Planning

Planning means deciding in advance what to do and how to do it, and it bridges the gap between where we are and where we want to go. In this chapter you will study its features: planning focuses on achieving objectives, it is the primary function of management, it is pervasive, continuous, futuristic and a mental exercise, and it involves decision making. You will learn its importance in providing direction, reducing the risks of uncertainty, reducing overlapping and wasteful activities, promoting innovative ideas, facilitating decision making and establishing standards for controlling, and also its limitations, such as rigidity, unsuitability in a dynamic environment, high cost and delay. The chapter then explains the seven steps of the planning process, from setting objectives and developing premises to implementing the plan and following up. Finally, you will study the types of plans, single-use and standing plans, and the specific forms they take: objectives, strategy, policy, procedure, method, rule, programme and budget, with examples from real businesses.

Detailed Worksheet: Planning Section A - Definitions (10 marks) 1. Define planning. Why is it called the primary function of management? (2 marks) 2. What are planning premises? Give two examples. (2 marks) 3. Distinguish between single-use plans and standing plans with one example of each. (2 marks) 4. Distinguish between a policy and a procedure. (2 marks) 5. What is a budget? Why is it considered both a plan and a control device? (2 marks) Section B - Calculations and Applications (15 marks) 6. A company's sales were Rs 80 crore last year. It plans to increase sales by 15% next year. Calculate the sales target. If its sales budget is divided equally among four quarters, calculate the quarterly target. Identify the types of plan involved. (3 marks) 7. A firm has three alternatives for expanding production: Option 1 costs Rs 50 lakh and yields a profit of Rs 12 lakh a year; Option 2 costs Rs 80 lakh and yields Rs 18 lakh a year; Option 3 costs Rs 30 lakh and yields Rs 6 lakh a year. Calculate the rate of return for each option and identify the best one. Name the steps of the planning process involved. (3 marks) 8. Identify the type of plan in each case: (i) "No smoking in the factory premises" (ii) "We will achieve 20% market share in three years" (iii) "Purchases above Rs 1 lakh require three quotations" (iv) a step-by-step sequence for processing a loan application (v) a plan to launch a new product, including all activities and resources (vi) "Promotions will be based on merit." (3 marks) 9. A company plans to sell 1,20,000 units in a year. Each salesperson can sell 500 units a month. Calculate the number of salespersons required. If the company currently has 15 salespersons, how many must be recruited? Which function follows from this planning? (3 marks) 10. A company budgeted its advertising cost at Rs 24 lakh for the year, but by the end of six months it had spent Rs 15 lakh. Calculate the projected annual spending if this rate continues, and the overspending. State how the budget acts as a standard for controlling. (3 marks) Section C - Diagrams (10 marks) 11. Draw a flowchart showing the seven steps of the planning process. (4 marks) 12. Draw a chart showing the classification of plans into single-use and standing plans, with examples of each. (3 marks) 13. Draw a chart showing the importance of planning with six points. (3 marks) Section D - Analysis and Higher-order Thinking (15 marks) 14. An airline planned to expand its fleet based on forecasts of rising demand, but a sudden fuel price hike and a pandemic made the plan unworkable. Analyse the limitations of planning shown, and explain why planning is still necessary despite them. (5 marks) 15. Explain the difference between a strategy and a policy, and between a method and a procedure, with examples. Analyse how a strategy influences the policies of a company entering the electric scooter market. (5 marks) 16. A company's top management set the objective of doubling profits in two years but did not share the plan with departments or follow up its implementation. Evaluate the planning process followed, identify the steps that were missing, and suggest improvements. (5 marks) Instructions: Time allowed 2 hours. Attempt all sections. Quote relevant lines from cases while identifying concepts, and show calculations clearly.