Grand Fine Rice Ltd. has the largest share of 55% in the market. The company's policy is to sell only for cash. In 2015, for the first time company's number, one position in the industry has been threatened because other companies started selling rice on credit also. But the managers continued to rely on its previously tried and tested successful plans which didn't work because the environment is not static. This led to a decline in sales of the company. The above situation is indicating two limitations of planning which led to a decline in its sales.

Planning does not guarantee success.

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Planning leads to flexibility

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Planning reduces cost

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Planning may not work in a dynamic environment.

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Solution

The correct options are
A
Planning does not guarantee success.

D
Planning may not work in a dynamic environment.

1. Planning does not guarantee success.

2. Planning may not work in a dynamic environment.

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Q. Super Fine Rice Ltd. has the largest share of 55% in the market. The company's policy is to sell only for cash. In 2015, for the first time company's number one position in the industry has been threatened because other companies started selling rice on credit also. But the managers of Super Fine Rice Ltd. continued to rely on its previously tried and tested successful plans which didn't work because the environment is not static. This led to decline in sales of Super Fine Rice Ltd.
The above situation is indicating two limitation of planning which led to decline in its sales. Identify these limitations.

Q. Refer to the data.
Mr. Rightsize has the option of investing his severance pay in the shares of one out of four companies available. A positive investment decision is based on four parameters: good management, price of the company's shares (cheaper the better), attractiveness of the industry in which the company operates, and good future growth prospects. Details of the four companies are:
1] Cooch Behar Railroads has a good management, but the industry in which it operate; is not attractive and has limited growth prospects. The company's shares could possibly appear cheap.
2] Alliance Petro also has a good management and the company's shares are cheap. However, the industry in which it operates may possibly not be attractive and definitely has limited growth prospects.
3] eZoooom! is a hot Internet company with a good management. The industry could possibly be attractive, the growth prospects could possibly be good and its shares could possibly appear expensive.
4] BioSync is an attractive industry and the company's shares are certainly expensive. However, either the management is not up to the mark or the company's growth prospects are limited, but not both.
The limited size of the severance pay restricts the possible investment to just one company.
If atleast two parameters need to be positive (of which good management is one) for a positive investment decision, then Rightsize may possibly not invest in:

A company M Ltd. is manufacturing mobile phones both for the domestic Indian market as well as for export. It had enjoyed a substantial market share and also had a loyal customer following. But lately, it has been experiencing problems because its targets have not been met with regard to sales and customer satisfaction.

Also, the mobile market in India has grown tremendously and new players have come with better technology and pricing. This is causing problems for the company. It is planning to revamp its controlling system and take other steps necessary to rectify the problems it is facing.

How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets attained?

Q. Bhuvan Ltd is a garment manufacturing company, the company regularly scan business environment and constantly adapts itself to the changes in environment. With all these efforts also it became difficult for company to foresee future trends. Competition in the market effects the financial plan of the company, sales targets have to be revised which in turn effect the cash budget.
(i) Name and explain the limitation of planning highlighted in the above para
(ii) Identify the two types of plans mentioned in above para

F Ltd. was engaged in the business of food processing and selling its products under a popular brand. Lately, the business was expanding due to good quality and reasonable prices. Also with more people working, the market for processed food was increasing. New players were also coming to cash in on the new trend. In order to keep its market share in the short run, the company directed its existing workforce to work overtime.

But this resulted in many problems. Due to increased pressure of work, the efficiency of the workers declined. Sometimes, the subordinates had to work for more than one superior resulting in declining efficiency. The divisions that were previously working on one product were also made to work on two or more products. This resulted in a lot of overlapping and wastage. The workers were becoming indisciplined. The spirit of teamwork, which had characterised the company previously, was beginning to wane. Workers were feeling cheated and initiative was declining. The quality of the products was beginning to decline and market share was on the verge of decrease. Actually, the company had implemented changes without creating the required infrastructure.

What steps should the company management take in relation to the above principles to restore the company to its past glory?

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The correct options are A Planning does not guarantee success. D Planning may not work in a dynamic environment. 1. Planning does not guarantee success. 2. Planning may not work in a dynamic environment.

The correct options are
A
Planning does not guarantee success.

D
Planning may not work in a dynamic environment.

1. Planning does not guarantee success.

2. Planning may not work in a dynamic environment.