:

  1. Method. He teaches ‘on the job training’ the ways in which a task has to be done by the workers at the shop level.
  2. Budget. He gives him a numerical statement quantifying the amount needed in various activities at the shop floor.
    The step of planning process highlighted in the above case is ‘Setting Objectives’. The boss approves his requirements and gives him a job to set targets in figures about the next plan he thinks is good for the manufacturing unit.

Question 16.
Rajesh is at the real point of decision making in the course of his planning. He has arrived at this point after identifying various alternative courses of action. After identification he was thoroughly involved in the evaluation of each of these alternatives. He later got involved into making several permutations and combinations of these alternatives to arrive at this point.
Through which stage of the planning process is Rajesh going? Also give the next two steps of planning process.
Answer:
Rajesh is at the real point of decision making in the course of his planning. He has arrived at this point after identifying various alternative courses of action. After identification he was thoroughly involved in the evaluation of each of these alternatives. He later got involved into making several permutations and combinations of these alternatives to arrive at this point.
The stage through which Rajesh is going is ‘Selecting an alternative’. The real point of decision making is selecting an alternative.
The next two steps in the process of planning are ‘Implementing the plan’ and ‘Follow through’.

Question 17.
Naman is a very intelligent planner. He knows the market pretty well. For last 15 years he has been leading several successful projects for his company. Company gives him responsibility to start a new project in S. America. With his experience he makes assumptions about all the possible future scenarios.
Which step of the planning process is the above paragraph related to?
What is the other term used for assumptions in planning process?
What is the base material for developing premises?
Answer:
The step of the planning process referred to here is ‘Developing Premises’ (second step of the planning process).
The other term used for assumptions in planning process is ‘Premises’.
The base material for developing premises is forecasts, existing plans or any past information.

Question 18.
‘High Voltage’ – a company which manufactures microwaves is known for its flawless planning. However the top management of the company accepts that some of its plans have failed in the past as the outside business environment is unpredictable and dynamic. The company invests a huge portion of its revenue on planning related issues. Recently in a newspaper the company was blamed for preventing its employees from doing new things due to the plans which are decided by the top management. Rajesh a middle level manager in the company in a seminar said that the planning aspect of a company should be dealt cautiously. There should be specific goals and activities to reach these goals should also be properly executed. Company has many serious competitors in the market. Even they unanimously agree that without planning no other function of management can exist and it’s the basic platform on which the whole structure of management is laid. When it comes to follow up of plans it becomes very important to know the standards. The success of a plan can only be checked when it is known how much of the set target has been met because it is at the stage of planning these targets are set. It’s not about the past. It’s for the coming time and challenges that a company formulates a plan. Rajesh knows this well. He uses his intelligent imagination and foresight while formulating the plans.
Which limitations of planning have been highlighted in the above case?
Which features of planning have been indicated in the above paragraph?
Which importance of planning do you find sighted in the above case?
Answer:
The limitations of planning highlighted in the above case are:

  1. Planning may not work in a dynamic environment. (However the top management of the company accepts that some of its plans have failed in the past as the outside business environment is unpredictable and dynamic).
  2. Planning reduces creativity. (Recently in a newspaper the company was blamed for . preventing its employees from doing new things due to the plans which are decided by the top management).

The features of planning indicated in the above case are:

  1. Planning helps in achieving objectives. There should be specific goals and activities to reach these goals should also be properly executed.
  2. Planning is the primary function of management. Even they unanimously agree that without planning no other function of management can exist and it’s the basic platform on which the whole structure of management is laid.
  3. Planning is a mental exercise. He uses his intelligent imagination and foresight while formulating his plans.

The importance of planning highlighted in the above paragraph:

  • Planning sets standards for controlling. The success of a plan can only be checked when it is known how much of the set target has been met because it is at this stage of planning such targets are set.

Question 19.
It is deciding in advance what to do and how to do? It is one of the basic managerial functions. It requires that before doing something, the manager must formulate an idea of how to work on a particular task. This function is closely connected with creativity and innovation. It seeks to bridge the gap between where we are and where we want to go and is performed at all levels of management.
In spite of this the function of management referred above has a number of limitations. Explain any two such limitations.
Answer:
Planning function of management has been referred above.
Two limitations of the planning function of management are:

  1. Rigidity. One of the limitations of planning is rigidity. The existence of,a plan puts the managerial activities in a rigid framework. Programmes are carried out according to the plan and deviations are considered to be highly undesirable.
  2. Reduces creativity. Planning involves deciding in advance what is to be done, how is it to be done, when is it to be done and by whom is it to be done. There is very little scope for deviating from the plans. This blind conformity with the pre-determined guidelines discourages individual initiative and freedom.

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