PYQ 4 - Learning Business Studies
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    VERY SHORT ANSWER QUESTIONS (1 or 2 Marks)

    QUESTION 1.
    Give the meaning of 'Method' as a type of plan.
    (CBSE BOARD 2015)
    Answer. Method is the prescribed way or manner in which a task has to be performed.

     QUESTION 2.
    What is planning?
    Answer. Planning is deciding in advance what to do and how to do. It is one of the basic
    managerial functions.

     QUESTION 3.
    What all qualities are required for doing planning?
    Answer. Intelligence, Imagination, Foresight, Sound Judgment.

     QUESTION 4.
    Name and state the aspect of financial management that enables to foresee the fund
    requirements both in terms of ‘the quantum’ and ‘in terms of the timings'.
    (CBSE BOARD 2016)
    Answer. The aspect of financial management that enables to foresee the fund requirements
    both in terms of ‘the quantum’ and in terms of ‘the timings' is "Financial Planning". Financial
    planning involves designing the blueprint of the overall financial operations of a company such
    that right amount of funds are available for various operations at the right time.

    QUESTION 5.
    How does planning create rigidity?
    Answer. Planning creates rigidity by putting adverse effect on initiative taken by the managers.

     QUESTION 6.
    What is the basis for creating future course of action?
    Answer. Forecasting

     QUESTION 7.
    Give one limitation of planning function.
    Answer. Planning does not guarantee success

     QUESTION 8.
    Which is the most crucial step in planning process?
    Answer. Setting objectives for the organisation.

     QUESTION 9.
    Define 'Objective'?
    Answer. Objectives are desired future position that the management would like to reach.

     QUESTION 10.
    Define 'Strategy'.
    Answer. A strategy refers to future decisions and actions, defining the organisation's direction
    and scope in the long run.

    SHORT ANSWER QUESTIONS (3 or 4 Marks)

    QUESTION 11:
    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.
    (CBSE BOARD 2015)
    or
    State any three limitations of planning function of management.
    (CBSE BOARD 2016)
    Answer.
    The following are the limitations of planning.
    1. Planning leads to rigidity: In an organisation, a well-defined plan is drawn up with specific
    goals to be achieved within a specific time but managers may not be in a position to change it.
    As the business environment is, dynamic managers need to be given some flexibility to cope up
    with the changed circumstances.
    2. Planning may not work in dynamic environment: Planning is based on anticipation of future
    happenings and since future is uncertain and dynamic, so the organisation needs to adapt itself
    to changes. However planning cannot foresee the future events effectively.
    3. Planning reduces creativity: Top management does planning and middle management does
    implementation of plan but they are not allowed to deviate from the plan and thus creativity of
    these managers are reduced.

     QUESTION 12.
    Enumerate six points of importance of planning.
    Answer. Importance of planning is as under:
    i. It provides direction for action.
    ii. It reduces the risk of uncertainty
    iii. It facilitates decision making.
    iv. It establishes standards for controlling.
    v. It promotes innovative ideas.
    vi. It reduces overlapping and wasteful activities.

     QUESTION 13:
    Explain the first three steps in the process of 'Planning'.
    (CBSE BOARD 2016)
    Answer: The following are the first three steps are involved in the planning process.
    i. Setting the objectives: Any business enterprise needs to decide upon its objectives, and the
    first step in the planning process is to set the objectives. Managers are required to define
    objectives clearly, so that they can take the right action to achieve the goals.
    ii. Developing the premises: Planning is based on certain assumptions regarding the future.
    These assumptions are known as premises. The assumptions are regarding the predictions of
    the future, which form the basis of the planning process. Accuracy of forecast is necessary for
    successful plans.
    iii. Identifying alternatives: The next step is to identify alternative courses of action. Managers
    must identify all the alternative courses of action for achieving the objectives of the
    organisation. This involves innovation and creativity.

     QUESTION 14:
    Explain any three features of 'Planning.'
    (CBSE BOARD 2017)
    Answer. The following points highlight the features of planning.
    i) Planning focuses on achieving objectives: Organisations set up with general goals and
    specific goals along with the plans and activities to be undertaken to achieve these goals. Any
    management should formulate plans keeping in view the specific goals in mind. These plans
    must ensure that the desired objective is attained. The managers must make sure that the
    plans made are purposeful. For example, if sales target is to be achieved then the plans must be
    made in sync with this objective.
    ii) Stepping Stone: Planning lays down the base for other functions of management. That is,
    planning precedes all other functions such as organising, directing, staffing and controlling. This
    is because plans states the objectives and all other functions are in accordance with the said
    objectives. Once the plans are determined, the role of other interrelated functions comes into
    place. Thus, planning sets the basis for other functions of an organisation.
    iii) Pervasiveness: Planning is required at all levels of management as well as in all
    departments of the organisation. The scope of planning is different at different levels and for
    different departments.

    For example, the top level managers have to chalk out the policies regarding the overall
    management whereas the middle level managers plan out the authority to be assigned to the
    subordinates. On the other hand, the lower level managers make out small targets for day-today
    working.

     QUESTION 15.
    'Planning focuses on achieving objectives'. Explain.
    Answer. Planning is a goal oriented process which helps in defining objectives, and preparation
    of necessary plans of action to achieve goals. Thus, planning is focused on clarifying what is to
    be done and how is that to be done. The planning holds no purpose if it does not focus on
    achievement of preset organizational or corporate objectives.

     QUESTION 16.
    'Planning is the basic function on of management'. Comment.
    Answer. Every management starts with planning. All other functions like organizing, staffing,
    directing and controlling are based on planning. It precedes the execution of all other
    managerial functions and allows mangers to organize the staff and direct and control the
    activities in a better way to achieve organizational goals. All the activities are created in such a
    way that plans are easily carried out. This is also referred to as primacy of planning.

     QUESTION 17.
    Somnath Ltd. is engaged in the business of export of garments. In the past, the performance
    of the company had been up-to the expectations. In line with the latest technology, the
    company decided to upgrade its machinery. For this, the Finance Manager, Dalmia estimated
    the amount of funds required and the timings. This will help the company in linking the
    investment and the financing decisions on a continuous basis. Dalmia therefore, began with
    the preparation of a sales forecast for the next four years. He also collected the relevant data
    about the profit estimates in the coming years. By doing this, he wanted to be sure about the
    availability of funds from the internal sources of the business. For the remaining funds, he is
    trying to find out alternative sources from outside. Justify the financial concept discussed in
    the above para. Also, state the objectives to be achieved by the use of financial concept, so
    identified.
    (CBSE BOARD 2017)
    Answer. The concept stated in the question is Financial Planning. It involves designing the
    blueprint of the overall financial operations of a company such that right amount of funds are
    available for various operations at the right time. That is, it tends to forecast what amount of
    fund would be required at what time as per the growth and performance of the company.
    Objectives of Financial Planning
    Proper financial planning is a prerequisite for the successful growth of any organisation,
    regardless of whether they are new or existing ones. The two main objectives of financial
    planning are as given below:
    1. Ensure timely availability of funds: Financial planning involves estimating the right amount
    of funds required for various business operations and the time when these funds would be
    required. It also involves identifying the probable sources of raising funds.
    2. Proper utilization of funds: It implies ensuring that situations of both inadequate funds as
    well as surplus funds are avoided. While on the one hand, inadequate funds hinder the smooth
    operations of the firm; on the other hand, excess funds add to the cost of business and
    encourage unnecessary and wasteful expenditure. Thus, financial planning ensures that the
    funds are optimally utilised.

     QUESTION 18.
    What do you mean by planning premises?
    Answer. Planning premises are assumptions relating to future conditions and events which are
    likely to have an effect on achievement of goals. These are the bases upon which the entire
    structure of planning is built. Every plan is drawn with certain assumptions. To make planning
    effective, it is necessary that the premises should be based on accurate forecasts, existing plans
    or any past information about policies etc.
    For example, demand for a product, cost of raw materials, interest rates, state of technology,
    intensity of competition, government policies etc.

     QUESTION 19:
    Give the meaning of 'procedure' and 'rule' as types of plans.
    (CBSE BOARD 2017 )
    Answer.
    (i) Procedure: A procedure is a set of routine steps defined in a chronological order to be
    followed for the enforcement of a policy. It include a detailed description of the exact manner
    in which a task is to be performed. Generally, procedures are developed for the insiders, i.e. the
    employees of the organisation. They consist of steps in a sequential manner, which are
    undertaken to implement a policy or a particular work. In short, we can say that procedures are
    the steps that require to be carried out within a broad policy framework.
    (ii) Rule: A rule refers to a standard or specific statement that gives information about what is
    to be done and what is not to be done. Rules are the simplest type of plans that do not allow
    any kind of flexibility. They signify the managerial decision that a particular task or action has to
    be performed or not. Such rules do not allow any scope for compromise or change unless the
    managers take a policy decision.

     QUESTION 20:
    Ramnath Ltd. is dealing in import of organic food items in bulk. The company sells the items
    in smaller quantities in attractive packages. Performance of the company has been up to the
    expectations in the past. Keeping up with the latest packaging technology, the company
    decided to upgrade its machinery. For this, the Finance Manager of the company, Mr. Vikrant
    Dhull, estimated the amount of funds required and the timings. This will help the company in
    linking the investment and the financing decisions on a continuous basis.
    Therefore, Mr. Vikrant Dhull began with the preparation of a sales forecast for the next four
    years. He also collected the relevant data about the profit estimates in the coming years. By
    doing this, he wanted to be sure about the availability of funds from the internal sources. For
    the remaining funds he is trying to find out alternative sources. Identify the financial concept
    discussed in the above paragraph. Also, state any two points of importance of the financial
    concept, so identified.
    (CBSE BOARD 2017)
    Answer. The financial concept discussed in the paragraph is Financial Planning. Its importance
    can be highlighted from the following factors:
    a. Helps in facing eventual situations: Financial planning helps in forecasting the future
    situations. In this way, it prepares an organisation to cope with the adverse situations in a
    better manner.
    b. Helps in avoiding surprises and shocks: Through financial planning, an organisation can
    detect situations of shortage or surplus of funds that may arise in future. Therefore, it prepares
    the managers in advance for such situations.

     QUESTION 21.
    Give the meaning of ‘Strategy’ and ‘Rule’ as types of plans.
    (CBSE BOARD 2017)
    Answer.
    a. Strategy: Strategy refers to future decisions defining the organisations direction and scope in
    the long run. Objectives, adopting the required course of action and allocating the necessary
    resources. They are often defined as the future decisions, which display the direction and scope
    of the organisation in the end. While formulating a strategy, a manager must consider all the
    different aspects of the business environment and based upon all factors, should finally take up
    the strategic decisions.
    b. Rule: Rules are specific statement that inform what is to be done and what not to be done in
    various circumstances. They signify the managerial decision that a particular task or action has
    to be performed or not. Such rules do not allow any scope for compromise or change.

     QUESTION 22.
    'Planning reduces creativity'. How?
    Answer. Usually in an organisation, the top management performs planning function and the
    rest of the members are required to implement these plans. As a result, middle management
    and other members are not allowed to deviate from plans nor they are granted authority to act
    on their own. Hence, most of the initiative and creativity in them is reduced.

     QUESTION 23.
    What is meant by budget?
    Answer. Budget is a plan in numerical terms, which quantifies desired data. A budget is a
    statement of expected results expressed in numerical terms for a definite period in the future.
    For example, a sales budget helps in forecasting the sales of a particular product in different
    areas during a particular month.

    QUESTION 24.
    How can (i) Political climate and (ii) Policies of competitors obstruct planning?
    Answer.
    (i) Obstruction in planning due to political climate
    When the government regulates the business practices or introduces new trade policies, the
    plans of business enterprises may get upset. In addition, political instability affects business
    plans. For example, change in the taxation policy.
    (ii) Obstruction in planning due to policies of competitors
    The policies of competitors may lead to change in business policies. . For example, discounting
    policies of the competitors may lead to change in pricing policy of a business enterprise.

    LONG ANSWER TYPE QUESTIONS (5 OR 6 MARKS)

    QUESTION 25:
    Two years ago Nishant, completed his degree in Textile Engineering. He worked for sometime
    in a company manufacturing readymade garments. He was not happy in the company and
    decided to have his own readymade garments manufacturing unit. He set the objectives and
    the targets and formulate action plan to achieve the same. One of his objectives was to earn
    80% profit on the amount invested in the first year. It was decided that raw materials like
    cloth, thread, buttons etc, will be purchased on two months credit. He also decided to follow
    the steps required for marketing the products through his own outlets.
    He appointed Ritesh as a production manager, who decides the exact manner in which the
    production activities are to be carried out. Ritesh also prepared a statement showing the
    requirement of workers in the factory throughout the year. Nishant informed Ritesh about
    his sales target for different products area wise for the forthcoming quarter.
    A penalty of Rs 200 per day was announced for the workers who found smoking in the factory
    premises.
    Quoting lines from the above para identify and explain the different types of plans discussed.
    Answer. The different types of plans discussed in the paragraph are listed below.
    1. Objective- "One of her objective was to earn 80 % profit on the amount invested in the first
    year"
    Objectives are the end results, which the management seeks to achieve, by its operations. It is
    to be expressed in specific terms i.e., they should be measurable in quantitative terms, in the
    form of a written statement of desired results to be achieve within a given time period.
    2. Policy- "It was decided that raw materials like cloth, thread, buttons etc. will be purchased
    on two months credit."
    Policies are general statements that guide thinking or channelize energies towards a particular
    direction. It provides a basis for interpreting strategy. It forms the general response or a course
    of action to be followed in a particular situation.
    3. Procedure- "Decided to follow the steps required for marketing of the products through her
    own outlets"
    A procedure is a set of routine steps defined in a chronological order that are to be followed for
    the enforcement of a policy.
    4. Method- "The exact manner in which the production activities are to be carried out"
    Methods provide the prescribed ways or manner in which a task can be performed considering
    the objective. It considers one step of an entire procedure and defines the step to be taken for
    the completion of the given task.
    5. Rule- "A Penalty of Rs 200 per day was announced for the workers who found smoking in the
    factory premises"
    A rule refers to a standard or specific statement that gives information about what is to be
    done and what is not to be done. Rules are the simplest type of plans.
    6. Budget- "Ritesh also prepared a statement showing the requirement of workers in the
    factory throughout the year"
    A budget is a statement of expected results expressed in numerical terms for a definite period
    in the future.

     QUESTION 26:
    Is planning actually worth the huge costs involved? Explain.
    Answer :
    Planning involves huge costs in terms of time and money. It involves analysis, research and
    scientific calculations that involve huge cost. However, despite being an expensive function it
    is a very basic and essential function of an organisation. Following are some of the
    highlighted factors due to which we can say that planning is a very significant action despite
    of the gigantic costs.
    (i) Renders Direction: Planning clearly states the goals and objectives to be achieved. Thus, it
    acts as a guide for the actions to be taken. It provides a direction to the actions of different
    departments of the organisation. They guide the managers about things to be done, what
    route to take and how the objectives are to be achieved. It ensures that the path taken for
    accomplishment of goals is righteously chosen. Planning also ensures that various
    departments of the organisation work in a coordinated manner towards the achievement of
    the desired objectives.
    (ii) Subdued Risk: By guiding an organisation in the right direction, it accredits its managers
    to analyse and anticipate changes. This leads to a reduction in uncertainty of the foreseen
    events. Planning shows how to deal with situations, which may arise in the due course of
    management, though it does not fully eliminate the problems.
    (iii) Minimized Overlapping: As the managers are well comprehended with the policies
    and plans of the organisation, they coordinate the activities together to reach the
    objectives. Thus, overlapping of the work is reduced. In addition, any wastage of
    resources that takes place due to overlapping is reduced. Proper planning ensures that
    there is no confusion and misunderstanding and the work proceeds smoothly.
    (iv) Encourages Creativity: Planning serves as the stepping-stone of any organization’s
    success. It includes formulating policies and plans which requires innovation. It is a crucial
    activity, which demands the best of managers thinking capabilities and creativity. It calls out
    for new ideas by the management to attain the goals.
    (v) Helps in Decision Making: Planning serves as the basis for decision making. Planning
    involves analysing the future, evaluating the various courses of action and choosing best
    alternative as per the objective. Thus, following a proper planning process helps the
    managers in taking rational decisions.
    (vi) Essential for Controlling: Planning states the objectives that are to be achieved. Thus, it
    sets the standards against which the performance is evaluated. It also helps in determining
    whether there is any deviation from the said objectives and thereby, facilitates the corrective
    measures.

    Hence, we can infer that despite the costs involved, planning is a very important function in
    management and worth the costs incurred.


    Question 1.
    State any three points of importance of planning function of management. (CBSE, Delhi 2017)
    Answer:
    The three points indicating the importance of planning is described below:
    1.    Reduces the risk of uncertainty: Planning relates to deciding in advance about the tasks to be performed in future. This enables a manager to anticipate changes and devise the way to deal with changes and uncertain events effectively.
    2.    Planning promotes innovative ideas: Planning is one of the basic managerial functions. Before doing something, the manager must formulate an idea of how to work on a particular task. Thus, planning is closely connected with creativity and innovation. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business.
    3.    Avoiding overlapping and wasteful activities: Planning ensures clarity in thought and action and serves as the basis of coordinating the activities and efforts of different individuals and departments. Therefore, by curtailing useless and redundant activities it helps in smooth working of the organisations work is without interruptions. Moreover, it makes detection of inefficiencies easier so that timely corrective measures may be taken to avoid them in future.
    Question 2.
    Give the meaning of ‘objectives’ and ‘budget’ as types of plans. (CBSE, Delhi 2017)
    Answer:
    1.    Objectives: Objectives are the end results of the activities that an organisation seeks to achieve through its existence. All other activities within the organisation are directed towards achieving these objectives. Objectives are based on the mission or philosophy of the organisation. Objectives are determined by top level management. For example, the objectives of a newly started business is to earn 30% profit gn the amount invested in the first year.
    2.    Budget: A budget refers to a financial plan that is expressed in numerical terms. For example, the marketing manager prepared an area wise sales target for different products for the forthcoming quarter. It is a type of single use plan.
    Question 3.
    State any three limitation of planning. (CBSE, Delhi 2017)
    Answer:
    The three limitations of planning are described below:
    1.    Planning may not work in a dynamic environment: The business environment is dynamic in nature. Every organisation has to constantly adapt itself to changes in its environment in order to survive and grow. However, it difficult to anticipate all the likely future changes in the environment with utmost accuracy. Hence, even with planning everything cannot be foreseen.
    2.    Planning reduces creativity: The top management undertakes planning of various activities whereas the other members are expected to merely implements these plans. This restricts the creativity of the middle managers as they are neither allowed to deviate from plans nor are they permitted to act on their own.
    3.    Planning involves huge costs: The process of planning involves huge cost in terms of time and money as detailed planning is based on a series of scientific calculations. Moreover it may include a number of related costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan. As a result the expenses on planning may turn out to be much more than benefits derived from it.
    Question 4.
    Give the meaning of ‘procedure’ and ‘rule’ as types of plans. (CBSE, Delhi 2017)
    Answer:
    1.    Procedure: A procedure contains a series of specific steps to be performed in a chronological order to carry out the routine activities. It is determined by lower and middle level management. It is a specific statement. There is no scope for managerial discretion. Procedure is framed to implement a policy. It is a type of standing plan.
    2.    Rule: A rule is a specific statement relating to the general norms in terms of Do’s and Don’ts that guide the behaviour of people. It commands strict obedience and a penalty is likely to be imposed on its violation. Rules help to maintain discipline. Rules are both specific and rigid. For example, No smoking, No Parking. It is a type of standing plan.
    Question 5.
    State any three features of planning. (CBSE, Delhi 2017)
    Answer:
    The three features of planning are described below:
    1.    Planning is pervasive: Planning is not an special function, is equally essential at all levels of management. But the scope of planning varies at different levels and among different departments.
    2.    Planning involves decision-making: Planning essentially involves*-application of rational thinking to choose the best alternative among the various available alternatives in order to achieve the desired goals efficiently and effectively.
    3.    Planning is a primary function: Planning precedes all the functions of management i.e. organizing, staffing, directing and controlling. This refers to primacy of planning. Planning provides basis of all other functions.
    Question 6.
    Give the meaning of ‘policy’ and ‘strategy’ as type of plans. (CBSE, Delhi 2017)
    Answer:
    1.    Policy: Policy are general statements that guide managerial decision making. If is determined by top level management. It is a general statement. It provides scope for managerial discretion. Policies are framed to achieve the objectives of an organisation. They all guides in implementing the strategy. It is a type of standing plan.
    2.    Strategy: A strategy is a comprehensive plan prepared for winning over the given challenge or problem. A strategy is based on the objectives of the organisation. A strategy may be determined by top level or middle level management.
    Question 7.
    Give the meaning of ‘Objective’ and ‘Procedure’ as types of plans. (CBSE, OD 2017)
    Answer:
    1.    Objectives: Objectives are the end results of the activities that an organisation seeks to achieve through its existence. All other activities within the organisation are directed towards achieving these objectives. Objectives are based on the mission or philosophy of the organisation. Objectives are determined by top level management. For example, the objectives of a newly started business is to earn 30% profit on the amount invested in the first year.
    2.    Procedure: A procedure contains a series of specific steps to be performed in a chronological order to carry out the routine activities. It is determined by lower and middle level management. It is a specific statement. There is no scope for managerial discretion. Procedure is framed to implement a policy. It is a type of standing plan.
    Question 8.
    Give the meaning of ‘Strategy’ and ‘Rule’ as types of plans. (CBSE, OD 2017)
    Answer:
    1.    Strategy: A strategy is a comprehensive plan prepared for winning over the given challenge or problem. It is based on the objectives of the organisation. It may be determined by top level or middle level management.
    2.    Rule: Rules are specific statements that tell people what should or should not be done. Violation of Rules may lead to imposition of penalties. Rules help to maintain discipline. Rules are both specific and rigid. For example, No smoking, No Parking. It is a type of standing plan.
    Question 9.
    Super Fine Rice Ltd. has the largest share of 55% in the market. The company’s policy is to sell only for cash. In 2015, for the first time company’s number one position in the industry has been threatened because other companies started selling rice on credit* also. But the managers of Super Fine Rice Ltd. continued to rely on it’s previously tried and tested successful plans which didn”t work because the environment is not static. This led to decline in sales of Super Fine Rice Ltd. The above situation is indicating two limitations of planning which led to decline in it sales.
    Identify these limitations. (CBSE, Sample Paper, 2017)
    Answer:
    The two limitations of planning which led to decline in it sales are:
    ·         Planning does not guarantee success.
    ·         Planning may not work in dynamic environment.
    Question 10.
    State the main aspects in the concept of planning. (CBSE, Sample Paper, 2017)
    Answer:
    The concept of planning primarily involves three aspects namely;
    ·         Setting objectives in clear specific and measurable terms for a given period of time.
    ·         Identifying the various alternative courses of action which may be adopted to achieve the objectives.
    ·         Selecting the best possible alternative course of action from among the various courses of action available.
    Question 11.
    Laxmi Chemicals Ltd., a soap manufacturing company, wanted to increase its market share from 30% to 55% in the long-run. A recent report submitted by the Research & Development Department of the company had predicted a growing trend of herbal and organic products. On the basis of this report, the company decided to diversify into new variety of soaps with natural ingredients having benefits and fragrances of Jasmine, Rose, Lavender, Mogra, Lemon Grass, Green Apple, Strawberry etc. The Unique Selling Proposition (USP) was to promote eco-friendly living in the contemporary life style. The company decided to allocate t 30 crores to achieve the objective.
    Identify the type of one of the functions of management mentioned above which will help the company to acquire dominant position in the market. (CBSE, Sample Paper 2016)
    Answer:
    Strategy is the type of plan which will help the company to acquire dominant position in the market.
    Question 12.
    Suhasini, a home science graduate from a reputed college, has recently done a cookery course. She wished to start her own venture with a goal to provide ‘health food’ at reasonable prices. She discussed her idea with her teacher (mentor) who encouraged her. After analysing various options for starting her business venture, they short listed the option to sell ready made and ‘ready to make’ vegetable shakes and sattu milk shakes. Then, they weighed the pros and cons of both the short listed options.
    1.    Name the function of management being discussed above and give any one of its characteristics.
    2.    Also briefly discuss any three limitations of the function discussed in the case. (CBSE, Sample Paper 2016)
    Answer:
    1.    Planning is the function of management which is being discussed above.
    Planning involves decision-making: Planning essentially involves application of rational thinking to choose the best alternative among the various available alternatives in order to achieve the desired goals efficiently and effectively.
    2.    The limitations of planning are described below:
    ·         Planning may not work in a dynamic environment: The business environment is dy¬namic in nature. Every organisation has to constantly adapt itself to changes in its environment in order to survive and grow. However, it is difficult to anticipate all the likely future changes in the environment with utmost accuracy. Hence, even with planning, everything cannot be foreseen.
    ·         Planning reduces creativity: The top management undertakes planning of various activities whereas the other members are expected to merely implement these plans. This restricts the creativity of the middle level managers as they are neither allowed to deviate from plans nor are they permitted to act on their own.
    ·         Planning involves huge costs: The process of planning involves huge cost in terms of time and money as detailed planning is based on a series of scientific calculations. Moreover, it may include a number of related costs as well, like expenses on boardroom meetings, discussions with professional experts and preliminary investigations to find out the viability of the plan. As a result, the expenses on planning may turn out to be much more than benefits derived from it.
    Question 13.
    Two years ago, Madhu completed her degree in food technology. She worked for sometime in a company that manufactured 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 an action plan to achieve the same.
    One of her objectives 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 from farmers cultivating only organic crops. She also decided to follow the steps required for marketing of the products through her own outlets. She appointed Mohan as the Production Manager who decided the exact manner in which the production activities were 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 area wise sales target for different products for the forthcoming quarter. While working on the production table, a penalty of ? 100 per day for not wearing caps, gloves and apron was announced.
    Quoting lines from the above paragraph, identify and explain the different types of plans discussed. (CBSE, Delhi 2016)
    Answer:
    The different types of plans discussed above are listed below:
    1.    Objectives: Objectives are the end results of the activities that-an organisation seeks to achieve through its existence. All other activities within the organisation are directed towards achieving these objectives.
    “One of her objectives was to earn 10% profit on the amount invested in the first year.”
    2.    Policy: A policy is a set of general guidelines that helps in managerial decision making and action.
    “It was decided that the raw materials like fruits, vegetables, spices, etc. will be purchased on three months credit from farmers cultivating only organic crops.”
    3.    Procedure: A procedure contains a series of specific steps to be performed in a chronological order to carry out the routine activities.
    “She also decided to follow the steps required for marketing of the products through her own outlets.”
    “The exact manner in which the production activities are to be carried out.”
    4.    Rule: A rule is a specific statement relating to the general norms in terms of Do’s and Dont’s that guide the behaviour of people. It commands strict obedience and a penalty is likely to be imposed on its violation.
    “While working on the production table, a penalty of ? 100 per day for not wearing caps, gloves and aprons was announced.”
    5.    Budget: A budget refes to a financial plan that is expressed in numerical terms.
    “Mohan also prepared a statement showing the number of workers different products for the forthcoming quater.”
    Question 14.
    Two years ago, Mayank obtained a degree in food technology. For some time, he worked in a company that manufactured bread and biscuits. He was not happy in the company and decided to have his own bread and biscuits manufacturing unit. For this, he decided the objectives and the targets, and formulated an action plan to achieve the same.
    One of his objectives was to earn 50% profits on the amount invested in the first year. It was decided that raw materials like flour, sugar, salt, etc. will be purchased on two months credit. He also decided to follow the steps required for marketing the products through his own outlets. He appointed Harsh as the Production Manager who decided the exact manner in which the production activities were to be carried out. Harsh also prepared a statement showing the requirement of workers in the factory throughout the year. Mayank informed Harsh about his are a wise sales target for different products, for the forthcoming quarter. While working on the production table, a penalty of ?150 per day was announced for not wearing the helmet, gloves and apron by the workers.
    Quoting lines from the above paragraph, identify and explain the different types of plans discussed. (CBSE, OD 2016)
    Answer:
    The different types of plans discussed above are listed below:
    1.    Objectives: Objectives are the end results of the activities that an organisation seeks to achieve through its existence. All other activities within the organisation are directed towards achieving these objectives.
    “One of her objectives was to earn 50% profit on the amount invested in the first year.”
    2.    Policy: A policy is a set of general guidelines that help in managerial decision making and action.
    “It was decided that the raw materials like flour, wheat, sugar, etc. will be purchased on two months credit.”
    3.    Method: A method refers to the prescribed ways or manner in which a task has to be performed considering the objective.
    “..decided the exact manner in which production activities were to be carried out.”
    4.    Procedure: A procedure contains a series of specific steps to be performed in a chronological order to carry out the routine activities.
    “He also decided to follow the steps required for marketing of the products through his own outlets.”
    5.    Rule: A rule is a specific statement relating to the general norms in terms of Do’s and Dont’s that guide the behaviour of people. It commands strict obedience and a penalty is likely to be imposed on its violation.
    “While working on the production table, a penalty of Rs. 150 per day was announced for not wearing helmets, gloves and aprons by the workers.”
    Question 15.
    Rahul, a worker, is given a target of assembling two computers per day. Due to his habit of doing things differently, an idea struck him which would not only reduce the assembling time of computers but would also reduce the cost of production of the computers. Instead of appreciating him, Rahul’s supervisor ordered him to complete the work as per the methods and techniques decided earlier as nothing could be changed at that stage. The above paragraph describes one of the limitations of the planning function of management. Name and explain that limitation. (CBSE, Delhi Comptt. 2011)
    Answer:
    The limitation of the planning function of management described in the above paragraph is that ‘planning reduces creativity.’ The top management undertakes planning of various policies and procedures whereas the other members are expected to merely implement these plans. This restricts the creativity of the middle level managers as they are neither allowed to deviate from plans, nor permitted to act on their own.
    ADDITIONAL QUESTIONS
    Question 1.
    Josh Ltd. is a one of the largest two-wheeler manufacturer in India. It has a market share of about 42% in the two-wheeler category. The company had witnessed almost a 35% drop in the booking as the currency crunch was prompting people to withhold new purchases due to demonetisation. Therefore, the production manager of the company had decided to align production to factor in slower sales in the market.
    In context of the above case:
    1.    Identify and explain the function of management being discussed in the above lines.
    2.    Which limitations of the function of management as identified in part (a) of the question was the production manager trying to overcome due to demonetisation?
    Answer:
    1.    Planning is the function of management which is being discussed in the above lines.
    Planning is deciding in advance what to do, how to do, when to do and who has to do it. Thus, it involves setting objectives and developing an appropriate course of action to achieve these objectives.
    2.    The production manager is trying to overcome the following limitations of planning:
    ·         Rigidity
    ·         Planning may not work in dynamic environment
    Question 2.
    The term demonetisation has become a household name since the government pulled the old Rs. 500 and Rs. 1,000 notes out of circulation in November 2016. Prior to the year 2016, the Indian government had demonetised bank notes on two prior occasions—once in the year 1946 and then again in the year 1978. In both cases, the purpose was to combat tax evasion by ‘black money’. Identify the types of one of the functions of management being discussed in the above lines.
    Answer:
    Objective and Strategy
    Question 3.
    The arrangement to demonetise the ? 500 and ?1000 bank notes began six to ten months prior to the public announcement and was kept highly confidential. The cabinet was informed about the demonetisation on 8th November 2016 in a meeting called by the Prime Minister of India, Narendra Modi. This was followed by Modi’s public announcement about the demonetisation in a televised address where he announced that currency notes with the denomination of ? 500 and ? 1000 would cease to be the legal tender from 9th of November 2016. The most interesting thing regarding the demonetisation is that people were devising various unique ways for transforming their black money in to white one by depositing money in the accounts of their poor relatives and friends, converting black money in to gold, paying a few months salaries in advance and so on.
    In context of the above case:
    Identify and explain the types of plans being discussed in the above lines with regard to demonetisation.
    Answer:
    The various types of plans being discussed in the above lines with regard to demonetisation are detailed below:
    ·         Procedure: It is a series of chronological steps which are performed to do a particular activity.
    ·         Rule: A rule is a specific statement relating to the general norms in terms of Do’s and Don’ts that guide the behaviour of people.
    Question 4.
    Flipkart is an e-commerce company founded in the year 2007 by Sachin Bansal and Binny Bansal. The company is registered in Singapore, but has its headquarters in Bangaluru, India. The company seeks to increase traffic (more clicks on their products) and boost sales and revenue through integration of Mobile Apps, Display, Pay Per Click and Search Engine Optimization. In order to dispel the fear of people related to shopping online, Flipkart was the first company to implement the popular ‘Cash on Delivery’ facility. All the products sold by the company under a particular category may have different return/replacement period. Flipkart allows multiple payment options such as cash on delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on delivery. The company operates both ways when an order is received. The products for which it holds inventory are dispatched by it directly. For the products they do not store in inventory, they just send the order received by them to the supplier who ships it. The company plans to spend about ? 75 crores on e-Commerce advertising in the year 2016. Flipkart reserves the right to terminate your membership and/or refuse to provide you with access to the website if it is brought to Flipkart’s notice or if it is discovered that you are under the age of 18 years. This is because as per the Indian Contract Act, 1872, the minors, un-discharged insolvents, etc. are not eligible to use the website.
    In context of the above case, identify and explain the different types of plans being used by Flipkart by quoting lines from the paragraph.
    Answer:
    The different types of plans being used by Flipkart are listed below:
    1.    Objectives: Objectives are the end results of the activities that an organisation seeks to achieve through its existence. All other activities within the organisation are directed towards achieving these objectives.
    “The company seeks to increase traffic (more clicks on their products) and boost sales and revenue through integration of Mobile Apps, Display, Pay Per Click and Search Engine Optimization.”
    2.    Strategy: A strategy is a comprehensive plan for achieving the objectives of the organisation. This comprehensive plan involves:
    ·         determining long term objectives
    ·         adopting a particular course of action
    ·         allocating resources necessary to achieve the objective.
    “In order to dispel the fear of people related to shopping online, Flipkart was the first company to implement the popular ‘Cash On Delivery’ facility.”
    3.    Policy: A policy is a siet of general guidelines that help in managerial decision making and action.
    “All the products sold by the company under a particular category may have different return/replacement period.”
    4.    Method: A method refers to the prescribed ways or manner in which a task has to be performed considering the objective.
    “Flipkart allows multiple payment options such as cash on delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on delivery.”
    5.    Procedure: A procedure contains a series of specific steps to be performed in a chronological order to carry out the routine activities.
    “The company operates both ways when an order is received. The products for which it holds inventory are dispatched by it directly. For the products they do not store in inventory, they just send the order received by them to the supplier who ships it.”
    6.    Budget: A budget refers to a financial plan that is expressed in -numerical terms.
    “The company plans to spend about ? 75 crores on e-commerce advertising in the year 2016.”
    7.    Rule: A rule is a specific statement relating to the general norms in terms of Do’s and Don’ts that guide the behaviour of people. It commands strict obedience and a penalty is likely to be imposed on its violation.
    “Flipkart reserves the right to terminate your membership and/or refuse to provide you with access to the Website if it is brought to Flipkart’s notice or if it is discovered that you are under the age of 18 years. This is because as per the Indian Contract Act, 1872, the minors, un-discharged insolvents etc. are not eligible to use the Website.”
    Question 5.
    Rajender has been running a successful business of manufacturing traditional wedding wear for women including sarees and lehengas. His friend Surinder who is engaged in the business of providing web designing solutions to his clients, suggests him to explore the option of selling his products online. Rajender agrees to his suggestion and decides to venture into online business, keeping in view the various e-commerce regulations in order to avoid imposition of any penalty. In order to facilitate the sale of his products, Rajender decides to offer multiple payment options such as cash on delivery, credit or debit card transactions, net banking to the buyers etc.
    In context of the above case:
    1.    Identify the two different types of plans mentioned in the above paragraph that relate to the online portal that Rajinder intends to startby quoting lines from the paragraph.
    2.     Distinguish between the two types of plans as identified in part (a).
    Answer:
    1.    Rule and Method are the two different types of plans that relate to the online portal that Rajender intends to start.
    ·         Rule: “Rajender agrees to his suggestion and decides to venture into online business keeping in view the various e-commerce regulations in order to avoid imposition of any penalty.”
    ·         Method: “However, he decides to offer multiple payment options such as cash on delivery, credit or debit card transactions, net banking to the buyers etc.”
    2.    The difference between rule and method is as follows:
    Basis
    Rule
    Method
    Meaning
    Rules are specific statements that tell people what should or should not be done.
    Methods define the way of doing routine or respective job.
    Violation
    Violation of rules may lead to imposition of penalties.
    Method does not involve any penalties on violation.
    Purpose
    Rules help to maintain discipline.
    Methods help in carrying out the job efficiently.
    Nature
    Rules are both specific and rigid.
    Methods are specific (well defined) but flexible.
    Example
    No smoking, No Parking etc.
    Method of payment of fee-cheque, cash, online etc.
    Question 6.
    Wazir Ahmed joins ‘Ashiyana Ltd.’ a company dealing in real estate, as a human resource manager. Through a series of interactions with his team during lunch breaks, he comes to know that quite a few managers at middle and senior levels have recently left the organisation as their promotions were overdue. Therefore, in order to reinstate the confidence of the staff, he lays out a clear cut plan consisting of a set of general guidelines for both time bound and performance related appraisals of the mangers at all levels. Moreover, he develops standardized processes containing a series of steps specified in a chronological order for its implementation.
    In context of the above case:
    1.    Identify the two different types of plans that Wazir Ahmed proposes to implement in order to reinstate the confidence of the staff by quoting lines from the paragraph.
    2.    Distinguish between the two types of plans as identified in part (a).
    Answer:
    1.    Policy and Procedure are the two different types of plans that Wazir Ahmed proposes to implement in order to reinstate the confidence of the staff.
    Policy: “… he lays out a clear cut plan consisting of a set of general guidelines for both time bound and performance related appraisals of the mangers at all levels.”
    Procedure: “Moreover, he develops standardized processes containing a series of steps specified in a chronological order for its implementation.”
    2.    The difference between Policy and Procedure is outlined below:
    Basis
    Policy
    Procedure
    Meaning
    Policies are general statements that guide managerial decision making.
    It is a series of chronological steps which are performed to do a particular activity.
    Level of management
    It is determined by top level management.
    It is determined by lower and middle level management.
    Expression
    It is a general statement.
    It is a specific statement.
    Manager’s
    Discretion
    It provides scope for managerial discretion.
    There is no scope for managerial discretion.
    Purpose
    Policies are framed to achieve the objectives of an organisation. They all guide in implementing the strategy.
    A procedure is framed to implement a policy.
    Question 7.
    ‘Apna Ghar/ a company dealing in consumer durables, plans to increase the sale of its products by 25% around Diwali this year. Moreover, in order to cash on the implementation of the seventh pay commission by that time, which is likely to raise the income of 47 lakh serving employees of the Central government and 52 lakh pensioners, the company has created 30 advertisement films which will be aired across 85 national and regional channels until Diwali.
    In context of the above case:
    1.    Identify the two different types of plans that ‘Apna Ghar’ proposes to implement by quoting lines from the paragraph.
    2.    Distinguish between the two types of plans as identified in part(i).
    Answer:
    1.    Objective and Strategy are the two different types of plans that ‘Apna Ghar’ proposes to implement.
    Objective: “Apna Ghar’, a company dealing in consumer durables, plans to increase the sale of its products by 25% around Diwali this year.”
    Strategy: “Moreover, in order to cash on the implementation of the seventh pay commission by that time which is likely to raise the income of 47 lakh serving employees of the Central government and 52 lakh pensioners, the company has created 30 advertisement films which will be aired across 85 national and regional channels until Diwali.”
    2.    The difference between objectives and strategy is outlined below:
    S. No.
    Basis
    Objectives
    Strategy
    1.
    Meaning
    Objectives are the end results of the activities that an organisation seeks to achieve through its existence.
    A strategy is a comprehensive plan prepared for winning over the given challenge or problem.
    2.
    Source
    Objectives are based on the mission or philosophy of the organisation.
    A strategy is based on the objectives of the organisation.
    3.
    Level of persons involved
    Objectives are determined by top level management.
    A strategy may be determined by top level or middle level management.
    Question 8.
    After completing a diploma in Bakery and Patisserie, Payai sets up a small outlet at Goa Airport to provide a healthy food option to the travellers. To begin with, she has decided to sell five types of patties, three types of pizzas and low sugar muffins in four flavours. Thus, by deciding in advance what to do and how to do, she is able to reduce the risk of uncertainty and avoid overlapping and wasteful activities. But sometimes her planning does not work due to some unavoidable circumstances like cancellation of flights due to bad weather conditions, government alert etc. which adversely affects her clientele.
    In context of the above case:
    1.    Identify and explain the points highlighting the importance of planning mentioned in the above paragraph.
    2.    Describe briefly the limitation of planning which adversely affects Payal’s business
    Answer:
    1.    The points highlighting the importance of planning mentioned in the above paragraph are described below:
    ·         Reduces the risk of uncertainty: Planning relates to deciding in advance about the tasks to be performed in future. This enables a manager to anticipate changes and devise the ways to deal with changes and uncertain events effectively.
    ·         Avoiding overlapping and wasteful activities: Planning ensures clarity in thought and action and serves as the basis of coordinating the activities and efforts of different individuals and departments. Therefore, by curtailing useless and redundant activities, it helps in the smooth working of the organisation’s work without interruptions. Moreover, it makes detection of inefficiencies easier so that timely corrective measures may be taken to avoid them in future.
    2.    The limitation of planning which adversely affects Payal’s business is:
    ·         Planning may not work in a dynamic environment: The business environment is dynamic in nature. Every organisation has to constantly adapt itself to changes in its environment in order to survive and grow. However, it difficult to anticipate all the likely future changes in the environment with utmost accuracy. Hence, even with planning, everything cannot be foreseen.
    Question 9.
    ‘Agile Ltd.’ is a well-known automobile manufacturing company in India. The company plans to increase the sale of its sedan cars by 20% in the next quarter. In order to achieve the desired target, the marketing team of the company considers the impact of policy of the government towards diesel vehicles and the level of competition in this segment of cars. They explore the various available options like offering more discount to dealers and customers, providing more customer friendly finance options, lucky draws on test drives, increasing advertising, offering more of free accessories on the purchase of the car, etc. A thorough analysis of the various available options is done keeping in view the relative viability of each option. The company decides to pursue the option of offering more discount to dealers and customers in order to boost the sale of sedan cars. In order to implement the plan, they determine the various discount packages and communicate the same to their product dealers. To make the prospective consumers aware about the new available benefits, advertisements are made through various sources of print and electronic media. The market analysts of the company keep a close watch on the revenue from the sedan cars to study the effect of new initiatives by the company to promote its sales.
    In context of the above case:
    1.    Name the function of management described in the above paragraph.
    2.    Identify and explain the various steps involved in process the function of management as identified in part (a) by quoting lines from the paragraph.
    Answer:
    1.    Planning is the function of management which is being described in the above paragraph.
    2.    The various steps involved in the planning process are explained below:
    ·         Setting objectives: The planning process is initiated by setting the objectives in clear, specific and measurable terms. The objectives may be set for the organization as a whole and for each department or unit within the organization.
    “The company plans to increase the sale of its sedan cars by 20% in next quarter.”
    ·         Developing Premises: Planning process is carried out keeping in view the assumptions related to the future, which is uncertain. These assumptions are called premises and may relate to government policy, interest rate, inflation, etc. Accurate forecasts are therefore essential for successful planning.
    “In order to achieve the desired target the marketing team of the company considers the impact of policy of the government towards diesel vehicles and level of competition in this segment of cars.” .
    ·         Identifying alternative courses of action: The next step in the planning process involves identification of the various ways in which the goals can be achieved.
    “They explore the various available options like offering more discount to dealers and customers, providing more customer friendly finance options, lucky draws on test drives, increasing advertising, offering more of free accessories on the purchase of the car, etc.”
    ·         Evaluating alternative courses: In order to select the best option, the relative positive and negative aspects of each alternative should be evaluated in the light of their feasibility and consequences.
    “A thorough analysis of the various available options is done keeping in view the relative viability of each option.”
    ·         Selecting an alternative: The best plan is adopted to achieve the desired goals. Sometimes, a combination of plans may be selected instead of one best course of action.
    “The company decides to pursue the option of offering more discount to dealers and customers in order to boost the sale of sedan cars.”
    ·         Implement the plan: This step is concerned with putting plans into action.
    “In order to implement the plan, they determine the various discount packages and communicate the same to their product dealers. To make the prospective consumers aware about the new available benefits, advertisements are made through various sources of print and electronic media.”
    ·         Follow up action: Monitoring of plans is equally important to ensure that objectives are achieved efficiently and effectively.
    “The market analysts of the company keep a close watch on the revenue from the sedan cars to study the effect of new initiatives by the company to promote its sales.”
    Question 10.
    Arush joins as a sales manager of a company dealing in naturotherapy products. Being proficient in his work, he knew that without good planning he will not be able to organise, direct, control or perform any of the other managerial functions efficiently and effectively. Only on the basis of sales forecasting, he would assist in the preparation of the annual plans for its production and sales. Besides, he will have to prepare sales plans regularly on weekly, monthly, quarterly and half yearly basis. While preparing the sales forecasts, he undertakes intellectual thinking involving foresight, visualization and issued judgement rather than wishful thinking or guess work. Most importantly, all these planning activities will be meaningful only if they will coincide with the purpose fob which the business is being carried out.
    In context of the above case, identify the various features of planning highlighted in the above paragraph by quoting lines from it.
    Answer:
    The features of planning highlighted in the above paragraph are explained below:
    1.    Planning is a primary function: Planning precedes all the functions of management i.e. organizing, staffing, directing and controlling. This refers to primacy of planning. Planning provides the basis of all other functions.
    “… without good planning he will not be able to organise, direct, control or perform any of the other managerial functions efficiently and effectively. “
    2.    Planning is futuristic: Planning is called a forward looking function as it enables an organization to meet future events effectively.
    “Only on the basis of sales forecasting, he would assist in the preparation of the annual plans for its production and sales.”
    3.    Planning is continuous: Plans need to be continuously made, implemented and followed by another plan and so on till an organization exists
    “Besides, he will have to prepare sales plans regularly on weekly, monthly, quarterly and half yearly basis.”
    4.    Planning is a mental exercise: Planning is done on the basis of rational thinking involving foresight, visualization and issued judgement rather than wishful thinking or guess work.
    “While preparing the sales forecasts, he undertakes intellectual thinking involving foresight, visualisation and issued judgement rather than wishful thinking or guess work.”
    5.    Planning focuses on achieving objectives: Planning is a purposeful activity as it contributes to the achievement of predetermined goals of the organisation both efficiently and effectively.
    “Most importantly, all these planning activities will be meaningful only if they will coincide with the purpose for which the business is being carried out.”
    Question 11.
    Holistic Education Public School in Bahadurgarh decides to implement the literacy programme of the government in the school. It is decided that within the year, the forty five support staff employees of the school will be made literate by the school counsellors and social workers. In order to enhance the learning process, the school decides to use audio-visual aids. To start the programme, the school has to first procure the literacy books from State Resource Centre at Jamia. Besides the curriculum, each literacy book contains a series of nine tests which the volunteers have to get completed by the learners during the programme. Moreover, by implementing the plan of ‘each one teach one’, each student of the school from classes fifth to tenth will be encouraged to make one person literate. The student volunteers may select a learner by adopting any one of the two ways; either from the slum areas adopted by the school or on their own within the vicinity of their residence. As per the norms of the Delhi Government, it is mandatory for the volunteers to send back the filled copy of only the ninth test paper in the series to the authorities as a conclusive proof of the completion of the course, else the certificate of commendation will not be awarded to them. Considering the implementation of the programme to be a part of its corporate social responsibility initiative, the school has decided to spend around Rs. 50,000 on the distribution of free stationery items, refreshments of the learners, etc.
    In context of the above case:
    1.    Identify the various types of plans being used by Holistic Education Public School in order to implement the literacy programme in their school by quoting the lines from the paragraph.
    2.    Categorise the various types of plans as identified in part (a) into single use plans and standing plans.
    Answer:
    1.    The various types of plans being used by the school to implement the literacy programme in the school are:
    ·         Objectives: “It is decided that within the year, all the forty five support staff employees of the school will be made literate by the school counsellors and social workers.”
    ·         Strategy: “In order to enhance the learning process, the school decides to use audio visual aids.”
    ·         Policy: “Moreover, by implementing the plan of ‘each one teach one,’ each student of the school from classes fifth to tenth will be encouraged to make one person literate.”
    ·         Procedure: “To start the programme the school has to first procure the literacy books from State Resource Centre at Jamia. Besides the curriculum, each literacy book contains a series of nine tests which the volunteers have to get completed by the learners during the programme.”
    ·         Method: “The student volunteers may select a learner by adopting any one of the two ways; either from the slum areas adopted by the school or on their own within the vicinity of their residence.”
    ·         Rule: “As per the norms of the Delhi Government, it is mandatory for the volunteers to send back the filled copy of only the ninth test paper in the series to the authorities as a conclusive proof of the completion of the course, else the certificate of commendation will not be awarded to them.”
    ·         Budget: “Considering the implementation of the programme to be a part of its corporate social responsibility initiative, the school has decided to spend around ? 50,000 on the distribution of free stationery items, refreshments of the learners, etc.”
    2.    Single use plans are the ones that are formulated to deal with new or non-repetitive situations that may arise in an organisation from time to time. This includes programmes, budgets and projects.
    Standing plans refer to the types of plans which once formulated may be used for a long period of time in similar or repetitive situations that may prevail in an organisation. These include objectives, strategies, policies, procedures methods and rules.


    Q. 1. Laxmi Chemicals Ltd., a soap manufacturing company wanted to increase its market
    share from 30% to 55% in the long run. A recent report submitted by the Research &
    Development Department of the company had predicted a growing trend of herbal and
    organic products. On the basis of this report the company decided to diversify into new
    variety of soaps with natural ingredients having benefits and fragrances of Jasmine, Rose,
    Lavendear, Mogra, Lemon Grass, Greed Apple, Strawberry etc. The Unique Selling
    Proposition (USP) was to promote eco-friendly living the contemporary life style. The
    company decided to allocate Rs. 30 crores to achieve the objective.
    Identify the type of one of the functions of management mentioned above which will help the
    company to acquire dominant position in the market. (1 mark)
    Ans. Strategy

    Q. 2. Suhasini a home science graduate from a reputed college has recently done a cookery
    course. She wished to start her own venture with a goal to provide ‘health food’ at
    reasonable price. She discussed her idea with her teacher (|mentor) who encouraged her.
    After analyzing various options for starting her business venture, they shortlisted the option
    to sell ready made and ‘ready to make’ vegetable shakes and sattu milk shakes. Then they
    both weighed the pros and coris of both the shortlisted optins.
    1. Name the function of management being discussed above and give any one of its
    characteristics.
    2. Also briefly discuss any three limitations the function discussed in the case.
    (5 marks)
    Ans.
    1. Planning.
    Characteristic of planning
    Planning focuses on achieving objectives
    1. Limitation of planning
    1. Planning leads to rigidity:
    2. Planning reduces creativity:
    3. Planning is a time-consuming process:

    Q. 3. A company is manufacturing garments. The manager wants to increase profits by
    purchasing new high speed machines or increasing the sale price or using waste material in
    manufacturing stuffed toys.
    He decided that ‘using waste material’ to increase the profit is the best solution for him.
    1. Identify the concept of management involved.
    2. Mention the steps involved in the above process by quoting the line from the
    question.
    3. To complete the process of the concept identified in (a), what two next steps does the
    manager have to take? Explain. (6 marks)
    Ans.
    1. The concept of management involved is PLANNING.
    2. Steps involved are:
    ● Setting objectives : increasing profits
    ● Developing planning premises : making certain assumptions about future.
    ● Identifying alternative courses of action:
    ● Purchasing new high speed machines, or
    ● Increasing the sale price, or
    ● Using waste material in manufacturing stuffed toys
    ● Evaluating alternatives and selecting an alternative :
    1. Further steps to complete the process of planning:
    ● Formulating derivate plans:
    ● Implementing the plan and follow-up-action:

    Q. 4. Two year ago, Madhu completed her degree in food technology. She worked for
    sometime in a company that manufactured 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 an action plan to achieve the
    same.
    One of her objectives 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 from farmers cultivating only organic crops. She also decided to follow the
    steps required for marketing of the products through her own outlets. She appointed Mohan
    as the Production Manager who decided that exact manner in which the production activities
    were 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
    area wise sales target for different products for the forthcoming quarter. While working on
    the production table, a penalty of Rs. 100 per day for not wearing caps, gloves and apron
    was announced.
    Quoting lines from the above paragraph, identify and explain the different types of plans
    discussed.
    Ans.
    The different types of plan discussed above are listed below:
    1. Objectives:
    “One of her objectives was to earn 10% profit on the amount invested in the first year.”
    1. Policy:
    “It was decided that the raw materials like fruits, vegetables, spices, etc. will be purchased
    on three months credit from farmers cultivating only organic crops.”
    1. Method:
    “The exact manner in which the production activities are to be carried out.”
    1. Procedure:
    “She also decided to follow the steps required for marketing of the products through her own
    outlets.”
    1. Rule:
    “While working on the production Table, a penalty of Rs. 100 per day for not wearing caps,
    gloves and aprons was announced.”

    Q. 5. During partition, Kundan Lal came to Mumbai from Lahore with a lot of wealth.
    Keeping in view his innate ability to visualize and create things, he decided to work as a
    junior assistant in a film studio. Over a period of time, as he gained experience and his work
    was well acclaimed, he decided to set up his own film studio. Initially he was himself looking
    into every aspect of the business, but as his work increased manifolds and his own
    productivity reduced with age, he hired Jummy as manager. Jimmy being immature in his
    work started giving bookings for the studio haphazardly. He would never decide anything in
    advance or do any kind of forecasting of events. This led to lot of confusions and conflicts.
    As a result, the goodwill earned by Kundan Lal over the years began to decline.
    In context of the above case:
    1. Identify and explain the function of management which Jimmy failed to perform by
    quoting lines form the paragraph.
    2. Describe briefly any two features of the function of management as identified in part
    (a).
    Ans.
    1. Planning is the function of management which Jimmy failed to perform.
    Planning is deciding in advance what to do, how to do, when to do and who has to do it.It is
    one of the basic managerial functions.Thus, it involves setting objectives and developing an
    appropriate course of action to achieve those objectives.
    1. The two features of the planning function of management are as follows:
    1. Planning is pervasive:
    2. Planning involves decision-making:

    Q. 6. After completing a diploma in Bakery and Patisserie, Payal sets up a small outlet at
    Goa Airport to provide a healthy food option to the travellers. To begin with, she has
    decided to sell five types of patties, three type of pizzas and low sugar muffins in four
    flavours. Thus, by deviding in advance what to do and how to do, she is able to reduce the
    risk of uncertainty and avoid overlapping and wasteful activities. But sometimes her
    planning does not work due to some unavoidable circumstances like cancellation of flights
    due to bad weather conditions, government alert etc. which adversely affects her clientele.
    In context of the above case:
    1. Identify and explain the points highlighting the importance of planning mentioned in
    the above paragraph.
    2. Describe briefly the limitation of planning which adversely affects Payal’s business.
    Ans.
    1. The paints highlighting the importance of planning mentioned in the above paragraph
    are described below:
    1. Reduces the risk of uncertainty:
    2. Avoiding overlapping and wasteful activities:
    1. The limitation of planning which adversely affects Payal’s business is:
    1. Planning may not work in a dynamic environment:

    Q. 7. Rahul, a worker, is given a target of assembling two computers per day. Due to his
    habit of doing things differently, an idea struck him which would not only reduce the
    assembling time of computers but would also reduce the cost of production of the
    computers. Rahul’s supervisor instead of appreciating him, ordered him to complete the
    work as per the methods and techniques decided earlier as nothing could be changed at
    that stage.
    The above para describes one of the limitation of planning function of management. Name
    that limitation. 1
    mark)
    Ans. Planning reduces creativity.

    Q. 8. ABC Ltd. has a plan of increasing profits by 20%. It has devoted a lot of time and
    money to this plan. But the competition starts increasing, so it could not change its plan to b
    eat its competitors because huge amount of money had already been devoted to the
    pre-decided plan. It caused losses to the company.
    Explain any two limitations of planning highlighted in the above case. Also, quote the lines
    from it. (4
    marks)
    Ans.
    1. ‘ABC Ltd. has devoted a lot of time and money to its plan.’
    Planning is a time consuming process. It also involves huge costs.
    1. ‘The competition starts increasing, so it could not change its plan to beat its
    competitors because huge amount of money had already been devoted to the
    pre-decided plan.’
    Planning leads to rigidity. Following a pre-decided plan, when circumstances change, may
    not turn out to be in the organization’s interest.

    Q. 9. In ‘Chak De India’ movie, Shahrukh Khan becomes the coach of the girls’ hockey
    team. He knows that he has to prepare the girls for the international hockey matches and
    bring the world cup after winning. For this he prepares a long-team plan and thinks the
    ways how to bet the competitors. He coaches the girls to play in different ways like
    defensive, offensive, etc. at the outset of a match he explains who will open the match, and
    how the ball will be passed by one player to another step by step.
    Identify four types of plan that are highlighted in the above case, quoting the lines from it.
    (4 marks)
    Ans.
    1. Objective
    ‘…bring the world cup after winning.’
    2. Strategy
    ‘For this he prepares long-term plan and thinks the ways how to beat the
    competitors.’
    3. Method
    ‘He coaches the girls to play in different ways like defensive, offensive, etc.’
    4. Procedure
    ‘At the outset of a match he explains who will open the match, and how the ball will be
    passed by one player to another step by step.’

    Q. 10. Flipkart is an e-commerce company founded in the year 2007 by Sachin Bansal and
    Binny Bansal. The company is registered in Singapore, but has its headquarters in
    Bangaluru, India. The company seeks to increase traffic (more clicks on their products) and
    boost sales and revenue through integration of Mobile Apps, Display, Pay Per Click and
    search Engine Optimization. In order to dispel the feat of people related to shopping online,
    Flipkart was the first company to implement to popular ‘Cash on Delivery’ facility. All the
    products sold by the company under a particular category may have different
    return/replacement period. Flipkart allows multiple payment options such as cash on
    delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on
    delivery. The company operates both ways when an order is received. The products for
    which it holds inventory are dispatched by it directly. For the products they do not store in
    inventory, they just send the order received by them to the supplier who ships it. The
    company plans to spend about Rs. 75 crores on e-Commerce advertising in the year 2016.
    Flipkart reserves the right to terminate your membership and/or refuse to provide you with
    access to the website if it is brought to Flipkart’s notice or if it iis discovered that you are
    under the age of 18 years. This is because as per the Indian contract Act, 1872, the minors,
    un-discharged insolvents, etc. are not eligible to use the website.
    In context of the above case, identify and explain the different types of plans being used by
    Flipkart by quoting lines the paragraph.
    Ans. The different types of plans being used by Flipkart are listed below:
    1. Objectives:
    “The company seeks to increase traffic (more clicks on their products) and boost sales and
    revenue through integration of Mobiles Apps, Display, Pay Per Click and Search engine
    Optimization.”
    1. Strategy:
    “In order to dispel to fear of people related to shopping online, Flipkart was the first company
    to implement the popular ‘Cash On Delivery’ facility.”
    1. Policy:
    “All the products sold by the company under a particular category may have different
    return/replacement period.”
    1. Method:
    “Flapkart allows multiple payment options such as cash on delivery, credit or debit card
    transactions, net banking, e-gift voucher and card swipe on delivery.”
    1. Procedure:
    “The company operataes both ways when an order is received.The products for which it
    holds inventory are dispatched by it directly.For the products they do not store in inventory,
    they just send the order received by them to the supplier who ships it.”
    1. Budget:
    “The company plans to spend about Rs. 75 crores on e-Commerce advertising in the year
    2016.
    1. Rule:
    Flipkart reserves the right to terminate your membership and/or refuse to provide you with
    access to the Website if it is brought to Flipkart’s notice or if it is discovered that you are
    under the age of 18 years.This is because as per the Indian Contract Act, 1872, the minors,
    un-discharged insolvents etc. are not eligible to use the Website.”

    Q. 11. An electronic company 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 price models for mass consumers who are price sensitive. For quality
    conscious consumers, company is introducing new model LED TV and DVD players with
    added features and new technological advancements. For this, the company raises extra
    funds Rs. 5 crore form banks.
    Name the type of plan the company is preparing. State the steps which the company
    follows to implement this plan quoting the line from the above para. (4 marks)
    Ans. The type of plan needed to be prepared under this situation is ‘Strategy’.
    Steps involved in preparing this plan are:
    (i) Determining long-term objectives:
    (ii) Adopting a particular course of action:
    (iii) Allocating resources necessary to achieve the objectives:

    Q. 12. Arush joins as a sales manager of a company dealing in naturotherapy produces.
    Being proficient in his work, he knew that without good planning he will not be able to
    organise, direct, control or perform any of the other managerial functions efficiently and
    effectively. Only on the basis of sales forecasting, he would assist in the preparation of the
    annual plans for its production and sales. Besides, he will have to prepare sales plans
    regularly on weekly, monthly, quarterly and half yearly basis. While preparing the sales
    forecasts, he undertakes intellectual thinking involving foresight, visualization and issued
    judgement rather than wishful thinking or guess work. Most importantly, all these planning
    activities will be meaningful only if they will coincide with the purpose for which the business
    is being carried out.
    In context of the above case, identify the various features of planning highlighted in the
    above paragraph by quoting lines from it.
    Ans. The features of planning highlighted in the above paragraph are explained below:
    1. Planning is a primary function:
    “… without good planning he will not be able to organise, direct, control or perform
    any of the other managerial functions efficiently and effectively.”
    2. Planning is futuristic:
    “Only on the basis of sales forecasting, he would assist in the preparation of the
    annual plans for its production and sales.”
    3. Planning is continuous:
    “Besides, he will have to prepare sales plans regularly on weekly, monthly, quarterly
    and half yearly basis.”
    4. Planning is a mental exercise:
    “While p reparing the sales forecasts he undertakes intellectual thinking involving foresight,
    visualization and issued judgement rather than wishful thinking or guess work.”
    1. Planning focuses on achieving objectives:
    “Most importantly, all these planning activities will be meaningful only if they will coincide
    with the purpose for which the business is being carried out.”

    Q. 13. Zyesha Ltd. is a company which manufactures leather bags. The CEO of the
    company wants to increase their sales and earn more profits. The consulted with a
    management consultant who suggested the top management of the company tow rok hard
    in thinking about the future in making business prediction and achieve the targets since the
    business environment keeps on changing whether in terms of technological improvement,
    shifts in consumer preferences or entry of new competitors in the market.
    1. Identify and state the concept of management discussed in the para.
    2. State the characteristic feature of business environment highlighted in the above
    para. (3 marks)
    Ans.
    1. Planning
    It involves setting objectives and developing appropriate course of action to achieve these
    objectives.Dreams (e.g. increase sales, earn more profits, etc.) can be turned into reality
    only if business managers think in advance on what to do and how to do it.
    1. Business environment is dynamic as it keeps on changing.

    Q. 14. Lira Ltd. is a company manufacturing designer socks. While making its plan, the
    company takes into consideration the business environment. It constantly adapt itself to
    changes in environment by making changes in its plan. However, it becomes difficult for the
    managers of the company to accurately foresee future trends in the environment.
    Competition in the market upsets its financial plans; then sales targets have to be revise3d
    and, accordingly cash budgets also need to be modified since they are based on sales
    figures.
    1. What characteristic features of business environment are highlighted in the above
    lines? State any two.
    2. State and explain the limitation of planning highlighted in the above lines.
    3. Identify any two types of plan mentioned in the above pare by quoting the lines from
    it. (6 marks)
    Ans.
    1. (i) Business environment is dynamic as it keeps on changing.
    (ii) Business environment is uncertain as it is difficult for the managers to accurately foresee
    future trends in the environment.
    1. Planning may not work in a dynamic environment.
    The organisation has to constantly adapt itself to changes in environment by making
    changes in its plans.However, since planning cannot foresee everything, there may be
    obstacles to effective planning.
    1. (i) Strategy – ‘while making its plan, the company takes into consideration the
    business environment.’
    (ii) Budget – ‘Competition in the market upsets its financial plans; then sales targets have to
    be revised and accordingly cash budgets also need to be modified since they are based on
    sales figures.”

    Q. 15. Pan Masala and Sons is a manufacturer of tobacco products. It decided to increase
    profits by at least 20% in the next quarter. It has many options:
    1. To increase the working hours of labourers without additional payment.
    2. To employ children from the local community.
    3. To sell its products outside the schools and colleges.
    It opted the (ii) and (iii) options to achieve the target.
    1. Identify the function of management described in the above para.
    2. State the steps of the process involved in the function of management identified in (a)
    quoting the lines from the above para.
    3. State any two values neglected by the organisation (6
    marks)
    Ans.
    1. Planning
    2. Steps involved in planning process:
    (i) Setting organizational objectives:
    (ii) Identifying and evaluating alternative courses of action:
    (iii) Selecting the best possible alternatives(s):
    1. Values neglected:
    ● Child labour is banned.
    ● Bad effect on students’ health
    ● Moral values.

    Q. 16. A reputed car manufacturing company in NCR is facing the problem of decline in its
    market share due to its internal mismanagement. Therefore it has planned to increase its
    production capacity at its Gurgaon plant by manufacturing low price eco-friendly cars for
    price sensitive consumers and introducing new models with added features for quality
    conscious consumers. For this the company issues shares to the public and raises Rs. 150
    crore.
    The company purchases more machinery required to increase production.
    1. Identify the type of plan the company is preparing.
    2. State the steps involved in this plan quoting the lines from the above case.
    3. State any one value which the company wants to communicate to the society.
    (5 marks)
    Ans.
    1. Strategy
    2. Steps involved in preparing a strategy are:
    (i) Determining long-term objectives:
    (ii) Adopting a particular course of action:
    (iii) Allocating resources necessary to achieve the objectives:
    1. Value:
    ● Sensitivity towards environment
    ● Socially responsible behavior

    Q. 17. ‘Agile Ltd.’ is a well-known automobile manufacturing company in India. The
    company plans to increase the sale of its sedan cars by 20% in the next quarter. In order to
    achieve the desired target, the marketing team of the company considers the impact of
    policy of the government towards diesel vehicles and the level of competition in this
    segment of cars. They explore the various available option like offering more discount to
    dealers and customers, providing more customer friendly finance options, lucky draws on
    test drives, increasing advertising, offering more of free accessories on the purchase of the
    car, etc. a thorough analysis of the various available options is done keeping in view the
    relative viability of each option. The company decides to pursue the option of offering more
    discount to dealers and customers in order to boost the sale of sedan cars. In order to
    implement the plan,, they determine the various discount packages and communicate the
    same to their product dealers. To make the prospective consumers aware about the new
    available benefits, advertisements are made through various sources of print and electronic
    media. The market analysts of the company keep a close watch on the revenue from the
    sedan cars to study the effect of new initiatives by the company to promote its sales.
    In context of the above case:
    1. Name the function of management described in the above paragraph.
    2. Identify and explain the various steps involved in process the function of
    management as identified in part (a) by quoting lines from the paragraph.
    Ans.
    1. Planning is the function of management which is being described in the above
    paragraph.
    2. The various steps involved in the planning process are explained below:
    1. Setting objectives:
    “The company plans to increase the sale of its sedan cars by 20% in next quarter.”
    2. Developing Premises:
    “In order to achieve the desired target the marketing team of the company considers
    the impact of policy of the government towards diesel vehicles and level of
    competition in this segment of cars.”
    3. Identifying alternative courses of action:
    “They explore the various available options like offering more discount to dealers and
    customers, providing more customer friendly finance options, lucky draws on test
    drives, increasing advertising, offering more of free accessories on the purchase of
    the case, etc.”
    4. Evaluating alternative courses:
    “A thorough analysis of the various available options is done keeping in view the
    relative viability of each option.”
    5. Selecting an alternative:
    “The company decides to pursue the option of offering more discount to dealers and
    customers in order to boost the sale of sedan car.”
    6. Implement the plan:
    “In order to implement the plan, they determine the various discount packages and
    communicate the same to their product dealers.To make the prospective consumers
    aware about the new available benefits, advertisements are made through various
    sources of print and electronic media.”
    7. Follow up action:
    “The market analysts of the company keep a close watch on the revenue from the sedan
    cars to study the effect of new initiatives by the company to promote its sales.”

    Q. 18. Palvinder, is working as a supervisor in Alpha Ltd. To achieve the target he wants to
    try a new method and different way of allocating the work. His superior did not permit him
    and forced him to do the work strictly as per the plan.
    (i) Name the limitation of planning indicated in above case.
    (ii) Name the value overlook by Palvinder’s superior.
    Ans.
    1. ‘Planning reduces creativity.’
    2. Value of motivating and encouraging employee to increase initiative level.
    Q. 19. The management of ABC Ltd. set up the target of selling 10,000 units per week and
    made all their plans based on this target. But due to change in technology adapted by
    competitors which reduced their cost, the ABC Ltd. could not achieve their target.
    (i) Identify the limitation of planning discussed in the above para.
    (ii) State any other two limitations.
    Ans.
    (i) Planning may not work in dynamic environment.
    (ii) Any two limitations: 1. Planning reduces creativity 2. Planning involve huge cost.

    Q. 20. Alpha Ltd. spent a lot of money to hire specialized people for framing their plans and
    collecting important facts from environment. The company cut done their cost by cancelling
    the employee’s trip for recreation.
    (i) Name the limitation of planning mentioned in above para.
    (ii) Name the value overlook by management.
    Ans.
    1. Limitation: ‘Planning involves huge cost.’
    2. Value overlook: Psychological need of employees.

    Q. 21. ABC Ltd. announced a plan nobody would smoke in the organization premises and
    they further added that certain penalty will be imposed on employees, overlooking this.
    (i) Name the type of plan related to above para.
    (ii) Name the feature of that plan.
    (iii) Name the values emphasized by the company.
    Ans.
    (i) ‘Rule’ is the type of plan.
    (ii) Rules are very Rigid.
    (iii) Values: (a) Respect towards environment
    (b) Follow discipline and order.

    Q. 22. Alpha Ltd. has a plan of increasing profit by 20%. The company spent lot of time and
    money to frame and implement this plan. The competition start increasing, so it could not
    change its plan to beat its competitors because huge amount of money is already spent.
    State any two limitations of planning.
    Ans.
    (i) Planning involve huge cost.
    (ii) Planning is time consuming.
    (iii) Planning may not work in dynamic environment.

    Q. 23. ‘Natural disaster like floods in Gujarat has been responsible for failure of production
    and sales plans of Jindal Textile Industry.’ Which limitations of planning is highlighted in the
    given statement? State any three such limitations. (3)
    Ans. External limitations of planning
    1. Change in government policies (e.g. tax rates, bank rate, etc.) may lead to failure of
    planning.
    2. Changes in the strategies of competitors also lead to failure of planning many tiems.
    3. Rapid technological changes may affect planning

    Q. 1. Laxmi Chemicals Ltd., a soap manufacturing company wanted to increase its market
    share from 30% to 55% in the long run. A recent report submitted by the Research &
    Development Department of the company had predicted a growing trend of herbal and
    organic products. On the basis of this report the company decided to diversify into new
    variety of soaps with natural ingredients having benefits and fragrances of Jasmine, Rose,
    Lavendear, Mogra, Lemon Grass, Greed Apple, Strawberry etc. The Unique Selling
    Proposition (USP) was to promote eco-friendly living the contemporary life style. The
    company decided to allocate Rs. 30 crores to achieve the objective.
    Identify the type of one of the functions of management mentioned above which will help the
    company to acquire dominant position in the market. (1 mark)
    Ans. Strategy

    Q. 2. Suhasini a home science graduate from a reputed college has recently done a cookery
    course. She wished to start her own venture with a goal to provide ‘health food’ at
    reasonable price. She discussed her idea with her teacher (|mentor) who encouraged her.
    After analyzing various options for starting her business venture, they shortlisted the option
    to sell ready made and ‘ready to make’ vegetable shakes and sattu milk shakes. Then they
    both weighed the pros and coris of both the shortlisted optins.
    1. Name the function of management being discussed above and give any one of its
    characteristics.
    2. Also briefly discuss any three limitations the function discussed in the case.
    (5 marks)
    Ans.
    1. Planning.
    Characteristic of planning
    Planning focuses on achieving objectives
    1. Limitation of planning
    1. Planning leads to rigidity:
    2. Planning reduces creativity:
    3. Planning is a time-consuming process:

    Q. 3. A company is manufacturing garments. The manager wants to increase profits by
    purchasing new high speed machines or increasing the sale price or using waste material in
    manufacturing stuffed toys.
    He decided that ‘using waste material’ to increase the profit is the best solution for him.
    1. Identify the concept of management involved.
    2. Mention the steps involved in the above process by quoting the line from the
    question.
    3. To complete the process of the concept identified in (a), what two next steps does the
    manager have to take? Explain. (6 marks)
    Ans.
    1. The concept of management involved is PLANNING.
    2. Steps involved are:
    ● Setting objectives : increasing profits
    ● Developing planning premises : making certain assumptions about future.
    ● Identifying alternative courses of action:
    ● Purchasing new high speed machines, or
    ● Increasing the sale price, or
    ● Using waste material in manufacturing stuffed toys
    ● Evaluating alternatives and selecting an alternative :
    1. Further steps to complete the process of planning:
    ● Formulating derivate plans:
    ● Implementing the plan and follow-up-action:

    Q. 4. Two year ago, Madhu completed her degree in food technology. She worked for
    sometime in a company that manufactured 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 an action plan to achieve the
    same.
    One of her objectives 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 from farmers cultivating only organic crops. She also decided to follow the
    steps required for marketing of the products through her own outlets. She appointed Mohan
    as the Production Manager who decided that exact manner in which the production activities
    were 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
    area wise sales target for different products for the forthcoming quarter. While working on
    the production table, a penalty of Rs. 100 per day for not wearing caps, gloves and apron
    was announced.
    Quoting lines from the above paragraph, identify and explain the different types of plans
    discussed.
    Ans.
    The different types of plan discussed above are listed below:
    1. Objectives:
    “One of her objectives was to earn 10% profit on the amount invested in the first year.”
    1. Policy:
    “It was decided that the raw materials like fruits, vegetables, spices, etc. will be purchased
    on three months credit from farmers cultivating only organic crops.”
    1. Method:
    “The exact manner in which the production activities are to be carried out.”
    1. Procedure:
    “She also decided to follow the steps required for marketing of the products through her own
    outlets.”
    1. Rule:
    “While working on the production Table, a penalty of Rs. 100 per day for not wearing caps,
    gloves and aprons was announced.”

    Q. 5. During partition, Kundan Lal came to Mumbai from Lahore with a lot of wealth.
    Keeping in view his innate ability to visualize and create things, he decided to work as a
    junior assistant in a film studio. Over a period of time, as he gained experience and his work
    was well acclaimed, he decided to set up his own film studio. Initially he was himself looking
    into every aspect of the business, but as his work increased manifolds and his own
    productivity reduced with age, he hired Jummy as manager. Jimmy being immature in his
    work started giving bookings for the studio haphazardly. He would never decide anything in
    advance or do any kind of forecasting of events. This led to lot of confusions and conflicts.
    As a result, the goodwill earned by Kundan Lal over the years began to decline.
    In context of the above case:
    1. Identify and explain the function of management which Jimmy failed to perform by
    quoting lines form the paragraph.
    2. Describe briefly any two features of the function of management as identified in part
    (a).
    Ans.
    1. Planning is the function of management which Jimmy failed to perform.
    Planning is deciding in advance what to do, how to do, when to do and who has to do it.It is
    one of the basic managerial functions.Thus, it involves setting objectives and developing an
    appropriate course of action to achieve those objectives.
    1. The two features of the planning function of management are as follows:
    1. Planning is pervasive:
    2. Planning involves decision-making:

    Q. 6. After completing a diploma in Bakery and Patisserie, Payal sets up a small outlet at
    Goa Airport to provide a healthy food option to the travellers. To begin with, she has
    decided to sell five types of patties, three type of pizzas and low sugar muffins in four
    flavours. Thus, by deviding in advance what to do and how to do, she is able to reduce the
    risk of uncertainty and avoid overlapping and wasteful activities. But sometimes her
    planning does not work due to some unavoidable circumstances like cancellation of flights
    due to bad weather conditions, government alert etc. which adversely affects her clientele.
    In context of the above case:
    1. Identify and explain the points highlighting the importance of planning mentioned in
    the above paragraph.
    2. Describe briefly the limitation of planning which adversely affects Payal’s business.
    Ans.
    1. The paints highlighting the importance of planning mentioned in the above paragraph
    are described below:
    1. Reduces the risk of uncertainty:
    2. Avoiding overlapping and wasteful activities:
    1. The limitation of planning which adversely affects Payal’s business is:
    1. Planning may not work in a dynamic environment:

    Q. 7. Rahul, a worker, is given a target of assembling two computers per day. Due to his
    habit of doing things differently, an idea struck him which would not only reduce the
    assembling time of computers but would also reduce the cost of production of the
    computers. Rahul’s supervisor instead of appreciating him, ordered him to complete the
    work as per the methods and techniques decided earlier as nothing could be changed at
    that stage.
    The above para describes one of the limitation of planning function of management. Name
    that limitation. 1
    mark)
    Ans. Planning reduces creativity.

    Q. 8. ABC Ltd. has a plan of increasing profits by 20%. It has devoted a lot of time and
    money to this plan. But the competition starts increasing, so it could not change its plan to b
    eat its competitors because huge amount of money had already been devoted to the
    pre-decided plan. It caused losses to the company.
    Explain any two limitations of planning highlighted in the above case. Also, quote the lines
    from it. (4
    marks)
    Ans.
    1. ‘ABC Ltd. has devoted a lot of time and money to its plan.’
    Planning is a time consuming process. It also involves huge costs.
    1. ‘The competition starts increasing, so it could not change its plan to beat its
    competitors because huge amount of money had already been devoted to the
    pre-decided plan.’
    Planning leads to rigidity. Following a pre-decided plan, when circumstances change, may
    not turn out to be in the organization’s interest.

    Q. 9. In ‘Chak De India’ movie, Shahrukh Khan becomes the coach of the girls’ hockey
    team. He knows that he has to prepare the girls for the international hockey matches and
    bring the world cup after winning. For this he prepares a long-team plan and thinks the
    ways how to bet the competitors. He coaches the girls to play in different ways like
    defensive, offensive, etc. at the outset of a match he explains who will open the match, and
    how the ball will be passed by one player to another step by step.
    Identify four types of plan that are highlighted in the above case, quoting the lines from it.
    (4 marks)
    Ans.
    1. Objective
    ‘…bring the world cup after winning.’
    2. Strategy
    ‘For this he prepares long-term plan and thinks the ways how to beat the
    competitors.’
    3. Method
    ‘He coaches the girls to play in different ways like defensive, offensive, etc.’
    4. Procedure
    ‘At the outset of a match he explains who will open the match, and how the ball will be
    passed by one player to another step by step.’

    Q. 10. Flipkart is an e-commerce company founded in the year 2007 by Sachin Bansal and
    Binny Bansal. The company is registered in Singapore, but has its headquarters in
    Bangaluru, India. The company seeks to increase traffic (more clicks on their products) and
    boost sales and revenue through integration of Mobile Apps, Display, Pay Per Click and
    search Engine Optimization. In order to dispel the feat of people related to shopping online,
    Flipkart was the first company to implement to popular ‘Cash on Delivery’ facility. All the
    products sold by the company under a particular category may have different
    return/replacement period. Flipkart allows multiple payment options such as cash on
    delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on
    delivery. The company operates both ways when an order is received. The products for
    which it holds inventory are dispatched by it directly. For the products they do not store in
    inventory, they just send the order received by them to the supplier who ships it. The
    company plans to spend about Rs. 75 crores on e-Commerce advertising in the year 2016.
    Flipkart reserves the right to terminate your membership and/or refuse to provide you with
    access to the website if it is brought to Flipkart’s notice or if it iis discovered that you are
    under the age of 18 years. This is because as per the Indian contract Act, 1872, the minors,
    un-discharged insolvents, etc. are not eligible to use the website.
    In context of the above case, identify and explain the different types of plans being used by
    Flipkart by quoting lines the paragraph.
    Ans. The different types of plans being used by Flipkart are listed below:
    1. Objectives:
    “The company seeks to increase traffic (more clicks on their products) and boost sales and
    revenue through integration of Mobiles Apps, Display, Pay Per Click and Search engine
    Optimization.”
    1. Strategy:
    “In order to dispel to fear of people related to shopping online, Flipkart was the first company
    to implement the popular ‘Cash On Delivery’ facility.”
    1. Policy:
    “All the products sold by the company under a particular category may have different
    return/replacement period.”
    1. Method:
    “Flapkart allows multiple payment options such as cash on delivery, credit or debit card
    transactions, net banking, e-gift voucher and card swipe on delivery.”
    1. Procedure:
    “The company operataes both ways when an order is received.The products for which it
    holds inventory are dispatched by it directly.For the products they do not store in inventory,
    they just send the order received by them to the supplier who ships it.”
    1. Budget:
    “The company plans to spend about Rs. 75 crores on e-Commerce advertising in the year
    2016.
    1. Rule:
    Flipkart reserves the right to terminate your membership and/or refuse to provide you with
    access to the Website if it is brought to Flipkart’s notice or if it is discovered that you are
    under the age of 18 years.This is because as per the Indian Contract Act, 1872, the minors,
    un-discharged insolvents etc. are not eligible to use the Website.”

    Q. 11. An electronic company 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 price models for mass consumers who are price sensitive. For quality
    conscious consumers, company is introducing new model LED TV and DVD players with
    added features and new technological advancements. For this, the company raises extra
    funds Rs. 5 crore form banks.
    Name the type of plan the company is preparing. State the steps which the company
    follows to implement this plan quoting the line from the above para. (4 marks)
    Ans. The type of plan needed to be prepared under this situation is ‘Strategy’.
    Steps involved in preparing this plan are:
    (i) Determining long-term objectives:
    (ii) Adopting a particular course of action:
    (iii) Allocating resources necessary to achieve the objectives:

    Q. 12. Arush joins as a sales manager of a company dealing in naturotherapy produces.
    Being proficient in his work, he knew that without good planning he will not be able to
    organise, direct, control or perform any of the other managerial functions efficiently and
    effectively. Only on the basis of sales forecasting, he would assist in the preparation of the
    annual plans for its production and sales. Besides, he will have to prepare sales plans
    regularly on weekly, monthly, quarterly and half yearly basis. While preparing the sales
    forecasts, he undertakes intellectual thinking involving foresight, visualization and issued
    judgement rather than wishful thinking or guess work. Most importantly, all these planning
    activities will be meaningful only if they will coincide with the purpose for which the business
    is being carried out.
    In context of the above case, identify the various features of planning highlighted in the
    above paragraph by quoting lines from it.
    Ans. The features of planning highlighted in the above paragraph are explained below:
    1. Planning is a primary function:
    “… without good planning he will not be able to organise, direct, control or perform
    any of the other managerial functions efficiently and effectively.”
    2. Planning is futuristic:
    “Only on the basis of sales forecasting, he would assist in the preparation of the
    annual plans for its production and sales.”
    3. Planning is continuous:
    “Besides, he will have to prepare sales plans regularly on weekly, monthly, quarterly
    and half yearly basis.”
    4. Planning is a mental exercise:
    “While p reparing the sales forecasts he undertakes intellectual thinking involving foresight,
    visualization and issued judgement rather than wishful thinking or guess work.”
    1. Planning focuses on achieving objectives:
    “Most importantly, all these planning activities will be meaningful only if they will coincide
    with the purpose for which the business is being carried out.”

    Q. 13. Zyesha Ltd. is a company which manufactures leather bags. The CEO of the
    company wants to increase their sales and earn more profits. The consulted with a
    management consultant who suggested the top management of the company tow rok hard
    in thinking about the future in making business prediction and achieve the targets since the
    business environment keeps on changing whether in terms of technological improvement,
    shifts in consumer preferences or entry of new competitors in the market.
    1. Identify and state the concept of management discussed in the para.
    2. State the characteristic feature of business environment highlighted in the above
    para. (3 marks)
    Ans.
    1. Planning
    It involves setting objectives and developing appropriate course of action to achieve these
    objectives.Dreams (e.g. increase sales, earn more profits, etc.) can be turned into reality
    only if business managers think in advance on what to do and how to do it.
    1. Business environment is dynamic as it keeps on changing.

    Q. 14. Lira Ltd. is a company manufacturing designer socks. While making its plan, the
    company takes into consideration the business environment. It constantly adapt itself to
    changes in environment by making changes in its plan. However, it becomes difficult for the
    managers of the company to accurately foresee future trends in the environment.
    Competition in the market upsets its financial plans; then sales targets have to be revise3d
    and, accordingly cash budgets also need to be modified since they are based on sales
    figures.
    1. What characteristic features of business environment are highlighted in the above
    lines? State any two.
    2. State and explain the limitation of planning highlighted in the above lines.
    3. Identify any two types of plan mentioned in the above pare by quoting the lines from
    it. (6 marks)
    Ans.
    1. (i) Business environment is dynamic as it keeps on changing.
    (ii) Business environment is uncertain as it is difficult for the managers to accurately foresee
    future trends in the environment.
    1. Planning may not work in a dynamic environment.
    The organisation has to constantly adapt itself to changes in environment by making
    changes in its plans.However, since planning cannot foresee everything, there may be
    obstacles to effective planning.
    1. (i) Strategy – ‘while making its plan, the company takes into consideration the
    business environment.’
    (ii) Budget – ‘Competition in the market upsets its financial plans; then sales targets have to
    be revised and accordingly cash budgets also need to be modified since they are based on
    sales figures.”

    Q. 15. Pan Masala and Sons is a manufacturer of tobacco products. It decided to increase
    profits by at least 20% in the next quarter. It has many options:
    1. To increase the working hours of labourers without additional payment.
    2. To employ children from the local community.
    3. To sell its products outside the schools and colleges.
    It opted the (ii) and (iii) options to achieve the target.
    1. Identify the function of management described in the above para.
    2. State the steps of the process involved in the function of management identified in (a)
    quoting the lines from the above para.
    3. State any two values neglected by the organisation (6
    marks)
    Ans.
    1. Planning
    2. Steps involved in planning process:
    (i) Setting organizational objectives:
    (ii) Identifying and evaluating alternative courses of action:
    (iii) Selecting the best possible alternatives(s):
    1. Values neglected:
    ● Child labour is banned.
    ● Bad effect on students’ health
    ● Moral values.

    Q. 16. A reputed car manufacturing company in NCR is facing the problem of decline in its
    market share due to its internal mismanagement. Therefore it has planned to increase its
    production capacity at its Gurgaon plant by manufacturing low price eco-friendly cars for
    price sensitive consumers and introducing new models with added features for quality
    conscious consumers. For this the company issues shares to the public and raises Rs. 150
    crore.
    The company purchases more machinery required to increase production.
    1. Identify the type of plan the company is preparing.
    2. State the steps involved in this plan quoting the lines from the above case.
    3. State any one value which the company wants to communicate to the society.
    (5 marks)
    Ans.
    1. Strategy
    2. Steps involved in preparing a strategy are:
    (i) Determining long-term objectives:
    (ii) Adopting a particular course of action:
    (iii) Allocating resources necessary to achieve the objectives:
    1. Value:
    ● Sensitivity towards environment
    ● Socially responsible behavior

    Q. 17. ‘Agile Ltd.’ is a well-known automobile manufacturing company in India. The
    company plans to increase the sale of its sedan cars by 20% in the next quarter. In order to
    achieve the desired target, the marketing team of the company considers the impact of
    policy of the government towards diesel vehicles and the level of competition in this
    segment of cars. They explore the various available option like offering more discount to
    dealers and customers, providing more customer friendly finance options, lucky draws on
    test drives, increasing advertising, offering more of free accessories on the purchase of the
    car, etc. a thorough analysis of the various available options is done keeping in view the
    relative viability of each option. The company decides to pursue the option of offering more
    discount to dealers and customers in order to boost the sale of sedan cars. In order to
    implement the plan,, they determine the various discount packages and communicate the
    same to their product dealers. To make the prospective consumers aware about the new
    available benefits, advertisements are made through various sources of print and electronic
    media. The market analysts of the company keep a close watch on the revenue from the
    sedan cars to study the effect of new initiatives by the company to promote its sales.
    In context of the above case:
    1. Name the function of management described in the above paragraph.
    2. Identify and explain the various steps involved in process the function of
    management as identified in part (a) by quoting lines from the paragraph.
    Ans.
    1. Planning is the function of management which is being described in the above
    paragraph.
    2. The various steps involved in the planning process are explained below:
    1. Setting objectives:
    “The company plans to increase the sale of its sedan cars by 20% in next quarter.”
    2. Developing Premises:
    “In order to achieve the desired target the marketing team of the company considers
    the impact of policy of the government towards diesel vehicles and level of
    competition in this segment of cars.”
    3. Identifying alternative courses of action:
    “They explore the various available options like offering more discount to dealers and
    customers, providing more customer friendly finance options, lucky draws on test
    drives, increasing advertising, offering more of free accessories on the purchase of
    the case, etc.”
    4. Evaluating alternative courses:
    “A thorough analysis of the various available options is done keeping in view the
    relative viability of each option.”
    5. Selecting an alternative:
    “The company decides to pursue the option of offering more discount to dealers and
    customers in order to boost the sale of sedan car.”
    6. Implement the plan:
    “In order to implement the plan, they determine the various discount packages and
    communicate the same to their product dealers.To make the prospective consumers
    aware about the new available benefits, advertisements are made through various
    sources of print and electronic media.”
    7. Follow up action:
    “The market analysts of the company keep a close watch on the revenue from the sedan
    cars to study the effect of new initiatives by the company to promote its sales.”

    Q. 18. Palvinder, is working as a supervisor in Alpha Ltd. To achieve the target he wants to
    try a new method and different way of allocating the work. His superior did not permit him
    and forced him to do the work strictly as per the plan.
    (i) Name the limitation of planning indicated in above case.
    (ii) Name the value overlook by Palvinder’s superior.
    Ans.
    1. ‘Planning reduces creativity.’
    2. Value of motivating and encouraging employee to increase initiative level.

    Q. 19. The management of ABC Ltd. set up the target of selling 10,000 units per week and
    made all their plans based on this target. But due to change in technology adapted by
    competitors which reduced their cost, the ABC Ltd. could not achieve their target.
    (i) Identify the limitation of planning discussed in the above para.
    (ii) State any other two limitations.
    Ans.
    (i) Planning may not work in dynamic environment.
    (ii) Any two limitations: 1. Planning reduces creativity 2. Planning involve huge cost.

    Q. 20. Alpha Ltd. spent a lot of money to hire specialized people for framing their plans and
    collecting important facts from environment. The company cut done their cost by cancelling
    the employee’s trip for recreation.
    (i) Name the limitation of planning mentioned in above para.
    (ii) Name the value overlook by management.
    Ans.
    1. Limitation: ‘Planning involves huge cost.’
    2. Value overlook: Psychological need of employees.

    Q. 21. ABC Ltd. announced a plan nobody would smoke in the organization premises and
    they further added that certain penalty will be imposed on employees, overlooking this.
    (i) Name the type of plan related to above para.
    (ii) Name the feature of that plan.
    (iii) Name the values emphasized by the company.
    Ans.
    (i) ‘Rule’ is the type of plan.
    (ii) Rules are very Rigid.
    (iii) Values: (a) Respect towards environment
    (b) Follow discipline and order.

    Q. 22. Alpha Ltd. has a plan of increasing profit by 20%. The company spent lot of time and
    money to frame and implement this plan. The competition start increasing, so it could not
    change its plan to beat its competitors because huge amount of money is already spent.
    State any two limitations of planning.
    Ans.
    (i) Planning involve huge cost.
    (ii) Planning is time consuming.
    (iii) Planning may not work in dynamic environment.

    Q. 23. ‘Natural disaster like floods in Gujarat has been responsible for failure of production
    and sales plans of Jindal Textile Industry.’ Which limitations of planning is highlighted in the
    given statement? State any three such limitations. (3)
    Ans. External limitations of planning
    1. Change in government policies (e.g. tax rates, bank rate, etc.) may lead to failure of
    planning.
    2. Changes in the strategies of competitors also lead to failure of planning many tiems.
    3. Rapid technological changes may affect planning

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    This blog is created by Mrs. Kavita Jain, Principal, Kendriya Vidyalaya Gail Vijaipur. You can mail your suggestions and Feedback to us at our email address: kavitajainkv@gmail.com
    Born with a teacher's heart, learning and teaching are her bloodlines. she loves to learn and likes to teach. She is equally passionate about creating a learned and qualified next generation for her nation. She aims to reach out all who need help or are in doubt. She enjoys discussing the intricacies of her subject and turning them into lucid terms for all to understand in an easy and phased manner with a joyful experience.