Chapter planning: Planning Application Questions | business studies Class 12 CBSE

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Chapter planning: Planning Application Questions | business studies Class 12 CBSE | ByteNotes.in

Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 1

Applied Concept

A textile company's production manager discovers midway through the year that raw material prices have risen sharply, making the existing production plan unviable. Despite this, the top management insists on adhering strictly to the original plan. Identify the limitation of planning being exhibited here and explain its consequences.

The limitation being exhibited is that planning leads to rigidity. A well-defined plan with specific goals and a fixed time frame can make managers unable or unwilling to change course, even when circumstances have changed significantly.
By insisting on strict adherence to the original plan despite changed cost conditions, top management is not allowing the flexibility needed to cope with new environmental realities. This may lead to inefficient resource utilisation and financial losses.
This situation illustrates why managers need discretion to modify plans when circumstances change. Following a pre-decided plan when it is no longer relevant to current conditions may not serve the organisation's best interest and can cause serious operational and financial damage.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 2

Applied Concept

Sunrise Electronics Ltd. wants to capture a 30% market share within three years. The CEO has asked all department heads to define specific, quantified targets for their respective departments for the coming financial year. Which step of the planning process is being undertaken? Explain its significance.

The step being undertaken is 'Setting Objectives' — the first and most foundational step of the planning process. The CEO is directing all departments to formulate specific, measurable goals aligned with the company's broader three-year target.
Setting objectives is significant because it provides direction to all departments, specifying what each unit must achieve. Without clear objectives, employees have no clear target to work towards and departments may pursue conflicting priorities.
Objectives stated in specific, quantitative terms within a given time period enable performance measurement, coordination across departments, and a rational basis for the planning process. They ensure that all departmental efforts are aligned towards achieving the overall organisational goal of capturing 30% market share.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 3

Applied Concept

A bank manager notices that several employees handle customer loan applications differently, leading to inconsistencies and customer dissatisfaction. To resolve this, the bank introduces a step-by-step sequence for processing loan applications that all staff must follow. Identify the type of plan introduced and explain its features.

The type of plan introduced is a Procedure — a standing plan consisting of routine, chronological steps that specify the exact manner in which a particular activity is to be performed.
Procedures are designed to enforce policy and attain predetermined objectives. They are specified in a chronological order and are generally meant for insiders (employees) to follow, ensuring uniformity and consistency in carrying out regular, recurring activities.
By standardising the loan application process, the bank eliminates inconsistencies and confusion, improves service quality, and ensures compliance with policy. Procedures also make it easier to train new employees and measure performance against a defined standard, directly addressing the inconsistency problem.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 4

Applied Concept

A startup company is organising a product launch event next month. The management has prepared a detailed document outlining the event objectives, the policies for vendor selection, the step-by-step procedures for the event day, the budget, and the staff responsibilities. Identify the type of plan described and state whether it is a single-use or standing plan.

The type of plan described is a Programme — a detailed statement about a project that outlines the objectives, policies, procedures, rules, tasks, human and physical resources required, and the budget for implementation.
A programme is classified as a single-use plan because it is developed for a specific, one-time, non-recurring event or project. Once the product launch event is completed, the same plan will not be used again.
Since a programme integrates all other types of plans — objectives, policies, procedures, budgets, and resource allocation — into one comprehensive document, it provides the management with a complete, unified blueprint for executing the product launch successfully within the defined scope and timeframe.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 5

Applied Concept

Priya is a store manager at a retail chain. She ensures that all cashiers follow a specific rule: 'No cash transaction above Rs. 10,000 without a supervisor's approval.' A cashier once argued that there should be exceptions for trusted customers. Identify the type of plan in question and explain why the cashier's argument holds no validity.

The type of plan in question is a Rule — a specific statement that informs what is to be done, with no allowance for flexibility or discretion. Rules reflect a managerial decision that a certain action must or must not be taken.
The cashier's argument holds no validity because rules are the simplest type of plan and do not permit compromise or change unless a formal policy decision is taken at the managerial level. They are non-negotiable in their implementation.
Rules exist to ensure uniformity, compliance, and risk management. In a financial setting, the no-exception rule protects the company from potential fraud and regulatory violations. Any deviation must be formally authorised through a policy change — an individual cashier cannot unilaterally decide to make exceptions.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 6

Applied Concept

A large FMCG company has projected its expected sales, expenses, and profit for the next financial year in a document expressed entirely in numerical form. This document is also used to monitor actual performance monthly. Identify the type of plan and explain its dual role.

The type of plan described is a Budget — a statement of expected results expressed in numerical terms that quantifies future facts and figures such as sales, expenses, and profit for a specified period.
As a planning tool, the budget involves forecasting future conditions and setting financial targets that guide resource allocation and operational decisions across all departments for the year.
As a control device, the budget allows the company to compare actual monthly performance figures against the budgeted targets. Deviations — positive or negative — can be identified and corrective action can be taken promptly, making the budget simultaneously a planning instrument and a performance control tool.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 7

Applied Concept

A pharmaceutical company's marketing team submitted a proposal to launch a new drug. The proposal includes three options: launching in metro cities only, launching nationwide, and launching via online pharmacies. The management is currently examining the risks and benefits of each option. Which step of the planning process is being carried out? Explain.

The step being carried out is 'Evaluating Alternative Courses of Action' — the fourth step of the planning process. The management is systematically weighing the pros and cons of each of the three identified options.
This step involves assessing each course of action in the light of the objective to be achieved — in this case, successfully launching the new drug. Factors like financial viability, market reach, regulatory compliance, and implementation costs must all be considered.
Evaluation is critical because it prevents hasty decisions. By thoroughly analysing feasibility and consequences, including risk-return trade-offs, the company ensures that the alternative ultimately selected is the most rational and viable choice aligned with its objectives and available resources.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 8

Applied Concept

The HR department of a manufacturing company has issued a notice stating: 'All recruitment will be done through internal promotions first; external candidates will be considered only if no suitable internal candidate is available.' Identify the type of plan and explain how it helps the organisation.

The type of plan is a Policy — a general statement that guides managerial thinking and channelises energies in a particular direction, providing a basis for interpreting strategy in the context of human resource management.
This recruitment policy helps the organisation by providing a consistent framework for all hiring decisions. Managers across departments can resolve recruitment queries without confusion, using this policy as the standard response to any recruitment situation.
Policies improve decision-making efficiency by setting clear parameters within which managers may exercise their discretion. They also ensure fairness and transparency, as all employees and applicants know the rules of engagement. Major company policies, like this one, are available to all stakeholders and contribute to an organised, predictable HR process.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 9

Applied Concept

A construction company successfully completed a highway project using a particular project plan. When awarded a new bridge construction project, the project manager suggests simply reusing the same plan. With reference to the limitations of planning, explain why this approach is risky.

This approach reflects the limitation that planning does not guarantee success. Managers sometimes rely on previously tried and tested plans, assuming that past success ensures future success — this creates complacency and a false sense of security.
The highway project and the bridge project are fundamentally different in scope, geography, design, regulatory requirements, and technical complexity. A plan designed for one non-recurring project cannot simply be transplanted to another without careful adaptation.
Additionally, conditions change over time — material costs, labour availability, weather patterns, and client specifications may all differ. Reusing an old plan without reassessing premises and alternatives overlooks the dynamic nature of the environment, significantly increasing the risk of failure or cost overruns on the new project.

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Application Question

Hard difficulty • Concept in a practical situation

Hard

Question 10

Applied Concept

A national supermarket chain is planning to open 50 new stores across India in the next five years. Senior management has identified the broad direction — expansion into tier-2 cities — and decided to allocate Rs. 500 crore for this purpose. Identify the type of plan being described and explain its three dimensions.

The type of plan being described is a Strategy — a comprehensive plan that provides the broad contours of an organisation's business, defining its long-term direction and scope.
The first dimension is determining long-term objectives: the company's objective is to open 50 new stores over five years, with a specific focus on tier-2 cities as the target market.
The second dimension is adopting a particular course of action — geographic expansion into tier-2 cities, as opposed to deepening presence in existing markets or expanding into international markets. The third dimension is allocating resources necessary to achieve the objective — in this case, Rs. 500 crore earmarked specifically for this strategic expansion.

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Chapter sections

Chapter planning: Planning | Application Questions

A large FMCG company has projected its expected sales, expenses, and profit for the next financial year in a document expressed entirely in numerical form. This document is also used to monitor actual performance monthly. Identify the type of plan and explain its dual role.

The HR department of a manufacturing company has issued a notice stating: 'All recruitment will be done through internal promotions first; external candidates will be considered only if no suitable internal candidate is available.' Identify the type of plan and explain how it helps the organisation.

A construction company successfully completed a highway project using a particular project plan. When awarded a new bridge construction project, the project manager suggests simply reusing the same plan. With reference to the limitations of planning, explain why this approach is risky.

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