CBSE

CLASS - XII
BUSINESS STUDIES
ch.4

Planning
By Henna Punjabi (PIS)
BY
HENNA PUNJABI
By Henna Punjabi (PIS)
 CONTENTS
▶ Meaning
▶ Features
▶ Importance / Significance
▶ Limitations
▶ Planning process
▶ Single use plans
▶ Standing plans
▶ Types of plans (objectives, strategy, policies,
procedures, methods, rules, programmes, budgets)
By Henna Punjabi (PIS)
 MEANING OF PLANNING

▶ Thinking in advance
▶ Setting objectives
▶ Appropriate course of
action
▶ Time period
▶ Limitations
By Henna Punjabi (PIS)
 MEANING OF PLANNING

▶ “Planning is deciding in advance what to do, how to do and who is to do it.

Planning bridges the gap from where we are to where we want to go. It makes
it possible for things to happen.”
– Koontz and O’Donnell

▶ Planning is the function that determines in advance what should be done. It

consists of selecting the enterprise objectives, policies, programmes,
procedures and other means of achieving those objectives. In his planning the
manager must decide which of the alternative plans are to be followed and
executed. Planning is intellectual in nature. It is mental work. It is looking
ahead and preparing for the future.
- Theo Haimann

By Henna Punjabi (PIS)

 Features of Planning

1. Contributes to objectives
2. Primary function of management
3. Pervasive
4. Futuristic / forward looking
5. Continuous
6. Involves decision-making
7. Mental exercise
By Henna Punjabi (PIS)
 Importance of Planning
1. Provides direction
2. Reduces risk of uncertainty
3. Reduces overlapping of wasteful activities
4. Promotes innovative ideas (e.g. Nerolac’s overnight campaign)
5. Facilitates decision-making
6. Establishes standard for controlling

By Henna Punjabi (PIS)

 Limitations of Planning
1. Planning leads to rigidity
2. Planning may not work in dynamic environment
3. Reduces creativity
4. Planning involves huge cost
5. It is a time-consuming process
6. Planning does not guarantee success

By Henna Punjabi (PIS)

 External Limitations of Planning

1. Natural calamity
2. Change in competitor’s policy
3. Change in taste, fashion and trend in market
4. Change in technologies
5. Change in government policy

By Henna Punjabi (PIS)

 PLANNING PROCESS
1. Setting up
objectives

2.
Developing
premises

3.Listing
alternatives

4.Evaluation of
alternatives

5. S
e
l
e
c
t
i
By Henna Punjabi (PIS) n
g
a
SINGLE USE PLANS AND STANDING PLANS

▶ SINGLE USE PLANS

▶ Single use plans are one time use plans. These are
designed to achieve a particular goal that once achieved
will not reoccur in future. Its duration depends upon
the need of the project.

▶ STANDING PLANS
▶ They are also known as repeat use plans. They focus on
situations which occur repeatedly. They are used over
and over again.
By Henna Punjabi (PIS)
 Features of Single Use
Plans
▶ Used only once
▶ Specific situations
▶ Discarded after work is done
▶ E.g. Budget, Programme,
Projects

By Henna Punjabi (PIS)

 Features of Standing
Plans
▶ Indefinite period
▶ Stable in nature
▶ Guidelines
▶ E.g. Policies, methods, rules,
etc.

By Henna Punjabi (PIS)

 TYPES OF PLANS
▶ Objectives : ▶ Methods :
Our goals for future Systematic ways of doing job
▶ Strategy : ▶ Rules :
A comprehensive plan Special actions or non-actions
to achieve of employees
organizational ▶ Programmes :
objectives Objectives + policies +
▶ Policies : procedures + rules
Guidelines for managers ▶ Budgets :
▶ Procedures : Expected results in
Steps to handle future numerical terms
By Henna
conditions Punjabi
(PIS)
OBJECTIVES
▶ Desired future position
▶ Ends to be achieved
▶ E.g. increasing sales by 10% or earning a reasonable rate of return on
investment, earn a 20% profit from business.
▶ Set by top management
▶ Futuristic
▶ Objectives are SMART
 S – Specific
 M – Measurable
 A – Achievable
 R – Relevant
 T – Time Bound By Henna Punjabi (PIS)
STRATEG
Y A plan of action designed to achieve a long-term or overall aim.
▶

▶ Organisation’s direction and scope in the long run.

▶ Comprehensive (all in one) plan to achieve objectives
▶ Determining long term objectives
▶ Adopting a particular course of action
▶ Allocating resources for achieving the objectives
▶ Blueprint of business
▶ Influenced by business environment
▶ Directs future decision making
▶ Strategies usually take the course of forming the organisation’s identity in the
business environment.
▶ Major strategic decisions will include decisions like whether the organisation will
continue to be in the same line of business, or combine new lines of activity with
the existing business or seek to acquire a dominant poBsyitHieonnna Piunnjatbhi (ePISs) ame
market.
Polic
y
▶ Policies are general statements that guide thinking or channelise energies
towards a particular direction.
▶ Policies provide a basis for interpreting strategy which is usually stated
in
general terms.
▶ They are guides to managerial action and decisions in the implementation of
strategy.
▶ Policies make it easier to resolve problems or issues.
▶ For all levels and departments
▶ Major company policiesare for all to know i.e., customers, clients,
competitors, etc.
▶ Whereas minor polices are applicable to insiders and contain minute
details
of information vital to the employees of an organisation.
▶ How should vendors be selected for procuring supplies? How many suppliers
should a company make purchases from? What is the criteria for choosing
suppliers. All these queries would be addressed by the P u r c h a s e P o l i c
Procedure
▶ Routine steps on how to carry out activities.
▶ They detail the exact manner in which any work is
to be performed.
▶ Specified chronological order of task
▶ Policies and procedures are interlinked with each
other.
▶ Procedures are steps to be carried out within a
broad policy framework

By Henna Punjabi (PIS)

Method

▶ Methods provide the prescribed ways or manner in

which a task has to be performed.
▶ It deals with a task comprising one step of a
procedure and specifies how this step is to be
performed.
▶ The method may vary from task to task.
▶ Selection of proper method saves time, money and
effort and increases efficiency.

By Henna Punjabi (PIS)

Rules

▶ Rules are specific statements that inform what is to

be done.
▶ They do not allow for any flexibility or discretion.
▶ It reflects a managerial decision that a certain
action must or must not be taken.
▶ They are usually the simplest type of plans because
there is no compromise or change unless a policy
decision is taken.

By Henna Punjabi (PIS)

 Budget
▶ A budget is a statement of expected results expressed in numerical terms.
▶ It is a plan which quantifies future facts and figures. For example, a sales
budget may forecast the sales 2020-21 of different products in each area for
a particular month.
▶ A budget may also be prepared to show the number of workers required in
the factory at peak production times.
▶ Budget is a control device from which deviations can be taken care of.
▶ Budget involves forecasting
▶ Budget represents all items in numbers.
▶ E.g. a statement showing the estimated cash inflows and cash outflows over
a given period.

By Henna Punjabi (PIS)

 Programme
▶ Programmes are detailed statements about a project which
outlines the objectives, policies, procedures, rules, tasks,
human and physical resources required and the budget to
implement any course of action.
▶ Programmes will include the entire range of activities as
well as the organisation’s policy and how it will contribute
to the overall business plan.
▶ The minutest details are worked out i.e., procedures,
rules, budgets, within the broad policy framework.

By Henna Punjabi (PIS)

1. Policies (a) Norms regarding actions and non-
actions
2. Methods (b) Step by step way of doing a job
3. Objectives (c) Organisation’s way of solving a
problem
4. Rules (d) End results of an organization
5. Strategy (e) Formalised way of doing routine
tasks
6. Procedures (f) Comprehensive plan

By Henna Punjabi (PIS)

1. Policies (a) Norms regarding actions and non-
actions
2. Methods (b) Step by step way of doing a job
3. Objectives (c) Organisation’s way of solving a
problem
4. Rules (d) End results of an organization
5. Strategy (e) Formalised way of doing routine
tasks
6. Procedures (f) Comprehensive plan

1-c; 2-e; 3-d; 4-a; 5-f; 6-b

By Henna Punjabi (PIS)
Strategies

By Henna Punjabi (PIS)

 Policies vs. Objectives

Policies Objectives

1. Own way to work 1. End results

2. How to do ? 2. What to do ?

3. Mode of achieving objectives 3. End points

4. 20% employment to women 4. Increase sales by 20% this year

By Henna Punjabi (PIS)

Procedures vs. Methods

Procedures Methods

1. Sequence of steps 1. Way to do routine tasks

2. More rigid 2. Less rigid

3. E.g.Admission procedure, giving 3. Valuation methods, production

contracts method

By Henna Punjabi (PIS)

Rules vs. Strategy
Strategy Rules

1. Comprehensive plan 1. Norms for actions and non-actions

2. Solves challenging and unforeseen 2. Guides behavior of employees

problems

3. Eg. A company may choose to 3. No smoking, no mobile phones

use only local raw materials or
National brands to manufacture
their products.

By Henna Punjabi (PIS)

 Questions
▶ P&G Ltd. Is offering free bucket on every purchase of Tide Washing
Powder. In response to this Hindustan Unilever Ltd. Started a new scheme
of giving free one kg. of Rin Washing Powder with every purchase of 5 kg.
of Rin Washing Powder. Identify the plan stated in the above paragraph
and explain it. STRATEGY
▶ Laxmi Chemicals Ltd., a soap manufacturing company wanted to increase
its market share from 30% to 35% in the long run. A report stated that
there is a growing trend of herbal products. On the basis of this report the
company decided to diversify into organic products. Their USP was to sell
eco-friendly products. STRATEGY
▶ A company directed its sales executives that they would sell goods on
credit but told employees to strictly inform the customer that if they will
not make payment within one month they will have to pay an interest of
10% per annum. Identify two plans. POLICY & RULES

By Henna Punjabi (PIS)

THANK YOU

By Henna Punjabi (PIS)