Students must start practicing the questions from CBSE Sample Papers for Class 12 Business Studies with Solutions Set 7 are designed as per the revised syllabus.
CBSE Sample Papers for Class 12 Business Studies Set 7 with Solutions
Time : 3 Hr.
Max. 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.
Identify the significance of staffing function of management, “ensures the continuous survival and growth of the enterprise through the succession planning for managers”
(a) optimum utilisation of the human resources
(b) discovering competent personnel
(c) right person on the right job
(d) continuous survival and growth (1)
Answer:
(d) continuous survival and growth
Related Theory
Staffing process consists of the following steps:
- Manpower Planning
- Recruitment
- Selection
- Placement
- Training and Development
- Promotion and Transfer
- Performance Appraisal
Question 2.
ABC Ltd. has Debt Equity ratio of 3 : 1 whereas XYZ Ltd. has Debt Equity ratio of 1 : 1. Name the advantage ABC Ltd. will have over XYZ Ltd. when the rate of interest is lower than the rate of return on investment of the company.
(a) Trading on equity
(b) Low risk
(c) Low cost of equity
(d) Greater flexibility (1)
Answer:
(a) Trading on equity
Explanation: Trading on equity is a financial process that involves taking more debt to boost the return of shareholders.
Question 3.
Vikrant joins his father’s business of Organic masalas, near Kotgarh in Himachal after completing his MBA. In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology. His father suggested that they hire financial consultants to estimate the amount of funds that would be required for the purpose and timings when it would be required. The concept being discussed by Vikrant’s father, links which financial decision with the investment decision?
(a) Dividend decision
(b) Financial Planning
(c) Capital structure decision
(d) Financing decision (1)
Answer:
(d) Financing decision
Explanation: Financing decisions are made for acquiring funds in the context of a business’ capital structure, which is a mix of long-term debt and equity used for a business’ operations
Related Theory
Financial planning: Financial Planning is the process of estimating the capital required and determining its competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise.
Question 4.
Shobhit, an experienced stock broker advised his client to invest in share of High Rise Ltd., as the company has declared high dividends since an increase in dividends is perceived as a good news and stock prices react positively to it. Identify the related factor of dividend decision being described in the above lines:
(a) Tax rate
(b) Growth opportunities
(c) Stock market reactions
(d) Access to capital market (1)
Answer:
(c) Stock market reactions.
Explanation: Investors view an increase in dividend as a good news and stock price react positively to it.
Question 5.
A recently started software company is doing very well and planning its expansion in near future. The company has distributed half of its profits to the shareholders and kept half of it with, itself. Identify the financial decision taken by the company
(a) Dividend decision
(b) Rnancing decision
(c) Investment decision
(d) Both (a) and (b) (1)
Answer:
(a) Dividend decision
Explanation: This is an example of dividend decision. It involves deciding how much of the profit (after tax), earned by the company, can be distributed to the shareholders and how much should be retained in the business. Here, the company decided upon distributing fewer profits so that it can invest in the expansion of the business.
Question 6.
‘Foods India Ltd.’ is a company engaged in the production of packaged juice since 2010. Over this period, a large number of competitors have entered the market and are putting a tough challenge to ‘Foods India Ltd.’ To face this challenge and to increase its market share, the company has decided to replace the old machinery with an estimated cost of rs. 100 crores. To raise the finance, the company decided to issue 9% debentures. The Finance department of the company has estimated that the cost of issuing the 9% debentures will be rs. 10,00,000. The company wants to meet its floatation cost. Name the instrument that the company may issue for this purpose.
(a) Commercial paper
(b) Call money
(c) Treasury bills
(d) Certificate of Deposit (1)
Answer:
(a) Commercial paper
Explanation: Commercial paper is a short¬term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period.
Question 7.
Raghav’s friend Raman works as a Chartered Accountant in Solutions Ltd. Raman in a meeting with the Board of Directors of the company came to know that the firm would soon be declaring a Bonus issue which would result in increase in the price of shares. Considering this, Raman advised Raghav to purchase the shares of Solutions Ltd., who acted on his advice and bought the shares before time. Which function of SEBI can control such malpractices?
(a) Protective functions
(b) Regulatory functions
(c) Development functions
(d) All the above (1)
Answer:
(a) Protective function
Explanation: The given case is of insider trading which comes under protective function ofSEBI.
Question 8.
“Ravindra Ahuja wishes to buy security, he approached a registered broker or sub-broker and enter into an agreement with him. He has also to provide certain other details”. Choose the appropriate information needed for such process.
(a) PAN number
(b) Depository account details.
(c) Client code number in the client regis-tration form.
(d) All of the above (1)
Answer:
(d) All of the above
Question 9.
Identify and name the promotional tool which includes outdoor display of organising charitable programmes, sport events etc. by Non Government Organisation (NGO) to promote their goodwill:
(a) Outdoor promotion
(b) Free samples
(c) Gift coupons
(d) Free service (1)
Answer:
(a) Outdoor promotion
Explanation: Charitable programmes, sports events etc. are organised for social welfare and does not include any profit motive and there is no trading activity in these programmes and events. Outdoor promotion of these activities by way of outdoor displays etc. is done to promote them and earn goodwill.
Question 10.
Lavanya chaudhry bought an iron of a reputed brand for Rs 1,200 but it caused an electric shock while it was being used. She wants to exercise her ‘Right’. Identify the ‘Right’ under which she can be protected.
(a) Right to Safety
(b) Right to be Heard
(c) Right to seek Redressal
(d) None of the above (1)
Answer:
(a) Right to Safety
Explanation: The consumer has a right to be protected against goods and services which are hazardous to life and health.
Question 11.
………. is the central point in the marketing philosophy.
(a) Customer satisfaction
(b) Customer welfare
(c) Quality of the product
(d) Quantity of the product (1)
Answer:
(a) Customer satisfaction
Explanation: Marketing concept refers to a philosophy of marketing in which the focus is on satisfaction of customers need, whether it is existing customer or prospective customer.
Question 12.
The first step in the process of planning is ………….
(a) Implementing plan
(b) Select alternative
(c) Setting up of objectives
(d) None of the above (1)
Answer:
(b) setting up of objectives
Explanation: the very first step in the process of planning is to set the objectives. It specifies what the organisation wants to achieve.
Related Theory
Steps in the process of planning
- Setting objectives
- Developing premises
- Identifying alternative courses of action
- Evaluating alternative courses of action
- Selecting the best alternative
- Implementing the plan
- Follow up action.
Question 13.
Which of the following statements is not true with reference to planning?
(a) Planning is a pre-requisite for controlling.
(b) Planning provides flexibility.
(c) Planning enables a manager to look ahead and anticipate changes.
(d) Planning facilitates co-ordination among departments and individuals in the organisation. (1)
Answer:
(b) Planning provides flexibility
Explaination: Planning leads to rigidity.
Related Theory
Features of planning:
Planning focuses on achieving objective.
- Planning is primary function of management.
- Planning is pervasive.
- Planning is continuous.
- Planning is futuristic.
- Planning involves decision making.
- Planning is a mental exercise.
Question 14.
Grouping of activities on the basis of functions is a part of
(a) decentralised organisation
(b) divisional organisation
(c) functional organisation
(d) centralised organisation (1)
Answer:
(c) functional organisation
Explanation: Functional structure is an organisational structure formed by grouping of jobs of similar nature under functions and organising these major functions as separate departments like production, finance etc.
Question 15
…………. initiates implementation of plans by clarifying jobs and working relationships.
(a) Planning
(b) Organising
(c) Staffin
(d) Controlling (1)
Answer:
(b) Organising
Explanation: it is the process of initiating the implementation of plans by clarifying jobs and working relationships and effectively deploying resources for attainment of identified and desired results.
Related Theory
Benefits of organising:
- Clarity in working relationship
- Benefts of specialisation
- Effective administration
Question 16.
Statement I: Management is an intangible force.
Statement II: Management has to make changes in goal, objectives and other activities according to changes taking place in the environment.
Choose the correct option from the options given below:
(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 (1)
Answer:
(c) Both the statements are true
Explanation: Management is an intangible force that cannot be seen but its presence can be felt in the way the organisation functions.
Question 17.
…………. is not a component of specific forces of business environment.
(a) Technological conditions
(b) Customers
(c) Employees
(d) Investors (1)
Answer:
(a) Technological conditions
Explanation: Technological conditions is a component of general forces that affect the business environment of an enterprise.
Question 18.
Samiksha purchased a bottle of chocolate syrup from the local grocery shop. The information provided on the bottle was not clear. She fell sick on consuming it. Identify the important aspect neglected by the marketer in the above case.
(a) Labelling
(b) Packaging
(c) Branding
(d) None of these (1)
Answer:
(a) Labelling
Explanation: Labelling is putting an informative tag, wrapper or seal on the product/packaging to describe clearly the product, its contents(ingredients), expiry date, method of use, allergyetc. Thus, in the above question marketer failed to provide sufficient information to the consumer through product label.
Question 19.
Vikrant joins his father’s business of Organic masalas, near Kotgarh in Himachal after completing his MBA. In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology. His father suggested that they hire financial consultants to estimate the amount of funds that would be required for the purpose & timings when it would be required. The concept being discussed by Vikrant’s father links which financial decision with the investment decision?
(a) Dividend decision
(b) Financial Planning
(c) Capital structure decision
(d) Financing decision (1)
Answer:
(d) Fin ancing decision
Explanation: Financing decisions are made for acquiring funds in the context of a business’capital structure, which is a mix of long-term debt and equity used for a business’ operations.
Question 20.
Identify the various decisions which Raj Maheshwari will take as a finance manager.
(a) Rnancing decision
(b) Dividend decision
(c) Investment decision
(d) All of the above (1)
Answer:
(d) All of the above
Question 21.
State ‘Job Enrichment’ and ‘Employee Participation’ as non-financial incentives. How do they motivate employees?
OR
Why is aptitude test conducted in the process of selection. (3)
Answer:
Job Enrichment means designing jobs that include greater variety of work content require higher level of knowledge and skill, give workers more autonomy and responsibility and provide the opportunity for personal growth and a meaningful work experience.
If jobs are enriched and made more interesting, the job itself becomes a source of motivation to the individual.
Employee Participation means giving more autonomy and powers to the employees. It makes them feel that their jobs are important and this feeling makes them contribute positively to the use of their skills and talents in the job performance.
OR
In the process of selection the best and right candidate, who is most suitable as per the job specification, is selected among the pool of the candidates. It is considered a negative process as many candidates come for the job in the recruitment process but get shortlisted in the selection process.
The reason that the aptitude test is conducted in the selection process is to compute and observe the potential of a candidate to learn new skills. It helps an employer to analyze the abilities and skills of a candidate. This test consists of numerical, problem-solving situations, and the reasoning capability of a candidate is seen.
Question 22.
Name and explain the consumer right under which does a business form set up consumer grievance cell?
OR
FSSAI (Food Safety and Standards Authority of India) has made a proposal for hotels and other food outlets to declare the kind of oil/fat used in cooking each of the food items on their menus. Name and explain the Consumer Right being reinforced by this proposal. (3)
Answer:
Right to be Heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. It is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells. Many consumer organisations are also working towards this direction and helping consumers in redressal of their grievances.
OR
Right to be Informed: The 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. It is because of this reason that the legal framework in India requires the manufactures to provide such information on the package and label of the product
Question 23.
“Providing liquidity and marketability to existing securities by allowing the investors a chance to disinvest and reinvest” is one of the important function of secondary market. Explain and also state other functions of secondary market. (3)
Answer:
It provides liquidity and marketability to existing securities by allowing the investors a chance to disinvest and reinvest. The basic function of a stock exchange is the creation of a continuous market where securities are bought and sold. It gives investors the chance to disinvest and reinvest.
Functions of secondary market:
(i) It ensures safety of transactions as the transactions carried out within an existing legal framework: The membership of a stock exchange is well- regulated and its dealings are well defined according to the existing legal framework. This ensures that the investing public gets a safe and fair deal on the market.
(ii) It contributes to economic growth as it indirectly promotes capital formation: stock exchange is a market in which existing securities are resold or traded. Through this process of disinvestment and reinvestment savings get channelised into their most productive investment avenues. This leads to capital formation and economic growth.
Question 24.
Personal selling plays a very productive role in the economic progress of a society. Do you agree with this statement, if yes, give reasons in support of your answer. (3)
Answer:
Yes, I agree with this statement. Benefits of personal selling to a society are as follows:
(i) Converts Latest Demand: Personal selling converts latest demand into effective demand. It is through this cycle that the economic activity in the society is fostered, leading to more jobs, more incomes and more products and services. That is how economic growth is influenced by personal selling.
(ii) Employment Opportunities: Personal selling offers greater income and employ-ment opportunities to the unemployed youth.
(iii) Career Opportunities: Personal selling provides attractive career with greater opportunities for advancement and job satisfaction as well as security, respect, variety, interest and independence to young men and women.
(iv) Product Standardisation: Personal selling increases product standardisation and uniformity in consumption pattern in a diverse society.
Caution
Selling is a wider concept whereas personal selling is a promotional tooL It should not be considered as one.
Question 25.
Chandrika Bhattacharya is working in Olax Ltd., a company manufacturing room heaters. She is responsible for all the activities of the business and for its impact on the society. Her job demands long hours and commitment to the organisation.
(A) Identify the level at which Chandrika Bhattacharya is working.
(B) State other functions required to be performed by Chandrika Bhattacharya at this level.
OR
Sanket, after completing his entrepreneurship course from U.SA. returned to India and started a coffee shop ‘Fioma Coffee’ in a famous mall in Mumbai. The speciality of the coffee shop was the special aroma of coffee and wide variety of flavours to choose from. Somehow, the business was neither profitable nor popular, Sanket was keen to find out the reason.
He appointed Riya, an MBA from a reputed management institute as a manager to find out the causes of the business not doing well Riya, took feedback from the clients and found out that though they loved the special unique aroma of coffee but were not happy with the long waiting time being taken to process the order.
She analysed and found out that there were many unnecessary obstructions which could be eliminated. She fixed a standard time for processing the order. She also realised that there were many flavours whose demand was not enough. So, she also decided to discontinue the sale of such flavours. As a result, with in a short period Riya was able to attract the customers. Identify and explain any two techniques of scientific management used by Riya to solve the problem. (4)
Answer:
Chandrika Bhattacharya is working at top level of management They consist of the senior-most executives of the organisation by whatever name they are called. They are usually referred to as the chairman, the chief executive officer, chief operating officer, president and vice-president. Top management is a team consisting of managers from different functional Levels, heading finance, marketing etc.
Functions of the top level of management:
- To co-ordinate the activities of different departments.
- To be responsible for welfare and survival of the organisation.
- To formulate overall organisational goals and strategies for their achievement.
- To be responsible for all the activities of the business and for its impact on the society.
OR
In the above case Riga used time study and simplification of work as techniques of scientific management.
Time Study: It is a technique to determine the standard time taken by a worker of reasonable skill and efficiency to perform a well-defined job. It helps in deciding the number of workers to be employed, frame suitable incentive schemes and determine Labour costs.
Simplification of Work: It is a technique to eliminate superfluous varieties, sizes and dimensions of products. It leads to reduced inventories, fuller utilization of equipment and increased turnover to reduce costs.
Question 26.
Huge costs are involved in formulating the plans and sometimes costs incurred may not justify the benefit derived from the plan.’ Identify the given limitation of planning. Also state three other limitations of planning.
OR
‘Planning without controlling is meaningless because once a plan become operational, controlling ensures that events conform to the plans.’ With referenece to this statement explain briefly the relationship between controlling and planning. (4)
Answer:
The above statement states that planning involves huge costs. The other limitation of planning are as follows:
(i) Leads to rigidity: Planning leads to rigidity because once a well defined plan is drawn, the managers may not be in a position to change it with the changed circumstances.
(ii) May not work in a dynamic environment: Planning may not work in a dynamic environment as the environment in which a business operates keeps on changing and planning may not foresee everything.
(iii) Reduces creativity: Planning reduces creativity as middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own.
Caution
Do not write extra points of limitation in the examination. Students should conclude their answer in the given word limit.
OR
Relationship between pLanning and controlling
(i) Controlling takes place on the basis of standards developed by planning because if the standards are not set in advance, managers have nothing to control.
(ii) Planning is prescriptive whereas controlling is evaluative because planning prescribes an appropriate course of action while controlling evaluates whether decisions have been translated into desired actions.
(iii) Planning and controlling both are forward Looking because while plans are prepared for the future, controlling seeks to improve the future on the basis of the past experience.
(iv) Planning and controlling are both looking back because, while planning is guided by past experiences, controlling compares the actual performance with the standards.
Question 27.
State any five regulatory functions of Securities and Exchange Board of India (SEBI). (4)
Answer:
Regulatory functions of Securities and Exchange Board of India (SEBI) are:
(i) Regulating the businesses in stock exchanges and any other securities market.
(ii) Registering and regulating the workings of stockbrokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers, depositors, participants, custodians of securities, Fils, credit rating agencies.
(iii) Notifying rules and regulations for smooth functioning of all intermediaries in the securities’ market.
(iv) Levying fees, penalties and other changes for contravening its directions and orders.
(v) Regulating substantial acquisition of shares and takeover of companies.
Question 28.
Setting Performance Standards is the first step in the process of one of the function of management. Name the process and also state other steps of the function of the management. (4)
Answer:
Setting Performance Standards is the first step in the process of contreolling.
Steps in the controlling process are:
(i) Setting performance standards: The standards of performance are set which serve as the criteria against which actual performance will be measured.
(ii) Measurement of actual performance: Actual performance is measured in an objective and reliable manner in the same units in which standards are set.
(iii) Comparing actual performance with the standards: Actual performance is compared with the standards to find out the deviation.
(iv) Analysing deviations: Deviations are analysed for their causes through Critical Point Control and Management by Exception.
(v) Taking corrective action: Corrective action is taken if deviations go beyond the acceptable limits.
Question 29.
Mrs. Rahi buys a packet of dry cake from a cake shop without asking for the bill. The pack does not bear any information other than the name of shop. After reaching home she finds the cake to be stale.
(A) Identify the consumer right that has been violated.
(B) State the responsibilities that a consumer must keep in mind while purchasing any good. (4)
Answer:
Right to be Informed: The 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. It is because of this reason that the legal framework in India requires the manufactures to provide such information on the package and label of the product. Three responsibilities that a consumer must keep in mind while purchasing any good:
(i) Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, Hallmark on jewelry etc.
(ii) Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products safely.
(iii) Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.
(iv) Assert yourself to ensure that you get a fair deal.
(v) Be honest in your dealings. Choose only from legal goods and services and discourage unscrupulous practices like black-marketing, hoarding etc.
(vi) Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made.
Question 30.
“Unforeseen events and changes, rise in costs and prices, environmental changes, governmental interventions, legal regulations, all affect business plan.” In the light of the statement, state any three limitations of planning function of management.
OR
Explain the importance of planning. (4)
Answer:
The limitations of planning are as follows:
(i) Planning leads to rigidity: In an organisation, a well defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This level of rigidity may create diffculty.
(ii) Planning reduces creativity: Planning is an activity which is done by the top management. Usually, the rest of the members just implement these plans. The middle management and other decision makes are neither allowed to deviate from plans nor they are permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced.
(iii) Planning involves huge costs: When plans are drawn up, huge costs are involved in their formulation. Detailed plans require scientific calculations to ascertain facts and figures. The costs sometimes incurred may not justify the benefits derived.
OR
The importance of planning is following:
(i) Planning provides direction: Planning acts as a guide for deciding what course of action should be taken to attain the organisational goals.
(ii) Planning reduces the risk of uncertainty: Planning reduces the risks arising due to the dynamic nature of business environment as it enables a manager to anticipate and meet changes effectively.
(iii) Planning reduces overlapping and wasteful activities: Planning serves as the basis for coordinating the activities and efforts of different divisions and individuals.
(iv) Planning promotes innovation: Planning encourages new ideas that can take shape of concrete plans.
(v) Planning facilitates decision-making: Planning enables a manager to choose the best alternative course’ of action among the various available alternatives in light of present and future conditions.
(vi) Planning establishes standards for controlling: Planning provides standards against which the actual performance is measured and timely corrective actions the taken.
Question 31.
Anoop Gaur started ‘Cats Eye’, a company for providing cyber security solutions to businesses. Its objective is to prevent, detect, respond to cyber attacks and protect ciritical data. He was a hard working software engineer and an expert in cyber security. His reputation grew by leaps and bounds as he was not only a person of integrity but also did his work with utmost honesty and sincerity. The business started growing day by day.
He was delighted when he was offered a big project by the Ministry of Science and Technology. While working on the project, he found that the volume of the work made it impractical for him to handle all liasion with an engineering college in the state. During a com pus placement, Aarav and Pranshi were appointed to work for the new project.
He found the new employees were capable, enthusiastic and trustworthy. Anoop Gaur was thus, able to focus on the objectives and with the heLp of Aarav and Pranshi, the project was completed on time. Not only this, Anoop Gaur was also able to extend his area of operations. On the other hand, Aarav and Pranshi also got opportunities to develop and exercise initiative.
(a) Identify and briefly explain the concept used by Anoop Gaur, in the above case, which helped him on focusing on the objectives.
(b) Also, explain any four points of importance of the concept identified in part (a). (6)
Answer:
(a) The concept used by Anoop Gaur, in the above case, is delegation. Delegation refers to the downward transfer of authority from a superior to a subordinate. It is a pre-requisite to the efficient functioning of an organisation because it enables a manager to use his time on high priority activities.
It also satisfied the subordinate’s need for recognition and provides them with opportunities to develop and exercise initiative. Delegation helps a manager to extend his area of operations as without it, his activities would be restricted to what he himself can do.
(b) The importance of delegation is as follows:
(i) Effective management: By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters.
(ii) Employee development: As a result of delegation, employees get more opportunities to utilise their talent and this may give rise to latent abilities in them. It allows them to develop those Business Studies Class XII138 skills which will enable them to perform complex tasks and assume those responsibilities which will improve their career prospects.
(iii) Motivation of employees: Delegation helps in developing the’ talents of the employees. It also has psychological benefits. When a superior entrusts a subordinate with a task, it is not merely the sharing of work but involves trust on the superior’s part and commitment on the part of the subordinate. Responsibility for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improve his performance further.
(iv) Facilitation of growth: Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures. Trained and experienced employees are able to play significant roles in the launch of new project by replicating the work ethos they have absorbed from existing units, in the newly set up branches.
Question 32.
Money is the only motivator. Do you agree? Give reasons.
OR
M/s Beta Ltd. deals in consumer goods. It employs 100 workers and 10 operative managers who give guidance and support to the workers while operating the machinery. The company has a policy of granting leave as per the requirement of the workers. Workers 3 H 3 are generally granted leave on festivals and special occasions. Recently on Puja festival, it received a big order.
Workers are keen to take Puja holidays while management is pressing hard for overtime. This matter was placed before the Personnel Manager who called the meeting of operative managers and workers to inform them about the changes in the incentive plan which states payment of double wages for working overtime and triple wages for working on holidays.
Workers without any pressure voluntarily took limited holidays and were able to increase their earning by working overtime and on holidays. During Board of Directors meeting, Personnel Manager was asked to update the management for achieving higher output, meeting timely supplies without any confrontation with workers. Personnel Manager replied, “I just used a carrot with no sticks approach”. By quoting the lines from above paragraph state any two elements of directing. (6)
Answer:
No, I don’t agree with this statement. This statement is not correct as an employee can be motivated with financial as well as non financial incentives. All the needs of individuals are not satisfied by money alone.
Psychological, social and emotional factors also play important role in providing motivation. Non-financial incentives mainly focus on these needs. Some times, monetary aspect may be involved in non-financial incentives as well Some of the important non-financial incentives are discussed below:
(i) Status: In the organisational context, status means ranking of positions in the organisation. The authority, responsibility, rewards, recognition, perquisites and prestige of job indicate the status given to a person holding a-managerial position. Psychological, social and esteem needs of an individual are satisfied by status given to their job.
(ii) Organisational Climate: Organisational climate indicates the characteristics which describe an organisation and distinguish one organisation from the other. These characteristics influence the behaviour of individuals in the organisation. Some of these characteristics are- individual autonomy, reward orientation, consideration to employees, risk-tasking, etc., If managers take positive measures regarding these aspects, it helps to develop better organisational climate.
(iii) Career Advancement Opportunity: Every individual wants to grow to the higher level in the organisation. Managers should provide opportunity to employees to improve their skills and be promoted
to the higher level jobs. Appropriate skill development programmes, and sound promotion policy will help employees to achieve promotions. Promotion works as a tonic and encourages employees to exhibit improved performance.
OR
Line: “It employs 100 workers and 10 operative managers who give guidance and support to the workers”
Element: supervision.
Meaning: Supervision being an element of directing, every manager in the organisation supervises his/her subordinates. In this sense, supervision can be understood as the process of guiding the efforts of employees and other resources to accomplish the desired objectives. It means overseeing what is being done by subordinates and giving instructions to ensure optimum utilisation of resources and achievement of work targets.
Line: “payment of double wages for working overtime and triple wages for working on holidays”
Element: Motivaton
Meaning: Motivation means incitement or inducement to act or move. In the context of an organisation, it means the process of making subordinates to act in a desired manner to achieve certain organisational goals.
Caution
Do not write all the elements of directing. Only those elements should be written which are mentioned in the given paragraph.
Question 33.
Explain points on the importance of management.
OR
Explain any five characteristics of ‘management’. (6)
Answer:
Importance of management:
(i) Helps in achieving group goals: Proper management is required to achieve the organisation goals, as management helps a manager to give a unified direction to the individual efforts so that itcan be used to achieve the organisational goals.
(ii) Increases efficiency: Management helps the manager to get work done effectively that too with efficiency through planning, organising, staffing, directing & controlling the activities of an organisation.
(iii) Creates a dynamic organisation: Usually the individuals in organisation resist change, here management helps people to adapt the change by various training exercises, etc.so that people adapt change and organisation will be able to maintain its competitive edge.
(iv) Helps in achieving personal objectives: A good manager always motivates and leads his team members in such a way that they can achieve their personal goals while contributing to organisational goals.
OR
Characteristics of management:
(i) Goal oriented process: Management functions and management activities always aims at achieveing the organisational objectives.
(ii) Group activity: Management always involve a group of people as it cannot be performed in isolation. Each group member had its role to play, while the group is accomplishing tasks for achieving goals.
(iii) Intangible force: Management is an intangible force, it cannot be touched or seen only its presence or absence (mismanagement) can be felt.
(iv) Pervasive: Management had true universal applicability, as its extent is not limited to business or non-business organisations, it is also applicable to other wide varity of groups of people or resources like library, club, school, hospitals, hotels, formal or informal gatherings of people, and applicable to the whole universe.
(v) Multi-dimensional: Management is not just about one function or activity, it has a multidimensional approach, which can be classified into three main dimensions:
Management of work: To manage work or task in such a manner that it is accomplished effectively & efficiently.
Management of people: Tasks had to be accomplished for achievement of goals and for accomplishing task organisation need a workforce also known as Human Resource, which is the most valuable asset for organisation. This human resource is to be managed in such a way that both the individual goals of the workforce and the organisational goals are achieved.
Management of Operations: Operations mean activities involved while accomplishing tasks for achieving goals, like buying raw / semi- finished inputs, then processing them into semi¬finished / finished goods as outputs.
(vi) Continuous process: Management is a continuous or never-ending process, in which managers all the time continuously perform series of various functions of management i.e. planning, organising, staffing, directing, and controlling.
Question 34.
The significance of the organising function mainly arises from the fact that it helps in the survival and growth of an enterprise and equips it to meet various challenges. Explain the importance of organising. (6)
Answer:
Importance of Organising:
(i) Benefits of specialisation: Organising leads to a systematic allocation of jobs amongst the work force. This reduces the workload as well as enhances productivity because of the specific workers performing a specific job on a regular basis. Repetitive performance of a particular task allows a worker to gain experience in that area and leads to specialisation.
(ii) Clarity in working relationships: The establishment of working relationships clarifies lines of communication and specifies who is to report to whom. This removes ambiguity in transfer of information and instructions. It helps in creating a hierarchical order thereby enabling the fixation of responsibility and specification of the extent of authority to be exercised by an individual.
(iii) Optimum utilisation of resources: Organising leads to the proper usage of all material, financial and human resources. The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. Avoidance of duplication of work helps in preventing confusion and minimising the wastage of resources and efforts.
(iv) Adaptation to change: The process of organising allows a business enterprise to accommodate changes in the business environment. It allows the organisation structure to be suitably modified and the revision of inter-relationships amongst managerial Levels to pave the way for a smooth transition. It also provides much needed stability to the enterprise as it can then continue to survive and grow inspite of changes.
(v) Effective administration: Organising provides a clear description of jobs and related duties. This helps to avoid confusion and duplication. Clarity in working relationships enables proper execution of work. Management of an enterprise thereby becomes easy and this brings effectiveness in administration.
(vi) Expansion and growth: Organising helps in the growth and diversification of an enterprise by enabling it to deviate from existing norms and taking up new challenges.