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CBSE
ANNUAL PAPER - 2000
BUSINESS
STUDIES
(SET-I)
Time allowed : 3
Hours
M.M. :
100
General Instructions :
(iii) Marks are indicated against
each question.
(iv) Answers should be brief and
to the point. |
|
PART-I
(PRINCIPLES AND
FUNCTIONS OF MANAGEMENT) |
Q.1 |
Enumerate any two features of functional organisation.
(2) |
Ans. |
Two features of
functional organisation : (i) The entire organisational
activities are divided into specified functions, such as operations,
finance, marketing, personnel relation etc.
(ii) Each functional area is put
under the charge of a functional specialists. The specialist has the
authority or right to give orders regarding his function wheresoever
that function is performed in the enterprise. |
Q.2 |
Define the term 'supervision.' (2) |
Ans. |
According to Vitels,
" Supervision refers to direct and immediate guidance and
control of subordinates in the performance of their tasks."
|
Q.3. |
State the principle of 'Esprit de Corps.'
(3) |
Ans. |
Esprit de Corps :
Since 'union is strength', the management should create a team sprit
among the employees. Only when all the personnel pull together as a
team, there is scope for realising the objectives of the concern.
Harmony and unity of the staff of a concern is a great source of
strength to the undertaking. The management should not follow the
policy of 'divide and rule' and it should strive to maintain unity
among the staff. If there are any differences or misunderstandings
or symptoms of distrust, the management should take timely steps to
eliminate them. |
Q.4. |
Explain, in brief any three characteristics of an ideal plan.
(3) |
Ans. |
Three characteristics
of an ideal plan : 1. The plan should be simple : A good plan to be
effective should be simple to be understood and worked upon by
different individuals and groups.
2. The plan should be specific rather than general : The
more explicit it is, less chance there is for it to be
misinterpreted. Objectives and goals should be clearly defined. The
means for carrying out the plan should also be indicated.
3. The plan should be logical and practical : The more
fact it is based on, the better it is. If facts are not available,
then reasonable assumptions must be made. |
Q.5. |
"Planning restricts creativity." Explain in about
sixty words.(3) |
Ans. |
Planning implies
strict adherence to predetermined policies, procedures and
programmes. This restricts individual's freedom, initiative and
desire for creativity. |
Q.6. |
Why is 'Line and Staff organisation' considered better than
'Line organisation' ? (3) |
Ans. |
Line and staff
organisation is an improvement over the line organisation as is
discussed below : 1. Relief to line executives : Staff executives look
after complicated problems of their respective areas. As such, line
executives are relieved of matters of technical nature.
2. Expert advice : Line executives and the enterprise as
a whole get the benefit of expert advice of staff
executives.
3. Better co-ordination : The line and staff
organisation provides for better co-ordination us the organisation
as the staff provides expert advice and the line officers put them
into action. |
Q.7. |
Distinguish between 'Motion Study' and 'Time Study'. On the
basis of : (4) (a)
meaning, and (b) purpose. |
Ans. |
Difference between
'Motion Study' and 'Time Study'. |
|
Basis of Distinction
|
Motion Study
|
Time Study
|
1.Meaning |
It is a technique which involves close observation
of the movements of the body and limbs required to
perform a Job. |
It is a technique which is used to measure the
time may be taken by a workman of reasonable skills and
ability to perform various elements of the tasks in a
Job. |
2.
Purpose |
Its
purpose is to detect and eliminate wasteful motions and
determine the best way of doing a job. |
Its
purpose is to determine time normally required to
perform a certain Job and a fair day's work for the
workman. |
|
Q.8. |
The directors of Narmada Ltd., an organisation manufacturing
computers have asked their marketing manager to achieve a target
sale of 100 computers per day. The marketing manager has delegated
the task to his deputy sales managers working under him. The deputy
sales managers could not achieve the targets. Is the marketing
manager responsible for the failure of his deputy sales managers ?
Explain, in brief, the relevant principle in support of your answer.
(5) |
Ans. |
In this situation the
marketing manager is responsible as per Principle of Absolute
Responsibility. This principle states that by delegating work to
subordinate, a manager cannot escape the responsibility for the
successful performance of delegated duties. He remains ultimately
responsible for the activities of his subordinates and cannot
dissociate himself for their acts. A general manager while arranging
the work of the organization assigns jobs to various individuals and
departments but remains ultimately responsible for whatever happens
in the organisation. |
Q.9. |
Describe, in brief, the various steps involved in the process
of staffing. (5) |
Ans. |
Steps
in the Staff Process:
The various steps or elements of
the staffing process are:
1.
Manpower planning : The first step in the staffing process
is assessing the present manpower inventory and determining the
present and future manpower requirement of the organisation both in
terms of quantity and quality.
2. Recruitment and Selection : The next step is
recruitment and selection. The process of identification of
different sources of personnel is known as recruitment. According to
Edwin B. Flippo, "Recruitment is the process of searching for
prospective employees and stimulating them to apply for jobs in the
organisation. "Selection is the process of choosing the best
candidates to fill the specific Jobs of the organisation.
3. Placement : Placement involves putting the right man
at the right Job after considering his ability and aptitude so as to
get the maximum out of him.
4. Training : Training is an organised activity for
increasing the knowledge and skills of people for a definite
purpose. The purpose of training is to achieve a change in the
behaviour of those trained and to enable them to do their jobs in a
better way.
5. Induction or orientation : It is the process which is
concerned with introducing or orienting a new employee to the
organisation and its policies procedures and rules so that he can
become familiar with the organisation and fellow employees at the
earliest.
6. Performance appraisal : Performance appraisal or
merit rating is the systematic evaluation of the individual with
respect to his performance on the job and his potential for
development. It is concerned with determining the differences among
the employees working in the organisation. |
Q.10. |
"Control does not require any process." Comment.(5) |
Ans. |
"Control does not
require any process." : This statement is not correct. For
control there is a need of control process. Controlling in the
process through which managers assure that the actual activities
confirm to the planned activities
Control Process : Control process is made of three
phases or elements which are a ways present :
(i) Determination of standard performance. Standard is a
criterion against which actual performance is measured. Fixation of
standard is the first step in the process of control. in other words
before control can be exercised, things must be planned so that -
planned performance can be compared with the actual performance. The
standards for this purpose must be set in tangible units so that
outcome is in clear cut results.
(ii) Comparison of actual and standard performance : This
is the second step in the process of control. The comparison of
actual with standard performance may reveal some differences between
the two. These differences of discrepancies should be analysed
according to the reasons and responsibility of this may be assigned
to persons who should be made accountable for these durations from
the standard performance. Where, however, standards are not
tangible, measurement of variations between planned and actual
performances may bot be so easy.
(iii) Corrective action : This is the last stage in the
control process. The reasons for the difference between standard and
actual results should be put into two categories - controllable and
uncontrollable. Uncontrollable factors are those which are not
within the control of management e.g., rise in market prices of raw
material. Controllable reasons are those which arise because of the
inefficiency of the staff. Remedial or corrective action should be
related to these controllable factors so that recurrence is avoided
in future. In brief remedial action is meant to improve performances
in future. |
Q.11. |
"Management is a profession like medical or legal
profession." Do you agree with this statement ? Give reasons in
support of your answer. (7) |
Ans. |
No, I do not agree
with the view that management is a profession like medical or legal
profession because it is not obligatory for managers to get
registered with any profession body. It has neither been able to
restrict entry of non-professional into managerial jobs. Further,
managers are also not subject to any formal professional code of
conduct enforceable by any regulatory authority like the Bar council
of India or Medical council of India. Unlike, other profession
managers do not require any minimum qualifications.
|
Q.12. |
Explain the term 'leadership.' Explain briefly the qualities
of a good leader. (8) |
Ans. |
Leadership is the process of
influencing the behaviour of the people. Leaders are the moving
spirits and guiding stars of inspiration to the followers. A leader
interprets the objectives of the business, suggests course of action
and guide people to achieve the set of objectives.
Koontz and O'Donnell have defined
leadership as the ability to exert interpersonal influence towards
the achievement of certain goals. Since managers get things does
through people, their success depends to a considerably extent upon
their ability to provide leader ship." It appears therefore
that every manager must attain the qualities of a leader.
Qualities of a Good Leader : - Some of the important
qualities of an effective leader are as under :
1. Intelligence : Leaders generally have somewhat higher
level of intelligence than the average people. Intelligence is
generally expressed in terms of mental ability to think
scientifically, and analyse accurately the problems before a
person.
2. Self - Confidence : - A good leader must have
self-confidence based on self-knowledge. This will enable him to win
confidence of others.
3. Physical Features : Physical characteristics and
level of maturity determine personality of an individual which is an
important factor in determining success of leadership. Physique,
health and appearance of an individual are important for leadership
to some extent.
4. Good Judgement : A good leader must have wisdom to
look ahead into the future and ability to make good
judgement.
5. Balance : The leader should be rational and objective
in his approach. He should be free from bias prejudice and
pre-conceived notions. Only then he would be able to decide issues
on their merit.
6. Communicating skill : The leader should be good it
communicating ideas, feelings, decisions, orders, etc. He should be
a good and effective speaker.
7. Ability to guide : The leader should help his
subordinates to learn.
8. Sociability : The leader should show keen interest in
his subordinates. He should try to meet them often and encourage
them to discuss their problems and difficulties with him. He should
be friendly, helpful and easily accessible to to his subordinates.
|
|
PART - B (FUNCTIONAL MANAGEMENT) |
Q.13. |
Enumerate any two activities of personnel
management. |
Ans. |
(i)Selection of
employees (a) Determination of manpower requirements, (b)
preparation of job description, (c) job analysis, (d) selection of
the nature and sources of requirement, (e) employees selection, (f)
induction and follow up. |
Q.14. |
What is "marketing management" ?
(2) |
Ans. |
According to Philip
Kotler, "Marketing management is the analysis, planning,
implementation and control of programmes designed to create, build,
maintain mutually beneficial exchanges and relationships with target
markets for the purpose of achieving organizational objectives.
"Marketing management deals with planning, organizing,
directing and controlling the activities related to the marketing of
goods and services to satisfy the customers' needs.
|
Q.15. |
How can internal sources of recruitment be better than
external sources of recruitment ? Give three reason in support of
your answer ? (3) |
Ans. |
Due to the following
reasons internal sources of recruitment is better than external
source of recruitment :
1. Filling vacancies for higher
jobs by promoting employees from within the organisation helps to
motivate and improve the morale of the employees. This induces them
to work more sincerely.
2. Internal recruitment helps to
minimise labour turnover and absenteeism. People wait for promotion
and the work-force is more satisfied.
3. It is a cheaper source of
recruitment. Full information about the candidates is already
available. Time and money need not be spent on advertising of
vacancies, tests and interviews, checking references,
etc. |
Q.16. |
There are major decisions which an organisation has to take in
respect of financial management. Enumerate and explain, in brief,
these decisions. (3) |
Ans. |
Three major decisions
which an organisation has to take in respect of financial management
:
1. Investment decisions : The financial manager has to
decide about the investment of funds in various business activities.
2. Financing Decisions : these relate to raising of
funds. The funds are available from various sources and for varying
periods of time. The Finance Manager is required to obtain a
balanced capital structure for the company.
3. Dividend Decisions : Such decisions are related to
dividend policy of the company. The finance manager has to decide
whether the company should distribute all profits or retain them,
distribute a portion and retain the balance. |
Q.17. |
"Both under - capitalisation and over-capitalisation are
evils, but under-capitalisation is a lesser evil. "Do you agree
with this statement ? Give reasons for your answer ?
(3) |
Ans. |
Yes,I am agree with
this statement that both under capitalisation and over-
capitalisation are evils, but under - capitalisation is a lesser
evil.
As we know that over -
capitalisation can prove more dangerous to the company, the
shareholders and the society than under capitalisation. It can be
remedied only after the shareholders have paid a high cost in the
form of sacrificing their interest in the company or bringing more
does of capital. This is done by re-organisation of the concern and
the creditors also may suffer. But in the case of under
-capitalisation the shareholders and the society share in the
increased prosperity of the company though it accelerates
competition on the part of business rivals, discontentment of
employees, and the idea of being exploited on the part of consumers.
Thus it may be concluded that
under-capitalisation is the lesser evil through both are bad.
|
Q.18. |
Distinguish between 'marketing' and 'selling' on the basis of
: (3) (a)
Meaning, (b) Objective, and (c) Scope.
|
Ans. |
(a) Meaning :
According to Cundiff and Still, "Marketing is the business
process by which products are matched with the markets and through
which transfers of ownership are effected. "Matching products
with the market means determining the requirements of potential
customers and suppling the products which meet their requirements.
Selling is simply a part of the marketing process. Selling involves
the transfer of goods from the producer to the customers.
(b) Objective : Marketing
concentrates on the satisfaction of the customer, whereas selling
attaches more importance to increasing the sales volume. Marketing
is more concerned with external things, selling is concerned with
the internal improvements. Marketing aims at maximisation of
Customer's satisfaction, while selling aims at maximisation of
profits.
(c) Scope: Marketing involves the
design of the products acceptable to customers and transfer of
ownership between the sellers and buyers. But selling simply
involves obtaining orders from customers and supplying them the
products. It is concerned with the sale of goods already produced.
|
Q.19. |
Which of the methods of wage payment - Time - rate or Piece
rate - is suitable under the following circumstances ? Give reasons
:
(a)
Where units of output can be measured.
(b)
Where quality is significant.
(c)
Where there is no clear relationship between effort and
output
(d)
Where work flow is regular. |
Ans. |
(a) Piece - rate
method of wage payment is suitable as this method differentiates
between efficient and non-efficient workers and motivate them.
(b) Time-rate method is more
suitable because the workers are not in a hurry to complete their
work to get more wages.
(c) Where there is no close
relationship between effort and output, time rate system of wage
payment is suitable because under this system workers are paid their
wages on the basis of the time spend by them on a job irrespective
of the quantity of output. |
Q.20. |
A newly appointed personnel manager is of the view that there
is no need for training the workers. Do you agree with his views ?
Give reasons in support of your answer.
(5) |
Ans. |
No, I am not agree
with his views ( Personnel Manager). Training is the act of
increasing the knowledge and skills of an employee for performing a
particular Job. Training is mainly Job oriented, it aims at
maintaining and improving current Job performance Training is needed
to achieve the following purposes :
Need
1. Newly recruited employees
require training so as to perform their tasks effectively.
Instruction, guidance, coaching help them to handle Jobs
competently, without any wastage.
2. Training is necessary to
prepare existing employees for higher level Jobs (Promotion).
3. Existing employees require
training so as to keep abreast of the latest development in Job
operations.
4. Training is necessary when a
person moves from one Job to another (transfer).
5. Training is needed to bridge
the gap between what the employee has and what the Job demands.
Training is needed to make employees more productive and useful in
the long run. |
Q.21. |
You are the finance manager of a newly established company.
The directors have asked you to determine the amount of working
capital requirements for the company. State any five factors that
you would take into consideration while determining the amount of
working capital requirements for the company.
(5) |
Ans. |
In order to determine
the working capital requirements of a newly established company,
careful consideration should be given to the following factors :
(i)
Nature and Volume of business : The nature and volume
of business are important factors in affecting working Capital. For
example, public utility services like transport concern, electricity
undertaking where much of the investment is in the fixed form,
require less amount of working Capital. On the other hand, trading
or manufacturing concerns have to invest large amount in raw
materials, wages, etc. hence they require a large amount of working
capital.
(ii) Production Cycle :Longer the process of production,
higher will be the amount of working capital required. Hence efforts
should be made to have more working capital.
(iii) Seasonality of Production : Industries, which produce
and sell seasonal goods, require large working capital than
industries with regular production and sales.
(iv) Rapidity of Turnover : Business units which sell
their products quickly such as newspapers, retail shops, bakeries
etc. require a lesser amount of working capital.
(v) Terms of Purchase and Sale : Undertakings which
procure materials on credit and sell finished goods on cash require
less working capital. |
Q.22. |
You are the advertising manager of an organisation
manufacturing toys. Which medium would you choose for advertising
your product ? Give reasons for your
answer.(5) |
Ans. |
As an Advertising
Manager of an organisation manufacturing toys, I would recommend
Television advertising because of the following advantages over
other media :
1. Children like to watch their
programmes like Phylwari Bachhon Ki, Cartoon films like Jungle Book,
Batman, Spiderman, Superman, etc. Advertising for toys can be given
before the commencement of such programmes or in between.
2. T.V. advertising will catch
quick attention of the viewing children and leave a lasting impact
on them.
3. It combines sight, sound and
motion effects.
4. It appeals a wide range
covering viewers nation-wide and will create huge demand for toys.
IT will appeal to children of all ages, education and economic
status.
5. Cost per unit of product will
be reduced due to large - scale production and sale through
Television advertising. |
Q.23. |
What is "financial planning" ? Explain briefly the
factors that should be kept in mind while formulating a financial
plan. (7) |
Ans. |
Financial Planning :
Finance is the life blood of a business when a new business is
established. One of the basic problems of promoters is to make sure
that adequate funds are made available to run the business.
Factors : The following factors
must be given due consideration in formulating sound financial plans
:
1. Nature and Size of Business : The capital needs
differ according to the nature and size of business. An enterprise
using capital intensive technique will require more fixed capital
than labour intensive enterprise. Big firms require more funds as
compare to small firms.
2. Objective : The main objectives of financial planning
is to secure adequate funds at minimum cost for the planned project.
The objectives of financial planning should be consistent with the
overall objectives of the business.
3. Present and Future Requirements : The financial plan
should take care of both the present and future requirements' of the
enterprise.
4. Flexibility : As the business conditions change,
financial ajustments become necessary. Therefore, the financial plan
should be easily adjustable to such change.
5. Solvency and Liquidity : The financial plan should
ensure the survival of the enterprise. The funds should be invested
in those ventures which are likely to give sufficient return on
investment. Moreover, adequate cash should always be available to
meet the requirements of the enterprise.
6. Attitude of Management- The attitude to management
towards the control of the company is also very important. If the
directors prefer to retain control of the company in their own
hands, it is advisable to raise capital through debentures and
financial institutions. |
Q.24. |
Explain "personal selling" and describe the
essential qualities of a good salesman. (8)
|
Ans. |
According to Daniel s. Warner,
"Salesmanship is a face-to-face persuasive communication
between a seller and prospective buyer."
Personal selling or salesmanship
refers to oral presentation to persuade the customer to buy certain
goods and services to satisfy his wants at reasonable costs.
Qualities of Good Salesman :
1. Personal Qualities : Personal quality is a
composition of various characteristics - grooming, posture, facial
expression, voice and speech. Cleanliness of body and neatness in
clothes constitute good grooming. The style of clothing should be
attractive good posture enhances the appearance, wins respect and
inspires confidence closely related to the attribute of a good
personality is the need of a sound health A salesman should also
feel free from any physical handicaps like limping, stammering etc.
A good salesman should ahve a pleasant voice, forceful and not
monotonous. dictation should be clear and words clearly
enunciated.
Honesty is an important quality
and build permanent goodwill with customers this involves rendering
services with satisfaction to the customers.
2. Mental Qualities : Mental qualities include presence
of mind, judgement, imagination, initiative, memory, self -
confidence, intelligence, observation etc. an alert salesman who is
able to diagnose the customers more accurately can do better
business. Mental qualities enable a salesman to look at the selling
problem from the point of view of customers and to find out ways and
means of mutual advantage of customer and salesman.
an alert salesman can judge the
need of the customer at the very first instance and can decide his
line of action to convince the customer. In order to convince the
customer the salesman should be himself fully convinced and
confident.
3. Social Qualities : Salesmanship is nothing but
"getting along with people." As the salesman has to deal
with people, he should possess tact needed for the accomplishment of
this task effectively. the social qualities of a salesman include
social mixing qualities, tact and diplomacy, sense of humour, sizing
up people, sound reasoning etc.
4. Vocational Qualities : Salesmanship is a highly
skilled vocation and a salesman who has a thorough knowledge of the
product and his job can obtain better business and render better
service. HE should have confidence in his knowledge of the product
and related things that he should not be afraid of any questions and
objections raised by customers. vocational qualities of a salesman
include quality of leadership, constructive thinking, tolerance,
sincerity, tactfulness, sales aptitude etc. Moreover, the job of a
salesman also requires energy and enthusiasm. He should be an
optimist and should aim high.
In brief, the qualities of a
successful salesman can be summarized as follows: pleasing voice,
cheerfulness, intelligence, open mindedness, aptitude, talent,
discipline of mind, body and heart, co-operative and helpful
attitude, tactfulness, good reputation, thrift, tolerance, clean
dress and good habits, strong observation power, good memory,
punctuality, loyalty, sound reasoning. Good posture and facial
expression. |