Chapter – 4 Planing (6 Marks)

Unsuitable:

In planning there are set policies, procedures to be strictly followed under all circumstances. However, this is against the very concept of business. Business is a dynamic activity faced with opportunities and problems. If it follows a set course of action, there may be risks of failure.

Time consuming:

Planning requires time to think, analyze the situation and then design the final plan. In case of emergencies it is necessary to take on the spot decisions. In such situations, time is a precious commodity and any delay caused by planning may deprive the business of a profitable opportunity.

Explain in brief, the meaning of “Goals & Objectives & Rules” as types of plans and give any four examples of each.

Or

Explain the types of plans? – This Q comes as a choice

“Goals” are collective ends towards that an organization direct their energies and activities.
Examples:

1. The goal of a car company can be to provide good quality and economically priced automobiles to the public.
2. Improvement in communication system
3. Improvement in customer relationship
4. Improvement in sales of specific product

“Objectives” are the ends towards which activity is aimed. They are the results to be achieved. An objective should meet the following five requirements –

1. It should relate to a single specific topic
2. It should relate to a result and not to an activity to be performed
3. It should be measured in quantitative terms whenever feasible
4. It should have a deadline for achievement

“Rules” are rigid instructions. They are specific statements and guide to behaviour. They indicate what should and should not be done. In rules, there is no scope for discretion.

Explain the term “policy” and procedure” as types of plans and give any four points of distinction between them. – 6 marks

“ Policy is a general statement of an organization which specifies its intention to respond to a specific problem or situation “.

Example: McDonald has a policy that it will not grant franchise to an individual who already owns another fast food restaurant.

Likewise a school admission office may have a policy that admission will be granted only to those applicants who have secured 60% and above

“Procedure” is a guide to action. It contains steps in chronological order for handling future activities.

Example: McDonald has a procedure that explains exactly how Big Macs are to be cooked, how long they can stay in the warming rack, etc.

Distinguish between (Any four points): 6 marks

POLICIES	PROCEDURES
It is a guide to thinking and steps to decision making	It is a guide to action and contains steps in chronological order to handle future activities
They are general statements	They are specific statements
Flexible	Rigid
Scope for discretion	No scope for discretion
Decided by top level management	Decided by middle & low level management
There may be different policies for different departments	There are same procedures for all departments
They are not dependent on procedures	They are dependent on policies

Marking Scheme – Policies and Rules (Important)

POLICIES	RULES
General statements	Specific statements
Flexible	Rigid
Scope for discretion	No scope for discretion
Guide to decision making	Guide to behaviour
Lay down management attitude	Indicates what should or should not be done
Example : McDonald's has a policy that it will not grant franchise to an individual who already owns another fast food restaurant.	Example: McDonald restaurant has a rule which prohibits customers from using its telephone