PROCESS OF PLANNING

The process of planning involves the following steps:

1. Setting Objectives: The first and foremost step of planning is setting up of objectives or goals.
Objectives
may be set for the entire organisation and each department within the organisation. Such
objectives specify
what the organisation wants to achieve.
2. Developing Premises: Planning involves deciding the future course of action, which is quite
uncertain. Every
manager has to make certain assumptions about the future. These assumptions are called
premises.
3. Identifying Alternative Courses of Action: After setting the objectives and making
assumptions about the
future, the next step is to determine alternative courses of action through which organisation
can achieve its
objectives. For every plan, there are a number of options. All the alternative courses of action
should be
identified.
4. Evaluating Alternative Courses: After identifying and listing out possible alternative courses,
the next step
is to evaluate each alternative, i.e., to weigh the pros and cons of each alternative.
5. Selecting an Alternative: After evaluating the various alternatives, the next step is to select
the most suitable
course of action. This is the real point of decision-making. Tho alternative to be selected should
be the most
feasible profitable and with least negative consequences.
6. Implement the Plan: Plans are of no use until these are put in action. So, this step is
concerned with
transforming the plan into action by activating other managerial functions.
7. Follow-up Action: The last step in the planning process is to see whether plans, are being
implemented and
activities are performed according to the schedule. Monitoring the plans is important to ensure
that objectives
are achieved.

TYPES OF PLANS
Single use Plans: Single use plan is one time plan which is specifically designed to achieve a
particular goal.
i) Programme: It is a detailed statement about a project which outlines the objectives, policies,
procedures, rules, tasks, human and physical resources required and the budget to implement
any course
of action.
ii) Budget: It refers to statement of expected result expressed in numerical terms over a specific
period of
time.
Standing Plans: Standing Plan is one which is used for activities that occur regularly over a
period

i) Policies: It refers to general statements that channelise energy towards a particular

direction.
ii) Procedure: It refers to a chronological sequence of various steps to be taken in order
to perform an activity in an efficient manner.
iii) Method: It is a prescribed process in which a particular operation or an activity is
performed considering the objective of the organisation.
iv) iv) Rules: These refer to specific statements that inform what is to be done.
v) v) Objectives: These are the ends which the management seeks to achieve within a
given time period by its operations.
vi) vi) Strategy: It is a comprehensive plan for accomplishing an organisation objective.

MCQ’S
1. Planning requires logical and systematic thinking rather than guess work or wishful thinking.
Identify the
related feature of planning.
(a) Planning is futuristic (b) Planning is a mental exercise
(c) Planning establishes standards for controlling (d) Planning focuses on achieving objectives
2. It is not always true that just because a plan has worked before it will work again. Identify the
related
limitation of planning.
(a) Planning leads to rigidity (b) Planning reduces creativity
(c) Planning may not work in a dynamic environment (d) Planning does not guarantee success
3. Identify the correct sequence of steps involved in the planning process.
(a) Evaluating alternative courses, Identifying alternative course of actions, Setting objectives,
Developing premises
(b) Setting objectives, Identifying alternative course of actions, Evaluating alternative courses,
Developing premises
(c) Setting objectives, Developing premises, Identifying alternative course of actions, Evaluating
alternative courses
(d) Developing premises, Setting objectives, Identifying alternative course of actions, Evaluating
alternative courses

Which of the following statements is not true with reference to planning?

(a) Planning is a pre-requisite for controlling (b) Planning does not lead to rigidity
(c) Planning enables a manager to look ahead and anticipate changes
(d) Planning facilitates co-ordination among departments and individuals in the organisation
5. Which one of the following elements is not a barrier to effective planning?
(a) Rapid Environmental Changes (b) Organisational inflexibility
(c) Inadequate Appreciation of Planning (d) Social Responsibility
Read the following statements: Assertion and Reason. Choose one of the correct alternatives
given below:
6. Assertion (A): Planning provides the base for controlling.
Reason (R): Planning establishes the standards against which the actual performance is
evaluated.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of
Assertion
(A)
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
7. Assertion (A): The need for planning arises only when there is one alternative.
Reason (R): Decision-making is an integral part of planning.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of
Assertion
(A)
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
8. Assertion (A): Planning works fantastically in a dynamic environment.
Reason (R): Plans operate in an external environment, which consists of a number of
dimensions.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of
Assertion
(A)
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
9. Assertion (A): Planning facilitates decision-making.
Reason (R): Planning helps the manager in selecting the only alternative available with the firm.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct
explanation of Assertion
Micromax was India’s largest seller of mobile handsets. It launched low-cost Chinese
manufacturing mobiles
with some smart packaging and features like long-lasting batteries and dual-sim functionality to
gain 20%
market share in India’s value-conscious mobile handset market. Identify the two types of plans
being
described in the above lines.
(a) Strategy and objective (b) Rule and Programme
(c) Programme and objective (d) Method and objective
12. According to the Economic Survey, insights from behavioural economics can be strategically
utilised to
create an aspirational agenda for social change – from BBBP (Beti Bachao Beti Padhao) to
BADLAVL (Beti
Aapki Dhan Lakshmi Aur Vijay Lakshmi); from Swachh Bharat to Sundar Bharat; from ‘Give It Up’
for the
LPG subsidy to ‘Think about the Subsidy’ and from tax evasion to tax compliance. Identify the
type of plan
being described in the above lines.
(a) Programme (b) Method (c) Strategy (d) Rule
13. Shubham is striving to earn a profit of 30% in the current financial year. Identify the type of
plan being
described in the above lines.
(a) Method (b) Objective (c) Strategy (d) Programme
14. Shaurya Enterprises adopts different ways to provide training to employees, like Job
Rotation, Coaching,
Vestibule Training, Conference, Lecture Method and Role Playing. Identify the type of plan
being described
in the above lines.
(a) Method (b) Strategy (c) Programme (d) Procedure
Read the following text and answer Q 15 to Q17 on the basis of the same:
Xavier Limited had been taken over by Goenka Group immediately following India's
independence. Since
then it enjoys a rich record of industry presence and experience. In 2005, with the aim to
accelerate growth
the company had gone through several rounds of meetings and discussions before launching
ERP system to
attract large projects. The management had done effective forecast and critical thinking
regarding allocation
of resources to reduce wastage. For this purpose, the company had laid down multiple courses
of action to
meet the challenge of adverse situations. In 2008, the company suffered loss in many projects
due to the great
recession despite taking many cost cutting measures. The management had taken utmost care
regarding the
possible outcome and timely review of the plans to achieve the set target during that hard
time. In 2010 the
system implemented successfully which subsequently helped the company to execute
numerous projects with
precision and timeliness.
15. “In 2005, with the aim to accelerate growth the company had gone through several rounds
of meetings and
discussions." What is the objective mentioned here according to the process stated here?
(a) Developing Premises (b) Growth and development
(c) Launching IT enabled system (d) Cost cutting
16. "In 2008, the company suffered loss in many projects due to the great recession despite
taking many cost
cutting measures." Which limitation of the management process is indicated here?
(a) It fails to cope with sudden changes (b) It involves huge cost
(c) It requires critical thinking (d) Need to construct multiple action plans
17. “The management had taken utmost care regarding the possible outcome and timely
review of the plans to
achieve the set target during that hard time." Which is the last step of the process mentioned
here?
(a) Implementation of plan (b) Timely execution of projects
(c) Follow up (d) To prepare alternative course of action

Dhriti had 25 acres land where she decided to convert land into agriculture farming. For this
purpose she set
out specific goals, objectives and activities. Everything was a challenge because she was not
aware about
farming. She learnt every activity and in the process, thought of assisting other farmers as well.
She eventually
launched her own company Agricultural Solutions Ltd. She wanted to be sure that the activities
effectively
met the best interests of the company and the farmers. Hence, she prepared an annual plan for
production,
sales and marketing through sales forecasting. She also realized that farmers were growing only
one or two
crops. On account of this; the land remained idle for the rest of the year. Thus, she identified
and evaluated
different alternatives through which the farms could be utilized throughout the year. She used
her foresight
and logical and systematic thinking based on analysis of all facts and examined and evaluated
all the
alternatives. She presented a plan to the farmers union, where after harvesting the primary
crop, seasonal
vegetables and fruits could be grown.
18. "For this purpose she set out specific goals, objectives and activities." Which feature of
planning is depicted
in the statement?
(a) Planning focuses on achieving objectives (b) Planning is a primary function of management
(c) Planning is pervasive (d) Planning is continuous
19. "Hence, she prepared an annual plan for production, sales and marketing through sales
forecasting." Which
feature of planning is depicted in the statement?
(a) Planning is continuous (b) Planning is futuristic
(c) Planning involves decision making (d) Planning is a mental exercise
20. Thus, she identified and evaluated different alternatives through which the farms could be
utilized throughout
the year." Which feature of planning is depicted in the statement?
(a) Planning is pervasive (b) Planning is continuous
(c) Planning is futuristic (d) Planning involves decision-making

CASE STUDY QUESTIONS

(3/4 MARKS)
Q1. Nirmala 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 readymade and ‘ready to make’ vegetable shakes and sattu milk
shakes. Then
they both weighed the pros and cons of both the shortlisted options.
(A) Name the function of management being discussed above.
(B) Also list any three limitations of the function discussed in the case.

Q2. 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.

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