Joshi Ltd. is one of the biggest companies that make scooters in India. They usually sell about 50% of all the two-wheelers (scooters) in the country. The term demonetisation has become a household name since the government pulled the old ₹500 and ₹1,000 notes out of circulation in November 2016. Before the year 2016, the Indian government had demonetized bank notes on two prior occasions- once in the year 1946 and then again in the year 1978. In both cases, the purpose was to combat tax evasion by ‘black money’. Due to demonetization, many people were not buying new vehicles because there was not enough money around. Because of this, the production manager who is incharge of making the scooters decided to make fewer of them to match the lower demand in the market.

What will be the next step after setting objectives by Joshi Ltd?

Developing premises

The correct answer is option 4- Developing premises.

After setting objective, assumptions are made by Joshi Ltd. which is the step of developing premises.

Planning is a process of decision-making. Planning includes following steps-
(i) Setting Objectives: The first and foremost step is setting objectives. Every organisation must have certain objectives. Objectives may be set for the entire organisation and each department or unit within the organisation.
(ii) Developing Premises: Planning is concerned with the future which is uncertain and every planner is using conjecture about what might happen in future. Therefore, the manager is required to make certain assumptions about the future. These assumptions are called premises.
(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.
(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.
(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.
(vi) Implementing the plan: This is the step where other managerial functions also come into the picture. The step is concerned with putting the plan into action, i.e., doing what is required.
(vii) Follow-up action: To see whether plans are being implemented and activities are performed according to schedule is also part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved.