Exam Tomorrow · Class 12 Business Studies · Chapter 4

Planning Quick Revision

Learn the planning process, types of plans and limitations without mixing them up.

60-second revision

  • Planning means deciding in advance what to do and how to do it.
  • The planning process starts with setting objectives, then developing premises, identifying alternatives, evaluating them, selecting a plan, implementing it and following up.
  • Standing plans include policies, procedures, methods and rules; single-use plans include programmes and budgets.
  • Planning gives direction and reduces risk but cannot eliminate uncertainty or guarantee success.

Keywords to remember

objectives · premises · alternatives · policy · procedure · rule · budget

Common mistakes

  • A budget is generally a single-use plan, while a policy is a standing plan.
  • Planning reduces uncertainty; it does not completely remove uncertainty.

Important questions

  1. Explain the steps in the planning process.
  2. Differentiate policy, procedure, method and rule.
  3. Explain any four limitations of planning.

Quick MCQ check

Question 1: What is generally the first step in planning?

  • Setting objectives
  • Selecting an alternative
  • Implementing the plan
  • Follow-up

Explanation: Planning begins by defining what is to be achieved.

Question 2: Which is usually a single-use plan?

  • Policy
  • Rule
  • Budget
  • Procedure

Explanation: Budgets are usually prepared for a specific period or objective.

Question 3: Planning cannot guarantee success mainly because:

  • Managers never set objectives
  • The business environment can change
  • Planning has no benefits
  • Budgets are illegal

Explanation: Future conditions are uncertain and may change despite planning.

Practice Business Studies case studies · Important questions · Timed exam mode