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Class 12 - Business Studies

Term 1 - Planning - 01

1. Planning means:
A. arrange the resources
B. think in advance
C. appoint the right person
D. monitor the activity
a. C and D
b. Only B
c. A and B
d. Only D
2. Which one of the following is a limitation of planning?
a. Planning helps in decision making
b. Planning leads to rigidity
c. Planning provides directions
d. Planning reduces risk of uncertainty
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3. Planning is required at all levels of management and in all departments of the organization. This fact
illustrates which feature of planning
i. Planning is continuous
ii. Planning is futuristic
iii. Planning is pervasive
iv. Planning involves decision making
a. only iii
b. only iv
c. ii and iii
d. i and ii
4. Objectives are generally set by ________.
a. middle level management
b. All of these
c. top management
d. supervisory level management
5. What is the last step in planning process?
a. Follow up action
b. Developing premises
c. Setting objectives
d. None of these
6. Planning is ________.
a. Flexible
b. Neither flexible nor rigid
c. Stable
d. Rigid
7. Plans can be implemented after the ________.
a. Selecting an alternative

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b. Setting objectives
c. Developing premises
d. Follow up action
8. ________ is the essence of Planning.
a. Forecasting
b. Directing
c. Organising
d. Controlling
9. Plans decide the future course of action and managers may not be in a position to change it. Identify
the limitation of planning indicated here.
a. Planning does not guarante success
b. Planning reduces creativity
c. Planning may not work in a dynamic environment
d. Planning leads to rigidity
10. Which of the following is not correct?
a. Planning reduces the profitability
b. Planning is futuristic
c. Planning is continuous process
d. Planning focuses on achieving objectives
11. Plans can be implemented after ________.
a. Selecting an alternative
b. Setting objectives
c. Developing premises
d. Follow up action

For question numbers 12-16, two statements are given- one labeled Assertion (A) and the other labeled
Reason (R). Select the correct answer to these questions from the codes (a), (b), (c) and (d) as given
below:
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a. Both A and R are true and R is the correct explanation of A.

b. Both A and R are true but R is not the correct explanation of A.
c. A is true but R is false.
d. A is false but R is true.

12. Assertion (A): Planning is concerned with a predetermined course of action.

Reason (R): It states what is to be done, how is to be done in advance thereby providing direction for
action.
13. Assertion (A): Goals should be clearly defined.
Reason (R): There is no need to communicate plans to the employees once they are made.
14. Assertion(A): Planning is the most challenging activity for management.
Reason(R): Planning helps in making rational decisions.
15. Assertion (A): Planning process begins with setting up of objectives.
Reason (R): Objectives must be set within the broad framework of the organisation's philosophy.
16. Assertion (A): Planning leads to rigidity and the reduction of creativity.
Reason (R): Planning reduces the chances of duplication of work.

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Answer questions 17-20 based on the following case study:

Read the following text and answer the questions:
Priya Ltd. an automobile company decided to close down its customer care service cell in Chennai because of
the adverse business environment. However, they also want to expand its services at the Madurai centre. The
company required 180 additional trained employees at the Madurai center. The top management of the
company based its decision on stability provided by the new government, positive attitude of newly elected
representatives in government, no drastic change in tax rates in the next financial year, etc. The top authority
decided that they could shift employees from Chennai to Madurai or hire new candidates from any HR agency.

17. Identify the management function which is highlighted here.

a. Staffing
b. Organizing
c. Planning
d. Cooperation
18. The top authorities decided that they could shift employees from Chennai to Madurai or hire new
candidates from any HR agency. Which step of the function is performed by the management?
a. Setting objectives
b. Evaluating alternative courses of action
c. Developing premises
d. Identifying alternative courses of action
19. After selecting an alternative, which is the next step in the planning process?
a. Evaluating alternative courses of action
b. Implementing the plan
c. Follow up action
d. Developing planning premises
20. In which step, the planners make predictions and assumptions regarding the future?
a. Developing premises
b. Selecting an alternative
c. Setting objectives
d. Implementation of the plan

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Term 1 - Planning - 01
Class 12 - Business Studies

Solution

1. (b) Only B
Explanation: Think in advance is related to planning.
2. (b) Planning leads to rigidity
Explanation: All others are the importance of planning except this. Because plans can not change
with the dynamic business environment. Thus they lead rigidity.
3. (a) only iii
Explanation: Planning is pervasive means planning is required at all levels of management as well as
in all departments of the organisation.
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4. (c) top management
Explanation: top management
5. (a) Follow up action
Explanation: Planning is a continuous process. It starts with setting the objectives and then putting
them into action. One can ensure the proper implementation of plans with proper monitoring by
comparing the actual results with expected. Thus it is the last step of the planning process.
6. (a) Flexible
Explanation: Planning is flexible.
7. (a) Selecting an alternative
Explanation: Selecting an alternative
8. (a) Forecasting
Explanation: Forecasting is the essence of planning.
9. (d) Planning leads to rigidity
Explanation: Once plans are made to decide the future course of action the manager may not be in a
position to change them.
10. (a) Planning reduces the profitability
Explanation: All others are the characteristics of planning and correct except planning reduces the
profitability.
11. (a) Selecting an alternative
Explanation: Implementation of the plan means putting the plans into action. It can only be possible
after the selection of an alternative.
12. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Planning provides a predetermined course of action to the employees by telling them
what is to be done and how is to be done.
13. (c) A is true but R is false.
Explanation: After setting up the goals and formation of plans, they are to be communicated to all the
employees very clearly because the employees actually have to carry on the activities according to the
specification of plans.
14. (b) Both A and R are true but R is not the correct explanation of A.
Explanation: Planning is the most challenging activity for managers because it's an intellectual process
demanding long hours of devotion and it guides all future actions leading to the growth and prosperity
of the business.

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15. (b) Both A and R are true but R is not the correct explanation of A.
Explanation: The planning process begins with setting up objectives because it is the objectives upon
which further steps in the planning process are based and the organization's objectives must be within
the broad framework of the organization's philosophy.
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complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams.
16. (b) Both A and R are true but R is not the correct explanation of A.
Explanation: Planning leads to rigidity and the reduction of creativity because the managers become
the blind followers of the plan.
17. (c) Planning
18. (d) Identifying alternative courses of action
19. (b) Implementation of plan
20. (a) Developing premises

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