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Planning_Chapter_Notes_Class_12

Planning is the process of setting objectives and determining actions to achieve them, characterized by being goal-oriented, continuous, and requiring decision-making. It is important for providing direction, reducing uncertainty, and facilitating decision-making, but has limitations such as rigidity and being time-consuming. The planning process involves setting objectives, developing premises, identifying and evaluating alternatives, and implementing the plan, with various types of plans categorized by use and functionality.

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14 views4 pages

Planning_Chapter_Notes_Class_12

Planning is the process of setting objectives and determining actions to achieve them, characterized by being goal-oriented, continuous, and requiring decision-making. It is important for providing direction, reducing uncertainty, and facilitating decision-making, but has limitations such as rigidity and being time-consuming. The planning process involves setting objectives, developing premises, identifying and evaluating alternatives, and implementing the plan, with various types of plans categorized by use and functionality.

Uploaded by

sujalbnms2004
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Class 12 Business Studies - Chapter: Planning

1. Meaning of Planning

Planning is the process of setting objectives and determining an appropriate course of action to

achieve those objectives. It is a systematic process of thinking about and organizing future activities.

It involves anticipating future scenarios and deciding in advance the actions to be taken.

2. Characteristics of Planning

- Goal-Oriented: Planning is focused on achieving specific objectives or goals of the organization.

- Primary Function of Management: It is the first step in the management process, forming the basis

for all other functions (organizing, staffing, directing, controlling).

- Pervasive: It is required at all levels of management and in all departments.

- Futuristic: Planning involves forecasting future events and preparing for them.

- Continuous Process: Planning is an ongoing process, as plans need to be revised according to

changes in the environment.

- Involves Decision-Making: Planning requires managers to evaluate different alternatives and

choose the most suitable one.

- Mental Exercise: Planning requires creativity, logical thinking, and analysis.

3. Importance of Planning

- Provides Direction: Planning gives a clear sense of direction by setting objectives and defining the

path to achieve them.

- Reduces Risks of Uncertainty: Planning helps in anticipating changes and preparing for them,

reducing the impact of risks.

- Facilitates Decision-Making: It provides a framework for decision-making by analyzing various

alternatives.
- Minimizes Wastage of Resources: By reducing overlapping activities and ensuring efficient use of

resources.

- Promotes Innovative Ideas: Planning encourages creativity and innovation by exploring new

opportunities and solutions.

- Establishes Standards for Controlling: Planning sets benchmarks against which actual

performance can be measured.

4. Limitations of Planning

- Rigidity: Plans, once made, may create inflexibility in the organization, making it difficult to adapt to

changes.

- Time-Consuming: Planning involves thorough analysis and evaluation, which can delay action.

- Costly Process: It requires time, effort, and resources, making it an expensive process.

- Does Not Guarantee Success: Even well-prepared plans may fail due to unforeseen events.

- Lack of Creativity: Overemphasis on plans may reduce the creativity and initiative of employees.

- Dynamic Environment: In a constantly changing environment, plans may become obsolete quickly.

5. Planning Process

- Setting Objectives: Determine what the organization wants to achieve. Objectives should be

specific, measurable, achievable, relevant, and time-bound (SMART).

- Developing Premises: Identify assumptions and forecast future conditions that will affect the plan

(economic, political, technological factors).

- Identifying Alternatives: List all possible courses of action to achieve objectives.

- Evaluating Alternatives: Assess each alternative based on feasibility, acceptability, and the

availability of resources.

- Selecting the Best Alternative: Choose the most viable and effective alternative.

- Implementing the Plan: Convert the plan into action by allocating resources and assigning

responsibilities.
- Follow-Up Action: Monitor and review the progress of the plan to ensure objectives are being met.

6. Types of Plans

A. Based on Use

- Single-Use Plans: Prepared for one-time use, such as specific projects or events. Example: A

marketing campaign for a new product launch.

- Standing Plans: Ongoing plans used for recurring activities. Example: Policies, procedures, and

rules.

B. Based on Functionality

- Strategic Plans: Long-term plans focused on achieving organizational objectives. Example:

Expansion into new markets.

- Tactical Plans: Medium-term plans developed by middle management for specific departments.

Example: Sales targets for a quarter.

- Operational Plans: Short-term plans that deal with day-to-day operations. Example: Scheduling

staff for daily shifts.

7. Types of Standing Plans

- Objectives: Specific results the organization aims to achieve.

- Policies: General guidelines that govern decision-making.

- Procedures: Detailed steps to perform a specific task.

- Rules: Strict statements that must be followed.

- Budget: A financial plan outlining income and expenditure.

8. Key Differences Between Planning and Strategy

Planning focuses on setting goals and actions. Strategy focuses on long-term vision and overall

direction.
Planning is more structured and formal. Strategy is flexible and adaptable.

Planning emphasizes efficiency. Strategy emphasizes competitive advantage.

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