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CBSE Class 12 Commerce Business Studies Unit 4 Planning Complete Notes

CBSE Class 12 Commerce Business Studies Unit 4 Planning  Complete Notes

CBSE Class 12 Commerce Business Studies Unit 4 Planning :  CBSE conducts the final examinations for Class 10 and Class 12 every year in the month of March. The results are announced by the end of May.The board earlier conducted the AIEEE Examination for admission to undergraduate courses in engineering and architecture in colleges across India. However the AIEEE exam was merged with the IIT-Joint Entrance Exam (JEE) in 2013. The common examination is now called JEE(Main).

CBSE also conducts AIPMT (All India Pre Medical Test) for admission to major medical colleges in India. In 2014, the conduct of the National Eligibility Test for grant of junior research fellowship and eligibility for assistant professor in institutions of higher learning was outsourced to CBSE.  Apart from these tests, CBSE also conducts the central teachers eligibility test and the Class X optional proficiency test. With the addition of NET in 2014, the CBSE has become the largest exam conducting body in the world

CBSE Class 12 Commerce Business Studies Unit 4 Planning  Complete Notes

CBSE Class 12 Commerce Business Studies  Unit 4 Planning : Here our team members Provides CBSE Class 12 Commerce Business Studies Unit 4 Planning Complete notes in pdf format. CBSE Class 12 Commerce Business Studies Unit 4 Planning Included some topics those are given bellow :

Unit 4: Planning

  • Concept, importance and limitations
  • Planning process
  • Single use and Standing Plans – Objectives, Strategy, Policy, Procedure, Method, Rule, Budget and Programme.

Download here CBSE Class 12 Commerce Business Studies Unit4 Planning  Complete Notes In PDF Format

CBSE Class 12 Commerce Business Studies Unit 4 Planning  Complete Notes

CBSE Class 12 Commerce Business Studies  Unit 4 Planning : Download CBSE Revision Notes for CBSE Class 12 Business Studies Planning Concept, importance and limitation. Planning process. Single use and standing plans. Objectives, Strategy, Policy, Procedure, method Rule, budget and Programme.

CBSE Class 12 Commerce Business Studies Unit 4 Planning  Complete Notes

CBSE Class 12 Commerce Business Studies  Unit 4 Planning :  Planning (also called forethought) is the process of thinking about and organizing the activities required to achieve a desired goal. It involves the creation and maintenance of a plan, such as psychological aspects that require conceptual skills. There are even a couple of tests to measure someone’s capability of planning well. As such, planning is a fundamental property of intelligent behavior.

Also, planning has a specific process and is necessary for multiple occupations (particularly in fields such as management, business, etc.). In each field there are different types of plans that help companies achieve efficiency and effectiveness. An important, albeit often ignored aspect of planning, is the relationship it holds to forecasting. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like for multiple scenarios. Planning combines forecasting with preparation of scenarios and how to react to them. Planning is one of the most important project management and time management techniques. Planning is preparing a sequence of action steps to achieve some specific goal. If a person does it effectively, they can reduce much the necessary time and effort of achieving the goal. A plan is like a map. When following a plan, a person can see how much they have progressed towards their project goal and how far they are from their destination.

Explain briefly 6 steps in PLANNING PROCESS OR in FORMULATION OF A PLAN – 6

DCDCFPF : the steps should be answered in sequence

  1. Defining objectives
    1st step-of the management is to develop a plan and set some clear and specific objectives, which should stipulate the areas where organized planning must occur.

  2. Choosing alternatives:
    2nd step – the manager should ascertain as many available alternatives as possible for reaching those objectives and he should explore all those alternatives without going into the merits and demerits of those alternatives.

  3. Developing planning premises:
    3rd step – the manager should list all the premises (assumptions) for each alternative and then determine the feasibility of using any one alternative to reach its objectives.

  4. Choosing the best alternative:
    4th step – the manager should evaluate all the alternatives + the premises on which the alternatives are based so that the unreasonable alternatives can be eliminated from further consideration and the best alternative can be decided to achieve the objectives of the organization.

  5. Forming supportive (derivative) plans: (Explain the meaning of supporting plans with the help of a suitable example?
    After forming the main plan, secondary plans are derived in order to support and expedite the achievement of the main plan. These secondary plans are known as derivative or supportive plans.
    For example – once the production plan is prepared, secondary plan would be to buy equipment, raw material, recruit and train staff, develop new product, etc. These derivative plans are formed on the basis of the main plan and therefore support it.

  6. Putting the plan into action:
    Once plans are developed, they are ready to be put into action. The organization does not benefit from the planning process until this step is carried out.
    For example – if the firm decides to promote sales through advertising, then the company should engage an advertising agency to go ahead with the advertising otherwise the company will not achieve its desired results.

  7. Following up:
    Once the plan is put into action, it should be monitored because in the course of implementing the plan, many adjustments may be required in order to achieve the given objective.
    NOTE: if any additional correct point is added at any relevant stage without violating the sequence, full credit should be given. If sequence is not maintained, 2 marks are deducted

Explain “rigidity” as a limitation of planning – 3 marks (Board Exams – 1998, 2004) – Imp

Anagram for Planning Limitations = RIP CUT


  • Planning leads to rigidity. This has an adverse effect on the initiative to be taken by the managers.
    For example – due to a sudden change in the economic environment, a manager may have to change the course of action to achieve the desired result. But the manager may not be able to take the initiative if it is not in the plan in which case rigidity in planning may prove costly to the organization.

  • Rigidity may be internal as well as external.


Planning is based on the future, which is uncertain and beyond the control of the organization. Predicting the future is difficult. Any plan based on inaccurate information may not be very useful to the organization.

Psychological barriers:

There are some inbuilt psychological barriers. For example-people prefer the present rather than the future, as the future is relatively uncertain. Also planning involves change and adjustment to such changes and people tend to resist change.


  • Planning is an expensive exercise as it involves time and money to prepare estimates, collect information and evaluate various courses of action.

  • Often there may be need to hire the services of experts for the purpose of planning.

  • Thus, planning can be beneficial only if the benefits to be derived from it are more than the costs.


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.


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

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

  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


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



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)


General statements

Specific statements



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

CBSE Class 12 Commerce Business Studies Unit 4 Planning  Complete Notes provides India’s top Class 12 Commerce  faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get Class 12 Commerce  Video classes from  to do a great preparation for primary Student.

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