Subject Enrichment Material Class XII BUSINESS STUDIES

KENDRIYAVIDYALAYA
SANGATHAN

CHANDIGARHREGION

SUBJECTENRICHMENTMATERIAL
CLASS:XII

SUBJECT:BUSINESSSTUDIES
2019-20

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INDEX

Sr. NameoftheChapter PageNo.
No.
3-20
1. NatureandSignificanceofthemanagement 21-29
2. PrinciplesofManagement 30-57
3. BusinessEnvironment 58-81
4. Planning 82-100
5. Organising 101-121
6. Staffing 122-131
7. Directing 132-142
8. Controlling 143-154
9. FinancialManagement 155-169
10. FinancialMarkets 170-181
11. MarketingManagement 182-190
12. ConsumerProtection

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SUBJECTENRICHMENTMATERIAL

(FORHIGHACHIEVERS)

CLASS:XII SUBJECT:BUSINESSSTUDIES

UNIT1-NATUREANDSIGNIFICANCEOFMANAGEMENT

Q.NO. QUESTIONS MARKS

1 Oneoftheorganisationalobjectivesofmanagementis‘Growthof 1
business’.Whichoneofthefollowingisnotassociatedwith
measurementofbusinessgrowth?

(a)Salesvolume (b)NumberofEmployees

(c)NumberofCreditors (d)NumberofProducts
offered

2 --------------referstotheorderlysynchronisingofeffortsof 1
subordinatestoprovideproperamount,timingandqualityof
execution.

(a)Planning (b)Organising

(c)Coordination (d)Cooperation

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3 -------------inManagementmeanstocompletethetaskcorrectly 1
withminimum resources. 1
1
(a)Effectiveness (b)Efficiency
1
(c)Coordination (d)Noneoftheabove

4 Vijayworksinabank.Thebankisabouttoloseitspositionas
theleadingbankinthebankingindustry.Vijaywasassignedto
findoutthereasonbehindpoorperformanceofthebank.He
analysedthesituationandcameoutwiththeconclusionthat
therewaslackofintegrationofeffortsmadebyvarious
departmentslikehumanresource,informationtechnologyand
consumerrelationship.

Identifythemanagerialconceptdiscussedintheabovecase.

(a)Cooperation (b)Coordination

(c)Effectiveness (d)Efficiency

5 Saurabhismanagingdirectorinashoemanufacturingcompany.
Hehasbeendoingwellatthispost.Underhisguidanceand
leadership,thecompanyhasbeenactivelyachievingalltheset
targetsasalltheunrelatedanddiverseactionstakenbydifferent
departmentsaregivenacommondirection.

Identifythecharacteristicofmanagementdiscussedintheabove
case.

(a)Managementisagoalorientedprocess

(b)Managementisacontinuousprocess

(c)Managementisagroupactivity

(d)Managementisadynamicfunction.

6 Jayisworkingasamarketingmanagerinacompany.Hasbeen
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giventhetaskofselling1,00,000unitsofaproductatthecostof
Rs.100perunitwithin20days.Heisabletosellalltheunits
withinthestipulatedtime,buthadtoselllast1,000unitsat20%
discountinordertocompletethetarget.Insuchasituation,he
willbeconsideredtobe

(a)Anefficientmanager (b)Aneffectivemanager

(c)Bothinefficientandineffective (d)Noneoftheabove

7 Managementissaidtobepoorifitis 1
1
(a)Efficientbutineffective (b)Effectivebutinefficient
1
(c)Bothinefficientandineffective (d)Alloftheabove

8 TarangEnterprisesLimitedisplanningtoincreaseitssalesby
30%inthenextquarter.Identifythefeatureofmanagement
beinghighlightedinthegivenstatement.

(a)Managementisallpervasive

(b)Managementisagoalorientedprocess

(c)Managementisacontinuousprocess

(d)Alloftheabove

9 Managementisequallyimportanttorunapoliticalorganisation
asitistorunaneconomicorganisation.Whichfeatureof
managementisbeingreflectedinthegivenstatement?

(a)Managementisagoalorientedprocess

(b)Managementismultidimensional

(c)Managementisallpervasive

(d)Managementisagroupactivity

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10 Managementtranslatestheworktobecarriedoutintermsof 1
goalstobeachievedandassignsthemeanstoachieveit.
1
Thisstatementrelatesto: 1

(a)Managementofwork (b)Managementofpeople

(c)Managementofoperations (d)Alloftheabove

11 Principlesofmanagementarenotexactastheprinciplesof
scienceandtheyhavetobemodifiedaccordingtoagiven
situation.Whichfeatureofscienceisnotapplicableinthis
statement?

12 Whyiscoordinationandcooperationrequiredtogether?

13 Atwhichlevelofmanagementarethemanagersresponsiblefor 1
maintainingthequalityofoutputandthesafetystandards?

14 “Dominospizzakeepsintroducingnewvarietyofpizzasinits 1
menu”.Whichfeatureofmanagementrepresentsthisact?

15 “Amanagerapplieshisknowledgeofmanagementinhisown 1
way”.Whichaspectofthenatureofmanagementdoesthis
statementindicate? 1
1
16 “Managementincreasesefficiency”.How? 1
1
17 Whatisthebasicdifferenceinthenatureofcoordinationand
cooperation?

18 Sincemanagementdealswithhumanbeingsandhuman
behaviour,itcanbetermedasa--------------

19 Itistheprocesswherebyanexecutivedevelopsanorderlypattern
ofgroupeffortsamonghissubordinatesandsecuresunityof
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actioninthepursuitofcommonpurpose.Whichprocessis
referredtohere?

20 Bhawnafeelsthatmanagementisrequiredinallkindsof 1
organisationwhereasPujaarguesthatmanagementisnot
requiredinnon-businessorganisationslikeSchools,hospitalsand
clubs,whoiscorrect?

21 Mitahasasuccessfulicecream businessatBikaner,namely 3
‘Smartflavours’.Hericecreamsareutterlydelicious.Shemakes
icecreamsfrom freshmilkandthesameareavailableinawide
rangeofflavoursandpacks.Shesetsviablebusinessobjectives
andworkswiththesameinmindinordertoensurethatthe
customerswillcomebackforpurchasing.

Havingthefirstmoveradvantageherbusinesswasdoingwell.
Toearnhigherprofits,shestartedcuttingcosts.Thiswould
sometimeleadtodelayindeliveryandtheicecream wasnot
reachinginthemarketintime.Overaperiodoftime,thedemand
forhericecream declinedandbecauseofitthecompetitors
enteredthemarket.Shelostsomeofhermarketshareto
competitors.

Atthebeginningofsummerseasonshegotbacktobackorders
forsupplyof4,000icecream packsofdifferentflavoursfor
specialoccasions.Toensurethatthetaskwascompletedand
ordersdeliveredintimeshehiredadditionalworkers.Shewas,
thusabletoproduceanddelivertheicecream packsbutatahigh
productioncost.Whilecompletingactivitiesandfinishingthe
giventaskforachievinggoals,Mitarealisedthatshewasignoring
oneoftheimportantaspectsofmanagement.

IdentifytheaspectofmanagementthathasbeenignoredbyMita.
Alsoexplainthesamewiththehelpofexample.

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22 ShivaComputersLtd.isaleadingcompanyinComputer 3
TechnologyandITservices.TheCEOofthecompanyattributes 3
thesuccessofthecompanytoitsmanagerialteam spirit,which
havehelpedtohandlerapidchangesintechnologiesandto
transform intoopportunities.Likeanyotherbusinessenterprise
profitsareimportantforsurvivalandgrowthofShivaComputers
Ltd.Themanagementofthecompanybelievesthatasatisfied
employeecreatesasatisfiedcustomer,whointurncreates
profitsthatleadstosatisfiedshareholders.

Thecompanyhasastrongsenseofsocialresponsibility.Ithas
setupmanyeducationalinstitutionsinthefieldofmanagement,
engineeringandcomputereducationinwhichhalfofthestudents
aregirls.

Identifyandexplainthevarioustypesofobjectivesof
managementbeingfulfilledbyShivaComputersLtd.byquoting
linesfrom theparagraph.

23 Ayushiworksasasoftskilltrainerinacorporatehouse.She
beginsanewsessioneverytimebyacquaintingthetraineeswith
aprocesswhichisvitalforachievingthegoalsofthe
organisationeffectivelyandefficiently.Shealsomakesthem
understandthevariousprimaryactivitiesinvolvedincarryingout
thisprocess.Sheemphasisuponthefactthatintheabsenceof
thisprocessitwillbedifficultfortheemployeestoattaintheir
personalgoals.Moreoverthedevelopmentofthesocietywillbe
hamperedasthewelfareofthepeopleisalsolikelytobe
overlookedbytheorganisation.

Incontextoftheabovecase:

(a)Identifyandexplaintheprocessbeingreferredtointheabove
lines.

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(b)Listtheprimaryactivitiescontainedinthisprocess. 3
3
(c)Howdoesthisprocesshelpinachievingpersonalobjectives
oftheemployees?

24 AjayandSanjayarechildhoodfriends.Sanjayhadlosthisright
handinanaccidentinchildhood.Theymeetafteralongtimeina
restaurant.Onbeingasked,SanjaytellsAjaythathefeelsvery
discontentedinmanaginghisfamilybusinessafterthedeathof
hisfatherasitdoesn’tmatchwithhisareasofinterest.Ajay
knowsthatSanjaypossessextraordinaryskillsinmanagement
althoughhehasn’tacquiredanyprofessionaldegreein
management.Therefore,heasksSanjaytowinduphisbusiness
inIndiaandjoinhim inhishotelbusinessinDubaiasanAssistant
ManagerinSalesandMarketingDivision.

CanSanjaybedeployedatthepostofAssistantManagerinSales
andMarketingDivisionalthoughhehasn’tacquiredany
professionaldegreeinmanagement?Explainbygivingsuitable
justificationinsupportofyouranswer.

25 Harshitahassuccessfullyemergedastheownerofthebest
modularkitchenmanufacturerfirm inDelhi.HerfriendVartikais
highlyinspiredbyHarshita’ssuccessinbusiness.Inorderto
understandtheessenceofsuccessfulbusinessmanagement
Vartikadecidestospendaweekinheroffice.Vartikaobserves
thatadeliberateeffortismadetointegratethediverseactivities
oftheorganisation.Likewheneverthesalesmanagermakesa
plantoraisethesalestarget,healsoconsultsotherdepartment
managersi.e.theproductionmanager,thepurchasemanager,the
financemanager,etc.inordertoavoidanyproblem thatmay
ariseinfuture.Moreover,workamongthepeopleworkinginthe
productiondepartmentisdividedinsuchamannerthatwherethe
workofonepersonends,theworkofthenextpersonbegins.

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Therefore,everybodymakeseffortstocompletehis/herworkon 3
time,andtheworkersdonotcreateobstructionineachother’s
work. 4
4
Inthecontextofabovecase:

(a)Identifytheconceptbeingdescribedintheaboveparagraph.

(b)Howdoestheconceptasidentifiedinpart(a)ofthequestion
helpincarryingoutmanagementfunctionssuccessfully?

26 Deveshworksashead(Finance)inaelectronicscompany.
Althoughovertheyears,withexperiencehehasbeenabletobuild
uponhismanagerialskillsintermsofcreativity,imaginationand
initiative,butstillhefeelsthattheknowledgeofcertainunderlying
theoriesandprinciplesofmanagementisamustforanyaspiring
manager.Thisisprimarilyduetothefactthattheseprinciples
areevolvedthroughobservationsandtestedthrough
experimentationandhelpthemanagersintakingscientific
decisions.Thus,amanagerrequiresboththeknowledgeand
certainskillstoapplytherelatedknowledgeinthelightofgiven
situationstobesuccessfulinhiswork.

Incontextoftheabovecase:

(a)Identifyandexplainthetwoaspectsofnatureofmanagement
whichDeveshthinksmakesamanagersuccessful.

(b)Also,explainthespecificfeatureofoneoftheaspectsof
natureofmanagementasidentifiedinpart(a)ofthequestion
whichdistinguishesitfrom otherphysicalscienceslikebiology,
physicsandchemistryetc.

27 “Managementhelpsindevelopmentofsociety”.How?

28 RishiSharmahasrecentlyjoinedABCLtd.,acompany

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manufacturingAir-conditioners.Hefoundthathisdepartment 4
wasunder-staffedandotherdepartmentswerenotcooperating 4
withhisdepartmentforsmoothfunctioningoftheorganisation.
Therefore,heensuredthathisdepartmenthastherequired
numberofemployeesanditscooperationwithotherdepartments
isimproved.

(a)IdentifythelevelatwhichRishiSharmawasworking.

(b)Also,statethreemorefunctionsrequiredtobeperformedby
him atthislevel.

29 NooriownsagarmentfactoryinGurugram.Shehasobserved
thatfrequentconflictsemergebetweenproductionandmarketing
departmentwhichadverselyaffectsthesalesofthecompany.
Whenshesharedthisproblem withherfather,hetoldherthat
theseconflictsariseduetothefactthateachdepartmentis
performingactivitiesinisolationfrom othersandbarriers
betweendepartmentsarebecomingmorerigid.

Inthecontextofabovecase:

(a)Identifyandexplainthequalityofmanagementwhichis
lackingbecauseofwhicheachdepartmentisperforming
activitiesinisolationfrom others.

(b)Also,explainanythreefeaturesoftheconceptasidentifiedin
part(a)ofthequestion.

30 Eshaworksasthecostandriskmanagementheadofacompany
inpowersector.Asaresultofherexcellentmanagerial
competence,thecompanyisabletoreducecostandincrease
productivity.Thecompanybelongstoinfrastructuresector,
whereinregularamendmentsaremadeinthegovernment
regulationsandpolicies.Sheholdsregularmeetingstoensure

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thatpeopleinherdepartmentarenotonlyawareoftherelated
changesbutarealsoabletoadapttothesechangeseffectively.
Thishelpsthecompanytomaintainitscompetitiveedge.She
motivatesandleadsherteam insuchamannerthatindividual
membersareabletoachievepersonalgoalswhilecontributingto
theoverallorganisationalobjective.Intheprocessoffulfillingher
dutiesforthegrowthoftheorganisation,shehelpsinproviding
competitiveservices,adoptingnewtechnology,creatingmore
employmentopportunitiesetc.forthegreatergoodofthepeople
atlarge.

Inthecontextoftheabovecase:

Identifythevariousreasonsthathavemademanagementso
importantbyquotinglinesfrom theparagraph.

31 AmitandSumitaregoodfriends.Consideringthefactthatthe 5
activitiesinvolvedinmanaginganenterprisearecommontoall
organisations,aftercompletingtheirmastersinbusiness
management,bothofthem takeupajobatmanageriallevelin
differentorganisationsaspertheirindividualareasofinterest.
Amittakesupamarketingjobinretailcompanyandstrivesto
increasesaleswhereasSumitjoinsanNGOandworksdiligently
torealiseitsobjectiverelatedtoprovidingemploymentto
especiallyabledpersons.Bothofthem havetoperform aseries
ofcontinuous,composite,butseparatefunctions.Onsomedays,
Amitmayspendmoretimeinplanningafuturedisplaylayoutand
onanotherday,hemayspendtimeinsortingoutanemployee’s
problem.BothAmitandSumitmakeconsciouseffortstobuilda
feelingofteam spiritandcoordinationamongdiverseindividuals
withdifferentneedswhoworkunderthem.Theeffectoftheir
managementisnoticeableintheirrespectivedepartmentsasthe
targetsaremetaccordingtoplans,employeesarehappyand

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satisfied,andthereisorderlinessinitsfunctioningratherthan 5
chaos. 5

Identifythevariousfeaturesofmanagementhighlightedinthe
aboveparagraphbyquotinglinesfrom it.

32 Aman,AhmadandAllyarepartnersinafirm engagedinthe
distributionofdairyproductsinMaharashtrastate.Amanisa
holderofSeniorSecondarySchoolCertificatefrom CentralBoard
ofSecondaryEducationwithBusinessStudiesasoneofhis
electivesubjects.AhmadhasdonehispostgraduationinHistory
andAllyindairyfarming.Onedaytherewasaseriousdiscussion
betweenAhmadandAllyregardingthenatureofmanagement.
Ahmadarguedthatmanagementwasaprofession,whereasAlly
arguedagainstitsayingthatthelegalandmedicalprofessions
aretheonlyprofessionbecausetheyfulfilalltheconditionsof
profession.AmanonthebasisofhisknowledgeofBusiness
Studiesexplainedthenatureofmanagementasaprofessionto
AhmadandAlly.

ExplainhowAmanwouldhavesatisfiedbothAhmadandAlly.

33 Aconsumergoodscompany,manufacturingelectricalgoods,has
beenfacingalotofproblemsforthelastoneyear.Itsmargins
areunderpressureanditsprofitsandmarketsharearedeclining.
Forthisstateofaffairs,theproductiondepartmentblamesthe
marketingdepartmentfornotmeetingsalestargetsandthe
marketingdepartmentblamestheproductiondepartmentfor
producinggoodswhicharenotofgoodqualitymeeting
customers’expectations.Thefinancedepartmentblamesboth
theproductionandthemarketingdepartmentsfordeclining
returnoninvestmentandbadmarketing.

Whatstepsshouldbetakentobringthecompanyontrack?

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34 RealAllianceLtd.isawell-knowncompanyinIndia.Itisableto 5
earnadequaterevenuestocovercosts.Itscapitalbase,number
ofemployeesandproductionturnoverhasincreasedmanifolds
overtheyears.Therateofprofitabilityofthebusinessisalso
creditable.Theemployeesofthecompanyarehappyand
satisfiedwiththeirremuneration,workingconditions,promotion
policyetc.Asapartofitsmoralobligation,thecompanyhas
takenmanyinitiativesforprovidingemploymenttoespecially
abledpersonsandpromotingliteracyinthevillagesadoptedbyit.

Identifyandexplainthevarioustypesofobjectivesof
managementbeingfulfilledbyRealAllianceLtd.byquotinglines
from theparagraph.

1C Answers MARKS
2C ANSWERS 1
3B 1
4B 14/190 1
5C 1
6B 1
7C 1
8B 1
9C 1
10 A 1
1

11 Universalvalidityandapplication 1
1
12 Becausethesearerequiredatalllevelsofmanagementdueto
theinterdependentnatureofactivitiesofvariousdepartments. 1
1
13 SupervisoryorOperationalLevelManagement 1

14 ManagementisDynamicinnature.

15 ManagementiscalledanArtbecauseitisconcernedwiththe
applicationofpersonalskillsbythemanager.

16 Throughplanningandorganisation,managementeliminatesall 1
typesofwastagesandachievesefficiencyinallbusiness
operations. 1

17 Coordinationisaconsciousanddeliberateeffort,whereas 1
cooperationisavoluntaryeffort. 1
1
18 InexactScience 3

19 Coordination

20 Bhawnaiscorrectbecausemanagementispervasiveinnature.

21 TheaspectsofmanagementthathasbeenignoredbyMitaare
EffectivenessandEfficiency.Forexample,Alkaworksasa
designerinanexporthouse.Asperthetermsofanorder
receivedbytheexporthouseshehastoget1,000unitsof
leatherjacketsmadein14days@ Rs.1,500perjacket.Sheis
abletocompletehertargetproductionin18days.So,inorder
tocompletetheorderin14daysshewouldhavemadethe
workersworkovertime.Asaresultthecostoproductionper
jacketmayhaveincreasedbyRs.100.

(a)Intheabovecase,Alkaisefficientinherworkasshehas
beenabletoget1,000unitsofleatherjacketsmade@ Rs.

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1,500perjacket. 3
3
(b)ButwecannotconsiderAlkatobeeffectiveasshewasnot
abletogettheworkcompletedwithinthestipulatedtimeof14
days.

22 (a)Organisationalobjectives:Itreferstotheutilisationof
humanandmaterialresourcesconsideringtheinterestof
stakeholders.

‘Likeanyotherbusinessenterpriseprofitsareimportantfor
survivalandgrowthofShivaComputersLtd.’

(b)SocialObjectives:itreferstoconsistentlycreatingeconomic
valueforvariousconstituentsofthesociety.

‘Ithassetupmanyeducationalinstitutionsinthefieldof
management,engineeringandcomputereducationinwhich
halfofthestudentsaregirls.’

23 (a)TheprocessofManagementisbeingreferredtointhe
abovelines.

Managementistheprocessofdesigningandmaintainingthe
environmentinwhichindividualsworkingtogetheringroups
efficientlyaccomplishselectedgoals.

(b)Theprimaryactivitiescontainedinmanagementprocess
referstothefunctionsofmanagementnamely;planning,
organising,staffing,directingandcontrolling.

(c)Personalobjectivesrelatetotheneedsofemployeesofthe
organisationswhichmustbegivendueconsiderationslikefair
wagesandsalary,growthprospects,goodworkingconditions
etc.Themanagementensuresthatindividualmembersare
abletoachievepersonalgoalswhilecontributingtowardsthe

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overallorganisationalobjectives. 3
3
24 Yes,SanjaycanbedeployedatthepostofAssistantManagerin
SalesandMarketingDivisionalthoughhehasn’tacquiredany
professionaldegreeinmanagementasmanagementisnot
consideredtobeafull-fledgedprofessionbecauseofthe
followingreasons:

(i)RestrictedEntry.Theentrytotheabovestatedprofessionis
restrictedthroughaprescribedqualification.Butthereisno
restrictiononanyonebeingappointedasamanagerinany
businessenterprise.So,presentlythisfeatureofprofessionis
notpresentinmanagement.

(iii)Professionalassociation.LegalandMedicalprofessions
areaffiliatedtoaprofessionalassociationlikebarcounciland
medicalcouncilwhichregulatesentry,grantscertificateof
practiceandformulatesandenforcesacodeofconduct.There
areseveralassociationsofpractisingmanagersinIndialikethe
AIMAthathaslaiddownacodeofconducttoregulatethe
activitiesoftheirmembers.Thereis,however,nocompulsion
formanagerstobemembersofsuchanassociation.So,
presentlythisfeatureofprofessionisnotpresentin
management.

25 (a)Coordinationistheconceptbeingdescribedintheabove
paragraph.

(b)Theimportanceofcoordinationisdescribedbelow:

(i)Growthinsize:Withthegrowthinthesizeofanorganisation
thereisaproportionateincreaseinthenumberofits
employees.Sothereisagreaterneedtounifytheeffortsof
diverseindividualstowardstherealizationoforganizational
goals.

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(ii)Functionaldifferentiation:Asaresultoffunctional 3
differentiationinanorganisationitspeopleandactivitiesget 4
dividedintosmalldepartmentsonthebasisoffunctionslike
marketing,financeetc.Therefore,thereisneedtoreconcilethe
goalspursuedbyeachofsuchdepartmentwiththegoalofthe
organisationasawhole.

26 (a)ThetwoaspectsofnatureofmanagementwhichDevesh
thinksmakesmanagersuccessfulareManagementasa
ScienceandManagementasanArt.

Managementasscienceformsthebasisofknowledgeof
underlyingtheoriesandprinciplesofmanagement.
Managementasanartenablesskilfulandpersonalapplication
ofexistingknowledgebythemanagerstoachievedesired
results.Italsoleadstoemergenceofdifferentstylesof
management.

(b)Thespecificfeatureofmanagementassciencewhich
distinguishesitfrom otherphysicalscienceslikebiology,
physicsandchemistryetc.isUniversalvalidity.

Unlikethescientificprinciples,theprinciplesofmanagement
lackuniversalvalidityasitdealswithhumanbehaviourwhichis
complexinnature.Differentpeoplereactdifferentlytothe
samesituationandtherefortheirbehaviourcannotbe
predictedwithaccuracy.

27 Efficientmanagementofresourceshelpsinthedevelopmentof
nationinthefollowingways:

(a)Provisionofgoodqualityproductsandservices;

(b)creationofemploymentopportunities;

(c)technologicalinnovationsforthebettermentofthesociety;

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and 4
4
(d)Contributiontoeconomicgrowthanddevelopment.

28 RishisharmaisworkingatMiddlelevelofmanagement.The
threemorefunctionsthathehastoperform atthislevelare:

(i)Hehastoassigndutiesandresponsibilitiestothepeoplein
hisdepartment.

(ii)Hehastomotivatethepeopleinhisdepartmenttoachieve
thedesiredobjectives.

(iii)hehastointerpretthepoliciesframedbytopmanagement.

29 (a)Coordinationisthequalityofmanagementwhichislacking
becauseofwhicheachdepartmentisperformingactivitiesin
isolationfrom others.

(b)Coordinationistheprocessofintegratingtheindividualand
groupeffortsinpursuitofcommongoals.Thethreefeaturesof
coordinationarestatedbelow:

(i)Coordinationintegratesgroupefforts:Coordination
integratesgroupeffortsintoapurposefulactivitybyensuring
thatactivitiesarecarriedoutasperpredeterminedstandards.

(ii)Coordinationensuresunityofaction:Coordinationensures
unityofactionasitactsasabindingforcebetweenandamong
departmentsandfacilitatessmoothworkingofthe
organisation.

(iii)Coordinationisacontinuousprocess:Coordinationisa
continuouson-goingprocessasitisrequiredtillanorganisation
existsinordertointegratediverseactivitiesofdifferent
individual/groups.

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30 Thevariousreasonsmentionedintheaboveparagraphthat 4
havemademanagementsoimportantarestatedbelow: 5

(a)Managementincreasesefficiencyasitleadstoreductionin
costsduetooptimum utilisationofresources.

“Asaresultofherexcellentmanagerialcompetence,the
companyisabletoreducecostandincreaseproductivity.”

(b)Managementcreatesadynamicorganisationsothatitis
abletoincorporatethecorrespondingchangesinitsworking
withanychangeinitsbusinessenvironment.

“Thecompanybelongstoinfrastructuresector,whereinregular
amendmentsaremadeinthegovernmentregulationsand
policies.Sheholdsregularmeetingstoensurethatpeoplein
herdepartmentarenotonlyawareoftherelatedchangesbut
arealsoabletoadapttothesechangeseffectively.Thishelps
thecompanytomaintainitscompetitiveedge.”

(c)Managementhelpsinachievingpersonalobjectivesofthe
employeesintheorganisation.

“Shemotivatesandleadsherteam insuchamannerthat
individualmembersareabletoachievepersonalgoalswhile
contributingtotheoverallorganisationalobjective.”

(d)Managementhelpsinthedevelopmentofsocietyby
contributingeffectivelytowardsitinmultipleways.

“Intheprocessoffulfillingherdutiesforthegrowthofthe
organisation,shehelpsinprovidingcompetitiveservices,
adoptingnewtechnology,creatingmoreemployment
opportunitiesetc.forthegreatergoodofthepeopleatlarge.”

31 Thevariousfeaturesofmanagementhighlightedintheabove

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paragraphare: 5

(a)Managementisallpervasive.“Consideringthefactthatthe
activities------------------aspertheirindividualareasofinterest.”

(b)Managementisagoal-orientedprocess.“Amittakesupa
marketingjobinretail---------------employmenttospeciallyabled
persons.”

(c)Managementisacontinuousprocess.“Bothofthem haveto
perform aseriesof---------------insortingoutanemployee’s
problem.

(d)Managementisagroupactivity.“BothAmitandSumitmake
consciouseffortsto------------------needswhoworkunderthem.”

(e)Managementisanintangibleforce.“Theeffectoftheir
managementis----------------------orderlinessinitsfunctioning
ratherthanchaos.”

32 AmanwouldhavesatisfiedbothAhmadandAllybyexplaining
thefollowingfeaturesofmanagementasaprofession.

(i)Well-definedbodyofknowledge.Allprofessionsarebased
onawell-definedbodyofknowledgethatcanbeacquired
throughinstruction.

Managementtooisbasedonasystemicbodyofknowledge
comprisingwell-definedprinciples.Thisfeatureofprofessionis
presentinmanagement.

(ii)RestrictedEntry.Theentrytotheabovestatedprofessionis
restrictedthroughaprescribedqualification.Butthereisno
restrictiononanyonebeingappointedasamanagerinany
businessenterprise.So,presentlythisfeatureofprofessionis
notpresentinmanagement.

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(iii)Professionalassociation.LegalandMedicalprofessions 5
areaffiliatedtoaprofessionalassociationlikebarcounciland
medicalcouncilwhichregulatesentry,grantscertificateof
practiceandformulatesandenforcesacodeofconduct.There
areseveralassociationsofpractisingmanagersinindialikethe
AIMAthathaslaiddownacodeofconducttoregulatethe
activitiesoftheirmembers.Thereis,however,nocompulsion
formanagerstobemembersofsuchanassociation.So,
presentlythisfeatureofprofessionisnotpresentin
management.

(iv)Ethicalcodeofconduct.Legalandmedicalprofessionsare
boundbyacodeofconductwhichguidesthebehaviourofits
members.AIMAhasdevisedthecodeofconductforIndian
managersbutthereisnostatutorybackingforthiscode.So,
presentlythisfeatureofprofessionisnotpresentin
management.

(v)Servicemotive.Themotiveoflegalandmedicalprofession
istoservetheirclient’sinterestbyrenderingdedicatedand
committedservice.Thebasicpurposeofmanagementtohelp
theorganisationachieveitsgoalbyprovidinggoodquality
productsatreasonableprices,therebyservingthesociety,is
beingincreasinglyrecognised.So,presentlythisfeatureof
professionisnotfullypresentinmanagement.

Thisshowsthatmanagementdoesnotsatisfyallthecriteriaof
aprofession.So,Amanwouldhavebeenabletosatisfyboth
AhmadandAllybymakingthem understandthatManagement
isaprofessionbutnotafullfledgedoratrueprofession.

33 Inthiscase,thereislackofcoordinationamongdifferent
departments.Eachdepartmentisblamingtheothersfor
decliningsalesandprofitmargins.

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Thetopmanagementofthecompanyshouldtakethefollowing 5
steps:

(i)Everydepartmentshouldbeaskedtoworkforthecorporate
objectives.

(ii)Thereshouldbepropercommunicationamongthedifferent
departments.

(iii)Periodicmeetingsoftheheadofdifferentdepartments
shouldbeheldtoremoveanymisunderstandingandto
integratetheirefforts.

(iv)Theplansofvariousdepartmentsshouldbecoordinatedby
theCEO.

(v)conflictsamongdifferentdepartmentsmustberesolvedat
theearliest.

34 Objectives;

(i)organisationalobjectives:Anorganisationstrivestoachieve
multipleorganisationalobjectives,mainly:

(a)Survival:“itisabletoearnadequaterevenuestocover
costs”.

(b)Growth:“Itscapitalbase,numberofemployeesand
productionturnoverhasincreasedmanifoldsovertheyears”.

(c)Profit:“therateofprofitabilityofthebusinessisalso
creditable”.

(ii)Personalobjectives:Itrelatetotheneedsoftheemployees
oftheorganisationwhichmustbegivendueconsideration.

“Theemployeesofthecompanyarehappyandsatisfiedwith
theirremuneration,workingconditions,promotionpolicyetc.”

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(iii)Socialobjectives:Theyrelatetotakinginitiativesforthe
welfareofsocialgroupsandsocietyatlarge.
“Asapartofitsmoralobligation,thecompanyhastakenmany
initiativesforprovidingemploymenttospeciallyabledpersons
andpromotingliteracyinthevillagesadoptedbyit.”

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UNIT2-PRINCIPLESOFMANAGEMENT

1 Whichprincipleofmanagementaimsatsecuringtheloyaltyanddevotionofthe 1
employeesbygivingthem fairandjusttreatment?

A.Unityofdirection

B.Equity

C.Order

D.Unityofcommand

2 WhatisthepurposeofTimeStudy? 1

A.Toeliminateunnecessarymotionofworkers

B.Toestimatetheamountofrestintervals

C.Todeterminethefairdaywork

D.Todifferentiatebetweenefficientandinefficientworker

3 Whichofthefollowingstatementisrelatedtodivisionofwork 1

A.Resourcesshouldbedividedequallyamongdepartments

B.Workshouldbedividedintosmallerparts

C.Subordinatesshouldbedividedamongsuperiors

D.Departmentsshouldbedividedintosubsections

4 Whoisknownasthefatherofscientificmanagement 1

A.FW Taylor

B.HaroldKoontz

C.Gilbreth

D.HenryFayol

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5 Whichofthefollowingstatementsdescribes`Unityofdirection`thebest? 1

A.OneheadOneplan

B.Onesubordinateonesuperior

C.Oneworkoneperson

D.Onesuperioronedepartment

6 ______istheformallineofauthorityandcommunicationthatrunsfrom topto 1
bottom levelofmanagement

7 _________involvesacompletechangeinthementaloutlookandattitudeof 1
workersandmanagementfrom competitiontocooperation

8 ________isthetechniqueofscientificmanagementthatistheextensionof 1
principleofdivisionofworkandspecializationtotheshopfloor

9 Managementprinciplesaimsatinfluencingbehaviourofhumanbeing.Statethe 1
featureofmanagementprinciplehighlightedhere.

10 ThisprincipleofTaylorisanextensionofprincipleofharmonynotdiscord. 1
Nameit.

11 PrinciplesofFayolandTayloraremutuallycomplementary.Onebelievedthat
managementshouldnotonlyscientificallyselectthepersonandthework
assignedshouldalsosuithisphysicalandintellectualcapabilities,whileother
suggestedthattheworkcanbeperformedmoreefficientlyifdividedinto
specialisedtasks.IdentifyandexplaintheprinciplesofTaylorandFayolreferred
intheabovecase.

12 Taylor`stechniquesofmanagementareuniversallyapplicable.Doyouagree? 3
Givereasoninsupportofyouranswer.

13 TheDelhiGovernmentimposesbanonuse,storage,saleandmanufactureof 3
plasticafterconsideringitsadverseimpactonenvironmentandecology.Which
principleofFayolismentionedinabovedecision.Explain.

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14 FaiyaztheproductionmanagerofABCLtd.wantstoincreasethespeedof 3
packaging.Inordertoidentifyandeliminateneedlessandunproductive
movementsofworkersinpackaging,heinstalledthemoviecamerainthe
factory.

WhichtechniqueofTaylorisadoptedbyFaiyaz?

HowcanthetechniquehelpedABCLtd

15 Theapplicationofprinciplesofmanagementisdependentupontheprevailing 3
situationatparticularpointoftime.Stateandexplainthefeatureof
managementmentionedhere.

16 NameandexplainthetechniqueofTaylorwhichisthestrongestmotivatorfora 3
workertoreachstandardperformance.

17 GivethreeobjectivesofStandardisationofwork. 3

18 SGLtdisawellknowncompanymanufacturingwashingmachines.The 3

companyhasthepolicyofpayingproperattentiontothetrainingofthe

managers.Theorganisationteachesthevariousmanagementprinciplestothe

managerswheneverrequiredsothattheyapplythem andunderstandthe

practicalaspectsofbusinessthroughthem.Yearbyyeartheorganisationisable

toincreaseitsrevenuethisisbecausemangersareabletoeconomicallyusethe

fundsofthecompanyandincreasetheoutputofworkersthroughvarious

principlesofmanagement.Thecompanyhasdecidedtodonate10%ofits

earningtonearbyorphanage.

Identifythethreeimportanceofprinciplesofmanagementhighlightedinabove
casebyquotinglines.

19 Identifythenatureofprinciplesofmanagementhighlightedingivenstatements 3

1.Theydonotprovidereadymadesolutionsasbusinessenvironmentisever
changinganddynamic.

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2.Theyareappliedtoalltypesoforganisation,businessaswellasnon
business.

Theyaredevelopedthroughresearchworkonthebasisofexperienceof
manager.

20 Identifythesignificanceofprinciplesofmanagementhighlightedfrom the 3
followingstatement:

1.Managementprincipleshelpinthoughtfuldecisionmaking.Theyemphasis
logicratherthanblindfaith.

2.ProfessionalcoursessuchasBBA,MBAalsoteachtheseprinciplesaspartof
theircurriculum

Principlesofmanagementcanbemodifiedaccordingtochangestakeplacein
theenvironment

21 Satyam Ltdmanufacturescurtainclothes.Noticingit’spopularityinthemarket, 6
thecompanydecidedtomanufacturebedsheetsalso.Thedecisionwas
executedwithimmediateeffect.Butthecompanydidnotincreasetheworkforce
tothedesiredextent.Thecompanywantedtheexistingstafftomanagethe
workforsometime,byworkingovertime.Theresultwasthatontheonehand
thenewproductofthecompanyfailedtokeepitsholdonthemarketandonthe
otherhandduetooverworktheefficiencyoftheemployeesdeclined.Onseveral
occasionsitwasdiscoveredthatasubordinatewasgettinginstructionsfrom
twoormoremanagers.Managershadstartedgivingsimpleandeasyworkto
theirknownemployeesandcomplexanddifficultworktootheremployees.The
companywasnowignoringtherulescompletely.

Identifyandstatethosethreeprinciplesofmanagementthathavebeenignored
inthecasebyquotingthelines.

22 AnujGuptaandMangalaSharmaarebothqualifieddentistandgoodfriends. 6
Afterobtainingacertificateofpractice,theydecidedtopursueacareeroftheir
ownchoice.AnujGuptastartsadentalcarecentreinthecitywhereasMangala

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Sharmajoinsagovernmenthospital.Theymeetafteralongtimeinaparty.Anuj
GuptainvitesMangalaSharmatovisithisdentalcarecentreandsheacceptshis
invitation.Sheobservesathisclinicthatthereisfixedplaceforeverythingand
everyoneandtoolsandequipmentsarelyinginanorganisedmanner.Also,Anuj
GuptaalwaystendtoreplaceIwithWewhilehavingaconversationwiththestaff
members.LateronAnujGuptaalsoshareswithherthathealwaysdealswith
lazystaffsternlytosendthemessagethateveryoneisequalinhiseyes.Identify
andexplainthethreeprinciplesofmanagementwhichAnujGuptaisapplyingfor
successfulmanagementofhisdentalcarecentre.

23 KaranNathtookoverDNorthmotorcompanyfrom hisailingfatherthree 6
monthsago.Inthepastthecompanywasnotperformingwell.Karanwas
determinedtoimprovethecompany’sperformance.Heobservedthatthe
methodsofproductionaswellasselectionofemployeesinthecompanywere
notscientific.Hebelievedthattherewasonlyonebestmethodtomaximize
efficiency.Healsofeltthatoncemethodisdevelopedtheworkersofthe
companyshouldbetrainedtolearnthatbestmethod.

Heaskedtheproductionmanagertolearnthebestmethodandcarryoutthe
necessarytraining.Theproductionmanagerdevelopedthismethodandcarry
outnecessarytraining.Theproductionmanagerdevelopedthismethodusing
severalparametersrightfrom decidingthesequenceofoperations,placefor
men,machinesandrawmaterialstillthedeliveryoftheproducttothe
customers.Thismethodwas6implementedthroughouttheorganization.It
helpedinincreasingtheoutput,improvingthequalityandreducingthewastage.
Identifyandexplaintheprinciplesandtechniquesscientificmanagement
followedbytheproductionmanagerinabovecase.

24 Rishabhmanagingdirectorofanelectronicgoodsmanufacturingcompanyhas 6
beenexperiencingyeartoyearincreaseinrevenuesandnetprofit.Thereason
wasthatheensuredcompetitionisreplacedbycooperationandRishabhhas
alwaysbeenreceptivetowardsconstructiveemployeessuggestions.He
emphasizedonworkertrainingashefeltthatefficientemployeesshallproduce

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more.Thus,hedecidedtorewardworkersbypayingthem higherpayas
comparedtoinefficientones.

Identifyandexplaintheprincipleofmanagementandtechniqueofscientific
managementreferredinabovepara.

25 NewDelhiLtdisafamousserviceprovidingcompany.MrLakshayWadhwaisits 6
managingdirector.Hecontinuouslymotivatestheresearchanddevelopment
departmentthatanewandlatestmethodofdoingworkmustbeexplored.The
provisionhasbeenmadetogiverewardtothoseemployeeswhowillparticipate
inaparticularexploration.Healsobelievesthatthetwogroupsworkingin
managerialandnonmanagerialpostsaresimilartotwowheelsofan
organisationalvehicle.Ifthisvehicleistobedriveninarightwaythenboththe
wheelshouldbeproperlyaligned.Mr.Lakshayisasuccessfulleader.Amonghis
employeeshehasinstilledthefeelingthatnodecisionwillbetakenwithout
consultingthesubordinates.Toexcel,theothercompaniesinthisfieldisthe
mainmotiveofMrLakshay.Payingattentiontotrainingisthesecretofthe
company.

Identifythefourprinciplesofscientificmanagementhighlightedinaboveparaby
quotingthelines.

26 ApplicationLtdisengagedinmanufacturinganddistributionofhomeappliances 6
since1987.Ithasgoodnameinmarketasthecompanyisproducinggood
qualityappliances.Ithasseparatedepartmentsformanufacturing,finance,
sales,maintenanceservicesandtechnicalservicestoachievespecialization.

Sincetheareasofoperationsofthecompanyhaveincreasedandcustomers
havebecomemoredemandingthecompanydecidedtomodifytheexisting
principleofmanagementtomeetthechangingrequirementsofenvironment.

Stateandexplaintheprincipleofmanagementwhichthecompanywantsto
modifytomeetthechangingrequirements.

27 ConsolidatedconstructionsLtdhavenevergivenanyimportancetoemployees 6

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suggestions.Allemployeesofthecompanyconsiderthemselvessuperiorto
other.Theyneitherhelpanybodynorgethelpfrom anybody.Lastyear
Mr.GurpreetwasappointedasChiefmanagerofthecompany.HewasanMBA
from IIM Ahemdabadandalsosevenyearsexperienceofthesamepost.
Immediatelyaftertakingchargehedecidedtodealwithboththeproblemsofthe
company.Heconvenedthemeetingofalltheemployeesandsaid“Allthe
employeesarefreetogivetheirsuggestions.Besidestheonewhogivesthebest
suggestionwillberewarded.Inadditionheadvisedthem todiscardegoand
extendhelpineachotherswork.Wewillhavetogiveitshapeofthemovement.
Thosewhoparticipatedinthemovementwillbepromotedattheearliest.
Gurpreetprovedtobeagoodleader.

Identifyandexplainprinciplesdiscussedabovebyquotingthelines.

SuggestedAnswers: 1
1B 1
2C 1
3B 1
4A 1
5A 1
6 ScalarChain 1
7 Mentalrevolution 1
8 Functionalforemanship 1
9 Mainlybehavioral 1
10 Cooperationnotindividualism 3
11 Taylorprincipledevelopmentofeachandeverypersontohis

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greatestefficiencyandprosperity

Fayolprinciple:Divisionofwork

12 No,techniquesofscientificmanagementarenotuniversally 3
applicable

1.FunctionalForemanship:

Thistechniqueinsistonordersandinstructionsfrom eight
specialist.Thistechniqueisnotapplicableinorganizations
followingUnityofcommand.Moreoverthistechniqueisnot
applicableincaseofsmallsizedorganizations.

2.Differentialpiecewagesystem

Thistechniqueisnotapplicableintheorganizationsfollowing
principleofequityasthistechniquemakesprovisionforpaymentof
differentforsamejob.

13 Initativewithexplanation 3

14 Motionstudy 3

Motionstudycanhelpindetectingandeliminatingunproductive
movementsandcandeterminethebetterwayofdoingthejob

15 Contingent(withexplanation) 3

16 Differentialpiecewagesystem 3

17 1.Reductioninthegivenlineorproducttoafixedtypesizeand 3
characteristics.

2.Determinethestandardofperformanceofmenandmachine

3.Establishstandardofexcellenceandqualityinmaterial

18 1.Providingmanagerusefulinsightintoreality 3

Theorganisationteaches……..practicalaspectsofbusinessthrough
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them

2.Optimum utilizationofresources
Thisisbecausethemangers……..throughvariousprinciplesof
management

3.Fulfilingsocialresponsibilty

Thecompanyhasdecidedtodonate…….toanearbyorphanage 3
19 1.Managementprinciplesaregeneralguidelines 3
6
2.TheyhaveUniversalapplicability 6
3.Formedbypracticeandexperimentation 6
20 1.Providingmangerusefulinsighttoreality
2.Managementtraining,Educationandresearch
Meetingchangingenvironmentrequirement
21 1.Unityofcommand
2.Equity
3.Discipline
Withexplanation
22 1.Order
2.Espiritdecorps
3.Equity
Withexplanation
23 Principlesofscientificmanagementfollowedbyproduction
managerinabovecase:

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1.Sciencenottheruleofthumb

2.Developmentofeachandeverypersontohis/hergreatest
efficiencyandprosperity

Thetechniqueofscientificmanagementdiscussedinabovecaseis
`Methodstudy`

24 PrincipleofmanagementisInitiative 6

Techniqueofscientificmanagementdifferentialpiecewagesystem

Withtheirexplanation

25 1.Sciencenottheruleofthumb 6

Hecontinuouslymotivateshisresearchanddevelopmentdept.That
newandlatestmethodofdoingworkmustbeexplored

2.Harmonynotdiscord

Ifthisvehicleistobedriveninarightwaythenboththewheels
shouldbeproperlyaligned.

3.Cooperationnotindividualism

Amonghisemployeeshehasinstilledthefeelingthatnodecision
willbetakenwithoutconsultingthesubordinates

4.Developmentofeachandeverypersontohis/hergreatest
efficiencyandprosperity

Payingattentiontothetrainingisthesecretofthecompany.

26 Thecompanywantstomodifyexistingprincipleofcentralizationto 6
decentralization.Explanationindetail

27 1.Initative 6

Allemployeesarefreetogivetheirsuggestion.Besidesonewho
givethebestsuggestionwillberewarded

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2.Espiritdecorps
Inadditionheadvised……..eachotherwork

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UNIT3-BUSINESSENVIRONMENT

Q.No. Questions Marks

1 Businessenvironmentisagroupof……………….Powers. 1

(a)Specific 1
(b)General
(c)Internal
(d)Specificandgeneral
2

Whichoffollowingisnotincludedinspecialpowersofbusiness
environment?

(a)Technicalsituations 1
(b)Customers
(c)Suppliers
(d)Investors
3 Indicatewhetherthefollowingstatementsare‘True’or‘False’:

(i) Compositionoffamilyisanexampleofsocialenvironment.

(ii) MoresupplyintheeconomyisanexampleofSocial

environment.

4 Whichoffollowingisavailableontimewithhelpofstudyof 1

environment?

(a)Governmenthelp 1
(b)ForeignAid
(c)Warningsignal
(d)Material
5 ThestudyofEnvironmentmakesavailable………………….Resources.

(a)Costly
(b)Cheap
(c)Inferior

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(d)Useful 1
6 Whichoffollowingisundergoingquickchanges?

(a)Competition
(b)Fashion
(c)Technique
(d)Allofabove
7 ITChotelsmadeastudyofbusinessenvironmentandplannedtoopen 1
…………….inIndiaandAbroad.

(a)Factories 1
(b)Hotels
(c)Shops
(d)Offices
8 Withthehelpofstudyofbusinessenvironmentanorganisationcan
improveits…………..

(a)Present 1
(b)Future
(c)Presentandfuture
(d)Past
9 DeterminationofEconomicpoliciesisforthepurposeof
regulating……………

(a)Politicalenvironment 1
(b)Socialenvironment
(c)Legalenvironment
(d)Economicenvironment
10 UnderwhichenvironmentaleffectsIBM andCoca-colahadtoleave
India?

(a)Political
(b)Social

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(c)Economic 1
(d)Technical
11 Whichoffollowingisfactorofthesocialenvironmentofbusiness?

(a)Customs

(b)Standardofeducation

(c)StandardofLiving

(d)Alltheabove

12 Whichcomponentofbusinessenvironmentresultedintherelaxationof 1
banimposedonForeignDirectInvestment?

(a)EconomicEnvironment
(b)PoliticalEnvironment
(c)Socialenvironment
(d)Legalregulatoryenvironment.
13 Withtheintroductionofphotostatmachinesinthemarket,thecarbon 1
paperindustrywasadverselyaffected.Whichcomponentof
environmentwasresponsibleforit?

(a)Economic
(b)Political
(c)Technical
(d)Alltheabove
14 WhichoffollowingdealswiththeprocessofsimplificationofImport- 1
Export?

(a)Liberalisation 1
(b)Privatisation
(c)Liberalisationandprivatisation
(d)Globalisation
15 UnderIndustrialpolicytheroleof…………..hasbeendecided.

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(a)Publicsector 1
(b)Privatesector
(c)Publicsectorandprivatesector
(d)Government
16 TheIncomeandExpenditurepolicyofthegovernmentiscalled?

(a)Fiscalpolicy
(b)Industrialpolicy
(c)Tradepolicy
(d)Monetaryreforms
17 Price controlmeans thatthe companies willsellgoods on the 1
…………price.

(a)Government
(b)Market
(c)Printed
(d)Voluntary
18 AsaresultofeconomicReformsthesellermarkethasbeenreplacedby 1

(a)Buyermarket
(b)Foreignmarket
(c)Wholesalemarket
(d)Retailmarket

CASESTUDIES

Q. Questions Mark
No. s

19 Which component of business environment requires that 1
advertisements ofbabyfood mustnecessarilyinform the potential
buyersthatmother’smilkisbestforthebaby?

20 The governmentofIndia is seriously thinking ofallowing the oil 1

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marketingpublicsectorundertakingstofixtheirownpricesforpetrol
and diesel.Which economic reform is reason forthis change in
government’spolicy?

21 Mr.AjayaftercompletingMBAfrom USAcomestoIndiatostartanew 3
businessunderthebannerEcom CreationsLtd.Helaunchesanew
product in e-learning for Senior Secondary School students in
Commercestream,whichalreadyhasaestablishedmarketinUKand
USAbutnotinIndia.HisbusinessstartsflourishinginIndia.Now more
Indiancompaniesenteredintothemarketwithothersubjectsalso.

Identifyandquotethelinesfrom aboveparawhichhighlightthe
significanceofunderstandingbusinessenvironment.

22 JustafterdeclarationofLokSabhaElections2014results,theBombay 3
stockexchange’spriceindex(Sensex)roseby1000pointsinaday.
Identifytheenvironmentalfactorwhichledtothisrisegivingreason.
Alsoexplainanytwootherdimensionsofbusinessenvironment.

23 Thecourtpassedanorderthatallschoolsmusthavewaterpurifierfor 3
theschoolchildrenas

(i)Societyingeneralismoreconcernedaboutqualityoflife.

(ii) Innovativetechniquesarebeingdevelopedtomanufacturewater
purifieratcompetitiverates.

(iii)Incomesarerisingandchildrenathomearealsodrinkingpurified
water.

(iv)Thegovernmentisalsoshowingpositiveattitudetowardsthewater
purifierbusiness.

Identifythedifferentdimensionsofbusinessenvironmentbyquoting
from theabovedetails.

24 Itiscommonnow toseeCD-ROM‟s,computerizedinformationkiosks,3

40/190

andInternet/WordWideWebmultimediapageshighlightingthevirtues
of products.‟ Name the dimension of the business environment
highlightedbythisstatement.

25 Itistheprocessbywhichgovernmentcontrolovertheindustryisbeing 1
loosened.Givetheterm towhichthisstatementistryingtoindicate.

26 Duetoentryofforeignfirms,competitionforIndianfirmshasincreased,1
especiallyinserviceindustries.Namesuchserviceindustries.

27 TheCourtpassedanordertobanpolythenebagsasthebagsare 4
creatingmanyenvironmentalproblemswhichaffectthelifeofpeoplein
generalandsocietyingeneralismoreconcernedaboutqualityoflife.

TheGovernmentdecidedtogivesubsidytojuteindustrytopromotethis
business.

Innovativetechniquesarebeingdevelopedtomanufacturejutebagsat
lowrates.

Incomesarerisingandpeoplecanaffordtobuythesebags.

IdentifythedifferentdimensionsofBusinessEnvironmentbyquoting
thelinesfrom theaboveparticulars.

28 KapilSharmaisworkingastheCountryHeadofacompanywhichowns 4
achainofmallsunderthenameof“Virtuoso”inthevariouspartsof
India.Throughananalysisreportofthebusinessenvironment,ithas
beenbroughttohisnoticethatinthecomingyears,shoppingatamall
willnotbeanecessityforthebuyersaspurchasescanbemadeonline
from anywhere and atanytime with ease and atthe consumer’s
convenience.Hence,malls willhave to provide much more than
shopping to be able to attractcustomers.So,he recommendsthat
“Virtuoso”malls should to be restructured into recreation centres,
offeringmorespacestosocialize,hosteventsandconcerts,andprovide
ampleFoodandBeveragesoptions.

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Consequently the share ofentertainmentsegmentand Beverages
segmentintheoverallmallspaceisincreasedby20%.Asaresult,the
companygainsenormouslybygettingthefirstmoveradvantage.

Incontextoftheabovecase:

1.Definetheterm “BusinessEnvironment”.
2. Explaintheterms“Threats”and“Opportunities”byquotinglines

from
theparagraph.

28 “ZeroDefectZeroEffect”(ZED)isaslogancoinedbythePrimeMinister 4
ofIndia,NarendraModiwithreferencetotheMakeinIndiainitiative
launched bythe government.The slogan reflects the efficiencyof
productionprocesses,i.e.theproductshavenodefectsandtheprocess
throughwhichtheproductismadehaszeroadverseenvironmentaland
ecological effects. The Zed model aims to make India the
manufacturinghuboftheworldandpreventtheproductsdevelopedin
Indiafrom beingrejectedbytheglobalmarket.Moreover,beforethe
initiativewaslaunched,thelimitsofforeigndirectinvestmentinvarious
sectors had been relaxed.The application forlicences was made
availableonlineandthevalidityoflicenceswasincreasedtothreeyears.
Various other norms and procedures were also relaxed by the
government.

In thelightoftheaboveparagraph,identifyand explain themajor
componentofNew EconomicPolicyof1991thatarebeingreferredto
byquotinglinesfrom theparagraph.

29 Overtheyears,e-businessinourcountryhaswitnessedtremendous 5
growthduetoseveralreasons.Thereissignificantimprovementinthe
Information Technology infrastructure overthe lastdecade as the
Government has taken important steps in high-speed Internet
connectivity.Asaresult,thebroadbandnetworkshavenotonlybecome

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betterbutalsomoreaffordable.Additionally,Governmentistryingto
makeruralIndiaconnectedthroughbroadband–agreatpossibilityfore
-businessto expand theretailmarketbyreaching outto themost
remoteruralcustomer.Anothercatalyststrengtheningthee-business
segmentisthecountry’sfavourabledemography.Ithasmorethan50%
ofitspopulationbelowtheageof25andmorethan65%belowtheage
of35.Itisexpectedthat,intheyear2020,theaverageageofanIndian
willbe29years,comparedto 37forChinaand48forJapan,this
promises for phenomenalincrease in e-business.Moreover,the
penetrationofthesmartphoneinalargesectionofthepopulationhas
aptlyaddressedtheproblem ofcomputeilliteracy.Notwithstandingthe
factthatconsumersalsoprefere-businessduetomultiplefactorslike
convenience,timeetc.

Identifyandexplainthevariousdimensionsofbusinessenvironment
beingreferredtointheabovecase.

30 Beni,aftercompleting herMBA,took up a job in a multinational 5
companynamed“Fortio”.Thecompanywaspayinggoodsalaryand
perkstoitsemployees.Thewageswerewithinthepayingcapacityof
thecompanythatprovidedtheemployeesareasonablestandardof
living.Thecompanyalsohadagoodwork-cultureandthebehavioursof
superiorswereverygoodtowardstheirsubordinates.Beniwasvery
happyinthisorganization,butduetolongworkinghoursshedidnot
havetimetocookhermeals.Shehadtodependonoutsidefound,which
wasdeterioratingherhealth.

Sheobservedthatthisproblem wasfacedbymanyofhercolleagues,
notonlyinhercompanybutalsoinmanyothercompanies.Thiswas
because ofincrease in the numberofworking women and non-
availabilityofhygienichome-cookedfood.Sheidentifiedthisasagreat
opportunityanddecidedtogiveupherjobtosupplypackagedhome-

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cookedfoodtoofficegoersatareasonableprice.Attheendoftheday
shealsodistributingtheleft-overfoodinthenearbynight-shelters.

(i) State the dimension of business environment being
discussedabove.

(ii)State the principle ofmanagementbeing followed by
“Fortio”.

(iii)Identify any two values being communicated by the
companytothesocietyintheabovecase.

31 Nakul,amanagerofZycoLtd.alwaystakesintoaccountthechanges 5
taking place in business environmentwhile determining plans.He
acceptschangesreadilyandgivesusefulsuggestionstohissuperior,
which resultsin reduction ofcosts.Asa result,company’sprofits
increase.Nakulenjoyscordialrelationswithhisco-workersandmakes
plansinconsultationwithhisteam toachieveorganizationalgoals.

(i) Whichcharacteristicofmanagementishighlightedin
theabovelines?

(ii) Identifyandstateanytwoprinciplesofmanagement
followedbyZycoLtd.

(iii) GiveanytwobenefitswhichZycoLtd.getbytakinginto
accountthe

changestakingplaceinbusinessenvironment,quotingthe
linesfrom theabovepara.

(iv) State any one value which Nakul wants to
communicatetothesociety.

32 Itisinterestingtoknow thatthemenuitemsofthemultinationalfood 4
chainsarecustomizedtosuitthegeneralpalatesofthelocalpeoplein
theregion.WhenMcDonald’sstarteditsbusinessinIndiaintheyear
1996,the companywentthrough a complete localization strategy.
McDonald’schangeditsproductmenutoaccommodatethevegetable

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burgergiventhelargevegetarianpopulation.Italsoaltereditsstore
designandevenreducedtheproductpricebyclosetofifteenpercent.
Also,the “McAlooTikkiburger”is notavailable anywhere butin the
IndianoutletsofMcDonalds.

Identifytherelevantfeatureofbusinessenvironmentbeingdiscussed
above.

33 Eco-friendlyproductsaregainingpowerastheconsumers‟awareness 4
aboutenvironmentalissueshasincreasedovertheyearsandtheyare
consciousaboutchoosingproductsthatdonothaveadverseeffectson
the environment.Theyare now more conscious aboutthe carbon
emissionandclimatechangeeffects,andwantthemselvestobe„seen‟
as a green advocate among theirpeers.In such a scenario,ithas
becomeachallengeforthecompaniesastheyhavetonotonlymeetthe
needsoftheconsumersbutalsoensurethattheirproductsaresafeand
environmentfriendly.Ataresult,thereisgrowingneedforbetterand
advancedtechnologiestoworksasacatalystinthisregard.

(i) Identifytherelevantfeatureofbusinessenvironmentbeing
discussedabove.

(ii) Describe briefly any three points which highlight the
importanceof
businessenvironmentanditsunderstandingbymanagers.

34 Ultra PaintCo.which ismanufacturing paintshasbeen enjoying a 5
prominentmarketpositionasitmanufacturedbestqualitypaints,made
timelypaymentoftaxestogovernment.Itassembledvariousinputslike
finance,machines,raw materials,etc.from itsenvironment.Butsince
lastyearithasbeendumpingitsuntreatedpoisonouswasteontheriver
bankwhichhascreatedmanyhealthproblemsforthepeople.Asa
result,thecourtpassedanordertosealthemanufacturingunitofthe
company.

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(i) State the importance ofbusiness environmenthighlighted
quotingthelinefrom theabovecase.

(ii) Identify any two dimensions of business environment
mentionedintheabovecasebyquotinglinesfrom it.

(iii) Stateanytwo valueswhich havebeen overlooked bythe
company?

35 Philips,acompanymanufacturinglightbulbsincurredheavyexpenditure 5
onscientificResearchandDevelopmentanddiscoveredatechnology
thatmadeitpossibletoproduceanenergyefficientlightbulbthatlasts
atleasttwentytimesaslongasastandardbulb.Itresultedingrowth
andprofitabilityofthecompany.

(i) Identifyandstatethedimensionofbusinessenvironment
mentioned
above.

(ii) State the importance ofbusiness environmentmentioned
aboveby
quotingthelines.

(iii) State any one value which the company wants to
communicatetothesociety.

36 DiscoLtd.manufacturesfashionableanddesignerclothes.Recentlyit 6
findsthatthedemandforitsproductshasbeendeclining.Aftermarket
researchitwasdiscoveredthatfashionandtastesoftheconsumersis
changing ata fastpace.Customers‟demand is increasing.New
competitorshaveenteredthemarketwithnewdesigns.Itisverydifficult
forthecompanytopredictfuturehappenings.Also,itisdifficulttoknow
the extentofthe relative impactofthe social,economic,political,
technologicalorlegalfactorsondecreaseindemandofitsproductsin
themarket.

Ameetingwasheldinwhichmanagersfrom differentfunctionallevels
heading Production,Marketing,Finance,etc.,for example,Chief

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OperatingOfficer,ChiefFinanceOfficer,VicePresident(Marketing)were
presentto discuss how to dealwith the situation.Aftera long
discussion,itwasdecidedthattheywouldstudyandanalyzethemarket
firstto identifycustomertastesand fashion and then manufacture
garmentsaccordingly.Itwasalsodecidedtoincreaseexpenditureon
advertising,after-salesservices,etc.

(i) Identifyanytwofeaturesofbusinessenvironmentbyquoting
thelinesfrom theabovecase.

(ii) Atwhichlevelofmanagementthemeetingofmanagersof
DiscoLtd.washeld?

(iii) Identifyanytwo impactofgovernmentpolicychangeson
business,
quotinglinesfrom theabovecase.

(iv) State the importance ofunderstanding ofenvironmentby
businessmanagersinthelightoftheabovepara.

37 TheorganicfoodmarketinIndiaisgrowat25-30percentwhichreflects 6
aclearshiftinconsumertastesandpreferences.Thecurrentgrowthin
theorganicfoodmarketisdrivenbymultiplicityoffactorslikerising
health consciousness,changing lifestyles,increase in disposable
incomeandgrowingavailabilityoforganicfoodproductsinshopping
malls,retailoutletsandonline.

Incontextoftheabovecase:

(i) Identifyand explain the featuresofbusinessenvironment
beingreferredtohere.

(ii) Byquotingphrasesfrom theparagraphidentifythevarious
componentsofgeneralforceswhichhaveledtoagrowthin
theorganicfoodmarket.

38 Anurag,aspirestoworkwithasociallyandenvironmentallycommitted 6
companyashedoesnotwanttoworkjustformonetarybenefitsbut
alsothebrandvalueofthecompanyheworksforinthesocietymatters

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alottohim.Therefore,hehasjoinedCerebraIntegratedTechnologiesa
Bengaluru-based Infotech company.The company has builtIndia’s
largeste-wasterecyclingplant.Thecompanystrivestobeoneofthe
leadingplayersinthisbusinesswhichhashugepotentialnotonlyin
terms ofgenerating huge revenues and profits butalso wants to
contribute to the environment issues that have become crucial
worldwide.Thecompanyseesbigbusinessinthemountainsofe-waste
inBengaluruwhichproduces2,00,000tonnesofe-wasteayear.The
companyplanstomakeitsmillionsbyextractingmetalssuchasgold
andplatinum from thee-wastepilingupinthecity.Asamobilephone,
forexample,ismadeupofacombinationofrareearthandprecious
metals:itcontains250mgofsilver,24mgofgoldandninemgof
palladium whilealaptophas1,000mgofsilver,220mgofgoldand500
gramsofcopper.

Tostartthebusiness,thecompanyhasobtainedalicencefrom KSPCB
(KarnatakaStatePollutionControlBoard).

Incontextoftheabovecase:

(i) Identify the various dimensions ofbusiness environment
being
referredtobyquotinglinesform theparagraph.

(ii) Listanytwovalueswhichthecompanywantstoconveyto
thesociety..

39 Aftercompeting hiseducation,Arun joinshisfatherin theirfamily 6
businessofmanufacturingcookware.Asabusinessman,hisfatheris
rigidinhisapproachandhasfixedideasaboutvariousissues.Hetends
tomaintainadistancefrom thefactoryworkers.

However,Arun ismore receptive to the needsofthe workersand
doesn‟tseem tobelieveinanyclass-differences.Hebelievesthatthe
prosperityoftheirbusinessgreatlydependsupontheprosperityoftheir

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workersandviceversa.Atthesametime,hehasagoodunderstanding
ofthebusinessenvironment.Therefore,heintroducesanew rangeof
green pans thatprovide a healthy cooking surface,as they are
manufacturedwithallceramicorsiliconcoatingandareconsidered
saferthanthetraditionalpetroleum basednonsticksurfaceswhichmay
containtoxicsubstances.Although,thenew cookwarerangeishighly
prices,heexpectsareadymarketforitasboththepurchasingpowerof
peopleandtheirpreferenceforbetterqualityproductshasincreased
overtheyears.

Incontextoftheabovecase:

1.Identifythenatureofmanagementwhichisbeingreflected
inthe

differentstylesofmanagementinpracticeadoptedbyArun
andhisfather.

2.Name and explain the related principle ofscientific
management.

3.Statetherelateddimensionsofbusinessenvironment.

40 Continuousandcomprehensiveevaluationisaprocessofassessment,6
mandatedbytherightto EducationAct,ofIndia.Thisapproachto
assessmenthasbeenintroducedbystategovernmentsinIndia,aswell
asbytheCentralBoard ofSecondaryEducation in India.With the
introductionof(CCE)system ineducationthereisgreaterfocuson
projectbasedlearning.Asaresult,besidestimeandeffortthestudents
arewillingtoinvestmoneytoenhancethevisualappealoftheirproject
filessoastoscorehighermarks.Inordertocashontheopportunity
Rishabhhasstartedasmallbusinessunitto manufacturedifferent
kindsofdecorativematerialsfortheprojectfiles.Hehasemployeda
team offourcreativedesignersfordevelopingtheinnovativematerial
withthehelpoflatesttechnology.However,hehasaprejudiceagainst

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womenandthereforepayslesssalarytothem ascomparedtothemale
staffforequalwork.

Inthecontextoftheabovecase:

1.NameanytwofunctionsofmanagementthatRishabhwill
haveto

perform inordertomanagehisbusinesssuccessfully.

2.Nameandexplaintheprincipleofmanagementwhichis
beingviolated

byRishabh.

3. Identify the related dimensions of the business
environment.

41 GovernmentofIndiaisseriouslythinkingtoallow oilmarketingpublic 3
sector,undertakingtofixtheirownpriceforpetrolanddiesel.

1.Name the economicreform related to thisdecision of
government.

2.Nameothertworeformsrecommendedinnew economic
policy.

42 Recentlymanycompanieshaveplannedforsignificantinvestmentin 6
organizesretailing in India.Variousfactorswhich haveencouraged
companiestotakethesedecisionsarecustomerincomeisincreasing,
riseinstandardoflivingofpeople.Peoplearereadytopayhighpricefor
qualitygoods,governmentpolicyofliberalizationregardingMNCentry
andFDI,etc.

1.Explainbrieflychangesinbusinessenvironmentunderdifferent
heads
that have facilitated the companies decision to plan
significantinvestmentinretailing.

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