Planning Test - 1

The correct answer is All of the above.

Key PointsPlanning is a mental exercise (it is a feature of planning)

Some Benefits of Planning are: 

Planning provides a guide for action.

• Plans can direct everyone’s actions toward desired outcomes.
• When actions are coordinated and focused on specific outcomes they are much more effective.

Planning improves resource utilization.

• Resources are always scarce in organizations, and managers need to make sure the resources they have are used effectively.
• Planning helps managers determine where resources are most needed so they can be allocated where they will provide the most benefit.

Plans provide motivation and commitment.

• People are not motivated when they do not have clear goals and do not know what is expected of them.
• Planning reduces uncertainty and indicates what everyone is expected to accomplish. People are more likely to work toward a goal they know and understand.

Plans set performance standards. 

• Planning defines desired outcomes as well as mileposts to define progress.
• These provide a standard for assessing when things are progressing and when they need correction.

Planning allows flexibility.

• Through the goal-setting process, managers identify key resources in the organization as well as critical factors outside the organization that need to be monitored.
• When changes occur, managers are more likely to detect them and know how to deploy resources to respond.

The correct answer is Planning is a mental exercise

Key Points Planning is a mental exercise (it is a feature of planning)

Some Benefits of Planning are:

• Planning provides a guide for action. Plans can direct everyone’s actions toward desired outcomes.
  • When actions are coordinated and focused on specific outcomes they are much more effective.
• Planning improves resource utilization. Resources are always scarce in organizations, and managers need to make sure the resources they have are used effectively.
  • Planning helps managers determine where resources are most needed so they can be allocated where they will provide the most benefit.
• Plans provide motivation and commitment. People are not motivated when they do not have clear goals and do not know what is expected of them.
  • Planning reduces uncertainty and indicates what everyone is expected to accomplish. People are more likely to work toward a goal they know and understand.
• Plans set performance standards. Planning defines desired outcomes as well as mileposts to define progress.
  • These provide a standard for assessing when things are progressing and when they need correction.
• Planning allows flexibility. Through the goal-setting process, managers identify key resources in the organization as well as critical factors outside the organization that need to be monitored.
  • When changes occur, managers are more likely to detect them and know how to deploy resources to respond.

The correct answer is ​Resistance to Change.

Key Points

Planning

• Planning is the primary function of management
• It is the methodology by which certain objectives are identified and strategies are devised for its subsequent realization.
• It is a preparatory step.
• It is a systematic activity that determines what, why, how, when, how, who and where is going to perform a specific job.

Disadvantage or Limitations of Planning are as follow,

1. Lack of Reliable Data 
2. Rigidity
3. Time-Consuming Process
4. Costly Process
5. Rapid Change
6. Internal Inflexibility
7. External Inflexibility
8. Expensive
9. Resistance to Change

The correct answer is Budget

Key Points

• A budget is the type of plan which is time-bound and linked with measurable outcomes.
• A budget is a quantitative statement for a definite future period of time for the purpose of obtaining a given objective.
• It is also a statement that reflects the policy of that particular period.
•  Financial planning includes both short-term as well as long-term planning.
• Long-term planning relates to long-term growth and investment.
• It focuses on capital expenditure programs.
• Short-term planning covers a short-term financial plan called budget

The correct answer is Setting objectives, Developing premises, Identifying alternative courses of action, Evaluating alternative courses

Key Points

• The planning process is to determine what is to be accomplished during the planning period. The vision and mission statements provide long-term, broad guidance on where the organization is going and how it will get there.
• The planning process should define specific goals and show how the goals support the vision and mission.
• Planning is the essential function of management. It is the technique by which certain objectives are recognized and procedures are concocted for its resulting acknowledgment.
• It is a preliminary step.
• It is a systematic activity that figures out what, why, how, when, who, and where will play out a particular work.
• Setting objectives, Developing premises, Identifying alternative courses of action, Evaluating alternative courses are the steps followed in the planning process.

The correct answer is Strategy

Key Points

• It starts at the highest level with defining a mission and casting a vision.
• Strategic planning includes a high-level overview of the entire business
• It's the foundational basis of the organization and will dictate long-term decisions.
• Strategic plans are all about why things need to happen,” Story said. “It’s big picture, long-term thinking. It starts at the highest level with defining a mission and casting a vision.
• Strategic planning includes a high-level overview of the entire business.
• It’s the foundational basis of the organization and will dictate long-term decisions.
• The scope of strategic planning can be anywhere from the next two years to the next 10 years
• Important components of a strategic plan are:
  1. vision,
  2. mission
  3. values.

The correct answer is Endurance.

Key PointsThe quality of managers must possess to succeed in planning are:

• Reflective Thinking: Reflective thinking means taking the bigger picture and understanding all of its consequences.
  • It doesn't mean that you're just going to simply write down your future plans or what you've done in the past.
  • It means truly trying to understand why you did what you did, and why that's important.
• Imagination: Imagination also helps business owners see possibilities for growth and expansion.
  • Many businesses don't grow simply because their owners don't see how they could.
  • Entrepreneurs see their businesses for what they are, then imagine what they could eventually become.
• Foresight: Foresight involves future-oriented awareness and planning, enabling businesses to respond quickly and effectively to future market threats and opportunities.

The correct answer is Decision making.

Key PointsPlanning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions.

Decision making: Planning essentially involves choice from among various alternatives and activities. If there is only one possible goal or a possible course of action, there is no need for planning because there is no choice.

Features of planning are:-

• Planning is Primary Function
• Planning is Pervasive
• Planning is Future Oriented
• Planning is Goal-Oriented
• Planning is Continuous
• Planning is an Intellectual Process
• Planning Aims at Efficiency
• Flexible
• Forward-Looking Process
• Foundation of Successful Action
• Coordination and Cooperation
• Conscious Process
• Planning Focuses on Achieving Objectives
• Planning is Futuristic
• Planning Involves Decision Making
• Planning is a Mental Exercise
• Planning is Base for to all Management Functions
• Primacy of Planning
• Selection of Alternatives
• Efficiency, Economy and Accuracy
• Limited Factors
• Planning is Dynamic
• Planning is Realistic
• Forecasting is a Prerequisite for Planning
• Basic Energy and a Few Others.

The correct answer is Standing Plan.

Key Points

Types of Plans

• Single-use and standing plans
• An organisation has to prepare a plan before making any decision related to business operation, or undertaking any project.
• Plans can be classified into several types depending on the use and the length of the planning period.
• Certain plans have a short-term horizon and help to achieve operational goals.
• These plans can be classified into single-use plans and standing plans.
• Single-use Plan: A single-use plan is developed for a one-time event or project.
  • Such a course of action is not likely to be repeated in future, i.e., they are for non-recurring situations. The duration of this plan may depend upon the type of the project.
• Standing Plan: A standing plan is used for activities that occur regularly over a period of time. It is designed to ensure that internal operations of an organisation run smoothly.
  • Such a plan greatly enhances efficiency in routine decision-making.

The correct answer is Programme.

Key Points

• Based on what the plans seek to achieve, plans can be classified as Objectives, Strategy, Policy, Procedure, Method, Rule, Programme, Budget.
• Objectives: The first step in planning is setting objectives. Objectives, therefore, can be said to be the desired future position that the management would like to reach. 
• Strategy: A strategy provides the broad contours of an organisation’s business. It will also refer to future decisions defining the organisations direction and scope in the long run.
• Policy: Policies are general statements that guide thinking or channelise energies towards a particular direction.
• Procedure: Procedures are routine steps on how to carry out activities. They detail the exact manner in which any work is to be performed.
• Method: Methods provide the prescribed ways or manner in which a task has to be performed considering the objective.
• Rules: Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion.
• 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.  
• Budget: A budget is a statement of expected results expressed in numerical terms. It is a plan which quantifies future facts and figures.