Planning and Organising

Establishment of Objectives

Step 1: The planning process follows a specific sequence. Step 2: According to the chapter, the planning process starts with 'Establishment of Objectives' – all plans begin by clearly defining what the organisation wants to achieve. Step 3: Making Assumptions (Step 2), Evaluation of Alternatives (Step 4), and Selection of Course of Action (Step 5) all come AFTER objectives are set. Step 4: You cannot plan anything without first knowing your goal, just like you cannot plan a journey without knowing your destination. Step 5: Therefore, Establishment of Objectives is the first and most fundamenta

Strategy

Step 1: The chapter defines Strategy as a comprehensive plan formulated by considering competitors and the market environment for optimum utilisation of resources. Step 2: The Tata Nano example is directly given in the chapter under 'Strategy' – it was a plan to attract a new customer segment (middle-income group). Step 3: A Policy is a general guideline for decision-making. A Budget is a numerical/financial plan. A Procedure is a sequence of steps for doing work. Step 4: Since launching a cheaper car to beat competition and attract new customers is a broad, comprehensive business plan, it is

Rule

Step 1: The chapter defines Rules as plans that clearly indicate what IS to be done and what is NOT to be done in a particular situation. Step 2: 'No Smoking on Company Premises' is a clear, strict guideline about what is NOT allowed. The chapter even gives 'No Smoking in a factory' as an example of a Rule. Step 3: A Policy is a general statement that guides decision-making (broader). A Programme is a plan for accomplishing a specific objective over time. A Method is a standardised way of performing a task. Step 4: Since this statement gives a strict, specific directive about behaviour, it is

A statement of expected results expressed in numerical terms

Step 1: The chapter defines Budget as 'a statement of expected results expressed in numerical terms.' Step 2: Budgets can be in financial terms (money), labour hours, machine hours, or units of product. Step 3: 'A general statement that guides decision-making' is the definition of a Policy. 'A sequence of steps' is the definition of a Procedure. 'A comprehensive plan to face competition' is the definition of a Strategy. Step 4: Since a Cash Budget estimates cash inflows and outflows (numbers/financial figures), it perfectly matches the definition of a Budget. Step 5: Therefore, the correct ans