Chapter 4: Planning Class 12 Business Studies — summary, notes, extra questions & MCQ quiz

Summary

Planning is deciding in advance what to do and how to do it; it bridges the gap between where we are and where we want to go. It is the primary function of management and the basis of all other functions. The importance of planning lies in providing direction, reducing the risks of uncertainty, reducing overlapping and wasteful activities, promoting innovative ideas, facilitating decision-making and establishing standards for controlling. Its features are: planning focuses on achieving objectives; it is a primary function; it is pervasive across levels and departments; it is continuous; it is futuristic; it involves decision-making; and it is a mental exercise. Planning also has limitations — it leads to rigidity, may not work in a dynamic environment, reduces creativity, involves huge costs, is time-consuming and does not guarantee success. The planning process follows logical steps: setting objectives, developing premises (assumptions about the future), identifying alternative courses of action, evaluating alternatives, selecting an alternative, implementing the plan and follow-up action. Plans are of several types. Single-use plans (budget, programme, project) serve a one-time event, while standing plans (objective, strategy, policy, procedure, method, rule) are used repeatedly. Objectives are desired end results, a strategy is a comprehensive plan, a policy is a general guide to action, a procedure gives the steps, a method gives the manner, a rule is a specific do/don't statement, a programme is a detailed scheme and a budget is a numerical statement of expected results.

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