Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Set 3 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Set 3 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.
Cars Udyog Ltd. plans to manufacture solar cars in its new plant. It has an offer from Toyota for collaboration. What impact will the collaboration have on the requirement of fixed capital for Cars Udyog Ltd.? [1]
(A) Increase the requirement for fixed capital
(B) Decrease the requirement for fixed capital
(C) No change in fixed capital needed
(D) None of the above
Answer:
(B) Decrease the requirement for fixed capital
Explanation:
At times, certain business organizations share each other’s facilities. Such collaboration reduces the level of investment in fixed assets for each one of the participating organizations.
Question 2.
‘Safe Life Technologies Private Ltd.’ is a renowned pharmaceutical company in India. It has launched a new medicine to treat high blood pressure. To create awareness about the new medicine and to build a positive image about it, the company organized a seminar, which was attended by doctors from various hospitals and dealers in medicines. During the seminar, the representatives of company discussed about the chemical composition and the functioning of the medicine.
Identify the tool of promotion used by ‘Safe Life Technologies Private Ltd.’ in the above case: [1]
(A) Advertising
(B) Sales promotion
(C) Personal selling
(D) Public relations
Answer:
(D) Public relations
Explanation:
Public relations involve a variety of programmes designed to promote or protect a company’s image and its individual products in the eyes of the public.
Question 3.
With a revolution taking place in the manufacturing of mobile phones with super class cameras, the business of cameras in the consumer market has taken a hit. Studies show that mobile phone photography has devastated the camera industry.
The dimension of business environment highlighted in the above case is : [1]
(A) Economic Environment
(B) Technological Environment
(C) Social Environment
(D) Political Environment
Answer:
(B) Technological Environment
Explanation:
The technological environment refers to the overall state of technology and its impact on business operations and processes. It includes all the innovations, advancements, and developments in technology that can impact the way businesses operate, create products, and deliver services to customers.
Question 4.
The ……………. function of marketing ensures the buyers that goods confirm to predetermined standards of quality and reduces the need for inspection. It ensures that goods belong to a particular quality and helps in realising higher prices for high-quality output. [1]
(A) Product Designing and Development
(B) Standardisation and Grading
(C) Marketing Planning
(D) Branding
Answer:
(B) Standardisation and Grading
Explanation:
Standardisation is the function involving setting standards to which all products of a similar type should confirm. It brings about uniformity in size, colour, ingredients, etc. of the products. Grading means sorting out the products on the basis of their quality. It helps in the fixation of prices and also on the targeted customers on the basis of quality.
Question 5.
Which of the following statements is incorrect? [1]
(A) Providing liquidity to securities is one of the functions of stock exchange.
(B) Process of holding shares in electronic form is known as Dematerialization.
(C) Securities Exchange Board of India performs the regulatory function of controlling insider trading and imposing penalties for such practices.
(D) Capital market consists of Commercial banks, Development banks and stock exchanges.
Answer:
(C) Securities Exchange Board of India performs the regulatory function of controlling insider trading and imposing penalties for such practices.
Explanation:
Prevent insider trading is one of the protective functions of SEBI. By this SEBI protects the interest of investors and other financial participants.
Question 6.
Identify the function of management stated above. [1]
(A) Planning
(B) Organising
(C) Staffing
(D) Directing
Answer:
(A) Planning
Explanation:
Planning is the function of deciding in advance what to do, when to do, how to do and who should do it.
Question 7.
………………. is a number assigned to each transaction by the stock exchange and is printed on the contract note. [1]
(A) Client code number
(B) Unique order code
(C) Permanent account number
(D) Depository participant number
Answer:
(B) Unique order code
Explanation:
The unique order code assigned to the transaction by the stock exchange serves as a reference number for the trade executed through the stock exchange. The code is printed on the contract note issued by the broker and helps in tracking and verifying the transaction details.
Question 8.
ABC & Co. is conducting a training to help its managers understand the principles of management. However, one employee does not want to attend it as he thinks that such trainings only benefit employees of large organizations and not small firms like his. Which of the following nature of principles of management has the employee NOT understood: [1]
(A) Flexible
(B) General guidelines
(C) Universal applicability
(D) Formed by practice and experimentation
Answer:
(C) Universal applicability
Explanation:
The principles of management are universal in nature, that means they can be applied to all types of organizations irrespective of their size and nature. Their results may vary and application may be modified but these are suitable for all kinds of organizations.
Question 9.
In which of the following situations a company will fix high price for its product: [1]
(A) When firm’s objective is to obtain larger share of the market.
(B) When the firm is facing difficulties in surviving in the market because of intense competition.
(C) When the firm wants to cover high cost of Research and Development to attain product quality leadership.
(D) When the firm wants to maximise its total profit in the long run.
Answer:
(C) When the firm wants to cover high cost of Research and Development to attain product quality leadership.
Explanation:
Attaining product quality leadership: In this case, the firm charges higher prices for providing high-quality products because it incurs heavy expenditure on research and development.
Question 10.
Read the following statements: Assertion (A) and Reason(R). Choose the correct alternative from those given below:
Assertion (A): Management is a goal-oriented process.
Reason (R): An organization has a set of basic goals which are the basic reasons for its existence. [1]
Alternatives:
(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 but 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:
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Explanation:
Different organizations have different goals. Management unites the efforts of different individuals in the organization towards achieving these goals.
Question 11.
Rishabh joined an entertainment company Avtaar, as a creative head. As a manager looking after the creative unit of the company, one of the functions he has to perform is the process of organizing. Which step of the process will he need to perform after identifying and dividing the work that has to be done in accordance with previously determined plans? [1]
(A) Identification and division of work
(B) Departmentalisation
(C) Assignment of Duties
(D) Establishing Reporting Relationships
Answer:
(B) Departmentalisation
Explanation:
Departmentalization is an organizational structure that separates people into groups, or departments, based on a particular set of criteria. These departments have their own leadership and work together to complete tasks. With large or complicated projects, multiple departments may work together.
Question 12.
Name the function of management which helps in the formulation of future plans, in the light of the problems that were identified and thus, helps in better planning in the future period. [1]
(A) Planning
(B) Organising
(C) Directing
(D) Controlling
Answer:
(D) Controlling
Explanation:
Controlling function finds out how far actual performance deviates from standards, analyses the causes of such deviations and attempts to take corrective actions based on the same. This process helps in formulation of future plans in the light of the problems that were identified and, thus, helps in better planning in the future periods. Thus, controlling only completes one cycle of management process and improves planning in the next cycle.
Question 13.
Statement-I: The production concept of marketing philosophy is applicable with convenience products.
Statement II: The product concept of marketing philosophy is applicable with speciality products. [1]
(A) Statement I is correct and statement II is wrong.
(B) Statement II is correct and statement I is wrong.
(C) Both the statements are correct.
(D) Both the statements are wrong.
Answer:
(C) Both the statements are correct.
Question 14.
Airlines will be able to offer the benefit of lower pricing to customers on sectors/routes due to the decision of the civil aviation ministry to remove price caps from August 31, 2022. This can help an airline to do better performance if they take early decisions regarding future courses of action after understanding and doing analysis. Which importance of business environment and its understanding by managers is not highlighted above? [1]
(A) It helps in improving performance.
(B) It helps in assisting in planning and policy formulation.
(C) It helps in tapping useful resources.
(D) It enables a firm to identify opportunities and get first mover advantage.
Answer:
(C) It helps in tapping useful resources.
Explanation:
Understanding of business environment helps in tapping useful resources by designing the policies that allow it to get the resources it needs so that it can convert those resources into outputs that the environment desires.
Question 15.
……………ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it. [1]
(A) Span of management
(B) Divisional structure
(C) Functional structure
(D) Hierarchy of authority
Answer:
(B) Divisional structure
Explanation:
In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit.
Question 16.
Statement I: Higher fixed operating costs result in higher business risk.
Statement II: If a firm’s business risk is higher, its capacity to use debt is higher. [1]
Choose the correct option from options given below:
(A) Statement I is correct and statement II is wrong.
(B) Statement II is correct and statement I is wrong.
(C) Both the statements are correct.
(D) Both the statements are wrong.
Answer:
(A) Statement I is correct and statement II is wrong.
Explanation:
Business risk depends upon fixed operating costs. Higher fixed operating costs result in higher business risk and vice-versa. The total risk depends upon both the business risk and the financial risk. If a firm’s business risk is lower, its capacity to use debt is higher and vice-versa.
Question 17.
“The increase in the demand for many Ayurvedic medicines, health products and services in the past few months, is related to the need for building immunity and an increased awareness for health care due to the spread of Coronavirus.” Identify the feature of business environment being described above. [1]
(A) Specific and general forces
(B) Inter-relatedness
(C) Relativity
(D) None of the above
Answer:
(B) Inter-relatedness
Explanation:
Different forces of business environment are interrelated to each other. One component of the business environment affects the functioning of other components.
Question 18.
Match the Functions of Marketing in Column I with their respective Activities in Column II. [1]
Column I | Column II | ||
(a) | Marketing Planning | (1) | Providing the segregation of products on the basis of their quality. |
(b) | Product Designing | (2) | Providing basis for distinguishing the product of a firm with that of the competitor. |
(c) | Branding | (3) | Specifying the action programmes to achive different objectives. |
(d) | Grading | (4) | Making the product attractive to the target customers |
(A) (a) (3), (b)(4), (c)(2), (d)(1)
(B) (a) (2), (b)(1), (c)(4), (d)(3)
(C) (a) (3), (b) (2), (c) (4), (d) (1)
(D) (a)(1), (b)(4), (c)(2), (d)(3)
Answer:
(A) (a) (3), (b)(4), (c)(2), (d)(1)
Question 19.
Identify the reason which makes management important in the light of the fact that it is generally seen that individuals in an organization resist change, as a change often means moving from a familiar, secure environment into a newer and a more challenging one. [1]
(A) Management helps in achieving group goals.
(B) Management creates a dynamic organization.
(C) Management increases efficiency.
(D) Management helps in the development of society.
Answer:
(B) Management creates a dynamic organization.
Explanation:
Management creates a dynamic organization as it includes goals, objectives, and other activities which keeps on changing according to the changes taking place in the business environment.
Question 20.
Business environment is called dynamic because: [1]
(A) It keeps on changing.
(B) It is not static.
(C) Its components are highly flexible.
(D) All of the above.
Answer:
(D) All of the above.
Question 21.
Top management plans for the entire organization. According to these plans the organizational structure is developed and staffed. In order to ensure that these plans are executed according to plans, directing is required. Any discrepancies between actual and realized activities are then taken care of at the stage of controlling. Name and explain the process highlighted above which started at the planning stage itself and is implicit and inherent in all the functions of management in an organization. [3]
Answer:
Coordination
The process by which a manager synchronizes the activities of different departments is known as coordination.
Coordination is the force that binds all the other functions of management. It is the common thread that runs through all activities. It is implicit and inherent in all functions of an organization.
Question 22.
Explain “Critical point control” with respect to analyzing deviations, a step in the process of controlling. Give a suitable example.
OR
“Controlling is an indispensable function of management. Without controlling the best of plans can go away”. Do you agree? Explain any two reasons in support of your answer. [3]
Answer:
Critical point control: It is neither economical nor easy to keep a check on each and every activity in an organization.
Control should therefore focus on key result areas which are critical to the success of an organization.
These KRAs are set as the critical points. If anything goes wrong at the critical points, the entire organization suffers.
For instance, in a manufacturing organization, an increase, of 5% in the labour cost may be more troublesome than a 15% increase in postal charges.
OR
Yes. Importance of controlling:
(i) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action.
(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective.
(iii) Making efficient use of resources: 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) Improving employee motivation: 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) Ensuringorderand discipline: Controlling creates an atmosphere of order and discipline in the organisation.
(vi) Facilitating coordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals.
Question 23.
HRA & Co. is looking for a Sales Manager. It has posted an opening on its website post on which it received 1000 applications. The human resource manager is suggesting to do the first step filter exercise by holding a selection test. However, not everyone is convinced with this idea. Mention any three importance of selection tests which the human resource manager can use to convince the team. [3]
Answer:
Here are three important benefits of using selection tests in the hiring process that the human resource manager can use to convince the team:
(i) Objective assessment: Selectiontestsan objective assessment of the can candidates provide skills and abilities, which is not influenced by personal biases or perceptions. This ensures that all candidates are evaluated based on the same criteria, providing a fair and consistent selection process.
(ii) Predictive validity: Selection tests can have high predictive validity, which means that they can accurately predict job performance based on the
candidate’s test scores. This can help to identify candidates who are likely to be successful in the job and can reduce the risk of hiring the wrong candidate. ‘
(iii) Time and cost-effective: Selection tests can be time and cost-effective compared to other selection methods such as interviews or assessments centers. They can be administered to a large number of candidates simultaneously, saving time and resources. This can be particularly useful when there are a large number of candidates to be evaluated, as in tire case of HRA & Co. with 1000 applicants.
Question 24.
Explain any three methods of floating new issues in the primary market.
OR
State any three objectives of the Securities and Exchange Board of India. [3]
Answer:
(i) offer through Prospectus: Offer through prospectus is the most popular method of raising funds by public companies in the primary market. Tjhis involves inviting subscription from the public through issue of prospectus.
(ii) Offer for Sale: Under this method securities are not issued directly to the public but are offered for sale through intermediaries like issuing houses or stockbrokers.
(iii) Private Placement: Private placement is the allotment of securities by a company to institutional investors and some selected individuals. It helps to raise capital more quickly than a public issue.
(iv) Rights Issue: This is a privilege given to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company.
(v) e-IPOs: A company proposing to issue capital to the public through the online system of the stock exchange has to enter into an agreement with the stock exchange. This is called an Initial Public Offer (IPO).
OR
Following are the objectives of SEBI:
(i) To regulate stock exchanges and the securities industry to promote their orderly functioning.
(ii) To protect the rights and interests of investors* particularly individual investors and to guide and educate them.
(iii) to prevent trading malpractices and achieve a balance between self-regulation by the securities industry and its statutory regulation.
(iv) To regulate and develop a code of conduct and fair practices by intermediaries like brokers, merchant bankers, etc., with a view to making them competitive and professional.
Question 25.
state any four elements involved in the communication process.
OR
State any four semantic barriers of communication. [4]
Answer:
The elements involved in communication process are explained below:
(i) Sender: Sender means the person who conveys his thoughts or ideas to the receiver.
(ii) Message: It is the content of ideas, feelings, suggestions, order, etc., intended to be communicated.
(iii) Encoding: It is the process of converting the message into communication symbols such as words, pictures, gestures, etc.
(iv) Media: It is the path/channel through which encoded message is transmitted to the receiver, e.g., face to face, phone call, internet, etc.
(v) Decoding: It is the process of converting encoded symbols of the sender.
(vi) Receiver: The person who receives communication of the sender.
(vii) Feedback: Feedback is the response or reaction of the receiver. Without feedback the sender will not be able to judge the effectiveness of his message and the communication process will remain incomplete.
OR
Semantic Barriers:
(i) Badly expressed message: Sometimes intended meaning may not be conveyed by a manager to his subordinates. These badly expressed messages may be on account of in adequate vocabulary, usage of wrong words, omission of needed words, etc.
(ii) Symbols with different meanings: A word may have several meanings. Receiver has to perceive one such meaning for the word used by communicator.
(iii) Faulty translations: Sometimes the message originally drafted in one language (e.g., English) needs to be translated to the language understandable by workers (e.g., Hindi). If the translator is not proficient with both the languages, mistakes may creep in causing different meanings to the communication.
(iv) Unclarified assumptions: Some communications may have certain assumptions which are subject to different interpretations. For example, a boss may instruct his subordinate, “Take care of our guest”. Boss may mean that sub-ordinate should take care of transport, food, accommodation of the guest until he leaves the place. The subordinate may interpret that guest should be taken to hotel with care. Actually, the guest suffers due to these unclarified assumptions.
(v) Technical jargon: It is usually found that specialists use technical jargon while explaining to persons, who are not specialists in the concerned field. Therefore, they may not understand the actual meaning of many such words.
(vi) Body language and gesture decoding: Every movement of body communicates some meaning. The body movement and gestures of communicator matters while conveying the message. If there is no match between what is said and what is expressed in body movements, message may be wrongly perceived
Question 26.
Enumerate the limitations of using internal sources for recruitment.
OR
Discuss any four duties to be performed by a human resource personnel. [4]
Answer:
Limitations of using internal sources for recruitment:
(i) Limited pool of candidates: Internal recruitment limits the pool of candidates to those who are already employed within the organization. This can restrict the availability of new talent and fresh perspectives.
(ii) Inbreeding: Internal recruitment can lead to inbreeding within the organization, as existing employees are promoted or moved laterally within the organization. This can result in a lack of diversity and can lead to a culture of complacency and resistance to change.
(iii) Lack of new skills and perspectives: Internal recruitment may not bring in new skills or perspectives, which may be needed to address changes in the business environment or to pursue new opportunities. This can limit the ability of the organization to innovate and adapt.
(iv) Limited geographical reach: Internal recruitment may not be suitable for filling positions in different geographic locations, especially if the organization operates in multiple regions or countries.
(v) Resentment and conflicts: Internal recruitment can lead to resentment and conflicts among employees who are not selected for the position, especially if they feel that they were overlooked or unfairly treated. This can lead to a decrease in morale and motivation among employees.
OR
Here are four duties typically performed by a human resource personnel:
(i) Recruitment and selection: Human resource personnel are responsible for attracting and selecting the best candidates for the organization. This includes creating job descriptions, advertising open positions, reviewing resumes, conducting interviews, and performing background checks.
(ii) Raining and development: Human resource personnel are responsible for ensuring that employees receive the necessary training and development to perform their jobs effectively. This includes designing and delivering training programs, identifying learning needs, and tracking employee progress.
(iii) Compensation and benefits: Human resource personnel are responsible for ensuring that employees are fairly compensated for their work. This includes developing and administering compensation and benefits programs, such as salary, bonuses, health insurance, and retirement plans.
(iv) Employee relations: Human resource personnel are responsible for maintaining positive relationships between the organization and its employees. This includes providing support and guidance to employees, managing employee complaints and grievances, and fostering a positive work culture. They may also be responsible for developing and enforcing company policies and procedures related to employee conduct and performance.
Question 27.
Sameeksha is a Class XII student having Business Studies as one of her subjects. After studying ‘Consumer Protection’ as one of the chapters in Business Studies she tried to apply the acquired knowledge while purchasing and using the goods. She checked online about the various brands of ‘Bread Maker’ available in the market and compared their prices, so that an intelligent and wise choice can be made. Then she went to a nearby market to buy it. Being an informed consumer she looked for the Standardization Mark, negotiated the price printed on the label, checked the date of manufacturing and asked for guarantee or warranty of the product.
After satisfying with all the concerned information she purchased the ‘Bread Maker’ and as a responsible consumer asked for the cash-memo. After coming back home she opened the package of the ‘Bread Maker’ and found an instruction booklet inside. She carefully read all the instructions and operated the Bread Maker step-by-step and succeeded in making nice ‘Atta Bread’ for her family.
Sameeksha has fulfilled many responsibilities of a consumer while purchasing and using the ‘Bread Maker’.
State any four responsibilities fulfilled by Sameeksha besides asking for a cash-memo. [4]
Answer:
Sameeksha followed the following responsibilities while purchasing the Bread Maker:
(i) Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.
(ii) Buy only standardized goods as they provide qualify assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, Hallmark on jewellery, etc.
(iii) Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products safely.
(iv) Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.
(v) Assert yourself to ensure that you get a fair deal.
(vi)Be honest in your dealings. Choose only from legal goods and services and discourage unscrupulous practices like black-marketing, hoarding, etc.
Question 28.
A businessman who wants to start a manufacturing concern approaches you to suggest him whether following manufacturing concerns would require large or small working capital: [4]
(i) Bread
(ii) Coolers
(iii) Furniture manufacturing against specific orders
(iv) Motor car
Give your viewpoint with reasons in each of the above cases.
Answer:
(i) Bread: A small amount of working capital is needed as the product is sold for cash or at very short credit and has a quick cash turnover.
(ii) Coolers: It is a seasonal product. Therefore, it requires large amount of working capital to store the output during the non-seasonal period.
(iii) Furniture manufacturing against specific order: It requires small working capital as it is quickly converted into cash sales and many times advance from customers is also available.
(iv) Motor car: A large amount of working capital is required because the gestation period is long.
Question 29.
Identify and state the non-financial incentives used in the following cases: [4]
(i) Fiza Ltd. try to keep the employees even after retirement as an advisor to the company.
(ii) The employees of Tina Ltd. get promotions easily or there is an increase in their status if they work well.
(iii) The management of Lokesh Enterprises is very friendly and take care of their employees very well.
(iv) Sana Housing does not only give promotions to their best employees but also help in developing new skills in them.
Answer:
(i) Job Security: Mostly workers prefer security and stability of job. They may not be in favour of jobs with higher wages and salaries which do not possess security of job. They need to be satisfied about future income and work so that they may become stress-free and work with a greater devotion.
(ii) Status: Status refers to rank, power, recognition, reputation and prestige related to the job or a particular position. It is related with social status of an individual satisfying his egoistic needs. This can be done by providing facilities or by offering higher ranks in the organization. In order to move to a higher status, a person will have to exhibit certain achievements or desired performance which motivates employees who have self-esteem and self-actualization needs in them.
(iii) Organizational Climate: These refer to the characteristics which describe an organization. They have direct influence over the attitude, performance and behaviour of a member. A positive approach whenever adopted by a manager or supervisor, leads to creating a better organizational climate whereas a negative approach may damage the organizational climate.
(iv) Career Advancement Opportunities and Skill Development: Whenever employees are given promotional opportunities, they improve their skills, performance and efficiency with the hope that they get a chance to be promoted to the higher level.1 Appropriate skill development programmes and sound promotion policy is the responsibility of the company to help achieve promotions. Thus, promotion stimulates and induces people to put in their best efforts.
Question 30.
A company was expecting a sale increase of 20% in comparison to last year. However, due to poor support from the economic situations around the increase turned out to be only 10%. The company, however, had prepared itself for this situation. It knew how to change its expenses in case the sales increase goes down in comparison to the expectations. Identify the concept of financial management which is highlighted in the above case. What should have been the action taken by the company if the situation had been different like increase in revenue by 30%? [4]
Answer:
The concept of financial management highlighted in the above case is ‘financial planning’. The company would keep different items of expenditure in the case of 30% as it would be having more cash in hand. It could start new projects and involve more manpower in its new projects. High revenue may help streamline operations in a better manner. The company definitely is going to have more freedom in deciding future courses of action.
Question 31.
(i) Explain any two of the following importance of principles of management:
(a) Providing managers with useful insights into reality
(b) Optimum utilisation of resources and effective administration
(c) Scientific decisions
(ii) Differentiate between scientific principles of management and principles of general management on any three basis.
OR
(i) Explain any two of the following features of principles of management:
(a) Formed by practice and experimentation.
(b) Flexible
(c) Mainly behavioural
(ii) How is unity of command different from unity of direction? [3+3]
Answer:
(i)
(a) Providing managers with useful insights into reality: The Principles of Management provide the managers with useful insights into the real world situations. Adherence to these principles will add to their knowledge, ability and understanding of managerial situations and circumstances.
(b) Optimum utilisation of resources and effective administration: Both human and material resources available with an organisation are limited. They have to be put to optimum use. By optimum use we mean that the resources should be put to use in such a manner that they should give maximum benefits with minimum, cost. Principles equip the managers to foresee the cause and effect relationships of their decisions and actions. Thus, wastages associated with a trial-and-error approach can be overcome.
(c) Scientific decisions: Decisions must be based on facts, thoughtful and justifiable in terms of the intended purposes. They must be timely, realistic and subjected to measurement and evaluation. Management principles help in thoughtful decision-making. They emphasize logic rather than blind faith. Management decisions are taken on the basis of principles which are free from bias and prejudice. They are based on the objective assessment of the situation.
(ii) The difference between the principles of scientific management and general management are:
S. No. | Basis of Distinction | General Management | Scientific Management |
(i) | Emphasis | It emphasises on the top level management | It emphasises on the low level management. |
(ii) | Applicability | It is applicable universally. | It is applicable only to specialized organizations, |
(iii) | Basis of formation | It is mostly formed with the help of own experience | The principles are formed with the help of constant observation and experimentation. |
OR
(i) (a) Formed by practice and experimentation: The principles of management are formed by experience and collective wisdom of managers as well as experimentation. For example, it is a matter of common experience that discipline is indispensable for accomplishing any purpose. This principle is mentioned in the management theory. On the other hand, in order to remedy the problem of fatigue of workers in the factory, an experiment may be conducted to see the effect of improvement of physical conditions to reduce the stress.
(b) Flexible: The principles of management are not rigid prescriptions, which have to be followed absolutely. They are flexible and can be modified by the managers when the situation so demands. They give the manager enough discretion to do so.
(c) Mainly behavioural: Management principles aim at influencing behaviour of human beings. Therefore, principles of management are mainly behavioural in nature. It is not that these principles do not pertain to things and phenomenon at all; it is just a matter of emphasis. Moreover principles enable a better understanding of the relationship between human and material resources in accomplishing organisational purposes.
(ii) The difference between unity of command and unity of direction are:
S. No. | Basis | Unity of Command | Unity of Direction |
(i) | 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. |
(ii) | Aim | It prevents dual subordination. | It prevents overlapping of activities. |
(iii) | Implications | It affects an individual employee. | It affects the entire organisation. |
Question 32.
“Planning is worth the huge costs involved?” Do you agree? Explain any four reasons in support of your answer.
OR
‘Planning provides clear benefits to organizations, but planning can also harm organizations if is not implemented properly.’ Explain the limitations of planning [6]
Answer:
Yes
Importance of Planning;
(i) Planning provides direction: Planning ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction. If goals are well defined, employees are aware erf what the organisation has to do and what they must do to achieve those goals.
(ii) Planning reduces the risks of uncertainty: Planning is an activity which enables a manager to look ahead and anticipate changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed.
(iii)Planning reduces overlapping and wasteful activities: Planning serves as the basis of coordinating foe activities and efforts of different divisions, departments and individuals; It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly’ without interruptions. Useless and redundant activities are minimised or eliminated.
(iv)Planning promotes innovative ideas: Since planning is foe first function of management, new ideas can take the shape of concrete plans. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business.
(v) Planning facilitates decision-making: Planning helps the manager to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternative and select foe most viable proposition. Planning involves setting targets and predicting future conditions thus helping in taking rational decisions.
(vi) Planning establishes standards for controlling; Planning provides’ the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals. If there is any deviation it can be corrected. Therefore, we can say that planning is a prerequisite for controlling.
OR
Planning is an important management function that helps organizations set goals, allocate resources, and develop strategies to achieve those goals. However, planning has several limitations that can impact an organization’s ability to succeed. Here are some limitations of planning:
(i) Rigidity: Planning can lead to rigidity in an organization, as a well-defined plan with specific goals may decide the future course of action, leaving little room for changes even in changing circumstances. This may not be in the organization’s best interest.
(ii) Inadequate in a dynamic environment: The dynamic nature of the business environment, including economic, political, physical, legal, and social dimensions, makes it difficult to accurately assess future trends. Planning cannot foresee everything, and changes in policies, competition, and natural calamities may upset the plan.
(iii) Reduction in creativity: Planning can stifle creativity as middle management and other decision-makers are not allowed to deviate from plans. This reduces initiative and creativity.
(iv) High costs: Planning involves huge costs in terms of time and money, including expenses on boardroom meetings, discussions with professional experts, ‘ and preliminary investigations. Sometimes, the costs may not justify the benefits derived from the plan.
(v) Time-consuming process: Planning involves identifying and evaluating alternatives, gathering information, analyzing data, and making decisions based on the information gathered. This process can be time consuming as it requires careful consideration of all available options and possible outcomes. Managers may spend weeks or months developing a comprehensive plan that includes specific goals and objectives, timelines, and resource allocation.
(vi) No guarantee of success: The success of an enterprise depends on the proper implementation of plans, and a reliance on previously successful plans can lead to complacency and a false sense of security. This may actually lead to failure instead of success.
Question 33.
Read the statement given in point (i) and (ii) and answer the questions that follows:
(i) Radha believes that a happy customer is best for the business. She listens to the grievances of her customers and make changes accordingly.
(a) Identify and explain the function of marketing that enables Radha to build a brand.
(b) State any two benefits that the marketer gets from the function.
(ii) Tiara sells different grades of rice at different prices.
(a) Identify and explain the function of marketing that enables to achieve the goal.
(b) Why do you think this function is important? [6]
Answer:
(i) (a) Customer support services: These services are provided by company to its customers to assist them in resolving issues related to the product. These services include maintenance services, technical services, after sales services, handling customer complaints, etc.
(b) The benefits that the marketer gets from this function are:
(i) It helps to create goodwill as the consumers feel confident to buy the product due to very good customer services and after sale services.
(ii) It helps to create brand loyalty of the product as the consumers will be loyal towards the brand.
(ii) (a) Grading: Grading helps in categorizing products or services based raj their quality, features, and other attributes, which ultimately affects their marketability. Grading is often used in industries such as agriculture, food, textiles, and construction to determine the quality of products or materials.
(b) The function is important due to:
(i) It helps in the proper pricing of the product and the consumers can actually buy the product as per their requirement.
(ii) It helps to create a proper branding of the product as the customers will be knowing the grades of the product very well.
Question 34.
Amit has joined a manufacturing firm as a worker. He has recently started working on the shop floor. The management is quite liberal and has allowed the workers to form a cricket fan club. The workers assemble and play cricket in the evening after the completion of their work. However, the management is a little worried about the outcomes. The management is trying to change the schedule of the workers but they are unsure about the reaction of the workers. Though majority of the workers are sincere, like Amit, yet the management is concerned about their companions in the cricket fan dub.
(i) Identify and explain the type of organisation the cricket fan club is?
(ii) Also give the disadvantages of the organisation identified in the above para. [6]
Answer:
(i) Informal Organisation: Interaction among people at work gives rise to a ‘network of social relationships among employees’ called informal organisation. Informal organisation emerges from within the formal organisation when people interact beyond their officially defined roles. When people have frequent contacts, they cannot be forced into a rigid formal structure. Rather, based on their interaction and friendship they tend to form groups which show conformity in terms of interest. Examples of such groups formed with common interest may be those who take part in cricket matches on Sundays, meet in the cafeteria for coffee, are interested in dramatics, etc. Informal organisation has no written rules, is fluid in form and scope and does not have fixed lines of communication.
(ii) Disadvantages: The informal organisation has certain disadvantages. Some of them are as follows:
(a) When an informal organisation spreads rumours, it becomes a destructive force and goes against the interest of the formal organisation.
(b) The management may not be successful in implementing changes if the informal organisation opposes them. Such resistance to change may delay or restrict growth.
(c) It pressurises members to conform to group expectations. This can be harmful to the organisation if the norms set by the group are against organisational interests.