5 Marks Each

Question 15 Marks

Discuss the type of Plan.

Answer

$1.$ Standing plan:

When there is repetition of some specific activities in an organization then the organization forms a plan to take care of that activity. Such a plan is called standing plan.
Standing plans provide guidelines for taking decisions in repetitive situation hence standing plan can be used repeatedly.
Standing plans help the subordinates to take prompt decision.

$2.$ Strategic plan:

Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.
Based on their philosophies the business units decide several business objectives.
The unit then develops short term as well as long term strategies for achieving the desired objectives. This is called strategic planning.

The effects of strategic plans can be seen in the long term. These plans shape the future of the business.

$3.$ Tactical plan:

Tactical plan is a short-term plan prepared for maximum one year and it emphasizes the current operations of various parts of the organization.
Since these are short term plans, they clarify short term objectives that the business aims at. Hence business activities remain goal oriented and take place in a systematic manner.
The tactical plans or say short term plans are prepared by middle level management.
These plans guide the departmental heads and employees about the roles that they must play to achieve tactical plans.

$4.$ Operational plan:

An operational plan is a detailed plan which provides a clear picture of how a team, department or an individual will contribute for achieving strategic goals of the organization. Operational plan is almost similar to tactical plan.
Generally, operational plans are formed for short duration say about one year.
Under this, plans related to monthly or quarterly production, sales, etc. are made for achieving of objectives of annual production.
These plans are mainly formed for performing routine work and achieving daily targets.

$5.$ Single Use plan:

As the name suggests, single use plans are made for handling one-time, non-recurring problems. Single-use plans are also referred ta as ‘specific plans’ since these are meant to solve a particular problem.
These plans are formulated to handle non-repetitive and unique problem. These plans cannot be used again and again. These plans become obsolete after achieving their purpose.
The examples of these plans could be constructing a dam, making budget, organizing an event, etc.

$6.$ Contingency plan:

A plan designed to take account of a possible future event or circumstance is called a contingency plan.
Business unit face changes like change in political, economical, social or natural factors.
If the business has to make changes in the original plan or make a new plan due to such reasons then the plan made is called contingency plan

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Question 25 Marks

Explain limitations of planning.

Answer

Limitations of planning:
$1.$ Uncertain future:

Planning is based on assumptions and forecasting i.e. it talks about future. But, no one knows future and so it is uncertain.
So, one may make assumptions and frame plans based on these assumptions. But it should be well noted, that assumptions can be wrong. Hence, uncertainties prevail in planning.

$2.$ Expensive process:

In a large unit, experts are engaged in the planning function.
Since these experts are highly experienced and knowledgeable they charge high consultation fees for assisting in framing the plans.
While planning several resources are also to be gathered like holding meetings, conducting surveys, gathering data and performing analysis, etc. All these activities require .time, effort and money. Hence, planning incurs huge expenses to the unit.

$3.$ Time-consuming:
Planning involves collection of necessary information, its classification, analysis and interpretation to decide alternatives for the business. Thus it is a lengthy and time-consuming process.

$4.$ Planning is irrelevant:

Although planning is extremely important but future is uncertain. There are chances of changes in government policies, tax slabs, price, demand, supply, etc.
Any major change can fail even a solid plan and hence planning becomes irrelevant in such a situation.

$5.$ Tends to be rigid:

Planning is done keeping future in mind. Now, if an adverse situation occurs in the future, managers or employees avoid taking risk,of deviating from the plan and making changes as per the new market situation.
They stick to the plan i.e. remain rigid for making changes.

$6.$ Uncertainty of external factors:
Business units are affected by external factors which keep on changing. This hinders the success of planning.

$7.$ Incomplete information:

Collecting necessary information is the pre-condition of the planning process.
If a plan is formulated and implemented on the basis of incomplete and unclear information then it may not give the desired result.

$8.$ Restricts creativity of employees:

A plan is formed by manager but implemented by the employees $($or say workers$)$ of the business unit.
Although employees have creativity and experience about the processes of the business unit they do not have the authority to make changes in the plan. Thus planning restricts the creativity of employees.

$9.$ Use of faulty methods:
While deciding assumptions and estimates for a plan, the planners make use of different mathematical and statistical methods. If these methods or information are faulty or say inappropriate, there are chances that the unit may take a wrong decision. This may fail the plan.

$10.$ Other limitations:
Over and above these limitations, many other factors that affect planning are changes in technology, prejudice of planner, ignorance of facts, problem of leadership, etc.

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Question 35 Marks

Explain elements or components of planning.

Answer

Elements/components of planning:
The subsidiary plans and programmes on which a planning is based are called elements of planning.The elements of planning are discussed below:
$1.$ Objectives:

All the plans of a business unit are based on the objectives they wish to achieve.
So, it is important that the managers consider all the factors affecting business while drafting the plans.
Such objectives should be set which are realistic and achievable.

$2.$ Strategy:

A plan of action designed to achieve a pre-decided long-term or overall aim is called a strategy.
Strategy formation helps the business unit to be capable enough to face the competition or to survive against the other factors.
Strategy should be kept confidential from the competitors.
A well-defined strategy can surely lead to success.

$3.$ Policy:

The decisions and strategies that the management decides for accomplishments of objectives are known as policies.
The type of policy framed by the business unit reflects the idea of efficiency and working style of the business unit.
Just like an objective, the policy should also be pragmatic and real.

$4.$ Method/Procedure:

The business units develop various methods or procedures to conduct business activities.
Method guides the best way for accomplishing pre-determined objectives as well as doing tasks.

$5.$ Rules:

Framing rules is extremely important to accomplish the functions of planning.
Rules decide the procedure and give the clear understanding.
They also ensure that discipline will be followed in the unit among the employees.
Through proper observance of rules it becomes easy for the unit to accomplish the objectives. For example the rule of prohibiting the use of mobile during working hours helps to increase efficiency of employees.

$6.$ Budget:

Budget is a tool that controls the outcomes and helps accomplishing business objectives.
A unit prepares different types of budget such as capital expenditure budget, sales budget, production budget, production cost budget, cash budget, etc.
Budget helps to control the business activities and also to increase the efficiency of management. s

$7.$ Programme:

The sequence of activities undertaken by a business unit to accomplish a task is called programme.
If the work is done according to programme then the objectives can be fulfilled without any confusions or hindrances.
The management sees to it that the work is done as per the programme as well as per the standards set. Corrective measures are taken in case if there are deviations.

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Question 45 Marks

Give the definition of Planning and explain its process.

Answer

$(A)$ Planning:
The task of collecting information for the activities to be undertaken in business, consider them in advance and plan out how to do these activities is called planning. Planning is an intellectual process to achieve business goals.
$(B)$ Process of planning:
The stage-wise process of framing a plan is discussed below:
$1.$ Determination of objectives:

The first step in planning is to set the objectives.
It is said that, if objectives are determined properly then it becomes extremely useful for the management.
Planners should set realistic, intellectual and achievable objectives.

$2.$ Clarifying planning premises:

The forecast or the assumptions about future which provide a base for planning in present are known as planning premises.
After determining the objective, it is important to clarify the planning premises.
Forecasting is made after considering the internal and external factors that affects the business unit.
Unclear and imprecise premises can fail a plan.

$3.$ Collection and analysis of information:

Once the planning premises is done, the planners gather necessary information. The information may be gathered through direct sources or indirect sources.
The information is then classified, analyzed and interpreted. This helps to make assumptions for desired results.

$4.$ Preparation of alternative plan:

After collecting, analyzing and interpreting information, alternative plan is to be made. An alternative plan and list of alternatives help in case if the main plan does not work as planned or if there are some unforeseen changes in the market.
The list of alternative steps could be whether to sale the goods by producing on our own or by purchasing and re-selling, second alternative for the material to be used, etc.

$5.$ Evaluation of alternatives:

Once the list of alternatives is prepared, they are evaluated to see if they are suitable alternatives or not.
How each alternative will affect the business and its processes is evaluated.
Evaluation of alternatives is an intellectual process. Mathematical and statistical methods are used for the evaluation of alternatives.
Business, units make use of a subject called Operation Research $(O.R.)$ to ‘ prepare the model of an ideal plan.

$6.$ Selection of the best alternative:
The various alternatives are evaluated, analyzed and scrutinized and then the best alternative is selected.

$7.$ Formulation and evaluation of subsidiary plan:

Over and above the main plan, different projects or alternatives have to be considered as per basic plan or in support of basic plan. These plans are known as subsidiary/derivative plan.
For example, a car manufacturing company is trying to make a decision to make tyres for its cars. On the other hand, it is also thinking to buy them rather than manufacturing. Such an alternative is considered subsidiary plan.
Even the subsidiary plan is evaluated to assess that it does not obstruct the basic plan in future.

$8.$ Evaluation of plan:

Once the basic plan and the subsidiary plan are formed the entire plan is thoroughly evaluated. The business unit takes the help of experts and consultants to evaluate the plan as and when necessary.
This third-party opinion helps the unit to get a correct opinion and also mistakes if any.
The business unit follows the principle of ‘Look and Leap’ at every stage i.e. it evaluates the plan at every stage and then moves forward accordingly.

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Question 55 Marks

What is Planning? Explain its characteristics.

Answer

$(a)$ Planning:
The task of collecting information for the activities to be undertaken in business, consider them in advance and plan out how to do these activities is called planning. Planning is an intellectual process to achieve business goals.
$(b)$ Characteristics of planning:
$1.$ Universal process:
Planning is a universal process. Planning is required in each and every field may it be business, politics, education, religion or a social event.
$2.$ Primary function:
Planning is the primary function of management. Management starts with planning.
Other functions of management like organization, staffing directing, controlling are implemented on the basis of planning.
$3.$ Conscious and mental process:
Planning is done using mental abilities while remaining conscious about the outcomes.
This is so because during planning decisions are taken consciously and on the basis of calculative assumptions.
$4.$ Flexibility:

Although planning is done so that tasks take place as per planned method, still planning holds a good amount of flexibility.
During the execution of planned steps the business may experience certain external factors. These factors may disturb the planned process. Hence, the unit may have to make necessary changes as per time, circumstances and situations.
Thus, planning is dynamic and flexibility is the precondition for planning.

$5.$ Precise:
Planning is a process done for the future.
Since, future is uncertain, the planning is to be done precisely and minutely by rigorous brain storming, collecting and analyzing statistical data, collecting relevant information, etc.
$6.$ Forecasting is essential:
Forecasting and planning are considered as the first function of management. Forecasting is done by considering the uncertainties of future that will take place while making a plan for the business unit.
$7.$ List of alternatives:
While planning for any objective there exist a variety of alternatives. For example, there can be several alternatives $($i.e. ways$)$ to increase the sales in future. These alternatives could be increasing advertisement, reducing prices, training to sales staff, announcing attractive offers, etc. The planners need to select the best suitable alternative from these.
$8.$ Concerned with future:

Planning presumes that there are uncertainties involved in future.
While remaining in present, planning evaluates future and hence we can say that planning is concerned with the happenings of future and is focused on – taking best steps for the same.

$9.$ Continuous process:

Planning is a continuous process.
It is such a process which begins with the establishment of the organization and continues till the end i.e. till the organization lasts. However, the plans and planning process keep on changing continuously as per time and situation.

$10.$ Objective oriented activity:

Planning is done to achieve a specific, pre-determined business objective.
Once an objective is accomplished the management decides the next objective for business.
It is desirable that realistic objectives are set so that they can be planned and achieved well. Thus planning is an objective oriented activity.

$11.$ Planning considers various available options and then selects the best suited one.
Since the planners need to make such decisions on a regular and continuous basis it is said that planning is a decision oriented process.

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Question 65 Marks

Differentiate between strategic planning and tactical planning.

Answer

Basis of comparison	Strategic plan	Tactical plan
Developed by	Developed by upper level management.	Developed by lower level management
Time period	Developed for long term	Developed for short term
Gathering fact and information	It is difficult to gather facts and information for these plans.	It is easier to gather facts and information for these plans.
Orientation	Towards the future	Towards the present condition
Based on	These plans are based on prediction and forecasting.	These plans are based on known situations that exist within the organization.

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Question 75 Marks

Differentiate between standing plan and single-use plan.

Answer

Basis of comparison	Standing plan	Single use plan
Approach for preparing	It is prepared for long term.	It is prepared for short term.
Who prepares?	It is prepared by top level managers.	It is prepared by lower level managers.
Objective	To attain primary objectives of the organization.	To attain specific goals or to solve specific problems that the organization face
Stability	They are very stable in nature and cannot be changed.	These plans are flexible and can be changed as per the conditions of the organization

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Question 85 Marks

Differentiate between planning and strategy.

Answer

Basis of comparison	Planning	Strategy
Meaning	Planning is thinking in advance, for ,the actions which are going to take place in the future.	A plan of action designed to achieve a pre decided long term or overall aim is called a strategy.
What is it?	Planning is a road map for accomplishing any task.	Strategy is the path chosen for achieving the objectives set under planning
Basis	It is based on assumptions	It is based on practical considerations
Term	Term depends upon the circumstances	Long term

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Question 95 Marks

Differentiate between budget and forecast.

Answer

Basis for comparison	Budget	Forecast
eaning	A budget is a financial plan expressed in quantitative terms, prepared by the management in advance for a pre defined period.	It is the estimation of future trends and outcomes, based on the past and present data.
What it contains?	It is the financial expression of a business plan or target.	It is the prediction of upcoming events or trends in business, on the basis of present business conditions.
Targets	Budget sets targets	Forecast does not set any target
What it estimates?	What business wants to achieve	What business will achieve

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Question 105 Marks

What is contingency plan?

Answer

Contingency plan:

A plan designed to take account of a possible future event or circumstance is called a contingency plan.
Business unit face changing market situations. These changes could be change in political, economical, social or natural factors.
If the business has to make changes in the original plan or make a new plan due to such reasons then the plan made is called contingency plan.

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Question 115 Marks

What is single use plan?

Answer

Single Use plan:

As the name suggests, single use plans are made for handling one-time, non-recurring problems. Single-use plans are also referred to as ‘specific plans’ since these are meant to solve a particular problem.
These plans are formulated to handle non-repetitive and unique problem. These plans cannot be used again and again. These plans become obsolete after achieving their purpose.
Examples of these plans could be constructing a dam, making budget, organizing an event, etc.

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Question 125 Marks

Write a note on operational plan.

Answer

Operational plan:

An operational plan is a detailed plan which provides a clear picture of how a team, department or an individual will contribute for achieving strategic goals of the organization. Operational plan is almost similar to tactical plan.
Generally, operational plans are formed for short duration say about one year.
Under.this, plans related to monthly or quarterly production, sales, etc. are made for achieving of objectives of annual production.
These plans are made by departmental heads for the implementation of strategic plan.
These plans are mainly formed for performing routine work and achieving daily targets. Hence, implementation of operational plans becomes easy, if they are made by involving concerned employees in the decisions, as these plans are related with routine work.

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Question 135 Marks

Write a note on tactical plan.

Answer

Tactical plan:

Tactical plan is a short-term plan that emphasizes the current operations of various parts of the organization.
These plans span for maximum period of $1$ year.
Since these are short term plans, they clarify short term objectives that the business aims at. Hence business activities remain goal oriented and take place in a systematic manner.
The tactical plans or say short term plans are prepared by middle level management.
These plans guide the departmental heads and employees about the roles that they must play to achieve tactical plans.
It requires specialized knowledge and skills to formulate these plans.

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Question 145 Marks

Write a note on strategic plan.

Answer

Strategic plan:

Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.
Based on their philosophies the business units decide several business objectives.
The unit then develops short term as well as long term strategies for achieving the desired objectives. This is called strategic planning.
Foresightedness and experience are essential for developing strategic plans.
The effects of strategic plans are seen in the long. These plans shape the future of the business.
These plans demand that the unit takes consistent decisions that are in line with the strategy

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Question 155 Marks

Write a note on standing plan.

Answer

Standing plan:

When there is repetition of some specific activities in an organization then the organization forms a plan to take care of that activity. Such a plan is called standing plan. These activities could be delivering goods to a customer in case he has crossed his credit limit, developing plan or policy to decide the quantity of a specific good to be produced during the end of sale season, etc.
Standing plans provide guidelines for taking decisions in repetitive situation hence standing plan can be used repeatedly.
Standing plans help the subordinates to take prompt decision.
If the standing plan is framed then employees need not take permission from their superiors for executing the plans in case if situation arise.

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Question 165 Marks

State the steps for planning process.

Answer

The planning process consists of following steps:

Determination of objectives
Clarifying planning premises
Collection and analysis of information
Preparation of alternative plan
Evaluation of alternatives
Selection of the best alternative
Formulation and evaluation of subsidiary plan
Evaluation of plan

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Question 175 Marks

State the importance of planning in short.

Answer

Introduction :

Not only for private or public sector industries but for the economic development of the country and for the development of every sector activities, government has accepted the importance of planning.
For this, central government has framed niti ayog and in which experts of different sectors are included.

Importance/advantage of planning : it can be noted as under.

All activities are done systematically because of planning.
Wastage of recourse can be avoided
Planning reduces future uncertainties
Planning leads to accuracy.
Useful for fulfillment of objectives.
Directness in other managerial functions
Planning increase employees co-operation.
Effective control can be possible.
due to planning various activities can be co-ordinates.
Above points shown the importance of planning which are explained in details under.

All activities are done systematically because of planning :

which activity, when, who, how in what time will be performed is decided in planning.
Hence, all the activities becomes systematized/organized and speedy.
Moreover, as the planning clarifies the divisional responsibilities of various divisions the divisional officers can make the activities of their division systematized and quick.

Wastage of resources can be avoided :

As planning involves pre-consideration of future activities, step can be taken for preventing wastage of resource and thereby saving becomes possible.

Planning reduces future Uncertainties:

Function of planning depends on the estimates made after due consideration.
At the time of doing planning, managers obtain estimates of future requirements and uncertainties. On accounts of this, the risks of future can be anticipated at present.
Keeping in view these anticipated risks and uncertainties, business unit can pre-plan the ideas to counter them. E.g. shortage of raw material, inflation/rising prices etc.

Planning leads to accuracy :

Planning is an intellectual process.
It consists of preparing short term and long term programmers for future activities with the help of experts.
On account of this , the resources are used efficiently. For this, data and information should be clear.

Useful to achieve the objectives :

Planning is an object-oriented process.
Before starting the planning function, first of all the main and subsidiary objectives.
Give clarified and they are arranged in order of priority.
On account of the clarity of objectives, the activity necessary for its accomplishments can be properly directed towards its achievement on the decided track.
By planning an option that reduces the cost an time can be selected and the objectives of the unit can be easily achieved.
Directness in other managerial factions : by planning an option,
The functions of organizing, directing and controlling become more easy and effective.

Planning increase employees co-operation:

Planning of activities makes clear the activity that is to be performed.
Clarity of activity makes the creation of effective organizational structure possible, which leads to an appropriate assignment of authorities and responsibilities to employees in relation to their activities.
On account of that their job – content increases and co-operation is received from them.

Effective control can be possible :

The function of control is to see whether or not the activities take place in the determined direction and as per the determined targets.
In planning specific ways, methods and targets are set for the success of activities.
It means that planning provides yardstick for control.
Hence, the function of control becomes more effective.

Due to planning various activities can be co-ordinates :

The interrelation among various divisional goals of defines at the time of determining the goals of various divisional activities on account of definition of such interrelationship among objectives, divisions and activities, the disharmony among objectivities and activities gets eliminated and the co-operation of employees results in co-ordination of activities.

Conclusion :

According to G .R. Terry, “function of plan means pre-thinking of results.
Looking to the above benefits of planning, it gets clear that on account of planning other activities of management get eased.
By that only the whole process of management becomes effective.
Taking this aspect/fact in view function of planning is called “The Soul of Management.”

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