Business Planning and Decision Making

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Questions and Answers

What is the first step in planning where managers and subordinates formulate objectives?

Developing Premises

Evaluating Alternative Courses

Collaboration (correct)

Determining Alternative Courses

What is the purpose of forecasting premises in planning?

To gain a common understanding of the planning environment (correct)

To develop alternative courses

To evaluate alternative courses

To select a course of action

What is the next step after determining alternative courses in planning?

Evaluating Alternative Courses (correct)

Developing Premises

Selecting a Course

Formulating Derivative Plans

What do budgets provide in planning?

A clear direction in numerical terms Signup and view all the answers

What is the purpose of evaluating alternative courses in planning?

To analyze strength, weakness, opportunity, and threat Signup and view all the answers

What type of plans are formulated in step 7 of the planning process?

Derivative plans Signup and view all the answers

What is the purpose of step 3 in the planning process?

To gain a common understanding of the planning premises Signup and view all the answers

What is the outcome of step 6 in the planning process?

A course of action is selected Signup and view all the answers

What is the primary purpose of planning in an organization?

To map out future activities and approach the environment systematically Signup and view all the answers

What do efficient managers try to do to achieve their goals effectively?

Foresee and predict problems before they occur Signup and view all the answers

What is involved in planning, according to Rao P. and Pande H (2009)?

Selecting objectives, policies, procedures, and programs from among alternatives Signup and view all the answers

Why is planning necessary in an organization?

To enable organizations to approach their environment systematically Signup and view all the answers

What is the result of planning in an organization?

Objectives are achieved Signup and view all the answers

What do managers try to do in order to achieve their goals effectively?

Foresee and prevent problems Signup and view all the answers

What is planning according to the text?

Deciding what is to be done in advance Signup and view all the answers

What is the outcome of planning in an organization?

Objectives are achieved effectively Signup and view all the answers

What is a characteristic of a rule in the hierarchy of plans?

It spells out specific required action or non-action Signup and view all the answers

What is included in a programme in the hierarchy of plans?

Goals, policies, procedures, rules, task assignment, and resources Signup and view all the answers

What is an example of a programme in the hierarchy of plans?

A training programme designed for the organization Signup and view all the answers

What is a budget in the hierarchy of plans?

A statement of expected results in numerical terms Signup and view all the answers

What is the main difference between a rule and a programme in the hierarchy of plans?

A rule is very specific, while a programme is more comprehensive Signup and view all the answers

What is the primary purpose of a programme in the hierarchy of plans?

To outline a course of action Signup and view all the answers

What is the relationship between a budget and a programme in the hierarchy of plans?

A budget is a type of programme Signup and view all the answers

What is the primary benefit of having a clear hierarchy of plans?

It provides a framework for decision-making and action Signup and view all the answers

Study Notes

Planning in Management

Planning involves deciding in advance what is to be done, including selecting objectives, policies, procedures, and programs from among alternatives.
It enables organizations to approach their environment systematically and efficiently.
Planning helps to foresee and prevent problems before they occur, allowing for effective goal achievement.

Importance of Planning

Planning maps out future activities in relation to other activities in the organization.
It enables organizations to approach their environment systematically.
Efficient managers try to foresee and prevent problems before they occur.

Steps in Planning

Developing Premises: acceptance of planning premises like forecast, policies, etc. by employees.
Determining Alternative Courses: developing alternative courses to achieve objectives.
Evaluating Alternative Courses: evaluating each alternative course in terms of strength, weakness, opportunity, and threat (SWOT) analysis.
Selecting a Course: ranking the alternative courses.
Formulating Derivative Plans: creating sub-plans or secondary plans, including policies, procedures, rules, programs, budgets, and schedules.
Budgeting: providing clear direction in numerical terms, with examples including capital budgets, financial budgets, material budgets, production budgets, sales budgets, and human resource budgets.

Hierarchy of Plans

Objectives: specific goals or outcomes.
Policies: broad guidelines for decision-making.
Procedures: detailed guidelines for implementing policies.
Rules: specific required actions or non-actions with no discretion.
Programs: include goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed, and other necessary elements.
Budget: a statement of expected results in numerical terms, with examples including cash budget, sales budget, and capital expenditure budget.

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Description

Test your understanding of business planning and decision making concepts, including deciding in advance what actions to take and the importance of planning meetings.