Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Set 1 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Set 1 with Solutions
Time Allowed: 3 hours
Maximum Marks: 80
General Instructions:
- This question paper contains 34 questions.
- Marks are indicated against each question.
- Answers should be brief and to the point.
- Answers to the questions carrying 3 marks may be from 50 to 75 words.
- Answers to the questions carrying 4 marks may be about 150 words.
- Answers to the questions carrying 6 marks may be about 200 words.
- Attempt all parts of the questions together.
Question 1.
The Board of directors of Medex Pharma Ltd. decided to issue debentures worth ₹40 lakhs in order to finance a major Research and Development project. This would increase the Debt Equity ratio from 1:1 to 2:1. However, at the same time it would increase the Earnings per share.
The reason that will justify the above situation is: [1]
(A) Unfavourable financial leverage, as the financial risk will be higher.
(B) Unfavourable financial leverage, as return on investment is lower than the cost of debt.
(C) Favourable financial leverage as debt is easily available
(D) Favourable financial leverage, as return on investment is higher than cost of debt
Answer:
(D) Favourable financial leverage, as return on investment is higher than cost of debt
Explanation:
The financial leverage is favourable in the above given case as EPS is increased when debt in increase. More the earning per share, more it is favourable.
Question 2.
A bottle of Anti-dandruff shampoo mentions ‘Clean your hair and get rid of dandruff in one squeeze’. The product related decision involved is: [1]
(A) Branding
(B) Product quality
(C) Packaging
(D) Labelling
Answer:
(D) Labelling
Explanation:
Labelling implies providing all the essential information about the product on its package. It includes information regarding size, weight, ingredients, date of manufacture expiry, price, etc. of the product.
Question 3.
With the presence of women in the workforce, there has been a shift towards formal wear, increased demand of electronic gadgets and increase in demand of cosmetics.
The related dimension of business environment referred in the above lines is: [1]
(A) Technological environment
(B) Social environment
(C) Political environment
(D) Economic environment
Answer:
(B) Social environment
Explanation:
Social Environment consists of the customs and traditions of the society in which business is existing. It includes the standards of living, taste, preferences and education level of the people living in the society where business exists.
Question 4.
Name the function of marketing which is effective in bringing repeat sales from the customers and developing brand loyalty for a product. [1]
(A) Standardization and grading
(B) Promotion
(C) Customer support services
(D) Packaging and labelling
Answer:
(C) Customer support services
Explanation:
Effective services to customers after the sales helps in bringing repeat sales as it makes effective impression on the customers.
Question 5.
SEBI calls for information and issues a show cause notice to stock exchange and its officials seeking explanation and conducting audit and enquiry. Which function is SEBI performing? [1]
(A) Regulatory function
(B) Development function
(C) Protective function
(D) Both (A) and (C)
Answer:
(A) Regulatory function
Explanation:
SEBI plays the role of conducting enquiries and audits of stock exchanges. It regulates the activities of stock brokers and merchant bankers.
Question 6.
Identify the point of significance of management illustrated in the picture. [1]
(A) Management helps in achieving group goals
(B) Management helps in achieving personal objectives
(C) Management helps in development of society
(D) Management increases efficiency
Answer:
(A) Management helps in achieving group goals
Explanation:
Management involves the use of group efforts in the pursuit of well-defined goals or objectives. It requires team work and coordination of efforts of group members for the achievement of organisational goals.
Question 7.
The allocative function of Financial market helps in ………….. [1]
(A) Bringing transparency in trading procedure
(B) Earning higher rate of return to household sector
(C) Better functioning of depository
(D) Determining the prices of securities
Answer:
(B) Earning higher rate of return to household sector
Explanation:
A financial market helps to link the savers and the investors by mobilizing funds between them. In doing so it performs what is known as an allcative function. The process by which allocation of funds is done is called financial intermediation.
Question 8.
IND Dyechem Ltd. is a chemical manufacturing company producing dyes and pigments both for domestic and international market. It has enjoyed a considerable market share but lately, it has been facing problems in terms of target sales and customer satisfaction. This is due to the reason that new entrants have emerged with better technology and competitive pricing. The Chairman of the company addressed this issue in the departmental meeting. The production head, Mr. Kamble, advised the Chairman to revamp the system and take immediate necessary actions to rectify the problem so that sales are achieved as per the plans. Identify the relevant function of management being discussed here. [1]
(A) Organising
(B) Staffing
(C) Controlling
(D) Planning
Answer:
(C) Controlling
Explanation:
Controlling is the comparison of actual performance with the planned performance to find out deviations and correct them.
Question 9.
Choose the incorrect statement about pricing objectives as a factor affecting the price of a product. [1]
(A) If a firm’s objective is to maximise profits in the short run, it should charge maximum price for its products.
(B) If a firm’s objective is to capture market share, it should keep low price of its product.
(C) If a firm wants to attain product quality leadership, it should charge lower prices.
(D) If a firm is facing problems in survival due to stiff competition, it may offer discount on its products.
Answer:
Option (C) is correct
Explanation: Positioning a product as a high-quality offering often and investment in superior materials or manufacturing processes. In order to maintain profitability and sustain the perception of quality firms often act higher price for their than quality products compare to competitor.
Question 10.
Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below: [1]
Assertion (A): Management is concerned with efficient use of resources.
Reason (R): For management both efficiency and effectiveness need to be balanced.
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true.
Answer:
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Explanation:
Efficiency and effectiveness help to get maximum product in quantity and quality.
Question 11.
Concentration of decision making functions at the apex of management hierarchy is called …………. [1]
(A) Decentralisation
(B) Delegation
(C) Organisational structure
(D) Centralisation
Answer:
(D) Centralisation
Explanation:
Centralisation refers to concentration of authority of power in few hands at the top level.
Question 12.
Some employees have been assigned the job of measuring the output in an objective and reliable way. They are applying different techniques for achieving this aim. Some of these are personal-observation, sample-checking etc. They are also keeping the units of measurement same as that of the units in the standards.
Name the step of ‘Controlling process applicable in the above paragraph. [1]
(A) Analysing deviations
(B) Comparing actual performance with standards
(C) Establishing standards
(D) Measurement of actual performance
Answer:
(D) Measurement of actual performance
Explanation:
Once the standards of desired performance are fixed, the next step is to measure the actual performance. Performance should be measured in same terms in which standards are set so that their comparison becomes easier.
Question 13.
Statement I: For products requiring long term storage like agricultural products, the warehouses are located near to the market.
Statement II: Higher the level of inventory, higher will be the level of service to customers but the cost of carrying the inventory will also be high.
Choose the correct option from the following: [1]
(A) Statement I is true and II is false.
(B) Statement II is true and I is false.
(C) Both the statements are true.
(D) Both the statements are false.
Answer:
(B) Statement II is true and I is false.
Explanation:
For products requiring long-term storage, such as agricultural products, warehouses are typically located closer to the source of production rather than the market. This is done to ensure efficient storage, preservation, and handling of the products before they are transported to the market when needed.
Question 14.
Mr. Vivek is working as the General Manager of Oshin Hotels Ltd. Mr. Vivek observed that Government was taking a special interest in the Tourism industry as this sector is an important source of foreign exchange and employment promotion. On the basis of this news, the company decided to set up hotels at several tourist places. Oshin Hotels Ltd. established 50 hotels before other companies considered this issue. Very soon, this brand Oshin Hotels Ltd. became well known in the market. Identify the importance of business environment described here. [1]
(A) It enables the firm to identify opportunities and getting the first mover advantage.
(B) It helps the firm to identify threats and early warning signals.
(C) It helps in tapping useful resources.
(D) It helps in improving performance.
Answer:
(A) It enables the firm to identify opportunities and getting the first mover advantage.
Explanation:
By analyzing the business environment the firm can get first mover advantage and can analyze the opportunities and threats before it effects the business working in the long run.
Question 15.
Name the function of management that acts as a means for translating plans into action. [1]
(A) Planning
(B) Directing
(C) Organising
(D) Controlling
Answer:
(B) Directing
Explanation:
Directing is that function of management which converts the action of people in motion. Planning and organizing are mere preparations for doing the work controlling is a follow-up to make sure standards are met.
Question 16.
Statement I: Electronic holdings can be converted into physical certificates with the process of dematerialisation.
Statement II: There is no danger of theft, loss or forgery of share certificates in dematerialisation.
Choose the correct option from the following: [1]
(A) Statement I is true and II is false.
(B) Statement II is true and I is false.
(C) Both the statements are true.
(D) Both the statements are false.
Answer:
(B) Statement II is true and I is false.
Explanation:
Dematerialization is about converting physical share certificates into electronic holding so the first statement in incorrect.
Question 17.
‘Pace.’ is a reputed Chartered Accountant firm which renders services to big MNC’s. The Chartered Accountants of the firm are required to travel to Delhi and NCR for which they use company’s cars. The firm decided to convert its Petrol cars to Electric cars in order to improve the quality of life of people. Identify the dimensions of business environment. [1]
(A) Political and Legal environment
(B) Legal and Social environment
(C) Technological and Political environment
(D) Social and Technological Environment
Answer:
(D) Social and Technological Environment
Explanation:
Social Environment consists of the customs and traditions of the society in which business is existing. Technological environment refers to the state of technology in the area of manufacturing, mining, constructions, transportation, etc.
Question 18.
Match the following tools of promotion with their explanation and choose the correct option. [1]
(a) | It is undertaken by some identified person /company who makes efforts and bears the cost of it. | (i) | Personal selling |
(b) | It plays an important role at the awareness stage and develops product preferences with the aim of making sale. | (ii) | Sales Promotion |
(c) | It helps in managing public opinion and company’s relation with the public on regular basis. | (iii) | Advertising |
(d) | It uses tools specifically designed to promote to customers, middlemen and to salespersons. | (iv) | Public Relations |
(A) (a) (iii), (b) (i), (c) (iv), (d) (ii)
(B) (a) (i), (b) (iii), (c) (iv), (d) (ii)
(C) (a) (ii), (b) (iii), (c) (iv), (d) (i)
(D) (a) (ii), (b) (iv), (c) (i), (d) (iii)
Answer:
(A) (a) (iii), (b) (i), (c) (iv), (d) (ii)
Question 19.
From the following which is not a relevant feature of management as science: [1]
(A) Principles are based on the basis of experimentation
(B) Systematized body of knowledge
(C) Based on practice and creativity
(D) Universal Validity
Answer:
(C) Based on practice and creativity
Explanation:
Management is a science because the principles of management are based on experimentation. It has a systematized body of knowledge and have universal validity.
Question 20.
The aim of demonetisation was not to ………… [1]
(A) Curb corruption
(B) Reduce the prices of real estate
(C) Withhold the accumulation of black money generated by undeclared income
(D) Counterfeit the use of high denomination notes for illegal activities
Answer:
(B) Reduce the prices of real estate
Explanation:
The aim of demonetisation was to curb corruption, withhold the accumulation of black money and stop the use of currency for illegal activities. It did not aim to reduce the prices of real estate.
Question 21.
Captcha Ltd. is a construction company in which all the employees learn various ways of dealing with diverse situations from their seniors. Company provides financial as well as non-financial incentives. This helps the employees to grow and develop their abilities. The organisation behaves as a responsible constituent of society and always creates good quality products. It has a positive image in the market. The training modules are excellent and the employees always try to find unique ways of providing solutions in the context of rapidly changing business environment. This has helped the organisation to adjust smoothly.
Identify and state three points of importance of management being highlighted here. [3]
Answer:
The importance of management highlighted:
(i) Helps in achieving personal objectives: A manager motivates and leads his team in such a manner that individual members are able to achieve personal goals while contributing to the overall organizational goals.
(ii) Helps in the development of society: The organisation tries to behave as responsible constituent of society and always creates good quality products.
(iii) Creates a dynamic organisation: Organisations have to function in a constantly changing environment. Management helps people adapt to the changes so that organisation is able to maintain a competitive edge.
Question 22.
State any three reasons as to why controlling is regarded as an indispensable function of management. [3]
OR
Enumerate any three advantages of Management by Exception which is used by manager in analysing deviations.
Answer:
Importance of Controlling: (Any three)
(i) The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action.
(ii) A good control system enables management to verify whether the standards set are accurate and objective.
(iii) By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with predetermined standards and norms.
(iv) A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they are appraised.
(v) Controlling creates an atmosphere of order and discipline in the organisation.
(vi) Controlling provides direction to all activities and efforts for achieving organizational goals.
OR
Advantage of Management by Exception:
(i) It saves the time and efforts of managers as they deal with only significant deviations.
(ii) It focuses managerial attention on important areas. There is better utilization of managerial talent.
(iii) The routine problems are left to the subordinates. Thus, it facilitates delegation of authority and increases morale of employees.
(iv) It identifies critical problems which need timely action to keep the organisation in right direction.
Question 23.
Resolutions Pvt. Ltd. is a publishing company. Its book on Business Studies for class XII is in great demand. As a result, the employees in the marketing department are always racing against time as they have to work overtime and on holidays as well to cater to the demand. The work stress has led to dissatisfaction among the employees of the marketing department.
(i) Name and explain the step of staffing process which has not been performed properly.
(ii) Also, explain the immediate next step in the process of staffing. [3]
Answer:
The step of staffing process which has not been performed properly is:
(i) Estimation of manpower requirements: Operationally, understanding the manpower requirements would necessitate workload analysis on the one hand and workforce analysis on the other.
(ii) The next stage immediately following the step Estimation of manpower requirement is as follows:
Recruitment: Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.
Question 24.
State any three functions of Stock Exchange.
OR
State the first three steps involved in the screen-based trading for buying and selling of securities. [3]
Answer:
Functions of Stock Exchange:
(i) Stock exchange provides liquidity and marketability to existing securities by creating a continuous market where securities are bought and sold. It gives them the chance to invest and disinvest.
(ii) A stock exchange is a mechanism of constant valuation through which the prices of securities are determined by the market forces of demand and supply.
(iii) The membership of a stock exchange is well-regulated and well-defined according to the existing legal framework, thereby ensuring a safe and fair deal to investors in the market.
(iv) Through the process of disinvestment and reinvestment savings get channelised into the most productive investment avenues leading to capital formation and economic growth.
(v) Stock exchange ensures wider share ownership by regulating new issues, better trading practices and taking effective steps in educating the public about investment.
(vi) Stock exchange provides sufficient scope for speculative activity in restricted and controlled manner.
OR
The first three steps in screen-based trading in securities are as follows:
(i) Investor has to first approach a registered broker and enter into agreement. He has to open a broker-client agreement and a client registration form before placing the order. He has to provide few details like PAN number, date of birth and address, educational qualification and occupation, Residential status, Bank account details, Depository account details, name of any other broker with whom registered, client code number in the client registration form. The broker opens a trading account in the name of investor.
(ii) The investor has to open a demat account or beneficial owner account with a depository participant for holding and transferring securities in the demat form.
(iii) The investor places an order with the broker to buy or sell shares. Clear instructions have to be given about the number of shares and price at which shares can be bought or sold. The broker will go ahead with the deal to mention the best price available. Order confirmation slip is issued to the investor by the broker.
Question 25.
Explain the following features of Directing:
(a) Directing initiates action
(b) Directing is a continuous process [4]
OR
Explain the following leadership styles:
(a) Autocratic leadership
(b) Laissez Faire leadership
Answer:
(a) Directing initiates action: Directing is a key managerial function. A manager has to perform this function along with planning, organising, staffing and controlling while discharging his duties in the organisation.
(b) Directing is a continuous activity: It takes place throughout the life of organisation irrespective of people occupying managerial positions.
OR
(a) Autocratic Authoritarian leadership style: An autocratic leader gives orders and expects his subordinates to obey those orders. This leadership style is effective in getting productivity in many situations like in a factory where the supervisor is responsible for production on time and has to ensure labour productivity. Quick decision making is also facilitated.
(b) Laissez fair or Free-rein leader: Such a leader does not believe in the use of power unless it is absolutely essential. The followers are given high degree of independence to formulate their own objectives or ways to achieve them. The manager is only there to support them and supply them the required information to complete the task assigned.
Question 26.
State any four limitations of using internal sources of recruitment. [4]
OR
State any four commonly used sources of recruiting employees from outside the organisation.
Answer:
Limitations of using internal sources of recruitment are as follows:
(i) When vacancies are filled through internal promotions, the scope for induction of fresh talent is reduced. Hence, complete reliance on internal recruitment involves danger of ‘inbreeding’ by stopping ‘infusion of new blood’ into the organization.
(ii) The employees may become lethargic if they are sure of time bound promotions.
(iii) A new enterprise cannot use internal sources of recruitment. No organisation can fill all its vacancies from internal sources.
(iv) The spirit of competition among the employees may be hampered; and
(v) Frequent transfers of employees may often reduce the productivity of the organisation.
OR
Commonly used sources of recruiting the employees from outside the organization:
Direct recruitment: A notice is placed on the notice board of the enterprise specifying the details of the jobs available. Job-seekers assemble outside the premises of the organisation on the specified date and selection is done on the spot. It is suitable for filling casual vacancies when there is a rush of work or when some permanent workers are absent.
Casual Callers: Many reputed business organizations keep a database of unsolicited applicants in their offices. A list of such job-seekers can be prepared and can be screened to fill the vacancies as they arise. Most of the senior positions of industry as well as commerce are filled by this method. The advantage of advertising vacancies is that more information about the organization and job can be given in the advertisement.
Employment exchange: Employment exchange run by a government are a good source of recruitment for unskilled and skilled operative jobs. They help to match personnel demand and supply by serving as a link between job-seekers and employers.
Placement Agencies and management consultants: Placement agencies provide a nationwide service in matching personnel demand and supply. Management consultancy firms help the organization to recruit technical, professional and managerial personnel.
Campus recruitment: Many big organisations maintain a close liaison with the universities, vocational schools and management institutes to recruit qualified personnel for various jobs.
Recommendation of employees: Applicants introduced by present employees, or their friends and relatives may prove to be a good source of recruitment. Such applicants are likely to be good employees because their background is sufficiently known.
Labour Contractors: Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice.
AdvertisingonTelevision: The detailed requirements of the job and the qualities required to do it are publicized along with the profile of the organization where vacancy exist.
Web publishing: Internet is becoming a common source of recruitment these days. There are certain websites specifically designed and dedicated for the purpose of providing information about both job seekers and job opening.
Question 27.
Mr. Akshay, a 20 year old college student purchased a book online from XYZ Pvt Ltd and when it was delivered, he noticed that there was no MRP mentioned on it. He browsed the internet and found that the book was sold at different prices in different places. He filed a case in District forum against the publisher. The court held in favour of Akshay and awarded a compensation of ₹10,000. [4]
(a) Identify and state the consumer right violated in the above case.
(b) Name and explain the right exercised by Mr. Akshay.
Answer:
(a) Right to be informed: Every consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quantity, directions for use etc.
(b) Right to seek redressal: This states that every consumer has the right to get relief in case the product or service falls short of expectations.
Question 28.
Explain the following factors affecting the dividend decision of the company: [4]
(a) Taxation Policy
(b) Cash Flow Position
Answer:
Taxation policy: If tax on dividend is higher, it is better to pay less by way of dividends. Though dividends are free of taxin the hands of share holders, a dividend distribution tax is levied on companies. Under the present tax policy, shareholders are likely to prefer higher dividends.
Cash flow position: The payment of dividend involves an outflow of cash. Availability of enough cash in the company is necessary for declaration of dividend.
Question 29.
Identify and state the various elements of communication highlighted in the following cases: [4]
(i) Department A’ has sent an encoded message to department ‘B’ through internet. What is the role of internet here?
(ii) Madhur is making gestures so that he can send a message to Ranbhir. What is Madhur doing here?
(iii) Ranbhir is trying to understand the message sent by Madhur by reading his gestures. What is Ranbhir doing here?
(iv) Kamesh picks up his phone and finds a message on it. He reads the message carefully. What is the role of Kamesh here?
Answer:
(i) Media: It is the path through which encoded message is transmitted to receiver. The channel maybe in the written form, face to face, phone call, internet.
(ii) Encoding: It is a process of converting the message into communication symbols like words, pictures, gestures etc.
(iii) Decoding: It is a process of converting encoded symbols of the sender.
(iv) Receiver: The person who receives communication of the sender.
Question 30.
Dhaval Acharya, after acquiring a bachelor’s degree in Hotel Management joined his father’s chain of vegetarian restaurants in Ahmednagar. Being young and enterprising, he suggested his father to add a new section of vegetarian bakery items which required an investment of ₹5 crores. His father Mr. Aariketh Acharya suggested him to take the decision with caution and understood everything comprehensively as bad decision may damage the financial fortune of business.
Identify the decision suggested by Mr. Aariketh Acharya. State by giving any three reasons as to why he must have advised his son to take decision with caution. [4]
Answer:
Mr Aariketh Acharya has suggested capital budgeting decision.
Reasons why he must have advised this decision are:
(i) These decisions have bearing on the long-term growth. They affect the future prospects of the business.
(ii) These decisions result in large portion of funds being blocked in long term projects, these investments are planned after a detailed analysis.
(iii) These decisions affect the returns of the firm, therefore influence the overall business risk complexion of the firm.
(iv) These decisions once taken, are not reversible without incurring heavy losses. Abandoning a project after heavy investment is costly in terms of waste of funds.
Question 31.
(i) Explain any two techniques of Scientific Management from the following:
(a) Method study
(b) Motion study
(c) Time study
(ii) Differentiate between Unity of Command and Unity of Direction on any three basis. [3+3=6]
OR
(i) Explain any two principles of Fayol from the following:
(a) Discipline
(b) Order
(c) Initiative
(ii) Differentiate between contributions made by F.W.Taylor and Henry Fayol on any three basis.
Answer:
(i) (a) Method Study: The objective of method study is to find out one best way of doing the job. There are various methods of doing the job. To determine the best way there are several parameters. Right from procurement of raw materials till the final product is delivered to the customer every activity is part of method study. The objective of the whole exercise is to minimise the cost of production and maximise the quality and satisfaction of the customer. For this purpose, many techniques like process charts and operations research etc., are used.
(b) Motion Study: Motion study refers to the study of movements like lifting, putting objects, sitting and changing positions etc., which are undertaken while doing a typical job. Unnecessary movements are sought to be eliminated so that it takes less time to complete the job efficiently. On close examination of body motions, for example, it is possible to find out:
(i) Motions which are productive.
(ii) Motions which are incidental (e.g., going to stores).
(iii) Motions which are unproductive.
(c) TimeStudy: It determines the standard time taken to perform a well-defined job. Time measuring devices are used for each element of task. The standard time is fixed for the whole of the task by taking several readings. The method of time study will depend upon volume and frequency of the task, the cycle time of the operation and time measurement costs. The objective of time studyis to determine the number of workers to be employed; frame suitable incentive schemes and determine labour costs.
(ii)
Basis |
Unity of Command | Unity of Direction |
1. Meaning | One subordinate should receive orders from and should be responsible to only one superior. | Each group of activities having same objective must have one head and one plan |
2. Aim | It prevents dual subordination. | It prevents overlapping of activities |
3.Implication | It affects an individual employee. | It affects the entire organisation. |
OR
(i) (a) Discipline: Discipline is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.
(b) Order: According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” The principle of order states that ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’. If there is a fixed place for everything and it is present there, then there will be no hindrance in the activities of business/factory. This will lead to increased productivity and efficiency.
(c) Initative: Workers should be encouraged to develop and carry out their plans for improvements according to Fayol. Initiative means taking the first step with self-motivation. It is thinking out and executing the plan. Initiative should be encouraged. But it does not mean going against the established practices of the company for the sake of being different. A good company should have an employee suggestion system whereby initiative/suggestions which result in substantial cost/time reduction should be rewarded.
(ii)
Basics Difference |
Henri Fayol | EW. Taylor |
Perspective | Top-level of Management | Shop floor level of a factory. |
Unity of Command | Staunch Proponent | Did not feel that it is important as under functional foremanship a worker receives orders from eight specialists |
Applicability | Applicable Universally | Applicable to specialized situations |
Basis of Formation | Personal Experience | Observation and Experimentation |
Focus | Improving Overall administration | Increasing Productivity |
Personality | Practitioner | Scientist |
Expression | General theory of Administration | Scientific Management |
Question 32.
Explain the steps that are required to be performed by a manager before evaluating all possible courses of action in planning process. [6]
OR
Explain how planning:
(a) Reduces overlapping and wasteful activities
(b) Establishes standards for controlling
(c) Facilitates decision making
Answer:
Steps in planning process:
(i) Setting objectives: Objectives or goals specify what the organisation wants to achieve. They give direction to all departments and must be stated clearly. They may be set for the entire organisation and each department within the organisation.
(ii) Developing premises: Planning is concerned with future which is uncertain, therefore manager has to make certain assumptions about future. Assumptions are base material upon which plans are drawn which may be in the form of forecasts, existing plans or past information about policies.
(iii) Identifying alternative courses of action: Once objectives are set and assumptions are made, next step is to identify alternative courses of action. The course of action may be routine dr innovative. An innovative course may be adopted by involving more people and sharing their ideas.
OR
(a) Planning reduces overlapping and wasteful activities: Planning serves as a basis of co-ordinating the activities and efforts of different divisions, departments and sections. Since planning ensures clarity in thought and action, work is carried out smoothly without interruptions.
(b) Planning establishes standards of controlling: Planning provides the goals against which actual performance is measured. Through comparison, managers can know whether they are actually able to achieve the goals. Deviations, if any can be corrected. Thus planning is pre-requisite for controlling. The nature of deviations depends upon the extent of deviations from the standard.
(c) Planning facilitates decision making: Planning helps managers to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternate and select the most viable proposition.
Question 33.
Read the statements given in point1 and 2, answer the questions that follow: [3+3=6]
(i) Tea is produced in Assam but is carried to customers not only in this state but also in other parts of the country.
(a) Identify and explain the function of marketing that enables the marketer to achieve its goals.
(b) Enumerate any two factors that marketer should take into consideration in order to analyse the identified needs.
(ii) Paddy is grown during summer season but its demand and sale takes place throughout the year.
(a) Name and state the function of marketing which should be undertaken to reduce the gap between production and consumption of Paddy.
(b) State by giving two reasons as to why proper discharge of this function is important.
Answer:
(i) (a) The function of marketing that enables the marketer to achieve its goals is Transportation.
It involves physical movement of goods from one place to another. Since the user of products are wide spread and geographically separated from the place where they are produced it is necessary to move them to the place where they are needed for consumption.
(b) The factors that should be taken into consideration to analyse the marketing needs are nature of the product, cost and location of target market.
(ii) (a) The function of marketing that reduces the gap between production and consumption of paddy is Storage or Warehousing.
Due to irregular demand or supply, there may be time gap between production of goods and their sale. Storage helps in reducing the time gap between production and consumption and provides time utility.
(b) Importance of warehousing:
(i) To ensure smooth flow of products in the market
(ii) To protect against any unavoidable delays in delivery or meet contingencies in demand.
Question 34.
Diligent developers, a website design company in Bangalore is a startup initiative of Mr. Maniraj which aims at achieving a profit margin of 10% in its first year. Mr. Maniraj appointed Mr. Advait as the Digital marketing Head, Mr. Kiyansh as the head of Backend department and Mr. Nirved headed the Graphics Designing department. Since each head was specialised in specific skills, it resulted in increased efficiency and better coordination.
However, problems arose when Mr. Advait started considering group objectives superior to organisational objectives and stopped exchanging information with Mr. Kiyansh and Mr. Nirved. The company had to bear the brunt of lack of coordination and was unable to achieve its objectives.
(a) Identify and state the organisational structure adopted by the company.
(b) State two benefits and two limitations of the identified structure highlighted in the above case. [6]
Answer:
(a) The organisational structure adopted by Diligent Developers is Functional structure. Functional structure is an organisational design that groups similar or related jobs together.
(b) Benefits of functional structure:
(i) It leads to occupational specialization since emphasis is placed on specific functions. This promotes efficiency in utilization of manpower as employees perform similar tasks within a department and are able to improve performance.
(ii) It promotes control and coordination within a department because of similarity in the tasks being performed.
Limitations of functional structure:
(i) A functional structure places less emphasis on overall enterprise objectives than the objectives pursued by a functional head. Such practices may lead to functional empires wherein the importance of a particular function may be over emphasised. Pursuing departmental interests at the cost of organisational interests can also hinder the interaction between two or more departments.
(ii) It may lead to problems in coordination as information has to be exchanged across functionally differentiated departments.