NCERT BOOK CLASS 12TH Business Studies MCQ
Chapter 4 : Planning
Important MCQs with Answers
1. What is Planning?
a) Forecasting for future
b) Analysis of current activities
c) Determining what, how, when, and by whom to achieve predetermined objectives
d) Setting only financial goals
Answer: c) Determining what, how, when, and by whom to achieve predetermined objectives
2. Which statement is incorrect regarding the Nature of Planning?
a) Planning is a mental exercise
b) Planning is always flexible
c) Planning is a directionless process
d) Planning is a decision-making process
Answer: c) Planning is a directionless process
3. What is the Primary Step in Planning?
a) Evaluating alternatives
b) Setting objectives
c) Formulating policies
d) Developing action alternatives
Answer: b) Setting objectives
4. Which is a Limitation of Planning?
a) It helps in decision-making
b) It reduces uncertainties
c) It is cost and time intensive
d) It provides direction
Answer: c) It is cost and time intensive
5. Strategic Planning is related to:
a) Daily operations
b) Long-term objectives of the organization
c) Only lower-level management
d) Only financial planning
Answer: b) Long-term objectives of the organization
6. Which of the following is not included in the Levels of Organizational Planning?
a) Tactical planning
b) Operational planning
c) Personal planning
d) Strategic planning
Answer: c) Personal planning
7. The Final Step in the Planning Process is:
a) Implementation
b) Follow-up action
c) Evaluating alternatives
d) Setting objectives
Answer: b) Follow-up action
8. Which of the following is not a Benefit of Planning?
a) Reducing uncertainty
b) Reducing wastage
c) Discouraging innovation
d) Aiding in control
Answer: c) Discouraging innovation
9. Single-use Plans include:
a) Budget
b) Policies
c) Procedures
d) Rules
Answer: a) Budget
10. Standing Plans include:
a) Programmes
b) Projects
c) Policies
d) Budget
Answer: c) Policies
11. Which of the following is not a Type of Planning?
a) Strategic planning
b) Operational planning
c) Financial planning
d) Random planning
Answer: d) Random planning
12. The relationship between Planning and Control is:
a) Both are unrelated
b) Planning is the basis of control
c) Control is an alternative to planning
d) Control comes before planning
Answer: b) Planning is the basis of control
13. A Policy is:
a) A specific decision
b) A general guide to action
c) A detailed work plan
d) A temporary plan
Answer: b) A general guide to action
14. A Procedure is:
a) A flexible guideline
b) A sequential way of doing tasks
c) A vague instruction
d) A long-term plan
Answer: b) A sequential way of doing tasks
15. A Rule is:
a) A suggestion
b) A specific directive
c) A flexible guideline
d) A temporary plan
Answer: b) A specific directive
16. A Budget is:
a) A qualitative plan
b) A quantitative plan
c) A vague plan
d) A long-term policy
Answer: b) A quantitative plan
17. Which of the following is not an Importance of Planning?
a) It increases uncertainty
b) It focuses on objectives
c) It facilitates control
d) It reduces wastage
Answer: a) It increases uncertainty
18. The Planning Process includes:
a) Only setting objectives
b) Only evaluating alternatives
c) From setting objectives to follow-up action
d) Only formulating policies
Answer: c) From setting objectives to follow-up action
19. A characteristic of a Good Plan is:
a) Flexibility
b) Rigidity
c) Vagueness
d) Complexity
Answer: a) Flexibility
20. Planning is referred to as:
a) Heart of management
b) Brain of management
c) Soul of management
d) Foundation of management
Answer: b) Brain of management
21. Which of the following is not an Objective of Planning?
a) Reduce uncertainty
b) Provide direction
c) Facilitate control
d) Delay decision-making
Answer: d) Delay decision-making
22. Limitations of Planning include:
a) It is not flexible
b) It is time-consuming
c) It is costly
d) All of the above
Answer: d) All of the above
23. In Planning, alternatives are evaluated based on:
a) Cost and risk
b) Only cost
c) Only risk
d) Luck
Answer: a) Cost and risk
24. Operational Planning is related to:
a) Long-term objectives
b) Daily operations
c) Only top management
d) Only external environment
Answer: b) Daily operations
25. A Strategy is:
a) A detailed work plan
b) A comprehensive plan against competitors
c) A general guideline
d) A temporary plan
Answer: b) A comprehensive plan against competitors
26. A Programme is:
a) A single-use plan
b) A standing plan
c) A flexible guideline
d) A vague instruction
Answer: a) A single-use plan
27. A Project is:
a) A standing plan
b) A plan for a specific task
c) A general policy
d) A long-term strategy
Answer: b) A plan for a specific task
28. Which of the following is not a Quality of Planning?
a) It is goal-oriented
b) It is universal
c) It is continuous
d) It is rigid
Answer: d) It is rigid
29. The Success of Planning Depends on:
a) Only top management
b) Participation of all levels of the organization
c) Only the external environment
d) Only luck
Answer: b) Participation of all levels of the organization
30. Environmental Analysis is Important in Planning Because:
a) It identifies opportunities and threats
b) It only studies the past
c) It makes planning complex
d) It makes planning unnecessary
Answer: a) It identifies opportunities and threats
31. Which of the Following is not a Principle of Planning?
a) Flexibility
b) Realism
c) Rigidity
d) Feasibility
Answer: c) Rigidity
32. Setting Priorities is Essential in Planning Because:
a) Resources are limited
b) All goals are equally important
c) It makes planning complex
d) It saves time
Answer: a) Resources are limited
33. The First Step in the Planning Process is:
a) Identifying opportunities
b) Setting objectives
c) Developing alternatives
d) Implementation
Answer: a) Identifying opportunities
34. Which of the Following is not a Type of Planning?
a) Strategic planning
b) Tactical planning
c) Operational planning
d) Random planning
Answer: d) Random planning
35. SWOT Analysis in Planning Includes:
a) Only analysis of strengths and weaknesses
b) Only analysis of opportunities and threats
c) Analysis of strengths, weaknesses, opportunities, and threats
d) Only financial analysis
Answer: c) Analysis of strengths, weaknesses, opportunities, and threats
36. To Enhance the Effectiveness of Planning, the Following is Required:
a) Clear objectives
b) Accurate information
c) Flexibility
d) All of the above
Answer: d) All of the above
37. Which of the Following is not a Benefit of Planning?
a) It promotes innovation
b) It facilitates coordination
c) It increases uncertainty
d) It reduces wastage
Answer: c) It increases uncertainty
38. Barriers in Planning May Include:
a) Environmental changes
b) Resistance to change
c) Inadequate resources
d) All of the above
Answer: d) All of the above
39. Flexibility is Important in Planning Because:
a) The environment is dynamic
b) It makes planning rigid
c) It makes planning unnecessary
d) It wastes resources
Answer: a) The environment is dynamic
40. Which of the Following is not a Step in Planning?
a) Setting objectives
b) Developing alternatives
c) Evaluating alternatives
d) Taking random decisions
Answer: d) Taking random decisions
41. For Successful Planning, the Following is Required:
a) Management commitment
b) Adequate resources
c) Effective communication
d) All of the above
Answer: d) All of the above
42. Decision-Making is Part of Planning Because:
a) It involves choosing between alternatives
b) It makes planning unnecessary
c) It concerns only top management
d) It wastes resources
Answer: a) It involves choosing between alternatives
43. The Relationship Between Planning and Control is:
a) Planning is the basis of control
b) Control is an alternative to planning
c) Both are unrelated
d) Control comes before planning
Answer: a) Planning is the basis of control
44. The Final Step in the Planning Process is:
a) Implementation
b) Follow-up action
c) Setting objectives
d) Developing alternatives
Answer: b) Follow-up action
45. Which of the Following is a Type of Planning?
a) Strategic planning
b) Tactical planning
c) Operational planning
d) All of the above
Answer: d) All of the above
46. Limitations of Planning Include:
a) It cannot eliminate future uncertainty
b) It is cost-intensive
c) It is time-consuming
d) All of the above
Answer: d) All of the above
47. Evaluating Alternatives in Planning is Done Based on:
a) Cost and risk
b) Only cost
c) Only risk
d) Luck
Answer: a) Cost and risk
48. Which of the Following is not a Benefit of Planning?
a) It promotes innovation
b) It facilitates coordination
c) It increases uncertainty
d) It reduces wastage
Answer: c) It increases uncertainty
49. To Enhance the Effectiveness of Planning, the Following is Required:
a) Clear objectives
b) Accurate information
c) Flexibility
d) All of the above
Answer: d) All of the above
50. Planning is Called the “Brain of Management” Because:
a) It involves thinking and reasoning
b) It is the basis of all management functions
c) It provides guidance for the future
d) All of the above
Answer: d) All of the above
51. In the planning process, “Developing Courses of Action” means:
a) Considering only one alternative
b) Identifying various possible approaches
c) Making random decisions
d) Focusing only on financial aspects
Answer: b) Identifying various possible approaches
52. Why is planning called the “Foundation of Management”?
a) Because it forms the basis for all other management functions
b) Because it relates only to top management
c) Because it is an alternative to control
d) Because it focuses only on profit-making
Answer: a) Because it forms the basis for all other management functions
53. A “Flexible Plan” refers to:
a) One that can be adjusted according to changing circumstances
b) One that is rigid and unchangeable
c) One that includes only financial aspects
d) One that is only short-term
Answer: a) One that can be adjusted according to changing circumstances
54. In planning, “Selecting the Best Alternative” is based on:
a) Cost, risk, and feasibility
b) Only personal preference
c) Random selection
d) Only short-term gains
Answer: a) Cost, risk, and feasibility
55. What is the main difference between a “Policy” and a “Procedure”?
a) A policy is a guiding principle while a procedure is a detailed method of performing tasks
b) Policy and procedure are the same
c) A policy relates only to top management
d) A procedure relates only to financial matters
Answer: a) A policy is a guiding principle while a procedure is a detailed method of performing tasks
56. Which of the following is not an example of a “Single-use Plan”?
a) Budget
b) Project
c) Programme
d) Policy
Answer: d) Policy
57. “Strategic Planning” is related to:
a) Long-term objectives of the organization
b) Daily operations
c) Only lower-level management
d) Only financial control
Answer: a) Long-term objectives of the organization
58. Why is “Follow-up Action” important in the planning process?
a) It helps evaluate the effectiveness of the plan
b) It makes planning unnecessary
c) It is just a waste of time
d) It complicates the planning process
Answer: a) It helps evaluate the effectiveness of the plan
59. Which of the following is not a principle of planning?
a) Flexibility
b) Realism
c) Rigidity
d) Feasibility
Answer: c) Rigidity
60. “Operational Planning” is related to:
a) Daily activities of the organization
b) Long-term strategies
c) Only top management
d) Only external environment
Answer: a) Daily activities of the organization
61. What is “SWOT Analysis” in planning?
a) Analysis of internal strengths and weaknesses and external opportunities and threats
b) Only analysis of financial statements
c) Only evaluation of employee performance
d) Only checking product quality
Answer: a) Analysis of internal strengths and weaknesses and external opportunities and threats
62. For successful planning, the following is required:
a) Management commitment
b) Adequate resources
c) Effective communication
d) All of the above
Answer: d) All of the above
63. Which of the following is not a benefit of planning?
a) It promotes innovation
b) It facilitates coordination
c) It increases uncertainty
d) It reduces wastage
Answer: c) It increases uncertainty
64. “Standing Plans” include:
a) Policies, procedures, and rules
b) Only budgets
c) Only projects
d) Only programmes
Answer: a) Policies, procedures, and rules
65. Why is “Environmental Analysis” important in planning?
a) It identifies external opportunities and threats
b) It focuses only on past mistakes
c) It makes planning unnecessary
d) It wastes resources
Answer: a) It identifies external opportunities and threats
66. Which of the following is not a characteristic of planning?
a) It is a mental process
b) It is future-oriented
c) It is rigid and unchangeable
d) It aids in decision-making
Answer: c) It is rigid and unchangeable
67. “Tactical Planning” is related to:
a) Middle-level management
b) Only top management
c) Only lower-level management
d) Only external consultants
Answer: a) Middle-level management
68. Why is “Setting Objectives” important in the planning process?
a) Because it provides direction to the organization
b) Because it makes planning unnecessary
c) Because it is important only for top management
d) Because it wastes resources
Answer: a) Because it provides direction to the organization
69. Which of the following is not a type of planning?
a) Strategic planning
b) Tactical planning
c) Operational planning
d) Random planning
Answer: d) Random planning
70. To enhance the effectiveness of planning, the following is required:
a) Clear objectives
b) Accurate information
c) Flexibility
d) All of the above
Answer: d) All of the above
71. A “Budget” is:
a) A quantitative plan
b) A qualitative plan
c) A vague plan
d) A long-term policy
Answer: a) A quantitative plan
72. In planning, “Evaluating Alternatives” is done based on:
a) Cost and risk
b) Only cost
c) Only risk
d) Luck
Answer: a) Cost and risk
73. Which of the following is not an objective of planning?
a) Reducing uncertainty
b) Providing direction
c) Facilitating control
d) Delaying decision-making
Answer: d) Delaying decision-making
74. Limitations of planning include:
a) It cannot eliminate future uncertainty
b) It is cost-intensive
c) It is time-consuming
d) All of the above
Answer: d) All of the above
75. Planning is called the “Brain of Management” because:
a) It involves thinking and reasoning
b) It is the basis of all management functions
c) It provides guidance for the future
d) All of the above
Answer: d) All of the above
76. The main purpose of “Setting Priorities” in planning is:
a) Efficient allocation of limited resources
b) Random selection of tasks
c) Focusing only on financial aspects
d) Putting excessive pressure on employees
Answer: a) Efficient allocation of limited resources
Explanation: Resources are limited, so setting priorities is essential.
77. When is a “Contingency Plan” created?
a) When the original plan fails
b) Only during financial crises
c) Only for top management
d) For routine tasks
Answer: a) When the original plan fails
Explanation: It serves as a backup plan for uncertain situations.
78. In planning, “SMART objectives” refer to:
a) Specific, Measurable, Achievable, Relevant, Time-bound
b) General, Arbitrary, Vague, Random, Technical
c) Only financial goals
d) Only long-term goals
Answer: a) Specific, Measurable, Achievable, Relevant, Time-bound
Explanation: SMART is an effective goal-setting technique.
79. Which of the following is not a characteristic of “Strategic Planning”?
a) Long-term perspective
b) Organization-wide approach
c) Focus on daily operations
d) Emphasis on competitive advantage
Answer: c) Focus on daily operations
Explanation: Daily operations are part of operational planning.
80. The key difference between a “Policy” and a “Strategy” is that:
a) A policy is a guiding principle while a strategy is a competitive action plan
b) Both are the same concepts
c) Policy relates only to government organizations
d) Strategy relates only to military organizations
Answer: a) A policy is a guiding principle while a strategy is a competitive action plan
Explanation: Policies guide decisions, while strategies respond to competitors.
81. The importance of “Forecasting” in the planning process is:
a) To predict future events
b) To repeat past mistakes
c) Only to collect financial data
d) To control employees
Answer: a) To predict future events
Explanation: Forecasting helps analyze future trends.
82. Which of the following is an example of “Operational Planning”?
a) Setting monthly production targets
b) Creating a 5-year expansion plan
c) Developing new market strategies
d) Planning an acquisition
Answer: a) Setting monthly production targets
Explanation: Operational planning relates to short-term and daily tasks.
83. At what stage does “Implementation” occur in the planning process?
a) After formulating the plan
b) Before setting objectives
c) Without evaluating alternatives
d) Without follow-up action
Answer: a) After formulating the plan
Explanation: Implementation is the final step in the planning process.
84. The main difference between “Rules” and “Procedures” is that:
a) Rules are specific directives while procedures are steps to perform tasks
b) Both are the same
c) Rules apply only to government organizations
d) Procedures relate only to financial matters
Answer: a) Rules are specific directives while procedures are steps to perform tasks
Explanation: Rules state ‘what to do,’ while procedures explain ‘how to do it.’
85. The most critical factor for effective planning is:
a) Environmental analysis
b) Management commitment
c) Flexibility
d) All of the above
Answer: d) All of the above
Explanation: All factors are crucial for successful planning.