class 12 business studies Planning very important notes

 Planning..... Short & Easy Notes for Board Exam

#1. What do you mean by Planning?

> Planning is the process  of thinking before doing. It involves determination of goals as well as activities to be undertaken to achieve the goals. More specifically planning consist of deciding in advance. It decides beforehand, what is to be done, how is to be done, where is to be done, when is to be done, by whom is to be done.

#2. Write the characteristics of good planning.

• Sitting clear cut objective- the existence of clear cut objectives is necessary for efficient and effective planning. Objectives should not only be understandable but also rational.
• Economical- the planner must undertakes cost benefit analysis to ensure that the benefits of planning are more than the cost involved in it.
• Flexibility-  some elements of flexibility must be introduced in Planning because modern business operates in an environment which keeps on changing.
• Dynamic manager- the person concerned with the task of planning should have dynamic outlook. 
• Paper understanding- The implementation of the plan will depend upon its proper understanding by those who are to execute. If the concerned person have not properly followed the plan then there will be no use of such plans
• Simplicity- plan must be simple to understood and worked upon by different individuals and groups.
• Increase in efficiency- planning should aim at increasing the efficiency of individuals, groups and departments.

#3. Write the advantage or importance of planning.

• Offsetting uncertainty and changes- planning reduce the risk of uncertainty by anticipating future events and making provisions to tackle them.
• The planning provides direction by making the objectives clear and specific and by formulating the policies and programs for achieving those objectives.
• Gaining economical operation- planning helps managers to allocate the organisation limited resources in the most efficient manner to achieve the organisational goal by specifying what is to be done, how is it to be done, when it is to be done, where is to be done, and by whom it to be done.
• Establish coordinated efforts- planning facilitates coordination of departmental organisations by establishing common goals.
• Encourage Innovation and creativity- planning is the process of Thinking in advance and therefore there is a scope of finding better and different methods and procedures to achieve the desired objectives.
• Reduce business risk- planning is forward looking. It forecast things to be done in future. Future is very uncertain. As such there are great risk. Planning is based on facts and probability not on guess work.

#4. Write the limitations or disadvantages of planning.

• Inaccurate forecasting- planning is based on forecasting. Forecasting itself has it limitations as future is uncertain and distant future is more uncertain.
• Time consuming- planning process takes very long time. It involves the evaluation of numbers of alternatives and selection of the best alternative. This is likely to delay the decisions.
• Costly- not only the planning process is time consuming but also it is very costly in term of money. A lot of money has to be spent on collection and Analysis of data and forecasting.
• Rigidity- planning is also very rigid. It has to follow the set procedures, method and programs which may not be suitable in changing environment.
• Lack of reliable data- there is lack of reliable data. The data may be inaccurate and incomplete. Moreover the data may also be unreliable because of personal bias or lack of adjustments.

#5. Planning process or steps involved in planning.

> Following steps are involved in planning;

• Establish objective of the organisation.
• Establishing planning premises with the help of forecasting.
• Exploring alternative course of action.
• Choosing the best course.
• Preparing detailed plan for implementation.
• Secure their cooperation is necessary, the employees should be properly motivated.
• Definition of key area and issue for planning.
• Formulation of medium and short range plans.
• Determination of alternative plans for their comparative and analytical evaluation.
• Securing participation of employees to improve the quality of planning.
• Considering the strategy.
• Arrangement for implementation of plans.
• Last step is follow up action.

#6. Types of plans.

• On the basis of nature- formal and informal
• On the basis of time- long term and short term
• On the basis of level of management- top level, middle level and lower level
• On the basis of use- standing or separated plan and single use plan 
• On the basis of coverage- Overall and functional

#7. What do you mean by budget?

> It is a statement of expected result. Expressed in numerical terms. It Expresses objectives in quantitative terms.

A budget is a plan of action prepared to achieve specific goals.

Following are the characteristics of budget

• A budget should be based on past figure.
• A budget should be specific statement.
• There should be an active involvement of top management while preparing a budget.
• Should be flexible so that it can be modified according to the requirement of the situation.
• Persons at various levels should be involved in preparing a budget.

#8. Write the characteristics of planning.

• planning contributes to objectives- planning starts with the determination of objectives. One cannot think planning in the absence of objectives.
• Planning is the basic function- planning is the basic function of management. First of all plan is prepared thereafter other functions of Management such as organising, staffing, directing and controlling follow.
• Planning is pervasive- planning function is performed by all managers.
• Planning is a continuous process- the last but not the least planning process is an ongoing process. A plan is not wait for all times to come. The old plants are revised and the new one are prepared to meet the changed circumstances and assumptions.
• Planning is futuristic- planning is essentially forward looking function based on forecasting. Forecasting, future events and conditions are anticipated and plans are drawn accordingly.

POINTS

1. Planning is a continuous process.
2. It is forward looking.
3. It is mental exercise.
4. It is primary function of management.
5. It is process of thinking about future.
6. A plan is a trap to capture the future, this statement is given by Allen. 
7. According to George R Terry There are four types of planning.
8. Planning is necessary.
9. A good plan is flexible, economical and less time consuming.
10. Planning is short term. middle term and long term.

THE END