NCERT Solutions Class 12 Business Studies Chapter 4 Planning

NCERT Solutions Class 12 Business Studies Chapter 4 Planning

NCERT Solutions Class 12 Business Studies Chapter 4 Planning: National Council of Educational Research and Training (NCERT) Class 12 Business Studies Chapter 4 Solutions – Planning.





Business Studies


Chapter Name


Exercise Solutions

Very short answer type:

(1) How does planning provide direction?

Ans: Planning seeks to bridge the gap between present and future and home provides a suitable direction towards achieving our goal.

(2) A company wants to increase its market share from the present 10% to 25% to have a dominant position in the market by the end of the next financial year. Ms. Rajni, the sales manager has been asked to prepare a proposal that will outline the options available for achieving this objective. Her report included the following options – entering new markets expanding the product range offered to customers, using sales promotion technique like rebates, discounts etc. Which step of the planning process has been performed by Ms. Rajni?

Ans: The step of the planning process performed by Rajni is identifying alternative courses of action as in her report she has enunciated all the possible alternative available for achieving 25% market share by the company.

(3) Why are rules considered to be plans?

Ans: Rules are considered to be plans because it reflects a managerial decision that a certain action must or must not be taken and rules are specific statements that informs what is to be done.

(4) Rama stationary mart has made a decision to make all the payments by e-transfers only. Identify the type of plan adopted by it.

Ans: The type of plan adopted by rama stationary is method as it adopting a e-transfers method of payment.

(5) Can planning work in a changing environment? Give a reason to justify your answer.

Ans: No, planning may not work in a changing business environment as it becomes difficult to assess future trends in the environment if economic policies are modified or political condition in the country is not stable.

Short answer type:

cbse board business studies chapter 4 class 12

cbse board business studies class 12 chapter 4 Planning

(1) What are the main aspects of in the definition of planning?

Ans: The main aspects in the definition of planning are as follows:

(i) Planning is a basic managerial function which decides in advance what to do and how to do.

(ii) Planning seeks to bridge the gap between present & the future.

(iii) It involves setting objectives out developing appropriate courses action to achieve this objectives that provides direction for all managerial decisions.

(2) If planning involves working out details for the future, why does it not ensure success?

Ans: The success of an enterprise is possible only when plans are properly drawn up and executed. Managers have a tendency to rely —– and tested successful plans which is not true always as —– environment is dynamic. Any plans needs to translated into action or its becomes meaningless.

(3) What kind of strategic decisions are taken by business organisation?

Ans: Strategic decision refers to future decisions defining the organisation direction and scope in the long run. The strategic decisions or —- adopted by an organisation includes – (i) Determining long term objectives, (ii) Adopting particular course of action, (iii) Allocating resources necessary to a choice the objective. It also involves decisions like – (a) Whether the organisation will continue to —- in the same line of business, (b) to determine the demand for the product.

(4) Planning reduces creatively. Critically comment.

Ans: (i) Planning reduces creativity because this function of management generally undertaken by top level managers and rest of the —– just independents these plans. This involves no such creative efforts given by middle and lower level managers.

(ii) Planning promotes innovative ideas as it is the most challenging ——- for the management as it guides all future actions leading to —– and prosperity of the business.

(5) In an attempt to cope with Reliance Jio’s onslaught in 2018, market leader Bharti Airtel has refreshed its ` 149 prepaid plan to offer 2 GB of 3G/4G data per day, twice the amount it offered earlier. Name the type of plan is highlighted in the given example. ? State its three dimensions also.

Ans: The type of plan that is highlighted in the given example is strategy. A strategy provides the broad contours of an organisations business.

The dimensions of a strategy includes the following aspects.

Refer to answer of Q3 short answer type questions.

(6) State the type of plan and state whether they are single use or standing plan:

(a) H type of plan which serves as a controlling device as well.

(b) A plan based on research and analysis and is concerned with physical and technical tasks. (Method).

Ans: (a) The type of plan discussed here is budget which is a single use plan. A single use plan is developed for a one-time event and so is a budget which is prepared individually for individual items on events. A Budget represents all items in numbers, and it becomes easier to compare actual performance with expected or standard performance and it also acts as a controlling technique for any such deviations.

(b) The type of plan discussed here is method which is a standing plan. Method provide the prescribed ways or manner in which a task has to be performed considering the objective. Method is a standing plan as it is used for activities that occur regularly over a period of time.

Long Answer type:

(1) Why is it that organisations are not always able to accomplish all their objectives.

Ans: Organisations are not always able to accomplish all their objectives due to the failure in implementing plans. This can be discussed with the various limitations of planning as follows

(i) Planning leads to rigidly: The plans decide the future course of action and managers may not be in a position to change it. Following a pre-decided plan. When situation changes may lead to creation of difficulty in achieving the objectives.

(ii) Planning may not work in a dynamic environment: It becomes difficult to accurately assess future trends in a dynamic business environment which creates an obstacle to elective planning.

(iii) Panning reduces creatively: Refer to (i) of answer of Q4 of short ans.

(iv) Planning is a lime-consuming process: Sometimes plans to draw up take much of time there is not much time left for their implementation.

(v) Planning does no guarantee success: Refer to ans of Q2 of short answer type questions.


(2) What are the steps taken by management in the planning process?

Ans: The steps in the process of planning are as follows:

(i) Setting objectives: objectives or goals specify what the organisation wants to achieve. The first and foremost step in the process of planning involves setting an objective according to the need of the organisation.

(ii) Developing premises: The assumptions are called premises and are the base material on which the plans are drawn. The assumptions must be the same for all and there should be total agreement on them.

(iii) Identifying alternative course of action: Once the objectives are set assumptions are made the next step is to act upon them. There are various ways to act upon them and the best alternative is to be chosen.

(iv) Evaluating alternative courses: The next step is to weigh the pros and cons of each alternative, and the positive and negative aspects of each proposals needs to be evaluated in the light of objectives to be achieved.

(v) Selecting an alternative: This is the real point of decision making and the best plan has to be adopted and implemented.

(vi) Implementing the plan: This is the step where other managerial functions also come into the picture and is concerned with putting the plan into action and doing what is required.

(3) An auto company C Ltd. 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 priced models for mass consumers who are price sensitive. C Ltd. realized that it needs to take steps immediately to improve its market standing in the future. For quality conscious consumers, C Limited plans to introduce new models with added features and new technological advancements. The company has formed a team with representatives from all the levels of management. This team will brainstorm and will determine the steps that will be adopted by the organisation for implementing the above strategy. Explain the features of Planning highlighted in the situation given below.(Hint: Planning is pervasive, Planning is futuristic and Planning is a mental exercise).

Ans: The features of planning highlighted in the situation given above are as follows:

(i) Planning is pervasive: Planning is required at all levels of management as well as in all departments of the organisation and is not an exclusive function of top management.

(ii) Planning is a mental exercise: It requires application of the mind involving foresight, intelligent imagination and sound judgement. It is an intellectual activity of thinking rather than doing as planning determines the action to be taken.

(iii) Planning is futuristic: Planning involves looking ahead and preparing for the future. The purpose of planning is to meet future events effectively to the best advantage of an organisation.

(iv) Planning focuses on achieving objectives: Organisations are set up with the. General purpose in view and specific goals are set out in the plans along with the activities to be undertaken to achieve the goals.

Read: This Book Previous Chapter 3 Question Answer

Updated: August 2, 2023 — 4:39 pm

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