NCERT Solutions For Class 12 Business Studies Chapter 4 Planning

Planning Class 12 NCERT Solutions Chapter 4

Planning business studies class 12 Takshila Learning’s NCERT Solutions for Business Studies are an advanced and next stage of Class 11 NCERT Solutions in business studies. We provide the basic fundamentals of the subject in Class 11 and then move on to an advanced degree of concepts in Class 12. The business studies topics are related to our practical life and dealt with in an easy way for understanding.


NCERT Solutions For Class 12 Business Studies Chapter 4 Planning
NCERT Solutions For Class 12 Business Studies Chapter 4 Planning


NCERT Solutions For Class 12 Business Studies Chapter 4 Planning provides us with all-inclusive information on all concepts. As students would have to learn the basics about the subject in class 12, this curriculum for class 12 is a comprehensive study material, which explains the concepts in a great way.

Questions Covered In Planning Class 12 NCERT Solutions Chapter 4

Short Answer Type:

  1. What are the main points in the definition of planning?

Ans: Planning and psychological about what is to be done and how it is to be done is a psychological process of thinking and decision making in advance. It is a mental activity in which the manager makes decisions about achieving goals, and the tasks through which they are to be accomplished. It is future in nature because it involves reviewing and predicting the future as well as looking ahead. Planning can be defined as the process of setting goals and objectives for a specific period of time, preparing options for a course of action, and finally deciding on an appropriate action from among the various options. Following are the main points in the definition of planning.i. Setting objectives: Planning should be related to a particular objective. That is, there must be a definite purpose for the achievement of the plan which is to be planned.ii. Timeline: Plan should be prepared for a fixed time period. If planning is not done with the deadline, it can prove to be redundant. This is because the business environment changes over time and requires fresh planning and action.iii. Preparing an alternative course for the course: Once the objective has been decided, the next task is to decide how to achieve it. There may be different elective courses of action for the achievement of any objective. These options should be prepared appropriately.iv. Deciding the course: Out of the various available options, the best decision should be taken.

  1. How does planning provide direction?

Ans: The plan tells in advance what is to be done. It defines achieving goals and objectives. These goals and objectives set out in the plan provide direction to managers as to what action to take to achieve them. Planning ensures clarity in ideas so that the right steps can be taken in the right direction to achieve the objectives. The plan ensures that each department of the organization works in a coordinated manner towards the general purpose of the organization. That is, with planning every department knows what to do and thus, moves in the right direction. Without planning the work will be done randomly with each department running in different directions. Thus, planning ensures smooth functioning towards the desired goals of an organization.

  1. Do you think planning can work in a changing environment?

Ans: No, planning may not do the right thing in a changing environment. The business environment is dynamic in nature and varies continuously. For example, political conditions, social conditions, consumer tastes and preferences, government regulations and laws are constantly changing. Planning cannot reverse such changes and may prove fruitless. That is, due to future uncertainty, the plan may remain ineffective. For example, suppose a textile manufacturing company plans to increase the production of silk shirts. But over time, market demand moved towards cotton shirts. Thus, in this case the company’s previous plan fails and it should revise its plans to meet the change in demand. Similarly, if the government announces a reduction in interest rates for consumer durables, the demand for such products increases.An organization’s plans cannot anticipate such changes and may prove ineffective. The production and sales plan of the organization should change according to the changing demand of the market. Similarly, with the entry of a competitor in the market a company will have to change the previous plans so as to better face the competition.

4: Why are rules considered to be plans?

Ans: The rules refer to standard or specific details informing what is to be done. The ‘rules’ are considered ‘plans’ because both are very similar in nature. The rules are considered the simplest of schemes. The purpose of the plan is to think about and decide the future course of action. Similarly, rules are statements that help decide whether action is to be taken or not. However, the rules are rigid in nature and should be followed until a change is called. Non-adherence to the rules leads to disciplinary action by the organization. For example, an organization may have rules regarding punch-timing of employees and every employee of an organization must follow these rules. The rules serve as a guide for the general behavior of employees in the organization.

  1. If planning involves working out details for the future, why does it not ensure success?

Ans: It is true that planning is a forward-looking task and is based on analysis and forecasting of future elements. However, the future involves uncertainty and cannot be predicted. There are various external forces that affect the functioning of an organization. These forces are complex and ever changing in nature. For example, social trends, political conditions, technology, government regulations and legislation are constantly changing. Due to such uncertainties, one cannot be sure of the success rate of the schemes, rather one needs to modify the plans to suit the changing environment. For example, suppose that due to the entry of a competitor, the demand for a company’s products decreases. The company could not expect such a change when planning production.Thus, the previous plans of the company fail and it should formulate new plans keeping in view the change in demand. Similarly, suppose the government announces a relaxation in foreign investment rules, resulting in increased market competition.Sales and manufacturing plans of domestic companies may fail due to increased competition. Thus, it can be said that despite the fact that planning involves preparing details for the future, it does not ensure success.

  1. What kind of strategic decisions are taken by business organisations.

Ans: Strategy refers to a comprehensive framework for an organization’s business. It has three broad objectives – setting objectives, deciding the course of action and proper allocation of objectives for the attainment of objectives. The following are some strategic decisions that a business organization may take.i. Deciding on which line of business to take.ii. Whether or not a new line of production should be adopted.iii. What position should the company target in the current market.iv. What kind of pricing policy should be used.v. Decisions regarding advertising policy and costs.

Long Answer Type:

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

Ans: To achieve the desired objectives, organizations make plans. Planning is an essential activity for any organization and sets the basis of its functioning. However, sometimes things do not go according to plan. Unexpected changes in the business environment often affect the organization’s plans. In addition, the planning process has its limitations that hinder the completion of all the objectives of an organization. Following are some of the limitations of planning that may result in the omission of organizational objectives. (i) Rigidity: The scheme is rigorous in nature. Once a plan is prepared about the objectives to be achieved and the action to be taken thereafter, the manager may not be able to change it. Such rigidity creates obstacles at times of unexpected change. In times of unforeseen changes, managers may need some degree of flexibility to cope with changes in the appropriate way. Thus, rigor in plans sometimes hinders the completion of objectives. (ii) Dynamic environment cannot be dealt with: the business environment is dynamic and, thus, very uncertain. However, planning cannot overcome such changes in times of change and uncertainties. This can lead to failure of the objectives. An organization must adapt its functioning to the changing environment.(iii) Huge Cost: The cost of time and money is involved in the formulation of plans. Since planning is based on future predictions, it requires a lot of thinking and analysis. It includes scientific calculations with statistics and facts, which are used to formulate a course of action. There is a high cost involved. In addition, sometimes it may be that the benefits from planning reduce costs. (iv) False protection: Good planning does not mean success is guaranteed. Often common people rely on prefabricated schemes that work well in the past. However, it is not always true that if a plan worked well in the past, it would also be successful in the future. Many unexpected changes may crop up that may cause the plan to fail. Sometimes managers think that planning can prevent problems from occurring, However, they ignore the fact that planning provides just a basis for predicting the future. It does not directly solve problems. (v) Time Consumption: Creating plans is a very time consuming task, as it involves moving forward in unexpected situations. It involves a lot of research and evaluation. This increases the time consumed by managers and may delay actual tasks.

  1. What are the main features to be considered by the management while planning?

Ans: The plan tells in advance where to go and in which direction to proceed. It is a continuous process that helps reduce the risk of uncertainty. Planning is an essential activity that provides justification for carrying out policies towards achieving goals.What a manager needs to consider during the planning highlights:(i) Focusing on objectives: Planning serves as the basis of guidelines for what goals are to be achieved and how they are to be achieved. Any management should formulate plans keeping specific goals in mind. These plans should ensure that the desired objective is achieved. Managers should ensure that the plans created are purposeful. For example, if the sales goal is to be achieved then the plans must be in sync with this objective.


(ii) Stepping Stone: Planning acts as stepping stone for all other functions of an organization. That is, planning precedes all other tasks such as organizing, directing, staffing, and controlling. This is because the plans state the objectives and all other tasks are in accordance with the stated objectives. Once plans are set, the role of other interrelated tasks is created. Thus, planning lays the foundation for other functions of an organization. (iii) Broadness: Planning should be done at all levels of the organization. It is not just the work of top level managers, but the work to be done at every level of management. However, its scope is different along different dimensions of business. For example, top-level managers have to chalk out policies regarding overall management, while middle-level managers plan the authority assigned to subordinates. On the other hand, Lower-level managers make smaller goals for day-to-day work. (iv) Continuity: Planning should be done continuously. This is because after the completion of one plan period, another plan needs to be prepared keeping in mind the new objectives and circumstances. In addition, plans need to be modified according to the changing needs and requirements within the duration of a plan. Thus, there is no end to planning. It is a continuous process throughout the life of a business enterprise.(v) Choice making: Planning is a process of making choices between different options to achieve the intended objectives. These options are based on the routes, strategies, or policies to be taken to achieve the goals. Managers need to evaluate these options thoroughly and then select the most rational plan to achieve the set objectives. (vi) Futuristic: Planning should be futuristic in nature. That is, it should be able to analyze and analyze the future. Plans should be made to prepare the organization to deal with future events. Managers should be able to anticipate and plan for potential situations so that they can cope better.

  1. What are the steps taken by management in the planning process?

Ans: Planning means deciding in advance what is to be done and how to do it. It involves some logical steps. The following steps are followed by the management while planning.



 Follow-up Action

(i) Establishing objectives: The first phase of the planning process is the setting of objectives and goals. Any business venture requires certain objectives to work. Managers need to state these objectives very clearly so that the right direction can be taken to achieve the goals. Furthermore, the objectives stated in the plan should be submerged at all levels in the organization. It provides a direction to individual departments / units so that they can work towards the general objectives of the organization. Until the goals are defined, the management’s actions cannot proceed. (ii) Developing the campus: The plan is based on some assumptions regarding the future. These beliefs are known as premises. There are assumptions about future predictions, past plans and current policies and facts. Common people at all levels of the organization involved in the plan should follow the same assumptions. These assumptions are very important for the organization as they lead the way for planning. Thus, the correct premises must be proposed for successful planning. (iii) Identification of alternatives: Once the objectives and beliefs have evolved, a need arises to identify different courses of action. There can be several ways to achieve the defined objective. Managers need to think carefully about these different routes. It involves innovation and a creative mind so that new methods can be developed to accomplish goals.(iv) Evaluation of alternatives: Managers are required to evaluate them after identifying the different paths of actions. This assessment is based on utility and results of alternatives. Managers should assess the pros and cons of each option. For example, which route will insure lower costs or which option can help achieve goals in a shorter period of time. In light of such aspects, various options must be properly evaluated. (v) Selecting the best: Selecting the best option is to select for the method that is most feasible according to the objective. Here, managers must use their skills and knowledge to select and choose the best option in terms of benefits, costs, and practicality. Depending on the situation, a combination of different routes can be moved upwards instead of just one.


(vi) Implementation: Implementation of options requires other management functions to step into the process. It involves organizing and directing the work according to the chosen path and policies. Implementation is concerned with following the chosen path of action and deciding how to use it to succeed. (vii) Follow-up action: In order to assess the overall functioning and implementation of plans, actions require continuous monitoring. Monitoring the activities performed is an important part of planning itself, as it helps to ensure the proper functioning of a plan. Thus, a thorough follow-up action enhances the success of a plan and, thus, the achievement of objectives.

  1. Is planning actually worth the huge costs involved? Explain.

Ans: Planning involves huge costs in terms of time and money. It involves analysis, research and scientific calculations that involve huge costs. However, despite being an expensive function it is a very basic and necessary function of an organization. Following are some of the highlighted factors due to which we can say that planning is a very important action in spite of huge cost.


(i) Render direction: The plan clearly states how to achieve the goals and objectives. Thus, it serves as a guide for action. It gives a direction to the functions of various departments of the organization. They guide managers about the things that are to be done, which route to take and how to achieve the objectives. This ensures that the path taken to achieve the goals is chosen correctly. The plan also ensures that the various departments of the organization work in a coordinated manner to achieve the desired objectives. (ii) Subject Risk: By directing the organization in the right direction, it recognizes its managers to analyze and anticipate changes. This reduces the uncertainty of preceding events. The plan shows how to deal with situations that arise in the management’s stipulated period, although this does not completely eliminate the problems.


(iii) least overlapping: As managers are well understood with the policies and plans of the organization, they coordinate the activities together to reach the objectives. Thus, overlapping of work is minimized. Also, wastage of recurring resources is reduced. Proper planning ensures that there is no confusion and misunderstanding and that the work progresses smoothly. (v) Assistance in decision making: Planning serves as the basis for decision making. Planning involves analyzing the future, evaluating various courses of action, and choosing the best option according to the objective. Thus, following a proper planning process helps managers make rational decisions.(vi) Necessary for control: Planning states the objectives that are to be achieved. Thus, it sets the standards against which performance is evaluated. It also helps to determine whether there is any deviation from the said objectives, which facilitates corrective measures.Therefore, we can infer that despite the cost involved, management is a very important function in management and is worth the cost.


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