Business Studies Class 12 Notes Planning

1 What is Planning?

Planning is ascertaining before what to try to and the way to try to.

It is one among the foremost important managerial duties.

Before doing something, the managers and supervisors must give their opinion regarding how to do a particular job.

Hence, planning is firmly correlated with discovery and creativity. But the supervisor would first have to set goals.

Planning is vital step what managers at all stages take.

It desires conserving on to the choices when you consider that it consists of choosing a preference from choice approaches of performance.

What is Business Planning
Fig: What is Business Planning

2 Features of Planning

Fig: Features of Business Planning
Fig: Features of Business Planning

I. Planning Focuses on Achieving Objective Planning is purposeful. It has no that means until it contributes to the fulfillment of predetermined organizational goals

II. Planning is a Primary Function of Management Planning is the important or first feature to be carried out via each manager.

No different characteristic can be completed via the supervisor except performing planning function.

III. Planning is Pervasive Planning is critical for each and every kind of commercial enterprise activity.

Every branch whether, purchase, income accounts, auditing, advertising and many others wishes systematic planning.

IV. Planning is Continuous Planning is a by no means ending or non-stop technique due to the fact after making plans additionally one has to be in contact with the adjustments in altering surroundings and in the resolution of one great way

V. Planning is Futuristic Planning usually skill searching ahead, it is by no means for the past.

All the managers strive to make predictions and assumptions for future.

VI. Planning Involves Decision Making Planning preference making of the fine feasible choice out of a range of choices

3 Importance of Planning

Importance of Business Planning
Fig: Importance of Business Planning

Planning is actually substantial as it directs us the place to go, it furnishes course and decreases the hazard of danger by using making predictions.

The full-size benefits of planning are furnished below:

A. Planninggives directions: Planning assures that the goals are virtually asserted so that they serve as a model for deciding what motion ought to be taken and in which direction.

If objects are properly established, personnel are knowledgeable of what the organization has to do and what they want do to accomplish these purposes.

B. Planning decreases the possibilities of risk: Planning is a pastime which approves a supervisor to seem ahead and predict changes.

By deciding in prior the duties to be completed, planning notes the way to deal with adjustments and unpredictable effects.

C. Planning decreases and wasteful activities overlapping: Planning works as the basis of organizing the things to do and functions of wonderful branches, departments, and people.

It assists in heading off chaos and confusion. Since planning ensures precision in appreciation and action, work is carried out on effortlessly barring delays.

D. Planning encourages revolutionary ideas: Since it is the most important characteristic of management, new procedures can take the shape of true plans.

It is the most difficult venture for the administration as it leads all deliberate moves pointing to boom and of the business.

E. Planning aids choice making: It encourages the supervisor to seem into the future and make a selection from amongst countless choice plans of action.

The supervisor has to investigate every choice and pick out the most manageable layout

4. Limitations of Planning

Internal Limitations

I. Planning leads to rigidity: Planning discourages individual’s initiative & creativity.

The managers do no longer make modifications in accordance to altering enterprise environment.

They give up taking or giving pointers and new ideas. Thus, special planning may additionally create an inflexible framework in the organization.

II. Planning may also now not work in dynamic environment: Planning is primarily based on anticipation of future happenings and when you consider that future is unsure and dynamic therefore, the future anticipations are no longer constantly true.

III. Planning entails massive costs: When plans are drawn up, big value is concerned in their formulation.

IV. Planning is time consuming: Sometimes plans to be drawn up take so a lot of time that there is no longer an awful lot time left for their implementation.

V. Planning does no longer assurance success: The success of a corporation is feasible solely when plans are top drawn and implement.

Sometimes managers rely on formerly tried profitable plans, however it is now not constantly actual that a format which has labored earlier than will work correctly again.

VI. Planning reduces creativity: In planning, work is to be accomplished as per pre-determined plans.

It is determined in strengthen what is to be done, how it is to be accomplished and who is going to do it.

Moreover, planning is executed by using pinnacle administration which leads to discount of creativity of different degrees of management.

External Limitations

They are these boundaries of planning which arises due to exterior elements over which an enterprise has no control.

I. Changes in Government insurance policies way leads to failure of planning.

II. Natural calamities such as flood, earthquake etc. additionally adversely have an effect on the success of planning.

III. Changes in the techniques of opponents additionally leads to failure of planning many times.

IV. Regular technological modifications may additionally have an effect on planning.

V. Changes in the Economic and Social Conditions additionally reduces the effectiveness of planning.

5. Planning Process

Business Planning Process
Fig: Business Planning Process

As planning is an activity, there are sure lifelike measures for each and every supervisor to follow:

A. Setting Objectives

This is the most important step in the system of planning which specifies the goal of an organization, i.e. what a company wishes to achieve.

The planning technique starts with the putting of objectives.

Objectives are quit outcomes which the administration desires to obtain via its operations.

Objectives are particular and are measurable in phrases of units.

Objectives are set for the agency as a total for all departments, and then departments set their very own targets inside the framework of organizational objectives.

Example: A cell telephone enterprise units the goal to promote 2,00,000 gadgets subsequent year, which is double the modern sales.

B. Developing Planning Premises

Planning is in truth centered on the future, and there are sure occasions which are anticipated to have an effect on the coverage formation.

Such occasions are exterior in nature and have an effect on the planning adversely if ignored.

Their grasp and truthful evaluation are indispensable for high-quality planning.

Such activities are the assumptions on the groundwork of which plans are drawn and are recognized as planning premises.

Example: The cell smartphone organization has set the goal of 2,00,000 gadgets sale on the groundwork of forecast completed on the premises of beneficial Government coverage toward digitization of transactions.

C. Identifying Alternative Courses of Action

Once targets are set, assumptions are made. Then the subsequent step is to act upon them.

There can also be many approaches to act and obtain objectives. All the choice publications of motion need to be identified.

Example: The Mobile business enterprise has many choices like decreasing price, growing advertising and promotion, after sale carrier etc.

D. Evaluating Alternative Course of Action

In this step, the nice and terrible factors of every choice want to be evaluated in the mild of targets to be achieved.

Every choice is evaluated in phrases of decrease cost, decrease risks, and greater returns, inside the planning premises and inside the availability of capital.

Example:The cell cellphone enterprise will consider all the picks and test its professionals and cons.

E. Selecting One Best Alternative

The great plan, which is the most worthwhile format and with minimal bad effects, is adopted and implemented.

In such cases, the manager’s trip and judgement play a necessary function in choosing the quality alternative.

Example: Mobile smartphone corporation selects greater T.V. commercials and on-line advertising and marketing with first-rate after income service.

F. Implementing the Plan

This is the step the place different managerial features come into the picture.

At this stage plans are implemented to achieve the desired results

In this step, managers speak the to the personnel truely to convert the plans into action.

This step entails allocating the resources, organizing for labor and buy of machinery.

Example: Mobile smartphone organization hires salesman on a massive scale, creates T.V. advertisement, and begins on-line advertising things to do and set up provider workshops.

G. Follow Up Action

Monitoring the layout continuously and taking remarks at ordinary intervals is known as follow-up.

Monitoring of plans is very essential to make sure that the plans are being applied in accordance to the schedule.

Regular tests and comparisons of the outcomes with set requirements are finished to make certain that goals are achieved.

Example: A desirable remarks mechanism was once developed with the aid of the cell cellphone agency during its branches so that the real purchaser response, income collection, worker response, etc. may want to be known.


Plan: -A Plan is a particular motion proposed to assist the business enterprise gain its objectives.

It is a report that outlines how dreams are going to be met.

The significance of creating plans is evident from the truth that there may additionally be extra than one capacity of attaining a unique goal.

So, with the assist of logical plans, goals of a business enterprise should be accomplished easily.


A Single use layout in a commercial enterprise refers to graph developed for a one-time assignment or tournament that has one precise objective.

It applies to things to do that do now not reoccur or repeat. It is specially designed to reap a unique goal.

Such sketch is developed to meet the desires of a special situation.

The size of a single use graph differs noticeably relying on the challenge in question, as a single match design can also solely remaining one day whilst a single mission may additionally ultimate one week or months.

For example, an define for an advertising and marketing campaign.

After the marketing campaign runs its course, the quick time period design will lose its relevance besides as an information for growing future plans.

Types of Single Use Plan

I. Programme: A programme is a single use layout containing specific statements about undertaking outlining the objectives, policies, procedures, rules, tasks, bodily and human assets required to put in force any direction of action.

II. Budget: A price range is a declaration of predicted end result expressed in numerical phrases for a precise length of time in the future.


Standing plans are used over and over once more due to the fact they center of attention on organizational conditions that take place repeatedly.

They are commonly made as soon as and keep their cost over a length of years whilst present process revisions and updates.

That is why they are also referred to as repeated use plans.

For example, Businessman plans to set up a new enterprise Entrepreneur drafts commercial enterprise design earlier than opening the doorways to their business, and they can use their sketch to information their efforts for years into the future.

Types of Standing Plans

I. Objectives: Objectives are described as ends for the fulfillment of which an organization goes on working.

They can also be designed as the favored future role 0that the administration would like to reach.

The first and fundamental step of the planning method is placing organizational objectives.

Examples growing income by way of 10%, Getting 20% return on Investment etc. Objectives must be clear and achievable.

II. Strategy: Strategies refer to these plans which an enterprise prepares to face a range of situations, threats and opportunities.

When the managers of a corporation put together a new method for the enterprise it is known as inside approach and when some techniques are organized to reply to the techniques of the competitors, then such techniques are known as exterior strategies.

Examples, choice of the medium of advertisement, decision of the channel of distribution etc.

III. Policy: Policies refers to the well-known tips which brings uniformity in decision-making for success of organizational objectives.

They furnish instructions to the managers of an organization. They are bendy as they may additionally be modified as per requirement.

Example, promoting items on money groundwork only, reserving some put up for ladies in the organization.

IV. Procedure: Procedures are these plans which decide the sequential steps to raise out some work/activity.

They point out which work is to be achieved in which sequence/way.

They assist in the overall performance of work. Procedures are publications to action. Example: Process adopted in the Selection of Employees.

V. Rule: Rules are precise declaration that inform what is to be completed and whatnot to be performed in a particular situation.

They assist in indicating which factors are to be stored in thinking whilst performing task/work.

Rules are inflexible which make certain self-discipline in the organization.

Example : ‘No smoking in the workplace premises’. Violation of regulations may also invite penalty.

VI. Method: Methods are standardized approaches or manners in which a unique challenge has to be performed.

There might also be many ways/methods of finishing a challenge but that method/way should be chosen by way of which work can be accomplished early at the minimal viable cost.

Methods are flexible. Example, a variety of techniques of education are adopted by using an organization to teach its personnel like apprenticeship training, vestibule coaching etc.

Short Answer Type Questions

1. What are the essential factors in the definition of planning?

Ans: The important factors in the definition of planning are as follows

(i) Planning is identifying in strengthen what to do and how to do.

(ii) It is one of the fundamental managerial function.

(iii) Planning includes putting goals and growing a terrific direction of motion to reap these objectives.

(iv) It bridges the hole between the place we are and the place we favor to reach.

2. How does planning supply direction?

Ans: Planning presents course for motion with the aid of identifying in improve what has to be done, how to do, when to do and who will do.

When we strive to are seeking for solutions to the above questions, which are properly deliberate then instructions are mechanically highlighted.

3. Do you suppose planning can work in a altering environment?

Ans: Planning might also now not work in a altering environment. The surroundings consist of a range of dimensions, economic, political, social, felony and technological dimensions. The enterprise has to continuously adapt itself to changes. It turns into hard to precisely examine future tendencies in the environment. Planning can’t foresee the whole lot and thus, there may additionally be boundaries to superb planning.

4. If planning entails working out small print for the future, why does it now not make certain success?

Ans: Planning does no longer warranty success. The success of an corporation is feasible solely when plans are right drawn up and implemented.

Any sketch wishes to be translated into motion or it turns into meaningless.

Managers have a tendency to count on beforehand tried and examined profitable plans.

It is no longer continually real that simply due to the fact a graph has labored earlier than it will work again.

This type of false experience of safety may additionally genuinely lead to failure as an alternative of success.

5. Why are regulations viewed to be plans?

Ans: Rules are unique statements that inform what is to be done. They do no longer enable for any flexibility or discretion.

It displays a managerial choice that a sure motion has to or ought to no longer be taken.

They are typically the easiest kind of plans due to the fact there is no compromise or trade except a policy choice is taken.

6. What variety of strategic selections are taken by way of enterprise organizations?

Ans: Major strategic selections encompass whether or not the agency will proceed to be in the equal line of enterprise or mix new traces of exercise with the present commercial enterprise or searching for to gather a dominant function in the identical market.

Long Answer Type Questions

1. Why is it that firms are no longer continually capable to accomplish all their objectives?

Ans: Organizations are no longer constantly in a position to accomplish all their targets due to the following reasons

(i) Planning Leads to Rigidity In an employer a nicely described diagram is drawn up with unique dreams to be achieved, with in a particular time frame.

These plans then determine how the work will growth in the future and managers may also now not be in a role to alternate it.

This creates a trouble as flexibility is very important. Always adhering to the sketch may additionally no longer provide us the favored effects always.

(ii)Planning May now not Work in a Dynamic Environment The commercial enterprise surroundings is dynamic, nothing is constant.

The commercial enterprise surroundings are a totality of exterior forces, the place in some adjustments or the different maintain on taking place.

Plans determine in strengthen what has to be performed in future. Planning can’t foresee the whole thing and for this reason there may additionally be limitations to positive planning.

(iii) Planning Reduces Creativity Planning is normally accomplished via the pinnacle management.

Usually the relaxation of the participants simply implements these plans. As a consequence, center administration and different selections makers are neither allowed to deviate from plans nor are they accredited to act on their own, as a result planning in a way reduces creativity given that humans have a tendency to suppose alongside the equal traces as others, there is nothing new or innovative.

(iv) Planning Involves Huge Cost Planning entails big fee in their formulation.

These can also be in phrases of time and money. The fees incurred on occasion may also now not justify the advantages derived from the plans.

(v) Planning is a Time-Consuming Process Sometimes plans to be drawn take up so a good deal of time that there is no longer a good deal time left for their implementation and the targets to be achieved.

(vi) Planning does no longer Guarantee Success Any plans wishes to be translated into motion or it turns into meaningless.

Managers have a tendency to be counted on in the past tried and examined profitable plans.

It is now not constantly authentic that simply due to the fact a design has labored earlier than it will work again.

2. What are the principal points to be viewed through the administration while doing planning?

Ans: The important aspects to be regarded with the aid of the administration while making planning is

(I) It helps in achieving objectives which is purposeful. Planning has no which means until it contributes to the fulfillment of predetermined organizational goals.

(ii) It is the Primary Function Planning lays down the base for different features of management.

All different managerial features are carried out inside the framework of the plans drawn. Thus, planning precedes different function.

(iii) Planning is Pervasive Planning is required at all tiers of administration as properly as in all departments of the organizations.

The pinnacle administration undertakes planning for the employer as a whole. Middle administration does the departmental planning.

At the lowest level, every day operational planning is finished with the aid of supervisors.

(iv) Planning is Continuous Plans are organized for a unique length of time, may additionally be for a month, a quarter or a year.

At the give up of that period, there is want for a new layout to be drawn on the groundwork of new necessities and future conditions. Hence, planning is a non-stop process.

(v) Planning is Futuristic The cause of planning is to meet future occasions correctly to the high-quality benefit of an organisation. It impliesanalyzing, predictingand peeping into the future

(vi) Planning Involves Decision Making Planning in actuality entails preference from amongst a number picks and activities.

If there is solely one feasible aim then there is no want for planning.

The want solely arises when choices are available. Planning thus, includes thorough examination and comparison of every choice and selecting the most suitable one.

(vii) Planning is a Mental Exercise Planning is essentially a mental exercise of questioning as a substitute than doing, due to the fact planning determines the motion to be taken.

Planning requires logical and systematic questioning alternatively than guesswork or wishful thinking.

3. What are the steps taken with the aid of administration in the planning process?

Ans: The planning technique includes the following steps

(i) Establishing Objectives The first step in planning is to decide targets which have to be realistic, unique and clear so as to specify what is to be performed by means of the community of policies, procedures, techniques etc.

(ii) Developing Premises They encompass assumptions or forecasts of the future and unknown stipulations that will have an effect on the operations of the plans.

They furnish a notion about the future which allows the work of planning.

(iii) Identifying the Alternative Courses of Action,the subsequent step in planning is to perceive the more than a few preferences reachable to reap the objectives.

(iv) Evaluating Alternative Courses,the deserves and demerits of one-of-a-kind publications of movements are evaluated in the mild of goals to be finished and their feasibility is judged i.e., how some distance they will be profitable in assisting to acquire the objective.

(v) Selecting an Alternative,the subsequent step is to locate out the most suitable path to be followed.

The efforts are directed closer to choosing that course. Which will increase effectivity in the employer through maximizing output and earnings at the minimal costs.

(vi) Implement the Plan At this step the first-rate choice chosen is put to use.

(vii) Follow Up Only placing the excellent choice to motion is no longer enough.

The future is unsure and dynamic. Therefore, it turns into essential to test again whether or not the sketch is giving effects or not

4. Is planning certainly really worth the big fees involved? Explain.

Ans: Planning entails massive cost, when plans are drawn up big charges are worried in their formulation.

These are in phrases of time, money, effort etc. Detailed plans require scientific calculations to confirm records and figures.

The charges incurred occasionally can also now not justify the advantages derived from the plans.

There is a quantity of incidental expenses as properly (which are indirect) like costs on organising a meeting, session charges given to expert experts, market survey etc.

But in spite of the excessive value no company can work barring desirable planning if used properly.

#Case Problem

Art auto enterprise D Ltd is dealing with a hassle of declining market share due to extended opposition from different new and present gamers in the market.

Its competitors are introducing decrease priced fashions for mass shoppers who are fee sensitive. For first-class aware consumers, the organization is introducing new fashions with delivered facets and new technological advancements.

1. Prepare a mannequin commercial enterprise diagram for D Ltd to meet the present challenge.

You want to be very particular about quantitative parameters. You may additionally specify which kind of layout you are preparing.

Ans: In such a situation, formulating an approach would be advisable.

A method is a single use plan. It is commonly made to battle opposition in the market.

The mannequin enterprise plan, i.e., approach will be

(i) It is goal and its reason is that how a lot income it wishes to make bigger over a particular time.

(ii) The enterprise must then list down its strengths and weakness. This brings in mild as to what will be handy and what will be difficult.

(iii) Aggressive, advertising and marketing and sales merchandising strategies to be adopted.

2. Identify the boundaries of such plans.

Ans: Limitations of the above approach can be

(i) Shortage of funds.

(ii) Shortage of technical professionals.

(iii) Top stage may additionally no longer be ready ample to increase a appropriate strategy.

(iv) The corporation might also now not be profitable in assessing the future plans of the rivals as in contrast to its very own strategy.

3. How will you are seeking for to do away with these limitations?

Ans: The above obstacles can be overcome by

(i) Arranging money in advance.

(ii) Effective techniques of recruitment ought to be adopted to make certain availability of superb personnel in all departments.

(iii) Middle degree must be prompted to advocate plans in the structure of suggestions. After thinking about all these, an approach has to be planned.

(iv) The organization have to be capable to verify the strikes of the opponents