Match List-I (steps of the planning process) with List-II (what the manager relies on at that step):
| List-I | List-II | ||
|---|---|---|---|
| (A) | Developing premises | (I) | The manager’s experience, judgement and, at times, intuition |
| (B) | Identifying alternative courses of action | (II) | Forecasts about the demand for a product, interest rates and tax rates |
| (C) | Evaluating alternative courses | (III) | Involving more people and sharing their ideas for an innovative course |
| (D) | Selecting an alternative | (IV) | Detailed calculations of earnings, interest, taxes and dividends |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A)-(II), (B)-(III), (C)-(IV), (D)-(I)
| List-I | List-II | Reason |
|---|---|---|
| (A) Developing premises | (II) Forecasts about the demand for a product, interest rates and tax rates | Premises rest on forecasts, which gather information about the future. |
| (B) Identifying alternative courses of action | (III) Involving more people and sharing their ideas for an innovative course | An innovative course is found by involving more people and their ideas. |
| (C) Evaluating alternative courses | (IV) Detailed calculations of earnings, interest, taxes and dividends | Proposals are judged through detailed calculations of their earnings and costs. |
| (D) Selecting an alternative | (I) The manager’s experience, judgement and, at times, intuition | Where numbers cannot decide, judgement and intuition help choose the plan. |
NCERT (2026-27 Edition): “(ii) Developing Premises: … Therefore, the manager is required to make certain assumptions about the future. These assumptions are called premises. Assumptions are the base material upon which plans are to be drawn. The base material may be in the form of forecasts, existing plans or any past information about policies. The premises or assumptions must be the same for all and there should be total agreement on them. All managers involved in planning should be familiar with and use the same assumptions. For example, forecasting is important in developing premises as it is a technique of gathering information. Forecasts can be made about the demand for a particular product, policy change, interest rates, prices of capital goods, tax rates etc. …” “(iii) Identifying alternative courses of action: Once objectives are set, assumptions are made. Then the next step would be to act upon them. There may be many ways to act and achieve objectives. All the alternative courses of action should be identified. The course of action which may be taken could be either routine or innovative. An innovative course may be adopted by involving more people and sharing their ideas. …” “(iv) Evaluating alternative courses: The next step is to weigh the pros and cons of each alternative. Each course will have many variables which have to be weighed against each other. The positive and negative aspects of each proposal need to be evaluated in the light of the objective to be achieved. In financial plans, for example, the risk-return trade-off is very common. The more risky the investment, the higher the returns it is likely to give. To evaluate such proposals detailed calculations of earnings, earnings per share, interest, taxes, dividends are made and decisions taken.” “(v) Selecting an alternative: This is the real point of decision making. The best plan has to be adopted and implemented. The ideal plan, of course, would be the most feasible, profitable and with least negative consequences. Most plans may not always be subjected to a mathematical analysis. In such cases, subjectivity and the manager’s experience, judgement and at times, intuition play an important part in selecting the most viable alternative.” |