OCM

Subject: O.C.M. (B. A.) Class-12th

Standard: 12 Marks: 00

Section - A

‣ Choose the correct option from those given below each question. (Each question carries
1 Marks) (00)
01. How many levels of management are there?
A. One B. Two C. Three D. Four
02. Art of getting work done from others is known as …….
A. Planning B. Management C. Directing D. Co—ordinating
03. What is the method that puts knowledge easily into practice called?
A. Profession B. Science C. Art D. Direction
04. Which of the following is the function of marketing management?
A. Distribution of
B. Production C. Product mix D. Use of finance
Income
05. Who are included in top level management?
A. Experts B. Workers C. Departmental
D. Board of Directors
heads
06. Who among the following is not included in any of the level of management?
A. Supervisor B. Jobber C. Workers D. Accountant
07. What does the management association framefor its own profession ?
A. Inconsistency B. Improper C. Code of conduct D. Decisions
08. Return earned by an employee against services provided by him is known as…………
A. Profit B. Remuneration C. Fees D. Discount
09. What is principles of management?
A. Result of
B. Management C. Decided by D. Manager’s decide
experience
decides it experiments it
10. Who is the promoter of scientific management?
A. Luther Gulick B. Fredrick Taylor C. Henry Fayol D. Peter Drucker
11. Which thoughts were presented till the end of 19th century?
A. Pre—classical B. Neo classical C. Classical D. Modern
12. Who was the promoter of neo classical thought?
A. Harzburg B. Henry Fayol C. F. W. Taylor D. Elton Mayo
13. Who was the founder of principle of management by objective?
A. P. F. Drucker B. F. W. Taylor C. Henry Fayol D. Max Weber
14. Method of removing waste generated from unnecessary movement done in wrong direction
from any work?
A. Time study B. Method study C. Motion study D. Employee
observation
15. Which activity from the following is possible by implementing labour division?
A. Aggregation B. Simplification C. Specialization D. Integration
16. If employee does not get appropriate compensation then what arises?
A. Labour turnover B. Promotion of
C. Absence of labour D. Decline of labour
labour
17. Which management gurus given below have contributed to modern thought?
A. C. K. Prahlad B. Elton Mayo C. Max Weber D. Henry Gentt
18. Who had given general principles of management?
A. F. W. Taylor B. P. F. Drucker C. Henry Fayol D. C. Barnard
19. Who said that ‘you save your employees, your employees will save yours’ everything?
A. C. K. Prahlad ‘ B. Prof. Urvik C. Aargris D. Peter Drucker
20. Why does need arise to make changes in the principles of management?
A. Change in asset B. Change in capital C. Change in
D. Change in
technology
managers
21. Which of the following is an element of planning?
A. Continuous
B. Controlling C. Directing D. Rules
process
22. Decisions and strategies are decided by management for accomplishment of objectives are
known as …………….
A. Programmes B. Policies C. Rules D. Budgets
23. Mention first function of management.
A. Organizing B. Planning C. Directing D. Controlling
24. Which of the following is not an element of planning?
A. Rules B. Assumptions C. Policy D. Method
25. The sequence of activities undertaken by a business unit is known as a……….
A. Method B. Programme C. Policy D. Strategy
26. Planning function means ………….
A. routine function B. function of choice C. fixed function D. difficult function
27. What is the first step of planning process.
A. Define objectives. B. Clarifying planning premises
C. Preparing alternatives D. Formation of a subsidiary plan
28. Planning is related to the………
A. past B. present C. production D. future
29. State the last step of planning process.
A. Evaluation of the plan B. Selection of the best plan
C. Verification of planning D. Determination of alternatives
30. What is the pre-condition for successful planning?
A. Flexibility B. Organization C. Short-term D. Long-term
31. Which of the following plans determines the objectives of business?
A. Standing plan B. Tactical plan C. Strategic plan D. Single-use plan
32. From the following, what should be implemented to prepare future managers?
A. Decentralization B. Centralization
C. Decapitalization D. Work distribution
33. The network framed naturally by human relations is called a/an…………..
A. informal
B. linear organization C. formal D. matrix
organization
organization organization
34. What is possible from the following due to departmentalization of work?
A. Specialization B. Planning C. Coordination D. Directing
35. When more than one person is working towards the achievement of a common goal, the
structure so formed is called………………….
A. organization B. directing C. planning D. control
36. A person who is at bottom level and receives orders is called …………….
A. subordinate B. superior C. project manager D. officer
37. in which type of organization, work is given more importance than department?
A. Linear B. Functional C. Informal D. Matrix
38. Which organization is called army organization?
A. Matrix B. Functional C. Linear D. Informal
39. What can not be delegated from the following?
A. Authority B. Responsibility C. Accountibility D. Work
40. Organization framed with the mixture of project structure and general structure is called
a/an………
A. matrix organization B. linear organization
C. functional organization D. informal organization
41. What is it called where authority is centrally delegated at higher management level?
A. Decentralization B. Centralization
C. Departmentation D. Transmission
42. What cannot be delegated from the following?
A. Authority B. Responsibility C. Accountability D. Work
43. Which type of function of management is staffing?
A. Productive B. Objective-oriented C. Managerial D. Administrative
44. First step or stage of the selection process is ………..
A. receiving and screening of applications
B. preliminary meeting and welcome
C. personal interview
D. employment test
45. Employees are..............for a business.
A. equal to capital B. strength C. responsibility D. invaluable assets
46....................is the second step after recruitment.
A. To give a
B. Selection C. Training D. Transfer
promotion
47. Which test is conducted to know the nature and self-confidence of an employee?
A. IQ test B. Trade test C. Aptitude test D. Psychological test
48. Which test decides the ability of the candidate?
A. IQ test B. Psychological test C. Aptitude test D. Trade test
49. The procedure up to obtaining candidates’ application is ..........
A. recruitment
B. ordinary function C. advertisement D. selection function
function
function
50. The main function of Human Resource Management is ………..
 A. increase in sales B. man power C. quality control D. production
planning
51. Selection procedure for non-managerial staff is……….
A. difficult B. short and simple C. expensive D. long and special
52. In directing process, by giving objectives are achieved.
A. motivation B. supervision C. training D. guidance
53. What does direction includes other than order, instruction and guidance?
A. Suggestions B. Control C. Supervision D. Training
54. Communication is a human activity, so human limitations act as to it;
A. assumptions B. barriers C. motivators D. helper
55. The process of sending information in the form of reports from the bottom level to the upper
level of management is called………..
A. communication B. reporting C. correspondence D. postal services
56. In which form is informal communication carried out?
A. Oral B. Written and Oral C. Written D. Formal
57. Which among the following is needed for the existence of leadership?
A. Planners B. Managers C. Supervisor D. Sub-ordinates
58. Which is the first need as per Maslow’s hierarchy of needs?
A. Physical needs B. Safety needs C. Social needs D. Esteem needs
59. In which element of direction does supervise, rules and analysis is included?
A. supervision B. Training C. Motivation D. Leadership
60. At which level of management, direction is required more?
A. Bottom B. Top C. Middle D. All of them
61. What do you mean by passing clear information from one person to another?
A. Communication B. Correspondence C. Courier D. Reporting
62. Which of these is related to financial incentives?
A. Promotion B. Appreciation
C. Job security D. Appreciation of work and reward
63. Which function of the management process sees that the work is performed according to
planning?
A. Organization B. Directing C. Training D. Controlling
64. After knowing the deviations, what type of measures does the management take?
 A. Gives training B. Removes the staff
C. Takes corrective action D. Appoints experts
65. What should be done when the organization obtains better results than set standards?
A. Improve and set lower standards B. Improve and set higher standards
C. No change in set standards D. To remove standards
66. Controlling is not a/an…...............process.
A. internal B. rigid C. dynamic D. continuous
67.................is the last function of management.
A. Planning B. Organization C. Staffing D. Controlling
68. Which is not the function of controlling?
A. Progress of activities B. Comparison with set standards
C. Determining objectives D. Getting information about deviations
69. Which function of management is known as the father of controlling ?
A. Organization B. Staffing C. Directing D. Planning
70...........................is the first stage of the controlling process.
A. Measuring performance
B. Comparing the actual performance against the set standards
C. Corrective action
D. Setting standards
71. ……………. is the process of maintaining balance between efforts and results and between
resources and objectives.
A. Directing B. Coordinating C. Staffing D. Controlling
72. Controlling takes place at..............level.
A. every B. middle C. top D. bottom
73. Decisions of investment means
A. capital cost B. capital budgeting
C. capital structure D. ploughing back of profits
74. On which concept is the approach to the wealth maximization based?
A. Profitability B. Social Responsibility
C. Present Value of Wealth D. Cash Flow
75. Which statement is true with reference to fixed capital ?
 A. Invested up to 5 years in business
B. Components include debtors, bills receivable, bank balance, etc.
C. The ratio of liquidity is less
D. Investment can be withdrawn easily
76. Excess of current assets over current liabilities means
A. positive working capital B. negative working capital
C. equilibrium working capital D. gross working capital
77. Which of the following statements is not true with reference to the concept of net working
capital?
A. It is the excess of current assets over current liabilities
B. It does not show the liquidity position of the company
C. It provides proper measurement for working capital
D. Increase in current liabilities does not increase the net working capital
78. From which capital is dividend paid?
A. Paid-up Capital B. Authorized Capital C. Called-up Capital D. Working Capital
79. How many types of capital structure are there?
A. Two B. Four C. Five D. Three
80. Capital structure having proper ratio of equity and debts means
A. optimum capital structure B. simple capital structure
C. working capital structure D. equilibrium capital structure
81. With what is financial management related?
A. Finance Function B. Finance Market C. Capital Market D. Stock Exchange
82. By which other name is the objective of wealth maximization known?
A. Social Welfare B. Net Present Value C. Capital Investment D. Trading on Equity
83. With whom has the foreign institution investor need to registered?
A. Company
B. Court C. Stock Exchange D. SEBI
Registrar
84. Under which Act, SEBI came into existence?
A. Companies Act
B. Securities Contracts (Regulation) Act
C. National Companies Act
D. Securities and Exchange Board of India Act (SEBI Act)
85. How many types of orders are there in purchase-sales of securities?
A. Two B. Three C. Four D. Five
86. From whom certificate of registration is to be obtained by a depository before starting its
operation?
Stock Exchange B. Central C. SEBI Reserve
D. Bank of
Government India
87. In which year Depository Act came into existence?
A. 1991 B. 1992 C. 1995 D. 1996
88. Whose approval is to be obtained by stock exchange under securities contracts (Regulation)
Act, 1956?
A. Central B. SEBI C. Reserve Bank ofD. Finance Minister
Government India
89. Market for sale of new issues securities means ..........
A. stock exchange B. secondary market C. primary market D. speculation market
90. Which statement is false with reference to commercial bills?
A. They are government securities.
B. They originate out of business transactions.
C. They are discounted by commercial banks.
D. They are negotiable Instruments.
91. Securities market having maturity period of one year or less means ........
A. capital market B. money market C. primary market D. secondary market
92. Who issues treasury bills on behalf of Indian Government?
A. State Bank of
B. Reserve Bank of C. Central Bank of D. Financial
India
India India Institutions
93. Who regulates organized money markets?
A. SEBI B. State Bank of
C. Reserve Bank of D. Financial
India
India Institutions
94. Who has introduced the principles of Trusteeship?
A. Jawaharlal Nehru B. Subhash Chandra C. Indira Gandhi D. Gandhiji
Bose
95. Which one of the following options is not included as Redressal Forum according to the
Consumer Protection Act?
A. Lok Adalat B. District Level Forum
C. State Level Commission D. National Level Commission
96. which court, can the public interest litigation be filed?
A. Criminal Court B. District Court C. Civil Court D. Supreme Court
97. How many members exist in the District Level Forum?
A. Total 3 B. At least 3 C. Total 5 D. At least 5
98. Members of which commission are appointed by the Central Government?
A. District Level B. National Level C. State Level D. International Level
99. Out of the following, which has not been included in the Consumer Protection Act 1986, as
consumers’ right?
A. Protection B. Basic Needs C. Awareness D. Choice
100. Which of the following is not done by consumer protection institutions?
A. Educating people regarding consumer rights
B. Publishing information in consumers’ interest
C. Giving a list of consumers to the industries
D. Protecting the interest of consumers
101. Which organization works towards compilation and co-ordination of the work of the various
institutions working for consumer protection?
A. Consumer Protection Council
B. Consumer Protection and Research Council
C. Consumer Co-ordination Council
D. Consumer Unity and Trust Society
102. When was the Consumer Protection Act passed?
A. 1966 B. 1976 C. 1986 D. 1996
103. With which consumer protection organizational set-up is Ahmedabad connected?
A. Consumer Education and Research Centre
B. Consumer Guidance Society of India
C. Consumer Unity and Trust Society
D. Consumer Coordination Council
104. Which organization coordinates all organizations engaged in the work of consumer protection
?
A. CUTS B. CCC C. CERC D. CGSI
105. In which year did Consumer Protection Act came into force?
A. 1951 B. 1955 C. 1969 D. 1986
106. In which year the Industrial Development and Regulation Act came into force?
A. 1951 B. 1955 C. 1969 D. 1986
107. In which year did Trade Mark Act came into existence?
A. 1951 B. 1955 C. 1969 D. 1986
108. In which year Standardized Weights and Measures Act came into existence?
A. 1951 B. 1955 C. 1969 D. 1986
109. In which year did Essential Commodities Act come into existence?
A. 1951 B. 1955 C. 1969 D. 1986
110. At present, which act is prevalent for foreign exchange in India?
A. FERA B. FECA C. FESA D. EFMA
111. In which year did liberalization privatization and globalization start in India?
A. 1951 B. 1991 C. 2001 D. 2011
112. Which of the following options is benefit of privatization?
A. Misuse of power by the top bureaucrats
B. Unequal distribution of wealth and income
C. Exploitation of consumers
D. Production of quality goods and services
113. Which of the following is not the benefit of privatization?
A. Increase in Productivity B. Absence of Political Interference
C. Exploitation of Employees D. Use of Modern Technology
114. How is India’s currency symbolized?
A. Rupees B. Rs. C. SI D. None of these
115. In the process of delegation of authority, authority is………..
A. entrusted B. conferred C. assigned D. created

Section - B
‣ Answer the following questions in one sentence. (Each question carries 1 Marks) (00)
116. In which activities management is necessarry?
117. Give the full form : M.B.A.
118. What is organisation?
119. What is planning?
120. Who are included in top level management?
121. Which level of management follows the order and instruction given by chief executive
officer?
122. What is other name of middle level of management?
123. Give the full form of CEO.
124. What is management?
125. Define Production Management and explain its functions.
126. What are the elements included in product-mix?
127. Which level of management has the supreme authority to manage the business?
128. Which concepts are included in behavior related thoughts?
129. What is unity of command?
130. What is management thoughts?
131. In modem thoughts which other subject are related with management?
132. What is time study?
133. What is ‘Principle of management’?
134. Give the full form of O.R.
135. What is planning premises?
136. State the types of budgets.
137. In which fields is planning found?
138. When is the principle of ‘Look and Leap ‘adopted? (March 2018)
139. What are the first and last functions of planning?
140. What is a method/procedure?
141. Mention reasons for the uncertainitics in planning.
142. What is a matrix organization?
143. What is responsibility?
144. What is called delegation of Authority?
145. What is an organization? (March 2018)
146. What is accountability?
147. What is an informal organization?
148. Which is the base of the selection process?
149. State the names of various types of tests conducted in the selection process.
150. What is an organization without staff compared to?
151. When does the need for recruitment arise?
152. On what does the selection process depend?
153. Give the full form of : IIM, IIT, HRM, HRD, IQ test.
154. State the reasons for recruitment.
155. Which external factors jeopardize the very existence of a business?
156. With which functions of management is planning closely related?
157. Before which function, should all other functions of management be performed?
158. What is deviation?
159. When do the established standards change an new and higher standards set?
160. Why is it necessary to measure performance?
161. At which level of management function does controlling take place?
162. With whom foreign investment insitution has to register itself?
163. Financial management is related with which type of financial decision making?
164. In which form dividend can be paid to the shareholders?
165. What does capital structure consist of?
166. What is meant by Optimum Capital Structure?
167. What are the components of fixed capital?
168. For which type of security issue the expense is comparatively less?
169. What is Promotion mix?
170. What is marketing management?
171. What is personal selling?
172. Give meaning of market research.
173. Give meaning of ‘publicity’.
174. What is Sales promotion?
175. Give full form of : NCH
176. Give full form of : CPC
177. In which courts can public interest litigation be filed?
178. What proof should compulsorily be produced by the consumer to prove his purchase?
179. Who is the king of the market in a free market system?
180. According to the principles of Trusteeship who is the important person in an organization?
181. Under which heads can consumer exploitation be divided?
182. Which two rights are favoured by the United Nations Organisation in its directive for the
consumer?
183. Give full form of : CCC
184. Give full form of : CUTS
185. Give full form of : CGSI
186. Give full form of : CERC
187. If the complainant is not satisfied by the judgement of State Level Commission, then to whom
should he appeal for reconsideration and within what period?
188. If the complainant is not satisfied by the judgement of District Level Forum, then to whom
should he appeal for reconsideration and within what period?
189. When can there be an increase in the per capita income of a country?
190. Which aspects are included in cultural factors?
191. Which are the two main classification of factors of business environment?
192. Give only names of factors related to business environment.
193. Give only names of internal factors affecting business environment.
194. Which aspects are included in fiscal policy?
195. Which aspects are included in monetary policy?
196. Give name of groups related to business environment.
197. What initiative have the banks taken to simplify banking operation and understand the
procedure?
198. Give the full Form : e — Banking
199. Give the full Form : M - Banking
200. Who is considered the father of controlling?
Section - C
‣ Answer the following question in Short. (Each question carries 2 Marks) (00)
201. Which are the main elements of marketing management?
202. What is co-ordination?
203. How does management benefit the society?
204. State any two functions performed at the top level management.
205. Discuss various elements of price—mix.
206. Discuss about staffing.
207. Explain Taylor’s differential wage rate study.
208. What does the principle of equality?
209. Explain the principle of unity of command.
210. In to which six parts, Henry Fayol divided his entrepreneur activities – Explain.
211. Into which six parts, did Henry Fayol divide entrepreneur activities. Explain.
212. “Principles of management are flexible“. Suggest.
213. What is ‘Rule of Thumb’?
214. What is scientific management?
215. State the elements or components of planning.
216. Explain the statement, “Planning is irrelevant”
217. What do you mean by policy?
218. What is final budget?
219. What is the need of strategy?
220. What do you mean by determination of objectives?
221. What is subsidiary plan?
222. “Planning is primary function of management.” Explain.
223. “Planning is an expensive process.” Why?
224. What is planning?
225. “Planning should be flexible” Why?
226. “Distribution of Authority and Responsibility is a base of an Organisation” – Explain.
227. What are the limitations of a matrix organization?
228. “Formal and Informal Organisations are Complementary to each other.” – Explain.
229. When is Decentralisation Possible?
230. “Organising is Body and Planning is a Brain of Business Enterprise” – Explain.
231. State the difference between Training and Development.
232. What is recruitment?
233. What can be known through trade test and psychological tests?
234. What is development?
235. Give the meaning of training.
236. What can be known through IQ and aptitude tests?
237. State the differences between recruitment and selection.
238. Name the stages of the process of selection.
239. Name the internal and external sources of recruitment.
240. Staffing is not merely an employee welfare activity. Why?
241. Explain the meaning of incentives.
242. What is co—partnership?
243. Explain the meaning of leadership.
244. Explain formal communication in short.
245. What do you mean by supervision?
246. What do you mean by motivation?
247. How does motivation help to reduce labour turn over rate?
248. Give the list of elements of direction.
249. What do you mean by informal communication?
250. A supervisor’s work is similar to that of a teacher “Explain the statement.
251. “Controlling is a continuous process. “Explain.
252. How is controlling an internal process?
253. “Controlling is a dynamic process. “Explain.
254. “Planning is the father of controlling. “Explain.
255. Give the meaning of controlling.
256. What is unorganised money market?
257. Which instrument of money market are negotiable?
258. What is dematerialisation?
259. What are the instruments of money market?
260. What is the main difference between call money and notice money?
261. Stock exchange is a mirror indicating economic condition of the country – How?
262. How does stock exchange provide liquidity element to securities?
263. Give the meaning of economic factors affecting business environment and state the aspects
included in it.
264. Give the meaning of business environment and list out the factors affecting business
environment.
265. Why is globalization important?
266. What is privatization ?
267. Give the meaning of liberalization.
268. Which political factors affect the business environment?
269. What is essential to get benefits of “E-banking” and ‘M-banking’?
270. Why is continuous study of business environment required?
271. State the social factors affecting business environment.
272. What are the ways in which producers can exploit the consumers to increase their sales of
goods and services?
273. Explain about consumers’ exploitation.
274. Explain consumer protection from the point of view of consumers.
275. How does Lok Adalat help in creation of consumer awareness?
276. Write in brief about Public Interest Litigations (PIL).
277. List out the advantages of labeling.
278. What is branding?
279. What is marketing-mix? What it includes?
280. State any two characteristics of a good salesman.
281. What is the need of ‘storage of goods’?
282. State any two characteristics of branding.
283. “Controlling is a positive activity. “Explain.
284. Define the ‘wealth maximization’ objective of financial management
285. “Leadership is a source of motivation. “— Explain.
Section - D
‣ Answer the following question in brief. (Each question carries 3 Marks) (00)
286. Explain: Management as a profession
287. What are the functions of financial management?
288. Explain importance of Co—ordination.
289. Discuss the importance of human resource management
290. Discuss about importance of the principles of management.
291. Discuss about Peter F. Drucker’s contribution in management field.
292. Write a short-note on modem thoughts.
293. Explain behavior related thoughts
294. Principles of management are based on human behavior.’ – Explain the statement.
295. Explain about Elements of delegation of authority.
296. Write a note on Matrix Organisation.
297. Explain Functional Organisation with its formation.
298. Describe characteristics of Informal Organisation.
299. Is controlling an end activity of management? Why?
300. “Controlling is not a negative function. “Justify this statement
301. Explain the relation between planning and controlling.
302. “Planning and controlling are two sides of the same coin. “Explain.(March 2018)
303. Explain the concept of financial management through various definitions.
304. Explain the objectives of financial management.
305. Write notes on (1) Decisions related to investments. (2) Decisions related to dividend
306. Distinguish between Gross working capital and net working capital.
307. Distinguish between Fixed capital and Working capital.
308. What is treasury bill?
309. Give the meaning of capital market and clarify its characteristics.
310. “Primary market means a market of new issued securities” – Explain and state the
characteristics of primary market.
311. Write a note on: Central Depository Services Limited [CDSLJ.
312. Explain the selling concept in marketing management.
313. Mention the characteristics of a ‘good salesman’.
314. Explain the difference between selling and marketing.
315. Explain the role of advertisement in marketing management.
316. Explain the role of public relation.
317. State the importance of consumer protection from the viewpoint of of business.
318. Write a note on the Principles of Trusteeship and Consumer Protection.
319. What are the rights made available to consumers as per the Consumer Protection Act?
320. How is consumer awareness created?
321. Define consumer and state who can complain to the dispute settlement institutions?
322. What is liberalization? What steps are taken by the Indian government as a part of
liberalization?
323. What is privatization? Write a note on effects of privatization.
324. Write notes on social and cultural factors affecting business environment.
325. Explain the meaning and importance of business environment.
Section - E
‣ Answer the following question in Details. (Each question carries 5 Marks) (00)
326. What is planning? Explain its characteristics.
327. Discuss types of plan
328. Give the definition of planning and explain its process.
329. Explain the limitations of planning.
330. Explain the meaning and characteristics of staffing.
331. Explain the meaning and importance of training.
332. Give the meaning of development and explain its importance.
333. Explain the selection procedure.
334. What is recruitment? Discuss in detail the internal and external sources of recruitment.
335. Explain the importance of staffing.
336. Explain barriers to effective communication.
337. Explain Financial Incentives.
338. Define Motivation and explain its features.
339. Define Direction and explain its characteristics.
340. Define Communication. Explain its characteristics.
341. Explain the Maslow’s hierarchy of needs with diagram.
342. What types of relief and compensation arc available to the consumer according to Consumer
Protection Act?
343. What is the role of consumers’ unions and non-goverment organizations in the consumer
protection movement?
344. Explain the responsibilities of consumers according to Consumer Protection Act.
345. Explain the working of Consumer Protection Institutions and Non-Government Organizations
for protection and maintenance of consumers’ interest.
346. Explain the 3 tier dispute settlement system according to the Consumer Protection Act.
347. What type of reilef and compensation is available to a consumer according to the Consumer
Protection Act?
348. Give the meaning of Consumer Protection and explain the rights of consumers. (March 2018)
349. Explain the types of non—monetaly incentives.
350. Give the meaning of staffing and explain its importance. (March 2018)
 OCM
ubject: O.C.M. (B. A.) Class-12th
andard: 12 Marks: 00

Section - A
‣ Choose the correct option from those given below each question. (Each question carries 1 Marks) (00)
01. How many levels of management are there?
A. One B. Two C. Three D. Four

ns. (C) Three

02. Art of getting work done from others is known as …….

A. Planning B. Management C. Directing D. Co—ordinating

ns. (B) Management

03. What is the method that puts knowledge easily into practice called?
A. Profession B. Science C. Art D. Direction

ns. (C) Art

04. Which of the following is the function of marketing management?

A. Distribution of
B. Production C. Product mix D. Use of finance
Income

Ans. (C) Product mix

05. Who are included in top level management?

A. Experts B. Workers C. Departmental heads D. Board of Directors

ns. (D) Board of Directors

06. Who among the following is not included in any of the level of management?
A. Supervisor B. Jobber C. Workers D. Accountant

ns. (D) Accountant

07. What does the management association framefor its own profession ?
A. Inconsistency B. Improper C. Code of conduct D. Decisions

ns. (C) Code of conduct

08. Return earned by an employee against services provided by him is known as…………
A. Profit B. Remuneration C. Fees D. Discount

ns. (B) Remuneration

 09. What is principles of management?
A. Result of experience B. Management decides C. Decided by D. Manager’s decide it
it experiments

ns. (A) Result of experience

10. Who is the promoter of scientific management?

A. Luther Gulick B. Fredrick Taylor C. Henry Fayol D. Peter Drucker

ns. (B) Fredrick Taylor

11. Which thoughts were presented till the end of 19th century?
A. Pre—classical B. Neo classical C. Classical D. Modern

ns. (C) Classical

12. Who was the promoter of neo classical thought?

A. Harzburg B. Henry Fayol C. F. W. Taylor D. Elton Mayo

ns. (D) Elton Mayo

13. Who was the founder of principle of management by objective?

A. P. F. Drucker B. F. W. Taylor C. Henry Fayol D. Max Weber

ns. (A) P. F. Drucker

14. Method of removing waste generated from unnecessary movement done in wrong direction from
any work?
A. Time study B. Method study C. Motion study D. Employee
observation

ns. (C) Motion study

15. Which activity from the following is possible by implementing labour division?
A. Aggregation B. Simplification C. Specialization D. Integration

ns. (C) Specialization

16. If employee does not get appropriate compensation then what arises?
A. Labour turnover B. Promotion of labour C. Absence of labour D. Decline of labour

ns. (A) Labour turnover

17. Which management gurus given below have contributed to modern thought?
A. C. K. Prahlad B. Elton Mayo C. Max Weber D. Henry Gentt

ns. (A) C. K. Prahlad

18. Who had given general principles of management?

A. F. W. Taylor B. P. F. Drucker C. Henry Fayol D. C. Barnard
Ans. (C) Henry Fayol

19. Who said that ‘you save your employees, your employees will save yours’ everything?
A. C. K. Prahlad ‘ B. Prof. Urvik C. Aargris D. Peter Drucker

Ans. (B) Prof. Urvik

20. Why does need arise to make changes in the principles of management?
A. Change in asset B. Change in capital C. Change in technology D. Change in managers

Ans. (C) Change in technology

21. Which of the following is an element of planning?

A. Continuous process B. Controlling C. Directing D. Rules

Ans. (D) Rules

22. Decisions and strategies are decided by management for accomplishment of objectives are known as
…………….
A. Programmes B. Policies C. Rules D. Budgets

Ans. (B) Policies

23. Mention first function of management.

A. Organizing B. Planning C. Directing D. Controlling

Ans. (B) Planning

24. Which of the following is not an element of planning?

A. Rules B. Assumptions C. Policy D. Method

Ans. (B) Assumptions

25. The sequence of activities undertaken by a business unit is known as a……….

A. Method B. Programme C. Policy D. Strategy

Ans. (B) Programme

26. Planning function means ………….

A. routine function B. function of choice C. fixed function D. difficult function

Ans. (B) function of choice

27. What is the first step of planning process.

A. Define objectives. B. Clarifying planning premises
C. Preparing alternatives D. Formation of a subsidiary plan

Ans. (A) Define objectives.

28. Planning is related to the………

 A. past B. present C. production D. future

Ans. (D) future

29. State the last step of planning process.

A. Evaluation of the plan B. Selection of the best plan
C. Verification of planning D. Determination of alternatives

Ans. (A) Evaluation of the plan

30. What is the pre-condition for successful planning?

A. Flexibility B. Organization C. Short-term D. Long-term

Ans. (A) Flexibility

31. Which of the following plans determines the objectives of business?

A. Standing plan B. Tactical plan C. Strategic plan D. Single-use plan

Ans. (C) Strategic plan

32. From the following, what should be implemented to prepare future managers?
A. Decentralization B. Centralization
C. Decapitalization D. Work distribution

Ans. (B) Centralization

33. The network framed naturally by human relations is called a/an…………..

A. informal organization B. linear organization C. formal organization D. matrix organization

Ans. (A) informal organization

34. What is possible from the following due to departmentalization of work?

A. Specialization B. Planning C. Coordination D. Directing

Ans. (A) Specialization

35. When more than one person is working towards the achievement of a common goal, the structure so
formed is called………………….
A. organization B. directing C. planning D. control

Ans. (A) organization

36. A person who is at bottom level and receives orders is called …………….
A. subordinate B. superior C. project manager D. officer

Ans. (A) subordinate

37. in which type of organization, work is given more importance than department?
A. Linear B. Functional C. Informal D. Matrix
Ans. (B) Functional

38. Which organization is called army organization?

A. Matrix B. Functional C. Linear D. Informal

Ans. (C) Linear

39. What can not be delegated from the following?

A. Authority B. Responsibility C. Accountibility D. Work

Ans. (C) Accountibility

40. Organization framed with the mixture of project structure and general structure is called
a/an………
A. matrix organization B. linear organization
C. functional organization D. informal organization

Ans. (A) matrix organization

41. What is it called where authority is centrally delegated at higher management level?
A. Decentralization B. Centralization
C. Departmentation D. Transmission

Ans. (B) Centralization

42. What cannot be delegated from the following?

A. Authority B. Responsibility C. Accountability D. Work

Ans. (C) Accountability

43. Which type of function of management is staffing?

A. Productive B. Objective-oriented C. Managerial D. Administrative

Ans. (C) Managerial

44. First step or stage of the selection process is ………..

A. receiving and screening of applications
B. preliminary meeting and welcome
C. personal interview
D. employment test

Ans. (B) preliminary meeting and welcome

45. Employees are..............for a business.

A. equal to capital B. strength C. responsibility D. invaluable assets

Ans. (D) invaluable assets

46...................is the second step after recruitment.

 A. To give a promotion B. Selection C. Training D. Transfer

Ans. (B) Selection

47. Which test is conducted to know the nature and self-confidence of an employee?
A. IQ test B. Trade test C. Aptitude test D. Psychological test

Ans. (D) Psychological test

48. Which test decides the ability of the candidate?

A. IQ test B. Psychological test C. Aptitude test D. Trade test

Ans. (D) Trade test

49. The procedure up to obtaining candidates’ application is ..........

A. recruitment function B. ordinary function C. advertisement
D. selection function
function

Ans. (A) recruitment function

50. The main function of Human Resource Management is ………..

A. increase in sales B. man power planning C. quality control D. production

Ans. (B) man power planning

51. Selection procedure for non-managerial staff is……….

A. difficult B. short and simple C. expensive D. long and special

Ans. (B) short and simple

52. In directing process, by giving objectives are achieved.

A. motivation B. supervision C. training D. guidance

Ans. (A) motivation

53. What does direction includes other than order, instruction and guidance?
A. Suggestions B. Control C. Supervision D. Training

Ans. (C) Supervision

54. Communication is a human activity, so human limitations act as to it;

A. assumptions B. barriers C. motivators D. helper

Ans. (B) barriers

55. The process of sending information in the form of reports from the bottom level to the upper level
of management is called………..
A. communication B. reporting C. correspondence D. postal services

Ans. (B) reporting

56. In which form is informal communication carried out?

 A. Oral B. Written and Oral C. Written D. Formal

Ans. (A) Oral

57. Which among the following is needed for the existence of leadership?
A. Planners B. Managers C. Supervisor D. Sub-ordinates

Ans. (D) Sub-ordinates

58. Which is the first need as per Maslow’s hierarchy of needs?

A. Physical needs B. Safety needs C. Social needs D. Esteem needs

Ans. (A) Physical needs

59. In which element of direction does supervise, rules and analysis is included?
A. supervision B. Training C. Motivation D. Leadership

Ans. (A) supervision

60. At which level of management, direction is required more?

A. Bottom B. Top C. Middle D. All of them

Ans. (D) All of them

61. What do you mean by passing clear information from one person to another?
A. Communication B. Correspondence C. Courier D. Reporting

Ans. (A) Communication

62. Which of these is related to financial incentives?

A. Promotion B. Appreciation
C. Job security D. Appreciation of work and reward

Ans. (A) Promotion

63. Which function of the management process sees that the work is performed according to planning?
A. Organization B. Directing C. Training D. Controlling

Ans. (D) Controlling

64. After knowing the deviations, what type of measures does the management take?
A. Gives training B. Removes the staff
C. Takes corrective action D. Appoints experts

Ans. (C) Takes corrective action

65. What should be done when the organization obtains better results than set standards?
A. Improve and set lower standards B. Improve and set higher standards
C. No change in set standards D. To remove standards
Ans. (B) Improve and set higher standards

66. Controlling is not a/an..................process.

A. internal B. rigid C. dynamic D. continuous

Ans. (B) rigid

67.................is the last function of management.

A. Planning B. Organization C. Staffing D. Controlling

Ans. (D) Controlling

68. Which is not the function of controlling?

A. Progress of activities B. Comparison with set standards
C. Determining objectives D. Getting information about deviations

Ans. (C) Determining objectives

69. Which function of management is known as the father of controlling ?

A. Organization B. Staffing C. Directing D. Planning

Ans. (D) Planning

70..........................is the first stage of the controlling process.

A. Measuring performance
B. Comparing the actual performance against the set standards
C. Corrective action
D. Setting standards

Ans. (D) Setting standards

71. ……………. is the process of maintaining balance between efforts and results and between
resources and objectives.
A. Directing B. Coordinating C. Staffing D. Controlling

Ans. (D) Controlling

72. Controlling takes place at…..........level.

A. every B. middle C. top D. bottom

Ans. (A) every

73. Decisions of investment means

A. capital cost B. capital budgeting
C. capital structure D. ploughing back of profits

Ans. (B) capital budgeting

74. On which concept is the approach to the wealth maximization based?

 A. Profitability B. Social Responsibility
C. Present Value of Wealth D. Cash Flow

Ans. (C) Present Value of Wealth

75. Which statement is true with reference to fixed capital ?

A. Invested up to 5 years in business
B. Components include debtors, bills receivable, bank balance, etc.
C. The ratio of liquidity is less
D. Investment can be withdrawn easily

Ans. (C) The ratio of liquidity is less

76. Excess of current assets over current liabilities means

A. positive working capital B. negative working capital
C. equilibrium working capital D. gross working capital

Ans. (A) positive working capital

77. Which of the following statements is not true with reference to the concept of net working capital?
A. It is the excess of current assets over current liabilities
B. It does not show the liquidity position of the company
C. It provides proper measurement for working capital
D. Increase in current liabilities does not increase the net working capital

Ans. (A) It is the excess of current assets over current liabilities

78. From which capital is dividend paid?

A. Paid-up Capital B. Authorized Capital C. Called-up Capital D. Working Capital

Ans. (A) Paid-up Capital

79. How many types of capital structure are there?

A. Two B. Four C. Five D. Three

Ans. (B) Four

80. Capital structure having proper ratio of equity and debts means
A. optimum capital structure B. simple capital structure
C. working capital structure D. equilibrium capital structure

Ans. (A) optimum capital structure

81. With what is financial management related?

A. Finance Function B. Finance Market C. Capital Market D. Stock Exchange

Ans. (A) Finance Function

82. By which other name is the objective of wealth maximization known?

 A. Social Welfare B. Net Present Value C. Capital Investment D. Trading on Equity

Ans. (B) Net Present Value

83. With whom has the foreign institution investor need to registered?
A. Company Registrar B. Court C. Stock Exchange D. SEBI

Ans. (D) SEBI

84. Under which Act, SEBI came into existence?

A. Companies Act
B. Securities Contracts (Regulation) Act
C. National Companies Act
D. Securities and Exchange Board of India Act (SEBI Act)

Ans. (D) Securities and Exchange Board of India Act (SEBI Act)

85. How many types of orders are there in purchase-sales of securities?

A. Two B. Three C. Four D. Five

Ans. (A) Two

86. From whom certificate of registration is to be obtained by a depository before starting its
operation?
A. Stock Exchange B. Central Government C. SEBI D. Reserve Bank of
India

Ans. (C) SEBI

87. In which year Depository Act came into existence?

A. 1991 B. 1992 C. 1995 D. 1996

Ans. (D) 1996

88. Whose approval is to be obtained by stock exchange under securities contracts (Regulation) Act,
1956?
A. Central Government B. SEBI C. Reserve Bank of D. Finance Minister
India

Ans. (B) SEBI

89. Market for sale of new issues securities means ..........

A. stock exchange B. secondary market C. primary market D. speculation market

Ans. (C) primary market

90. Which statement is false with reference to commercial bills?

 A. They are government securities.
B. They originate out of business transactions.
C. They are discounted by commercial banks.
D. They are negotiable Instruments.

Ans. (A) They are government securities.

91. Securities market having maturity period of one year or less means ........
A. capital market B. money market C. primary market D. secondary market

Ans. (B) money market

92. Who issues treasury bills on behalf of Indian Government?

A. State Bank of India B. Reserve Bank of
C. Central Bank of India D. Financial Institutions
India

Ans. (B) Reserve Bank of India

93. Who regulates organized money markets?

A. SEBI B. State Bank of India C. Reserve Bank of D. Financial Institutions
India

Ans. (C) Reserve Bank of India

94. Who has introduced the principles of Trusteeship?

A. Jawaharlal Nehru B. Subhash Chandra
Bose C. Indira Gandhi D. Gandhiji

Ans. (D) Gandhiji

95. Which one of the following options is not included as Redressal Forum according to the Consumer
Protection Act?
A. Lok Adalat B. District Level Forum
C. State Level Commission D. National Level Commission

Ans. (A) Lok Adalat

96. which court, can the public interest litigation be filed?

A. Criminal Court B. District Court C. Civil Court D. Supreme Court

Ans. (D) Supreme Court

97. How many members exist in the District Level Forum?

A. Total 3 B. At least 3 C. Total 5 D. At least 5

Ans. (B) At least 3

98. Members of which commission are appointed by the Central Government?

A. District Level B. National Level C. State Level D. International Level
Ans. (B) National Level

99. Out of the following, which has not been included in the Consumer Protection Act 1986, as
consumers’ right?
A. Protection B. Basic Needs C. Awareness D. Choice

Ans. (B) Basic Needs

100. Which of the following is not done by consumer protection institutions?

A. Educating people regarding consumer rights
B. Publishing information in consumers’ interest
C. Giving a list of consumers to the industries
D. Protecting the interest of consumers

Ans. (C) Giving a list of consumers to the industries

101. Which organization works towards compilation and co-ordination of the work of the various
institutions working for consumer protection?
A. Consumer Protection Council
B. Consumer Protection and Research Council
C. Consumer Co-ordination Council
D. Consumer Unity and Trust Society

Ans. (C) Consumer Co-ordination Council

102. When was the Consumer Protection Act passed?

A. 1966 B. 1976 C. 1986 D. 1996

Ans. (C) 1986

103. With which consumer protection organizational set-up is Ahmedabad connected?

A. Consumer Education and Research Centre
B. Consumer Guidance Society of India
C. Consumer Unity and Trust Society
D. Consumer Coordination Council

Ans. (A) Consumer Education and Research Centre

104. Which organization coordinates all organizations engaged in the work of consumer protection ?
A. CUTS B. CCC C. CERC D. CGSI

Ans. (B) CCC

105. In which year did Consumer Protection Act came into force?
A. 1951 B. 1955 C. 1969 D. 1986

Ans. (D) 1986

106. In which year the Industrial Development and Regulation Act came into force?
A. 1951 B. 1955 C. 1969 D. 1986

Ans. (A) 1951

107. In which year did Trade Mark Act came into existence?
A. 1951 B. 1955 C. 1969 D. 1986

Ans. (C) 1969

108. In which year Standardized Weights and Measures Act came into existence?
A. 1951 B. 1955 C. 1969 D. 1986

Ans. (C) 1969

109. In which year did Essential Commodities Act come into existence?
A. 1951 B. 1955 C. 1969 D. 1986

Ans. (B) 1955

110. At present, which act is prevalent for foreign exchange in India?

A. FERA B. FECA C. FESA D. EFMA

Ans. (D) EFMA

111. In which year did liberalization privatization and globalization start in India?
A. 1951 B. 1991 C. 2001 D. 2011

Ans. (B) 1991

112. Which of the following options is benefit of privatization?

A. Misuse of power by the top bureaucrats
B. Unequal distribution of wealth and income
C. Exploitation of consumers
D. Production of quality goods and services

Ans. (D) Production of quality goods and services

113. Which of the following is not the benefit of privatization?

A. Increase in Productivity B. Absence of Political Interference
C. Exploitation of Employees D. Use of Modern Technology

Ans. (C) Exploitation of Employees

114. How is India’s currency symbolized?

A. Rupees B. Rs. C. SI D. None of these

Ans. (D) None of these

115. In the process of delegation of authority, authority is………..

 A. entrusted B. conferred C. assigned D. created

Ans. (B) conferred

Section - B
‣ Answer the following questions in one sentence. (Each question carries 1 Marks) (00)
116. In which activities management is necessarry?
Ans. Industries, religion, defense, management, society, politics, education, and sports.

117. Give the full form : M.B.A.

Ans. Master of Business Administration

118. What is organisation?

Ans. Organizing or organization is a structure for assigning authority and responsibility among individuals
for achieving business objectives.
Business objectives, policy, programmes, etc. are decided through planning whereas organizing is done for
executing the plans.
Under organizing, various sections and groups of people are allotted various business activities so that
the objectives can be fulfilled.
The structure of organization decides on matters like who will supervise, who will have authority and
responsibility of work, inter-relationship among individuals, etc.

119. What is planning?

Ans. Planning is the function of determining in advance: (i) What is to be done. (ii) Who has to do it. (iii) To
what extent is the work to be finished and (iv) By what time the work to be completed.
OR
A planning is the function of predetermining the accomplishment of predecided objectives.

120. Who are included in top level management?

Ans. Board of Directors, Managing Directors, General Manager, Chief Executive Officer, etc. are included
on top level management.

121. Which level of management follows the order and instruction given by chief executive officer?
Ans. Middle level management follows orders and instructions given by the CEO.

122. What is other name of middle level of management?

Ans. The other name of middle level management is officer’s level / manager’s level.

123. Give the full form of CEO.

Ans. Chief Executive Officer

124. What is management?

Ans. Management is the art of getting things done through others.

125. Define Production Management and explain its functions.

Ans. Production management:
The process which includes planning for production, deciding programmes, maintaining co-ordination,
direction and keeping control is called production c management.
The process of converting naturally available raw material into consumable finished goods with the help of
human efforts is known as production:
Production management takes care that the goods and services produced are capable of satisfying the
needs of the customers.
Following functions are included in production management:
To decide production plan
To undertake production researdh
To select product development as well as product-mix To
select technology and machinery for production
To take decisions regarding selection of location for production as well as its layout To
estimate material and other needs for production
To control production activity To
control product quality
To undertake activities for controlling expenditure maintaining and increasing productivity To
introduce variety of products and simplify production process

126. What are the elements included in product-mix?

Ans. Appearance of the product, colour of the product, size of the product, shape of the product, weight of
the product, print on the product, packing of the product, guarantee of work, after-sales service, variety of
product, etc

127. Which level of management has the supreme authority to manage the business?
Ans. Top level of management has the supreme authority to manage the business.

128. Which concepts are included in behavior related thoughts?

Ans. Concepts like inter-human relations, motivation, leadership, information communication process,
disposal of industrial disputes are included in behavior related thoughts.

129. What is unity of command?

Ans. The principle of unity of command states that each participant in a formal organization should receive
orders from and be responsible to only one superior.

130. What is management thoughts?

Ans. The principles, opinions and thoughts given by several management gurus are together known as
management thoughts.

131. In modem thoughts which other subject are related with management?
Ans. Psychology, social studies, statistics, mathematics and computer and information technology are the
other subjects related – to thoughts of modern management.

132. What is time study?

Ans. Time study means, to determine the standard time required to complete a particular activity.

133. What is ‘Principle of management’?

 Ans. Principles which are formed in relation to the human behavior for achieving the goals easily are known
as principles of management.

134. Give the full form of O.R.

Ans. O.R. stands for Operations Research.

135. What is planning premises?

Ans. Planning premises is the second step of planning. After determining objectives, planning assumptions or
forecasting has to be made. These assumptions and forecasting are known as premises which has to be
clear and precise for success of . planning in business unit.

136. State the types of budgets.

Ans. The types of budget are: (i) Capital expenditure budget (ii) Sales budget (iii) Production budget (iv)
Cash budget (v) Production cost budget

137. In which fields is planning found?

Ans. Planning is found in business, politics, education, religion, social events, etc.

138. When is the principle of ‘Look and Leap ‘adopted? (March 2018)
Ans. When we proceed step-by-step in the planning process, the principle of ‘Look before you Leap’ is to
adopted. [Look and Leap = Think before you act.]

139. What are the first and last functions of planning?

Ans. The first function of planning is the determination of objectives. The last function of planning is
evaluation of the plan.

140. What is a method/procedure?

Ans. A method is an arrangement for can out a business programme.
OR
“Method” refers to the best way of accomplishment of predetermined objectives.

141. Mention reasons for the uncertainitics in planning.

Ans. There are uncertainties in planning because planning is based on assumptions and forecasting which is
made for future. Future is uncertain and therefore, assumptions carmot be fully correct. Uncertainties
prevail in planning as it is related to future.

142. What is a matrix organization?

Ans. Many large organizations with diversified activities have stopped adopting the simpler and basic
functional structure. They use a matrix organization, which is more suited to their activities. So, we can
say that a matrix organization is a modern form of organization.

143. What is responsibility?

Ans. Responsibility is the duty assigned by top level officers to their subordinates for a specific piece of
work.

144. What is called delegation of Authority?

 Ans. Delegation of authority is such a kind of process in which the administrator gives a part of the powers to
his sub-ordinates along with duties and the helpers, with the help of others, for the purpose of work .
performance, accepts such powers consciously.

145. What is an organization? (March 2018)

Ans. Planning is done for the implementation of managerial policies. To put these policies in practice, an
administrative structure is created. The administrative structure that is formed is called an organization.

146. What is accountability?

Ans. The delegated authority—holder has to provide a proper explanation and also follow the process for
reporting to the top—level management. This is known as accountability.

147. What is an informal organization?

Ans. Interaction among people at work gives rise to a network of social relationships among employees. This
network is called an informal organization.
OR
An informal organization is not deliberately established, but it is the outcome of interrelationships
created on their own to contribute towards specific common objective.

148. Which is the base of the selection process?

Ans. The base of selection process is size of the organization, type of organization, and kind of employees
required.

149. State the names of various types of tests conducted in the selection process.
Ans. The tests conducted for the selection process are:
(i) IQ test, (ii) Aptitude test, (iii) Trade test, (iv) Psychological test.

150. What is an organization without staff compared to?

Ans. An organization without staff is like a skeleton, i.e. without limbs.

151. When does the need for recruitment arise?

Ans. Recruitment is to be done when : (i) a new enterprise is established; (ii) when an existing unit is
expanded; (iii) when an employee resigns, dies or retires.

152. On what does the selection process depend?

Ans. The selection process of an employee is based upon the: (i) Size and type of organization and (ii) Kind
of employees required.

153. Give the full form of : IIM, IIT, HRM, HRD, IQ test.
Ans. IIM — Indian Institute of Management
IIT — Indian Institute of Technology HRM
— Human Resource Management HRD
— Human Resource Department IQ test
— Intelligence Quotient Test

154. State the reasons for recruitment.

 Ans. Recruitment is to be done when : (i) a new enterprise is established; (ii) when an existing unit is
expanded; (iii) when an employee resigns, dies or retires.

155. Which external factors jeopardize the very existence of a business?

Ans. xternal factors such as government policy, competition, changes in market scenario, inflation, shortage
of raw material, preference of people, change in fashion, etc.

156. With which functions of management is planning closely related?

Ans. Controlling

157. Before which function, should all other functions of management be performed?
Ans. All the functions of management must be performed before the controlling process.

158. What is deviation?

Ans. The difference between the actual result and the expected result is known as ‘deviation.’ It is also
known as ‘variance.’

159. When do the established standards change an new and higher standards set?
Ans. Standards are required to be changed when they are easily and continuously obtained. In such a case,
new and higher standards are to be set.

160. Why is it necessary to measure performance?

Ans. Performance is to be measured to find out whether or not activities are undertaken as per the set
standards.

161. At which level of management function does controlling take place?

Ans. At all levels of management

162. With whom foreign investment insitution has to register itself?

Ans. Foreign investment institution has to register itself with SEBI.

163. Financial management is related with which type of financial decision making?
[Link] management is related with: (I) Investment decision, (ii) Capital structure [Financing
decision), and (iii) Dividend decision.

164. In which form dividend can be paid to the shareholders?

Ans. Dividend can be paid to the shareholders in cash or cheque on paid—up capital of shares.

165. What does capital structure consist of?

Ans. The capital structure of the company consists of : (i) Equity shares, (ii) Equity shares and preference
shares, (iii) Equity shares and debentures, and (iv) Equity shares, preference shares and debentures.

166. What is meant by Optimum Capital Structure?

Ans. Capital structure which has maintained a balance between equity capital and debt is known as Optimum
capital structure.
167. What are the components of fixed capital?
Ans. The components of fixed capital are land, building, plant, machinery, vehicle, furniture, etc.

168. For which type of security issue the expense is comparatively less?
Ans. The expenses on issuing debenture are lower than the issue of other securities.

169. What is Promotion mix?

[Link] mix refers to combination of promotional tools used by an organization to provide
information about the goods and services to the consumers and persuade them to buy the product.

170. What is marketing management?

Ans. It is the management process which identifies customer wants, anticipates their future want and then try
to satisfy them profitably.

171. What is personal selling?

Ans. Advertisement conveys information to consumers about the product of a business unit, but sometimes, it
fails to give the desired result.
Hence, the next option available to the marketing manager for promoting the product is personal selling.
In personal selling, a salesman presents his product before the buyer and describes its features to the
prospective consumer.
Any doubt in the minds of the prospective consumer regarding the product can be cleared by the
salesman, which helps win over the trust of consumers regarding the product.
Personal selling not only creates awareness about the product but also a preference for the product.

172. Give meaning of market research.

Ans. Marketing research is a process of collecting information about consumers’ taste and preferencesaswell
as demand, price, competition etc.

173. Give meaning of ‘publicity’.

Ans. Any form of non-personal presentation of goods, services or ideas done through public media which is
free of charge is known as publicity.

174. What is Sales promotion?

[Link] promotion is a group of techniques which are designed to encourage the buyers to make
immediate purchase of a product.

175. Give full form of : NCH

Ans. National Consumer Helpline

176. Give full form of : CPC

Ans. Consumer Protection Council

177. In which courts can public interest litigation be filed?

Ans. Public Interest Litigation can be filed in the high court of the concerned state or directly to the supreme
court.
178. What proof should compulsorily be produced by the consumer to prove his purchase?
Ans. Bill of the product purchased

179. Who is the king of the market in a free market system?

Ans. Consumer is the king of the market in a free market system.

180. According to the principles of Trusteeship who is the important person in an organization?
Ans. According to the principle of trusteeship, consumer is the important person in an organization.

181. Under which heads can consumer exploitation be divided?

Ans. The exploitation of consumers can be predominantly categorized under three heads:
(i) Physical and mental exploitation; (ii) Economic exploitation; and (iii) Against public interest.

182. Which two rights are favoured by the United Nations Organisation in its directive for the
consumer?
Ans. (a) Basic rights and (b) Right to hygienic environment

183. Give full form of : CCC

Ans. Consumer Co—ordination Council

184. Give full form of : CUTS

Ans. Consumer Utility and Trust Society, Jaipur

185. Give full form of : CGSI

Ans. Consumer Guidance Society of India, Mumbai

186. Give full form of : CERC

Ans. consumer Education and Research Centre

187. If the complainant is not satisfied by the judgement of State Level Commission, then to whom
should he appeal for reconsideration and within what period?
Ans. The appeal should be made to National Level Commissions within 30 days of the judgment of the State
Level Commission.

188. If the complainant is not satisfied by the judgement of District Level Forum, then to whom should
he appeal for reconsideration and within what period?
Ans. The appeal should be made to State Level Commission within 30 days of the of the district forum.

189. When can there be an increase in the per capita income of a country?
Ans. The per capita income of a country increases if its population does not increase in the same proportion
as its national income.

190. Which aspects are included in cultural factors?

Ans. Cultural factors include tradition, practices, life style, habits, custom, belief, art, literature, eating habits
etc.
191. Which are the two main classification of factors of business environment?
Ans. Factors affecting business environment can be divided into two broad classification: (i) Internal factors
and (ii) External factors

192. Give only names of factors related to business environment.

Ans. Economic, social, cultural, technological, political and legal factors.

193. Give only names of internal factors affecting business environment.

[Link] factors affecting business environment are business objectives, employees, organizational
system etc.

194. Which aspects are included in fiscal policy?

Ans. Tax structure and government expenditure.

195. Which aspects are included in monetary policy?

[Link] monetary policy includes changes in interest rates, the inflation rate, credit creation, credit
availability, etc.

196. Give name of groups related to business environment.

Ans. Business environment includes many groups like consumers, competitors, suppliers of raw materials,
employees, etc.

197. What initiative have the banks taken to simplify banking operation and understand the
procedure?
Ans. Almost all banks have adopted E-banking and M-banking, which have made banking operation simple
and easy to understand.

198. Give the full Form : e — Banking

Ans. Electronic Banking

199. Give the full Form : M - Banking

Ans. Mobile Banking

200. Who is considered the father of controlling?

Ans. Planning is considered the father of controlling

Section - C
‣ Answer the following question in Short. (Each question carries 2 Marks) (00)
201. Which are the main elements of marketing management?
Ans. The main function of marketing management is to get information about the market demand.

202. What is co-ordination?

Ans. Co-ordination:
To task of maintaining co-ordination and harmony among the different functions carried out by different
departments in the business unit is called co-ordination.
Although co-ordination is not a function of management but it is required at each and every stage of
management.
It is necessary right from the planning stage to controlling.

203. How does management benefit the society?

Ans. Social benefit:
A business is done while remaining in the society and for the interest of the society.
Management makes uses of resources such as manpower, knowledge gained from the society, etc. available in
the society and then works in the favour of the society.
When the business earns success it in turn increases the wealth and welfare of society. For example, with time,
development and competition business units produce goods and services at low cost for the people. This
results into welfare of the entire society.

204. State any two functions performed at the top level management.
Ans. The top level (or higher level) management is the supreme authority for managing the enterprise.
It consists of Board of Directors, Managing Directors (MD), General Manager (GM) and Chief
Executive Officers (CEO).
The top management takes important policy decisions for the business unit. Functions of
the top management:
To lay down primary and subsidiary objectives of business. The
directors act as the trustees of the business enterprise.
To select Chief Executive Officer and higher officers and to assign them authority and responsibility. To
sanction the budget for different departments of the business unit.
To abide by law and to take care of interest of different stakeholders of the business. To
take strategic decisions by making long term plans.
To analyse and resolve complex problems of management as per legal provisions. To
draft plans for the enterprise, implement them and to supervise them.
To conduct functions like distribution of profit, dividend, reserve fund, re-investment of profit, etc. To
analyse reports of different activities and to instruct further activities accordingly.

205. Discuss various elements of price—mix.

Ans. The customer expects availability of better quality of goods at reasonable rates.
Therefore utmost care should be taken while deciding the price of the product.
The price decisions includes sales policy, credit policy, discount policy, wholesale and retail sale, commission
to mediators etc

206. Discuss about staffing.

Ans. Staffing:
It is said that “Employees are arms and legs (limbs) of unit.”
According to Dr. George Terry, “Staffing is concerned with availing and maintaining satisfactory
manpower.”
Every business organization requires staff. Hence, staffing is a very important function of management. An
organization without staff is like a mere skeleton. Activities of all businesses depend on their staff.
The function of staffing is to recruit employees for the right position, at the right time, in the right number,
with the right qualification. It also includes selection, training, transfer, promotion, dismissal, retirement
and welfare activities of employees.
This function is carried out by the Human Resource Department of the business organization.
Staffing also monitors the output of work of each employee. It also listens to the problems of the employees.
This helps in maintaining the enthusiasm and zeal of employees. Enthusiasm for work and comfortable
and encouraging work environment leads to increase in productivity and efficiency of the organization.
Today staffing also includes man-power planning, human resource development, evaluation of work, job
analysis, etc. It is a highly known fact that a satisfied staff is an invaluable asset of the business.

207. Explain Taylor’s differential wage rate study.

Ans. Differential wage-rate study:
A referential wage-rate system is a method of wage payment in which after tests a standard time for any task is
being set. The worker gets a high wage- rate for completing the job within the allotted time and lower
wage-rate for / completing the job beyond the allotted time.
Frederick Taylor favored this motivational wage method.
Each worker working in factory has different work efficiency. Considering this fact, efficient worker should get
more wages whereas workers having less efficiency should get lower wages.

208. What does the principle of equality?

Ans. Employees are a part of managerial system.
The employees are human beings and so the management should adopt a practical and humanitarian
approach to handle them.
Superiors should behave appropriately and uniformly while taking work from their sub-ordinates.
The management should make efforts to establish equality in unit informally father than through legal or
traditional ways.
This principle believes that behaviour of employees is based on faithfulness, attitude, uniformity and
justice in the unit.

209. Explain the principle of unity of command.

Ans. Unity of command: As per this principle, employee should get order from only one superior.
It means that the employee is responsible to only one superior for a particular job.
If employees get order from more than one superior, then there can be adverse effects which leads to : (I)
confusion among employees with regards to instructions given; (ii) difficulties in maintaining discipline;
and (iii) duplication of work etc.

210. In to which six parts, Henry Fayol divided his entrepreneur activities – Explain.
Ans.

enri Fayol was a French engineer and an industrialist. He contributed much in the management thoughts and
principles.
In 1961, he gave 14 principles of management. He presented these principles in his book ‘Industrial and
General Management’.
For better management, ease and clarification of these 14 principles he divided activities of industrial units in
6 parts. The six parts are:
Industrial activity Inclusions
Industrial activity Inclusions
(1) Technical activities These activities include factory machineries and activities related production.
(2) Commercial
Activities like purchasing, sales, exchange of units
activities
Activities like procurement of capital, use of capital, fund maintenance, re
(3) Financial activities
investment
These include safety of employees, safety of assets, safety of goods (raw
(4) Safety activities
materials)
(5) Accounting These include financial statements and performing necessary statistical
activities analysis
(6) Management These include planning, organization, direction, co ordination control
activities activities

211. Into which six parts, did Henry Fayol divide entrepreneur activities. Explain.
Ans.

212. “Principles of management are flexible“. Suggest.

ns. The principles of management are flexible and not rigid.
They can be changed as per the changing situations. They can be modified by the manager when the
situation so demands.
They give the manager enough discretion to do so. A manager can make any change in the principles as per the
time, situation and circumstances.

213. What is ‘Rule of Thumb’?

ns. Traditional method was military type and rule of thumb was the part of traditional method.
In the rule of thumb, workers were dominated by the owner.
Workers were not having any voice, since the owners were autocratic.
Orders instructions were given by the owner and it had to be blindly followed by the workers.

214. What is scientific management?

Ans. F. W. Taylor defined scientific management as “Knowing exactly what you want your man to do, and
then see to it that they do it ¡n the best and the cheapest way”
Scientific Management is a mental revolution favouring employeesof a factory. It focuses on tasks and duties of
the employees, their colleagues and owners. Taylor suggested the following things to be adopted for
scientific management:
Each worker should be assigned work as per his mental and physical ability. Each
worker should be instructed to perform maximum work as per category.
A worker working efficiently and rapidly should be paid 30% to 100% more wages.

215. State the elements or components of planning.

Ans. Elements/components of planning:
The subsidiary plans and programmes on which a planning is based are called elements of planning. The
elements of planning are discussed below:
Objectives Strategy
Policy
Method/Procedure Rules
Budget Programme

216. Explain the statement, “Planning is irrelevant”

Ans. Planning is Irrelevant: External factors change frequently, and therefore, plans are required to be altered
as per these changes.
This makes planning irrelevant.
If planning is not changed according to the time, circumstances and situation, it is liable to fail.

217. What do you mean by policy?

 Ans. Policy: Decisions and strategies decided by the management for accomplishment of objectives are
known as policies.
Policies are general statements that guide the employees or channelize their energies towards a particular
direction.
e.g. Policy of sale of goods on cash basis is a guideline for employees that goods will be sold only on
cash basis and not on credit basis.
Policies create a distinct image of the business unit.
They give an idea of efficiency and working style of the business unit.
If there is an established policy, it becomes easier for the business to resolve problems or issues.

218. What is final budget?

Ans. First of all, a budget is prepared for every department. e.g. Budget of production department, sales
department, finance department etc.
Then, the budgets for various departments are coordinated, and an overall budget for the enterprise is
prepared, which is known as the Final / Main / Master budget.

219. What is the need of strategy?

Ans. A contrivance used for the accomplishment of pre—decided objectives of planning is known as a
strategy.
A strategy is necessary for the accomplishment of pee—decided objectives of plans. It
makes the business unit capable enough to face competition.
An ideal strategy gives a guarantee of success of a business unit.

220. What do you mean by determination of objectives?

Ans. When a business unit has to decide what it wants to achieve with the help of available resources, it is
known as determination of objectives.
Determination of objectives is the first step of the planning process. Objectives should be pragmatic,
which means that they should be realistic and intellectual.

221. What is subsidiary plan?

Ans. Formulation and evaluation of subsidiary plan:
Over and above the main plan, different projects or alternatives have to be considered as per basic plan or in
support of basic plan. These plans are known as subsidiary/derivative plan.
For example, a car manufacturing company is trying to make a decision to make tyres for its cars. On the other
hand, it is also thinking to buy them rather than manufacturing. Such an alternative is considered
subsidiary plan. Even the subsidiary plan is evaluated to assess that it does not obstruct the basic plan in
future.

222. “Planning is primary function of management.” Explain.

Ans. Management starts with planning.
Planning lays down the basis for other functions of management.
All other managerial functions are performed within the framework of the plans drawn. Hence,
planning is considered the first/primary function of the management.
Other functions of management such as organization, staffing, directing, and controlling are implemented on
the basis of planning.
Without planning, neither can an organizational structure be created nor can the staffing function be
done. None from leadership, direction, or controlling are possible without planning.
Planning is the basis for other managerial functions, therefore it is known as the primary function of
management.

223. “Planning is an expensive process.” Why?

Ans. The word planning is small but it has a long process.
Right from “determination of objectives” down to “evaluation of plan,” it is a long process to make It self
meaningful.
During planning, so many persons remain busy for the collection of information, facts, its classification,
analysis and evaluation. Alternatives are considered, and then the best alternative is selected.
Thus, its preparation involves men, material and time.
Hence, it is certain that the expenses of the business unit will increase. Further,
business units sometimes take the services of experts to make a plan. These
experts charge high fees.
Thus, planning is an expensive process.

224. What is planning?

Ans. “Planning is the act of deciding in advance what to do, how to do it, when to do it and who is to do it.”
Thus, planning involves forecasting the future.
In other words, planning is the process of collecting information for the activities to be undertaken in
business, considering them in advance and taking into account how to do these activities.

225. “Planning should be flexible” Why?

Ans. Planning is done for future, which is uncertain due to the external factors affecting the business.
As any change take place in external factor, changes are made in planning too. It helps to a business unit to
survive in the competitive market.
Thus, planning is not a static element.
Flexibility is the precondition for planning. It helps to accept the changes as per time, situation and
circumstances.
This is possible only when planning is allowed to be flexible.

226. “Distribution of Authority and Responsibility is a base of an Organisation” – Explain.

Ans. Delegation of Authority and Responsibility:
The people working towards the achievement of a common goal are delegated authority as well as
responsibility as per their capabilities and skills.
Under organization, a chain is established between different people, right from the top to the bottom
level.
It is clearly specified what will be the authority and responsibility of every person working at different
levels.
227. What are the limitations of a matrix organization?
Ans. The limitations of a matrix organization are:
(1) Absence of Unity of Command : Unity of command is absent as orders are given by departmental
heads as well as project managers.
(2) Expensive: High fees are paid to the project specialist as well as to the functional authorities.
(3) Feeling of Insecurity : Many times, a project runs only for a small duration. In such a case the
problem of unemployment may arise if another project is not available to the organization in time.
(4) Difficulty in Coordination : If the project is for a small duration, it is difficult to establish widespread
coordination in the entire team.

228. “Formal and Informal Organisations are Complementary to each other.” – Explain.
Ans. Both formal and informal organizations co exist in every enterprise.
A formal organization is formed deliberately, while an informal organization emerges spontaneously.
A formal organization is helpful in easily attaining the objectives of a business, while an information
organization is not only an effective way to communicate, but it also increases initiative among
employees, decreases pressure of superiors and makes the formal organization strong.
It would be in the best interest of the organization if the existence of such informal groups is recognized
and the roles played by their members are identified.
Thus, it can be concluded that informal relations among employees are complementary to formal
relationships.

229. When is Decentralisation Possible?

Ans. Decentralization is possible when:
(i) the organization is of a large size
(ii) the top-level management cannot supervise day-to-day functions of the firm
(iii) quick decisions are required to be taken
(iv) effective control over employees and business activities is necessary.
Decentralization is most desirable under the above circumstances.

230. “Organising is Body and Planning is a Brain of Business Enterprise” – Explain.

Ans. Organization is considered as a physical structure while planning is considered as a brain of a human
body.
The function of a brain in the human body is to take the intellectual decision while its implementation is
done by various organs of the body.
In the same manner, the function of planning in a business unit is to take intellectual decisions.
Therefore it is said that, planning is the brain of a business while organization is its physical structure.

231. State the difference between Training and Development.

ns.

Points of
Training Development
Difference
is a process of imparting theoretical and is a process of imparting theoretical and
practical knowledge to employees with the object
practical knowledge to top level management and
Meaning
of acquiring proficiency in work departmental heads
The objective is over all development of
The objective of training is to increase efficiency
management and officers by enhancing their
Objective and productivity
abilities and moulding their personalities
Centre Future career and probable challenges are at
Work is at the centre of training
point centre of development
Time and
expense is a short term and less expensive process is a long term and expensive process

Who Experienced employees, experts or Experts belonging to educational institutions

imparts? supervisors. various fields
Developmental programs are for executives and
To
Training is given to staff at the bottom level. departmental heads working at top and
whom?
middle level.

232. What is recruitment?

 Ans. general terms recruitment can be defined as, “The process of looking for probable employees and
making them apply for the job.”
In a broader sense “Recruitment is the process of acquiring at the right time, in the right number, in the
right place, persons with the right qualifications.”
Recruitment is not a one time job. It keeps on continuing in the organization.
Recruitment takes place when a new enterprise is established, when an existing unit is expanded or when an
employee resigns, dies or retires.
Sources of Recruitment:
There are two sources of recruitment.
(A) Internal sources
Promotion
Transfer
Friends and relatives of employees Recalling
retrenched employees Promotion with
transfer
Waiting list
(B) External sources
Through advertisement
Through employment exchange
Through educational institutions
Through trade unions
Through contractors and jobbers
Recruitment at the gate
Modern methods

233. What can be known through trade test and psychological tests?
Ans. (c) Trade test: This test is meant to decide whether the candidate has the necessary skills to perform the
expected job or not.
(d) Psychological test : This test is meant to know about the nature, self-confidence, attitude and habits of the
candidate.

234. What is development?

Ans. As contrast to training, development is an organized activity in which the manpower learns and grows
through self-assessment. It is a type of educational process which develops the personnel over a period of
time.
The concept of development is more applicable to the higher level and top level management.
Top level management and departmental heads perform more of intellectual work than physical work. Like
workers, they do not work on machines. They play roles of leaders who lead the workers, manage them,
motivate them and take out work from them. So, their training needs are different. Hence, they need
different kind of training or say development.
The objective of this training is to increase their mental ability and their efficiency in taking policy decisions
and leading the organization in more and more efficient way. Such development trainings make them
experts in technical knowledge which then help in them in making strategic plans and policies. This type
of training is called officer development.
The modern world industries are developing very fast. The managers need to remain in line with these
developments so that they can stay well in the competition. So to enhance the ability of top level
management, the organization undertakes development-oriented programs.
Development is the process of imparting theoretical and practical knowledge to top-level management and
departmental heads.
The term development refers to a program which helps to achieve the predefined objectives of the organization
by improving the capabilities of heads (officers).

235. Give the meaning of training.

Ans. Training is the process of imparting theoretical and practical knowledge, with the objective of acquiring
proficiency in work.
Training is a continuous process.
Business units arrange training programmes to increase the knowledge, ability and proficiency of
employees.

236. What can be known through IQ and aptitude tests?

Ans. (a) IQ test : This test is meant to assess the common sense, memory, smartness, power of decision—
making and thinking ability.
(b) Aptitude test: This test is meant to know whether the candidate selected for the specific job has an
interest (aptitude) for it or not.

237. State the differences between recruitment and selection.

Ans.

Basis for comparison Recruitment Selection

Recruitment is an activity of searchingSelection refers to the process of selecting
Meaning candidates and the best candidates and
encouraging them apply for it. offering them job.
It has a positive approach i.e. it
It has a negative approach where it rejects
Approach encourages more and more people
the unsuitable candidates
apply
Key Factor Advertising the job Appointment of the candidate
Sequence Recruitment is the first step Selection is the second step
Vacancies are notified by the firm The firm makes applicant pass through
through various sources and various levels like submitting form,
Process
application form is made available written test, interview, medical
the candidate. test and so on.
As recruitment only implies the Selection involves the creation of
Contractual Relation communication of vacancies, no contractual relation between the
contractual relation is established. employer and employee.
Method Economical Expensive

238. Name the stages of the process of selection.

Ans. Steps of process of selection:
Welcoming and primary meeting . Receiving
and screening of applications Taking
necessary tests:
IQ test
Aptitude test Trade test
Psychological test
Personal interview
Checking references Preliminary
selection
Physical (Medical) examination Appointment
letter
Induction into the organization and allotment of work

239. Name the internal and external sources of recruitment.

Ans.

In general terms recruitment can be defined as, “The process of looking for probable employees and making
them apply for the job.”
In a broader sense “Recruitment is the process of acquiring at the right time, in the right number, in the right
place, persons with the right qualifications.”
Recruitment is not a one-time job. It keeps on continuing in the organization.
Recruitment takes place when a new enterprise is established, when an existing unit is expanded or when an
employee resigns, dies or retires. Sources of Recruitment:
There are two sources of recruitment.
(A) Inte
rnal sources
Promotion
Transfer
Friends and relatives of employees Recalling
retrenched employees Promotion with
transfer
Waiting list
(B) Extern
al sources
Through
advertisement
Through employment exchange
Through educational institutions
Through trade unions
Through contractors and jobbers
Recruitment at the gate
Modern methods

240. Staffing is not merely an employee welfare activity. Why?

[Link] is not merely an activity related to labour welfare, but it is also concerned with the
development of employees.
Employees’ development refers to the development of new skills and qualities required for working at
different levels. This is done by making and implementing training programmes for the employees.
Employees’ development is possible through training programmes and not simply by offering lucrative
wages and salaries.
‘ Thus, staffing is not merely an employee welfare activity, but it is also concerned with acquiring,
training, maintaining and developing personnel.

241. Explain the meaning of incentives.

Ans. Incentive means inspirations used to motivate people to improve their performance.
Any reward given to workers, other than their salary, either in monetary form or in the form of any
facility, with a purpose to inspire them to increase their efficiency is known as incentives.
According to an expert, “Incentive means that which incites or has a tendency to incite action.”
242. What is co—partnership?
Ans. Co—partnership:
In this type of incentive, employees are considered partners.
As employees are considered partners, they not only have a right in the share of profit, but they can also
participate in the management of the organization. This is known as co—partnership.
Co—partnership creates a feeling of ownership in employees and makes them contribute towards the
growth of the organization.
It also helps maintain industrial peace.

243. Explain the meaning of leadership.

Ans. “Leadership is the art and skill of creating a desire in others for achieving business objectives.”
A leader is an influential person of the group who provides guidance and inspiration without any pressure and
thus, gets the expected work willingly done.
The leaders always play a key role in the success and excellence of any organization. This
skill is known as leadership.

244. Explain formal communication in short.

Ans. Formal communication:
Communication that depends on the structure of an organization and its rules and regulations and is
implemented for the accomplishment of business objective is called formal communication. Generally,
formal communication is in writing.
This type of communication has a formal link between the superior and the subordinate. Its objective is to
control and co-ordinate.
Formal communication is clear and easy to understand.
Here, who will send information to who is decided before communicating. Moreover, the form of information is
also pre-decided.
Example:
Notice or Memo is given as warning to the employees who are irregular and remaining absent without
prior permission.
A letter given by superior to subordinate for his transfer or promotion. Characteristics:
In formal communication, superior and subordinates are formally related Its
main objective is control and co-ordination
Formal communication is generally in written form
This type of communication system is accepted as policy of organization It is
based on organization structure
Formal organization is formed for the accomplishment of business objectives It is
easy and clear to understand

245. What do you mean by supervision?

Ans. Overseeing or watching the work performance of those who are working under your charge is known as
supervision.
Supervision refers to the day—to—day guidance and direction to the subordinates.
Supervision is to know that, subordinates have implemented the work given to them as per orders and
instruction or not.
Supervision is mostly related with internal working of the business. Supervision is
required more at bottom level of management.
246. What do you mean by motivation?
Ans. Motivation means the inducement to act or move.
There is a difference between the capacity to work and the willingness to work.
If a worker is capable but not willing to work, then the objective of management is not achieved.
Willingness alone can increase productivity.
The process of converting ‘capacity’ of a person into ‘willingness’ is known as motivation.
Thus motivation is the process of inspiring people to get the expected result.

247. How does motivation help to reduce labour turn over rate?
Ans. Motivation self-satisfies employees, hence they get inspired.
Employees get remuneration based on their performance.
This induces them to continue with theirjob and not think of change.
This is how motivation helps in reducing the labour turnover rate.

248. Give the list of elements of direction.

Ans. Elements of Directing:
Supervision
Motivation
Leadership
Communication

249. What do you mean by informal communication?

Ans. Informal Communication:
Any communication which depends on human relations and friendship among employees of an organization is
known as informal communication.
Informal communication is flexible and simple in nature.
There is no need of control and order in formal communication.
It can be explained orally or even in a symbolic language i.e. through signs. Informal
organization provides co-ordination and credibility to the organization. Example:
Industrial manager instructs the labourer to work
Sales manager gives information and suggestions regarding presentation to the salesman in an easy-going
manner
Characteristics:
It depends on human relations
Control or order is not required in informal communication It can
be explained orally or through symbolic language Depends
on human and friendly relations
It is flexible and easy
Process is not important in this communication
It gives more co-ordination and credibility to organization
Informal communication is not. supplementary but complementary to the formal communication

250. A supervisor’s work is similar to that of a teacher “Explain the statement.

Ans. A supervisor maintains day-to-day contact and friendly relations with workers. A good supervisor acts
as a guide, friend and philosopher to the workers.
The main function of supervisor is guiding and advising the subordinates and thus solving their problems of
tools, machines, material etc.
The supervisor acts as a link between workers and management. On one hand, he conveys management ideas to
the workers and on the other, the workers’ problems to the management. This role played by a supervisor
helps avoid misunderstandings and conflicts between the management and the workers / employees.
A supervisor motivates his subordinates to perform the work in the best possible way. This
helps create an ideal job environment for the accomplishment of the business task.

251. “Controlling is a continuous process. “Explain.

Ans. Controlling is a function that brings the management cycle back to the planning function. The
controlling function finds out how far the actual performance deviates from standards, analyses the
causes of such deviations and attempts to take corrective actions.
Controlling performs some important and constant activities such as (i) Quality control and (ii) Cost control.
Thus, control is a continuous process that helps a manager make sure that the performance of his subordinates is
as per the predefined objectives.

252. How is controlling an internal process?

Ans. Internal process:
A business unit is affected by two factors: (i) External factors and (ii) Internal factors.
External factors are those factors over which a business unit has no control, e.g. change in government
policies, depression, inflation, changes in the psychology of people, etc.
Whereas, internal factors are those factors over which a business unit has complete control. e.g.
production, sales, purchase, financial matters, financial accounts, working method of the employees, etc.
Controlling is an internal process, as internal factors can only be regulated by the management.
External factors are beyond the reach and control of the management. Thus,
control is an exclusively internal process.

253. “Controlling is a dynamic process. “Explain.

Ans. Control is a dynamic (flexible) process and not rigid.
Today’s industrial environment keeps on changing.
These changes are in the form of competition, changes in consumers’ taste, legal provision government’s
influence, etc.
All of these changes hinder the performance of work in conformity with the plans.
Accordingly, instant changes as per the situation or plans are to be made in the controlling process.
Controlling is an intellectual process based on planning and foresight. As the assumptions of different
factors change, the goals or plans also change, and thus, quick changes are made in the controlling
process.
So, controlling cannot be static (rigid); it has to be dynamic for effective results.

254. “Planning is the father of controlling. “Explain.

Ans. Planning is the origin of controlling.
If standards are not set in advance, managers have nothing to control. The
entire process of controlling is decided by planning.
Controlling checks whether decisions have been translated into the desired action. Thus, controlling does not
exist without planning. The standards of performance which serve as the basis of controlling are provided
by planning.
When there is no plan, there is no basis of controlling.
Keeping this in mind, planning is considered the father of controlling.

255. Give the meaning of controlling.

Ans. In the management process, planning is the first step and controlling is the last step.
First of all, activities are planned and there after duties and responsibilities are assigned.
As the work begins as per duties and responsibilities, the function of controlling also begins.
The function of controlling is to check the performance of the staff, to find out the deviations and remove the
deviation by necessary corrective measures for the implementation of the plan.
The essence of controlling is to see that functions are carried out according to predetermined standards
and to regulate the activities.

256. What is unorganised money market?

 Ans. The unorganized money market is an informal market, therefore it is not regulated by any centralized
institution.
The activities of the unorganized money market are carried out without any rules or regulations.
This money market consists of money lenders, landlords, pawn brokers, indigenous bankers, shroffs, etc.
There is a lack of coordination among all of these in such a market.
The activities of the unorganized money market have mainly developed in rural areas of India, however the
unorganized money market is also found in urban areas.

257. Which instrument of money market are negotiable?

Ans. The following are the instruments of the money market which are negotiable:
(1) Commercial Papers: Commercial papers are unsecured, short—term promissory notes that are issued by
companies having high creditworthiness. (2) Certificates of Deposit : Certificates of deposit are unsecured,
negotiable instruments to procure short—term finance. (3) Commercial Bills: Commercial bills are short
—term, negotiable instruments.

258. What is dematerialisation?

Ans. As per the provisions of the Depository Act, 1996, an investor gets an option to hold securities either in
the physical form or in a dematerialized form.
If an investor wants depository services, he has to open a demat account.
This dematerialization or demat in short is the process through which an investor’s physical share certificate
gets converted to an electronic format that is maintained in an account with the depository participant.
A depository participant is either a representative or an agent of the depository.
An investor will have to give a duly filled form requesting the depository participant for opening a demat
account.

259. What are the instruments of money market?

Ans. The money market is a market for short-term securities.
The maturity period of the money market is either one year or less than one year.
In the money market, two types of instruments are traded : (i) Secured and (ii) Unsecured. The
main instruments of the money market are as follows:
(1) Treasury bills (2) Commercial papers (3) Certificates of deposit (4) Commercial bills (5) Call / notice
money\

260. What is the main difference between call money and notice money?
Ans. Call money and notice money are the important components of the money market.
The main difference between these two is:
(i) Call Money: Call money is borrowed or lent for only one day.
(ii) Notice Money: Notice money is borrowed or lent for 2 to 14 days.

261. Stock exchange is a mirror indicating economic condition of the country – How?
Ans. Investors invest in share market. This way public savings gets converted as capital for industries and
companies. When companies grow by using these funds the investors further invest in the market. The
cycle of trade in stock exchange depicts how well or poor is country’s economy.

262. How does stock exchange provide liquidity element to securities?

Ans. Stock exchange ¡s a ready market in which traders (investors) can buy or sell shares as per their will.
This is how stock exchange provides liquidity.

263. Give the meaning of economic factors affecting business environment and state the aspects
included in it.
Ans.

Economic factors are the fundamental data about the market and economy taken into consideration when an
investment or business value is calculated.
The economic factors of a country play a major role in deciding the special features or limitation of its
economy or society.
The size and the nature of business development are also dependent on economic factors prevailing in the nation.
Following aspects (economic factors) affect the business environment , of the country: Economic
system
Degree of economic development
Sectorial growth and inter-sectorial combinations
National income and per capita income
Distribution of national income
Monetary policy Fiscal
policy

264. Give the meaning of business environment and list out the factors affecting business environment.
Ans.

Each and every business is related to several factors of the society. These factors could be economic, social,
cultural, technological, political and legal. These factors include many groups like consumers,
competitors, suppliers of raw materials, employees, etc. The environment created by the group of all such
factors that directly or indirectly affect the business is called business environment.
No business can operate on its own aloof from the society i.e. the factors of the society affect the business
environment and hence the business.
Business environment is highly dynamic and also quite uncertain. (A) Internal factors Business
objectives
Employees
Managerial systems i.e. organizational structure
External factors
Economic factors
(a) Economic systems
(b) Degree of economic development
(c) Regional development and international integration
(d) National and per capita income
(e) Distribution of national income
(f) Monetary policy
(g) Fiscal policy
(h) Other factors
Social factors
Cultural factors
Technological factors
Political factors
Legal factors

265. Why is globalization important?

Ans. Free interaction among economies of the world in the fields of trade, finance, production, technology
and investment is termed as globalization.
Globalization encourages foreign trade and direct foreign capital investment.
It is important because : (i) the borders of the countries are opened for services like banking, insurance,
transportation, communication etc., (ii) the world has shrunk to a global village, and (iii) India is playing
a major role in the international consumer market.

266. What is privatization ?

Ans. Privatization means the transfer of ownership of an industrial unit from the public sector to the private
sector.
This can happen in industrial as well as in service sectors.
To encourage competition and thereby, increase productivity and efficiency, the sectors that were first
reserved only for the public sector are now open for even the private sector.
Privatization has a favourable impact on the economy such as : (i) increase in productive efficiency, (ii)
absence of political interference, (iii) advantage of modernization and innovation, etc.

267. Give the meaning of liberalization.

Ans. In simple terms, liberalization is a movement of business and trade from a controlled economy to an
open and free economy.
In other words, liberalization means removing unnecessary trade restrictions and making the economy
more competitive.
Till July 1991, various types of controls and barriers were imposed on the private sector.
But as a part of the liberalization policy, the Indian government started reducing the intensity of controls in
various phases.
Liberalization allows the private sector to run even those industries that were reserved for the public
sector.
In certain sectors, controls have been removed completely or to a maximum extent.
In the liberalization process, the government of a country reduces the restrictions regarding licensing,
quota, tariff, foreign exchange, import duties, etc.

268. Which political factors affect the business environment?

Ans. Political factors that affect the business environment are: (1) The government in power (2) The attitude
of the government towards the business community (3) Lobbying efforts by an interest group (4) The
framing of laws and their implementation (5) The ideology of political parties, etc.

269. What is essential to get benefits of “E-banking” and ‘M-banking’?

Ans. Computers connected to the internet are essential to get benefits of ‘E—banking’.
Smart phones connected to the internet are essential to get benefits of ‘M—banking’.

270. Why is continuous study of business environment required?

Ans. Continuous study:
Business houses direct the managerial teams to keep a track of business environment. Large business units
also carry out several studies such as market research, product and consumer satisfaction, preference, etc.
These studies help the units to increase their market size and profit.
Study of business environment also helps the manager to understand future trends like situation of capital
market or future demand for the products produced by the business. The business unit can then plan
accordingly for its products and services.
Example:
Information technology based companies need to continuously study new software and hardware coming up in
the market and update their own products.

271. State the social factors affecting business environment.

 Ans. Meaning of Society: Society means a group of people, social institutions, traditions, etc. Business is a
Part of Society: Business originates, develops and ends in society. Business activities cannot be separated
from the society. Therefore, social factors affect business units. Social Factors : Social factors include
customers, traditions, fashion, lifestyle, beliefs, ideologies, religious value, standard of living of people,
etc. Impact of Social Factors on Business: The lifestyle, beliefs, and ideologies of people keep on
changing, therefore they bring changes in business factors, too. In certain types of business, decisions are
affected by the religion, caste, sect, social norms, etc. Where there is a predominance of a social
institution, certain businesses are closely linked with certain castes and communities, which restricts the
growth of a business. Meanwhile, those classes of societies that are aloof from social constraints
experience a much faster rate of development. Such a class welcomes new ideas, and business activities
thus, get a greater incentive.

272. What are the ways in which producers can exploit the consumers to increase their sales of goods
and services?
Ans. As a result of growing competition and in an attempt to increase their sales and market share,
manufacturers and service providers may be tempted to adopt unethical, exploitative or unfair trade
practices.
Consumers are forced to pay a higher price as sellers are engaged in overpricing, hoarding and black marketing.
This means that consumers might be exposed to risks such as (i) insecurity due to defective and unsafe
products, (ii) health hazards due to adulteration, (iii) cheating due to misleading advertisement, (iv) sale
of duplicate or spurious products, (v) black marketing and hoarding of goods, etc.
Consumers who are victims of such malpractices might be exposed to health problems due to unsafe and
adulterated food products.
Thus, there is a need to provide adequate protection to consumers against such practices. This has given birth to
consumer protection movements.
Therefore, the earlier slogan “consumer should be aware” has changed to “seller should be aware.”

273. Explain about consumers’ exploitation.

Ans. Consumer exploitation can be categorized into three heads:
(1) Physical and Mental Exploitation:
Consumers gets disappointed and angry when they are forced to purchase a sub—standard quality of
goods or duplicate products.
The inferior ingredients used in a product lead to physical harm.
(2) Economic Exploitation:
Consumers might have to pay a higher price when sellers are engaged in : (i) hoarding of goods, (ii)
black marketing, (iii) charging a higher price than the printed one, etc.
(3) Against Public Interest:
Public interest is not safeguarded when some products are produced by using certain materials that can
cause harm to the environment or when there is a misuse of monopoly.

274. Explain consumer protection from the point of view of consumers.

Ans. The importance of consumer protection from the consumers’ point of view can be understood from the
following facts:
(1) Extensive exploitation of consumers:
Consumers might be exploited by business units that wish to increase their profits by producing sub—
standard, adulterated or duplicate goods.
These businesses may even resort to false and misleading advertising, hoarding, black marketing, etc.
Consumers need protection against such malpractices by such sellers.
(2) Ignorance of consumers:
The main reasons for the consumer being cheated are:
(1) They are not aware of their rights.
(2) They hesitate to take any legal step.
(3) They have insufficient and misguiding information.
(4) They are not organized.
Therefore, it is necessary to spread awareness among consumers regarding their rights and
responsibilities and getting their grievances redressed.
(3) Lack of unity among consumers:
An individual consumer always feel helpless in the absence of unity.
Consumers need to be organized in the form of consumer organizations that will take care of their
interests.
In India, there are consumer organizations which are working in this direction.
But greater adequate protection is required to be given to consumers untill these organizations become
powerful enough to protect and promote the interests of consumers.

275. How does Lok Adalat help in creation of consumer awareness?

Ans. Lok Adalat:
Lok Adalat or People’s Court is India’s innovative contribution to the world for resolving cases quickly. The
concept of Lok Adalat was started in Gujarat.
It is an effective way to provide speedy and economical justice to the poor, weak and exploited section of the
society.
Generally, the Lok Adalats hear cases related to accident and its compensation, divorce, alimony, general
debts, personal complaints, police complaints, etc.
Lok Adalats consist of advocates, social workers, educationalists, reputed citizens, businessmen, police
officers, insurance officers, judges and judicial officers.
The Lok Adalats try to solve the cases amicably in such a way that both the parties get satisfied.

276. Write in brief about Public Interest Litigations (PIL).

Ans. Public Interest Litigation (PIL):
In Indian law, public interest litigation means a litigation (judicial proceeding) for the protection of
public interest.
A person may not be capable enough to file a complaint individually in a court either because of economic
reasons or due to lack of time.
There are certain matters which affect not just the individual but the entire society.
The affected person or a group of person from the society can simply write an application on a plain paper to
the High Court of the concerned state or even directly to the Supreme Court.
The court must get assured that the petition is filed for the public interest and not casually. If the court feels
the application to be relevant, it can convert the petition into a case.
After hearing the arguments of both the parties, the court gives its judgment.

277. List out the advantages of labeling.

Ans. A label differentiates the product of one producer from that of other competitors.
Through label a unique identity gets created for the product.
Once the label becomes famous, the consumer easily identifies the product through that label. Labels
also help to prevent cheating of consumers through fake products.
It is also easy for the company to advertise the product if it retains the label properly. Labeling
ensures product quality.

278. What is branding?

Ans. The process of creating different identities of the product is known as branding.
OR When a producer gives a name, logo, design, number, and/or symbol to the product to differentiate
his own product from the product of competitors is known as branding.
e.g. TATA, Red Label tea, Britannia — Tiger biscuit, Sony — TV, etc. A
brand gives a distinct identity to the product.
While deciding a name or symbol for the product, the product’s features and the philosophy of the
organization are kept in mind.
The product name should convey a particular meaning, and it should be easy to remember. When
a name, logo, symbol or design is registered under the law, it becomes a trademark.

279. What is marketing-mix? What it includes?

Ans.

The marketing mix is the foundation model in marketing.

Marketing mix can be defined as the “set of marketing tools that the firm uses to attain its marketing
objectives”.
Under marketing mix, the firm has to take several marketing decisions that fall under four categories namely,
Product, Price,
Place and
Promotion.
These four constituents of the marketing mix are also known as 4Ps (Product, Price, Place and Promotion.)
Thus, marketing mix is a base on which the firm establishes various policies and undertakes decision so as to
launch the product successfully.
business unit does not has control over external factors, but can certainly control the 4Ps of marketing mix
to a much larger extent to satisfy and attract the consumers.

280. State any two characteristics of a good salesman.

Ans. The following are the characteristics of a good salesman:
(1) The salesman should be smart, interactive and physically fit. (2) The salesman should be intelligent,
good in communication and efficient in his work. (3) The most important qualities of a salesman are: (i)
his ability to talk with potential consumers, (ii) his style of presenting the product and (iii) his ability to
convince a customer. (4) The salesman must have thorough knowledge about the product he is selling.
(5) A good salesman should have certain qualities, e.g. (i) he should be honest, (ii) he should have a good
character and (iii) he should be sincere and regular in his work. (6) A salesman is a representative of his
company, therefore he should be polite. The company’s image depends largely on a salesman’s
behaviour. (7) An ideal salesman should always be enthusiastic, disciplined and ambitious.

281. What is the need of ‘storage of goods’?

Ans. The need for storing goods arises due to the following reasons:
(1) As a result of the storage facility, goods can be supplied according to the demand. This ultimately
helps minimize the price fluctuations.
(2) Goods can be produced in anticipation of their future demand.
(3) It helps maintain the quality of the product.
(4) As a result of the storage facility, goods are available to the consumers as and when they want them.

282. State any two characteristics of branding.

Ans. The characteristics of branding are as under:
(1) Branding ensures a uniform standard in the quality of the product. (2) Branding consist of a name, symbol or
design , while creating it various colours are used to symbolize it. (3) The chosen logo for the product is
printed on the packing. (4) A brand reflects the features, advantages, uses, personality and culture of the
product. (5) A symbol establishes an unique identity of the product. (6) A symbol is a verbal and
visual identity. (7) A product with a symbol can be sold at a higher price in the market. (8) A product with
a symbol can also be sold easily, because people have more trust in such products.

283. “Controlling is a positive activity. “Explain.

Ans. The purpose of controlling is goal-oriented, and hence, it is a positive process.
Even though, many people are against the concept of controlling because of the following reasons:
(I) Controlling is an attack on an employee’s freedom. (ii) There is a lack of autonomy. (iii) It is
dominating process, etc.
However, this belief is wrong.
The function of controlling is to see that workers work as per the plans and to provide necessa guidance to
them.
Hence, controlling is not a negative activity but a positive one.
Controlling rectifies mistakes and takes appropriate, steps to ensure that mistakes are not repeated. Thus,
controlling is a positive and constructive activity.

284. Define the ‘wealth maximization’ objective of financial management

Ans. Wealth Maximization:
Wealth maximization means to increase the capital invested by the shareholders in the business.
Wealth maximization is also known as net present value or value maximization or net worth
maximization.
The net present value creates wealth for the shareholders.
If the market price of the share increases, it can be said that wealth (capital) invested by the shareholders also
increases.
As a result, shareholders’ wealth will be maximized.
The wealth maximization approach only considers the concept of ‘cash flow,’ and the concept of
‘accounting profit’ is totally ignored.
The net present value can be computed by using the following formula:
Net present value of wealth = Present value of wealth — Investment required The objective of wealth
maximization is superior to that of profit maximization.
The objective of wealth maximization is fully practical, appropriate and a widely recognized objective.
Hence, it is universally accepted.
Prof. Ezra Soloman has also favoured the objective of wealth maximization.

285. “Leadership is a source of motivation. “— Explain.

Ans. Motivation is essential in order to improve the standard of work.
A leader provides necessary confidence, support and encouragement and thereby, creates a congenial
work environment.
A successful leader gets the expected results from his subordinates even in a difficult situation by
motivating them.
Therefore, a good leadership is itself a motivation to people.
In other words, it can be said that motivation of the employees is essential for the accomplishment of
business objectives and this work is possible only through a good leadership.

Section - D
‣ Answer the following question in brief. (Each question carries 3 Marks) (00)
286. Explain: Management as a profession
ns. Management as a profession:
Profession is an activity where specialized knowledge in specific field is acquired and it is used for the welfare
of the entire society. In return, a fee is charged. Doctors, lawyers, chartered accountants, engineers, etc.
are professionals.
Today’s business management is also handled by people who are trained and expert in the field. In other words
they are thorough professionals. In this sense, management is also considered as a profession.
The profession of such people has following characteristics:
1. Requires specialized knowledge:
Specialized knowledge is required for a profession. For example, a degree of L.L.B is needed for becoming a
lawyer and degree of MBBS, MD or MS is necessary for the profession of doctor.
Similarly, degree of BBA (Bachelor of Business Administration), MBA (Master of Business-Administration)
degrees is necessary for the specialized knowledge of management.
2. Increase in knowledge and research:
The management professionals undergo several training, enrich their experience through work. This
increases their knowledge and research capabilities as well as activities.
3. Professional association:
All professionals form their associations. For example, there is association of doctors, association of lawyers,
chartered accountants, etc.
In the same way there is also association of management professionals.
These associations provide education and training and update professionals with latest practices of management.
IIM (Indian Institutes of Management) is one of the finest management education Institutes of India. It is
working at national and international level. This institute works for developing management
professionals.
There are also other hundreds of universities and institutions that provide management training and education.
4. Framing and implementation of code of conduct:
Each professional association frames code of conduct for its members. It is mandatory for all members to follow
the code of conduct.
5. Moral responsibility:
Moral responsibility is an important factor for all the professions.
All the professionals must be loyal to their professions and they need to fulfill their moral responsibilities.
For example, it is the moral responsibility of the chartered accountant to remain loyal to his clients and not
disclose their financial information.
Conclusion:
From these characteristics we can conclude that management has evolved and is also yet evolving as an
independent profession for the benefit of individual, society and the mankind.

287. What are the functions of financial management?

Ans. Financial Management:
Financial management is the process of dealing with all the finance related functions of the business.
The function of acquisition, utilization and allocation of capital is called financial function or financial
management.
Finance is the lifeblood of business. No activity is possible without finance.
Finance is required for the establishment, development, expansion and modernization of a business.
Following functions are included in financial management:
To estimate the financial needs of the business activities To
make financial plans keeping in mind the time duration To
prepare budget
To allocate funds to various departments
To decide capital structure and to select sources of acquiring capital To
carry out the procedure for acquiring the finance
To see that the acquired funds are properly utilized and to keep control over financial activities To
form financial policy
To plan for taxes
To make arrangement of assets

288. Explain importance of Co—ordination.

Ans. Importance of Co—ordination:
(1) Co—ordination makes management functions like planning, organizing, directing, controlling etc.
effective.
(2) It ensures smooth functioning of all business activities.
(3) Due to co—ordination, there is no possibility of incomplete work or duplication of work.
(4) Co—ordination maintains harmony among various departments of the management.
(5) Co—ordination maintains balance between order and time of business activities performed by various
departments.
(6) Co—ordination leads towards the accomplishment of pre—decided objectives.

289. Discuss the importance of human resource management

Ans. Following are the points of importance of human resource management:
(1) Due to training, the efficiency of employees tend to increase.
(2) Higher standards for the quality of goods or service is maintained.
(3) Maximum utilization of factors of production is possible.
(4) Feeling of oneness among the employees is developed.
(5) There is reduction in the labour turn over rate.
(6) Job satisfaction among the employees is enhanced.
(7) Profitability of the business increases.
(8) Prestige of business is maintained.
(9) Employees get job satisfaction which finally turns into an environment of industrial peace

290. Discuss about importance of the principles of management.

Ans. Principles of management provide a vision to the managerial behaviour and highly affects the work of
the management.
The significance of principles of management can be discussed as below:
(1) Increase in managerial efficiency:
Principles of management provide guidelines to the managers to perform tasks in different situations.
Adherence to these principles will add to their knowledge, ability and understanding of the managerial
situations and circumstances.
It increases managerial efficiency helps to improve the functioning of a business unit.
(2) Maximum usage (utilization) and effective administration of resources:
Generally, in a business unit, human and physical resources are limited.
Therefore it is necessary to make maximum usage of these resources.
Maximum utilization means, to obtain the maximum benefit from the resources with minimum cost
through the principles of management.
(3) Helpful for scientific and logical decisions:
Decisions based on facts, thoughtfulness, objectives and justification are known as scientific and logical
decisions. These decisions should be timely, reality based and effective.
Principles of management provide a key role for taking appropriate decisions, which are impartial and
unbiased.
(4) To cope up with the changing business environment:
Business environment constantly changes.
On the basis of these changes, management makes necessary changes in the business.
Principles of management help to decide the strategy for constant growth of business, making it possible to
change and grow with changing business environment.
(5) To fulfill social responsibility:
Business is an indivisible (inseparable) part of the society. In
modern time, profit is not the only aim of a business unit.
Development and progress of the society is also one of the aims of a business unit.
A business unit can easily achieve the aim of social responsibility by the effective implementation of the
principles of management.
(6) Useful for research, training and development:.
Task of employees’ training, their education and development is possible through the principles of
management.
e.g. Aptitude test is taken to select the most suitable candidate for the business unit. This aptitude test is
prepared through research work and by implementing and using management principles.

291. Discuss about Peter F. Drucker’s contribution in management field.

 Ans. Peter F. Drucker (1909—2005) a well—known managerial leader was also a famous writer, philosopher
and an educator.
Due to globalization, there was a change at global level in the business organizations. Hence, a need of
development of new methods of management arose.
In a business unit, Peter Drucker has given more importance to human asset.
His important contribution was: (i) Management by Objective (MBO); (ii) Principle of ‘Self Regulations’
(Self control).
MBO is a process where superior and subordinates jointly decide the common objectives and set the
results that should be achieved by the subordinates.
MBO is very effective for different forms of business.
He has given his contribution in different fields of management like, (i) Human Resource Management;
(ii) Marketing Management; and (iii) Stress Management. Therefore, he
is called as the Father of Modern Management.

292. Write a short-note on modem thoughts.

Ans. (1) Concept: Modern management theory is an extension and synthesis of classical and neo classical
approaches to management.
After 1960, as changes occurred in the form of industry and business unit, the need for special theory of
management arose.
(2) Promoters: Management experts like Koontz O’donnell, George Terry, Peter Drucker, William Ouchi
and C.K. Prahlad have contributed in this thought.
(3) Multidisciplinary: Modern management freely draws concepts and techniques from many fields like
psychology, social studies, statistics, mathematics and computer and information technology.

293. Explain behavior related thoughts

Ans.(1) Promoter: During the early stage of the 20th century, Australian Industrial psychologist Elton
Mayo’s theory of Howthorne gave a new birth to the behaviour oriented thought.
(2) Concept: Behavioural approach has given importance to the ‘human element’, which was ignored by
the Classical theory.
Management should recognize that employees are social beings and not merely economic beings.
Hence, behaviour related thought emphasized on job satisfaction and increase in efficiency of employee by
using psychological observation.
As per Prof. Urvik, “You manage your men, your men will manage rest of all.” It shows that an
employee is having important place in a business unit.
(3) Matters included: Concepts like informal organization, inter human relations, motivation, leadership,
communication process, disposal of industrial disputes etc. are included in the behaviour related
thoughts.
(4) Limitations: The main limitation of this approach is that, economic parameter is neglected because
human relations are maintained at the cost of productivity.

294. Principles of management are based on human behavior.’ – Explain the statement.
Ans. Based on human behaviour:
As humans are at the centre the principles of management.
As the human behaviour is a psychological phenomenon, it is necessary to consider it while
implementing the principles of management.

295. Explain about Elements of delegation of authority.

Ans. According to Louis Allen, following three elements are included in the
delegation of authority:
Entrustment of responsibility
Conferment of authority
Creation of accountability
These three elements act as the supports of delegation and so we get a tripod structure wherein delegation rest
on these three elements.
All the three elements are equally important and independent and yet mutually connected. An
effective organizational structure can be formed by balancing these elements.

(A) Entrustment of responsibility:

The duty assigned by the top level officer to the subordinates for a particular work is called entrustment of
responsibility.
Entrusting responsibility creates a relationship between superior and subordinate because the subordinate is
expected to follow the orders given by the superior and also report him about the assigned work duty.
Thus, assignment of responsibility flows from top to bottom level.
(B) Conferment of authority:
By giving authority to a person, one can expect results and accomplished works.
During delegation, the administrators should provide enough power to the ‘ sub ordinates so that they can
further allot or distribute the work in various parts to the lower levels and get the work done.
Hence delegation of authority is an important step towards allotment of power. This flows from upper to
lower level.
(C) Creation of accountability:
The person who has been delegated the power and work is accountable for this work to the higher authorities.
He needs to provide proper explanation and follow reporting process to the top level management. This is
known as accountability.
The middle level authority holder cannot free himself from his responsibility of getting work done. Note that
this accountability flows from lower level to upper level i.e. the lower level is accountable to the middle
level and middle to upper level.

296. Write a note on Matrix Organisation.

Ans. Matrix Organization:
The organizational structure in which people with similar skills are pooled for work assignments, resulting in
more than one manager is called a matrix organization.
Matrix organization is a combination of work based (functional organization) and project based organization.
Matrix management is the practice of managing individuals with more than one reporting line i.e. in a matrix
organization structure.
For example, all engineers may be in one engineering department and report to an engineering manager (i.e.
part of functional organization structure), but these same engineers may be assigned to different projects
and report to a different engineering manager or a project manager while working on that project.
Therefore, each engineer may have to work under several managers at same point of time.
Design of matrix organization:
In matrix organization we find the combination of work based and project based organization.
In this type of organization, several project managers are appointed for various projects and each project
manager is given different type of work responsibilities.
The responsibility of the project manager is to successfully complete the project assigned to him that too on
time.
For each project, a pool of employees is made from different areas of the company. Each of these employees
holds some specific skill which is needed by the project.
Example:
An IT company has a typical functional organization structure. So, it has various departments such as
Research Department, Programming Department, Marketing, Accounts, etc.
The company takes various projects from its clients. Let us say a project from Vodafone, Torrent Power, etc.
For Vodafone project, the company may form a team of a computer expert,

Matrix Organization

research expert, production engineer, technical expert and an accounts expert for executing the project. All
these experts already work in specific departments of the company and report to their own bosses. But,
under the Vodafone project they will also report to their new temporary manager who is handling the
Vodafone Project.
 The authority of the functional managers goes downwards (vertical) whereas that of project managers
goes sideways i.e. horizontal and so the structure of the organization takes a matrix design.
Once when the work is done, they are sent to their respective work areas / to which they belonged.

297. Explain Functional Organisation with its formation.

Ans. Functional (Work-based) Organization
Linear organization gives more importance to department than work. This is the greatest limitation of this
kind of structure.
Keeping this limitation in mind, the ‘work based’ or say ‘function based’ organization came into existence.
An organization with a functional structure is divided based on functional areas, such as IT, finance, or
marketing.
In this structure, the experts with specialized knowledge are given special responsibilities for areas of their
expertise. This type of structure is called ‘ functional organization. For example, Human Resource
Manager will look after the recruitment, transfer, promotions, etc.
Thus, in functional organization, the distribution of work is not done according to the departmental but
according to the nature of work.
Formation of functional organization:
The core of functional organization lies in giving special importance to work distribution on the basis of
specialization.
Specialized experts are appointed for each kind of work. These experts do not serve only as advisors but
they are also administrative heads of their work areas. They are fully responsible for the task assigned to
them. For example, the purchase officer is fully responsible for all type of purchase related work.
The Chief Executive Officer is at the top and holds the supreme powers of the functional organization.

Functional Organization
As demonstrated in the chart, the unit can be divided into two (or more) parts. Each unit has its assigned
list of activities and works.
The units then assign the tasks and works to different officers. For example, the factory unit (or
department) will assign the work to Quality Control Officer, Chief Maintenance Engineer and so on.
Each officer then gives orders to the employees under him to perform the task.
 In functional organization, not a single work remains unassigned and at the same time not a single work is
assigned twice.
This structure is more favourable for units where there are a variety of works to be done. For example, IT
Industry, Telecom industry, etc.

298. Describe characteristics of Informal Organisation.

Ans. Meaning:
An informal organization is the outcome of interrelationships created on their own to contribute towards
common objective.
Informal organizations are not planned or established by the management.
It is developed by the employees themselves.
The relations are developed among people who inevitably work together.
An informal organization is the shadow of a formal organization.
Hence, no formal or proper chart can be prepared for the same.
Characteristics:
(1) Informal structure:
An informal organization emerges spontaneously and is not deliberately established by the management.
It is an outcome of the interrelationships created on their own towards the contribution of some common
objective.
(2) Based on Human Relations:
An informal organization is based on human behaviours.
It is the organization based on group norms, rather than from officially laid down rules and regulation.
(3) Flexible:
Informal organizations are flexible.
When an employee leaves one department and joins other, new informal relations develop again.
This shows that informal organizations possess the element of flexibility.
(4) Universal:
This structure is universal.
It is not only found in business, but it is also found in all kinds of human activities.
(5) Informal Communication:
When communication is informally done through an oral communication process, it is known as informal
communication.
There are chances that there will be more opinions and less facts in it.
Prescribed lines of communication are not followed in informal organizations, which leads to faster
spread of information as well as quick feedback.
(6) Small Size:
The size of an informal organizational structure is usually small, because the whole organization is
divided into many small groups.
(7) Lack of Control:
In this type of an organization, control is difficult to maintain, because a person develops his peer circle
with the other co—workers as per his/her need.
Hence, indiscipline may prevail.
(8) Complementary of Formal Organization:
Informal organizations are based on formal organizations.
Hence, they are complementary to formal organizations.

299. Is controlling an end activity of management? Why?

Ans. Control is the last function of management.
Controlling means ensuring that the activities in an organization are performed as per the plans. Controlling
also ensures that an organization’s resources are being effectively and efficiently used for the achievement
of predetermined goals.
Therefore, it is essential that all managerial functions such as planning, organizing, staffing, and directing are
performed before the function of controlling.
Planning decides the objectives, organizing implements them, directing gives them guidance for the same,
and then, the function of control begins.
Thus, control is the end activity of management.

300. “Controlling is not a negative function. “Justify this statement

Ans. The purpose of controlling is goal-oriented, and hence, it is a positive process.
Even though, many people are against the concept of controlling because of the following reasons:
(I) Controlling is an attack on an employee’s freedom. (ii) There is a lack of autonomy. (iii) It is
dominating process, etc.
However, this belief is wrong.
The function of controlling is to see that workers work as per the plans and to provide necessa guidance to
them.
Hence, controlling is not a negative activity but a positive one.
Controlling rectifies mistakes and takes appropriate, steps to ensure that mistakes are not repeated. Thus,
controlling is a positive and constructive activity.

301. Explain the relation between planning and controlling.

Ans. Planning refers to a systematic and intellectual programme to achieve objectives.
While control is a process to monitor whether business activities are carried out according to plan. Thus,
planning and controlling are interrelated.
(1) Planning and controlling are two sides of the same coin:
Planning without controlling is meaningless, and controlling is blind without planning. If
standards are not set in advance, managers have nothing to control.
When there is no plan, there is no basis of controlling.
Planning seeks consistent, integrated and articulated programmes, while controlling seeks to compel
events to conform to plans.
Controlling finds out the deviation, takes necessary corrective action and also takes business activities in the
right direction.
Through controlling, it can be ascertained whether or not the objectives of planning are achieved.
Thus, success of planning depends on controlling while controlling is also not possible without planning.
Hence, it is clear that planning and controlling are two sides of the same coin.
(2) Protection against change:
Implementation of the programmes of a plan depends on internal and external factors. Internal factors can
be regulated.
Meanwhile, control is needed for external factors such as (I) government policies, (ii) competition, (iii)
inflation, (iv) depression, (v) scarcity of raw material, (vi) change in the choices of people, (vii) change
in fashion, etc.
Thus, after taking into consideration the effects of external factors, controlling checks whether or not the
activities are carried out according to the plan.
Thus, planning and controlling give protection against changes.
(4) Planning is the precondition for controlling:
The function of planning is to make programmes for the achievement of the objectives of a business enterprise.
While the function of controlling is to see whether or not the activities are performed according to the plan, the
function of controlling is to compare the actual performance with the set standards predetermined under
planning.
It is, therefore, said that planning is the precondition for controlling.
(4) Planning is the father of controlling:
Planning is the origin of controlling.
Controlling keeps a check on activities decided during planning. Therefore,
controlling does not exist without planning.
Hence, planning is considered to be the father of controlling.

302. “Planning and controlling are two sides of the same coin. “Explain.(March 2018)
Ans. Planning and controlling are two sides of the same coin:
Planning without controlling is meaningless, and controlling is blind without planning. If
standards are not set in advance, managers have nothing to control.
When there is no plan, there is no basis of controlling.
Planning seeks consistent, integrated and articulated programmes, while controlling seeks to compel
events to conform to plans.
Controlling finds out the deviation, takes necessary corrective action and also takes business activities in the
right direction.
Through controlling, it can be ascertained whether or not the objectives of planning are achieved.
Thus, success of planning depends on controlling while controlling is also not possible without planning.
Hence, it is clear that planning and controlling are two sides of the same coin.

303. Explain the concept of financial management through various definitions.

Ans. Finance:
In layman language, management of finance is called financial management. Finance is
the blood of business.
Business can neither be started without finance nor can it sustain without it. Thus, finance is the
foundation stone of business.
Financial management:
The activity done at managerial level for planning and controlling financial resources for the business
enterprise is called financial management.
Under financial management, the managers try to optimally manage the financial resources so that the
business earns a satisfactory return.
Various definitions of financial management:
According to F. W. Paish, “In the modern economy, based on utilization of funds, financial management
means acquiring of required funds at the required time.”
According to Raymond J. Chambers, “Financial management means to take decisions about financial
matters to implement then smoothly and to review, them.”
According to Prof. M. Kimbal, “Financial management means acquisition of fund, its optimum
utilization and its appropriate allocation.”
From all these definitions we can conclude that the scope of financial management is so wide that it
covers all the financial decisions of business, right from the inception.

304. Explain the objectives of financial management.

 Ans. The objective of financial management is maximization of economic welfare of the owners, who are the
shareholders of the company.
The following are two important objectives of financial management:
(1) Profit Maximization:
Profit maximization means maximizing the income of the company. Maximization
of profit is the objective of every business unit.
According to this approach, a company should earn maximum profit while simultaneously ensuring the
effective utilization of available resources.
It should also pay dividend at competitive rates to the investors, because they purchase shares of the
company with the expectation of getting maximum dividend.
This approach suggests that the company should only accept profitable projects.
The company can increase the earning per share through the objective of maximization of profit.
(2) Wealth Maximization:
Wealth maximization means to increase the capital invested by the shareholders in the business.
Wealth maximization is also known as net present value or value maximization or net worth
maximization.
The net present value creates wealth for the shareholders.
If the market price of the share increases, it can be said that wealth (capital) invested by the shareholders also
increases.
As a result, shareholders’ wealth will be maximized.
The wealth maximization approach only considers the concept of ‘cash flow,’ and the concept of
‘accounting profit’ is totally ignored.
The net present value can be computed by using the following formula:
Net present value of wealth = Present value of wealth — Investment required The objective of wealth
maximization is superior to that of profit maximization.
The objective of wealth maximization is fully practical, appropriate and a widely recognized objective.
Hence, it is universally accepted.
Prof. Ezra Soloman has also favoured the objective of wealth maximization.

305. Write notes on (1) Decisions related to investments. (2) Decisions related to dividend
Ans. (1) Decisions Related to Investments:
The financial management needs to study various investment options and take decisions that are in the
interest of the enterprise.
The financial manager has to take both the risk and return factors into consideration while taking
investment decisions.
The process of making decision regarding investments in fixed assets that give earnings for a long period is
called capital budgeting.
Various methods of capital budgeting are being used to take investment decisions when more than one
alternative is available with the finance manager.
These methods are : (i) pay back method, (ii) rate of return method, (iii) discounted cash flow method,
etc.
(2) Decisions Related to Dividend:
Dividend is that part of a company’s profit that is distributed among its shareholders. Dividend is
a return on the investment of shareholders.
According to the Companies Act, dividend is paid in cash or cheque on the paid—up share capital. The amount
of total profit that is to be distributed as dividend and the amount that should be retained in the business is
another decision that a financial manager has to take.
If a major portion of the profit is distributed as dividend, then a small amount is left for reinvestment
( ploughing back of profits). On the other hand, if a major portion of profits is reinvested, then a small
amount is left for dividend. Hence, the manager has to maintain a balance between these two while
taking dividend decisions.

306. Distinguish between Gross working capital and net working capital.
Ans.

Points of
Gross working capital Net working capital
differences
It is the sum total of current assets such as bill receivables, debtors,
is current assets minus
Meaning short term marketable securities, bank balance, cash,
current liabilities.
etc.
This concept gives an idea
Liquidity This concept does not give an idea about the liquidity position of the
how much liquidity
position company.
company has.
[Link] Gives the true idea of
Does not give a true idea of the financial position of the company.
position and financial position of the
measurement company.
[Link] in Increase in current liabilities does not increase the gross workingIncrease in current liabilities
current capital. (Reason: Gross working capital is only decreases net
liabilities concerned with current assets and not liabilities.) working capital.

307. Distinguish between Fixed capital and Working capital.

ns.

Points of
Working Capital Fixed Capital
Differences
Capital invested in current assets such as stock of Capital invested in fixed assets such
Meaning raw materials and finished goods, debtors, bills receivable
as land, building, machinery, furniture is
etc. is called working capital. called fixed capital.
Blocked up for a long period in
Period Blocked up for a short period in business.
business.
Ratio of liquidity is less because
Ratio of liquidity is high because working capital can be
Liquidity fixed capital is invested for a long period
easily converted into cash.
in fixed assets.
Risk Ratio of risk is low. Ratio of risk is high.
It is required to purchase fixed assets
It is required for day-to-day expenses like wages, salary,
such as land, building, plant
Requirement purchasing raw materials, etc.
machinery.
Sources of raising fixed capital include
Sources of raising working capital include trade credit, issue of shares and debentures,
Sources
bank overdraft, indigenous bankers, etc. financial institutions,

Depreciation is calculated on fixed

Depreciation is not calculated on working capital
Depreciation assets

308. What is treasury bill?

Ans. Treasury Bills:
When the central government is in need of funds for short term, it issues treasury bills into the financial
market. Anyone willing to buy them such as individuals, firms, etc. can buy these bills.
Thus, a treasury bill is a short term financial instrument (government security). It is issued by Reserve
Bank of India on behalf of Government of India.
Treasury bill is an important component of money market all over the world. Treasury bill
is also known as T-Bills’.
The lock-Mn period or maturity of these bills is 91 days, 182 days or 364 days.
The minimum amount of a T-bill is Rs 25,000/- and then in multiples of Rs 25,000/-.
Government does not pay any interest to people who buy T-bills, but sells these bills at a discounted rate. Hence,
T-bill is also called ‘zero coupon bond’.
For example, government might sell Treasury bill of Rs 25,000 at Rs 23,500 to the investor. The investor would
then be paid the actual value i.e. Rs 25,000 on maturity date. Thus, the difference between the purchase
amount and redemption amount becomes the profit for the investor.

309. Give the meaning of capital market and clarify its characteristics.
Ans.

capital market (locally – share market) is an organized market in which capital is raised by the investment
made by general public in the form of shares, debentures, bonds, etc.
When companies issue equity shares in the market, investors buy them. The money invested becomes the
capital for the company who issued the shares. So, the companies and industries get fund through the
savings of general public.
Capital market is divided into two markets. They are:
Primary market and
Secondary Market
Capital market is a source of long term capital fund for industrial enterprises. Long
term securities like shares and debentures are traded in capital market.
Capital market is a market for all types of securities including industrial securities and government securities.
Since this market mobilizes savings of the community, it boosts economic growth.
Characteristics of capital market:
Capital market is a market for raising long term capital fund.
Instruments of capital market include government securities, debt instruments, securities of industrial
enterprises like shares and debentures.
Investment of fund is in long term securities.
In India, capital market is strictly regulated by Securities and Exchange Board of India (SEBI). Ownership of
shares and debentures is easily transferrable.
Provides liquidity to financial assets (securities).
Capital market is divided into two parts –
Primary market and
Secondary Market

310. “Primary market means a market of new issued securities” – Explain and state the characteristics
of primary market.
Ans.

When a company publicly sells new stocks or securities and bonds for the first time in the market, the market
is called the primary capital market.
primary capital market is the market of newly issued securities.
Here, the investors buy only newly issued securities as it is a market for new issued securities. The objective
of the primary capital market is to raise capital fund for the company issuing the securities.
Characteristics of primary capital market:
a market for newly issued securities.
The companies issue new securities for investors to buy.
There are numerous intermediaries in primary market like lead manager, registrar of issue, share broker, etc.
New capital is issued through prospectus in primary market.
311. Write a note on: Central Depository Services Limited [CDSLJ.
Ans.
Central Depository Services (India) Limited (CDSL) is the second electronic depository of India.
It was established in 1999 in Mumbai with collaboration of Bombay Stock Exchange and some banks.
Just like NSDL, CDSL provides online depository services all over India. It aims at easy and safe
services to the investors.
It publishes the list of its registered depository participants time to time on its website.

312. Explain the selling concept in marketing management.

Ans. Selling concept:
The selling concept holds the idea that “consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort”.
Hence, the company believes it should undertake aggressive production and
selling steps.
Company adopts aggressive marketing methods, large scale advertising campaigns, direct selling, etc.
Here efforts are made to create demand for products being produced and sell rather than understand the
demand and produce accordingly.
The complete emphasis is not given on the need of consumer but to sell what the company is producing.
This concept ignores customer satisfaction and keeps on producing, selling and dumping in the market
whatever is produced.

313. Mention the characteristics of a ‘good salesman’.

Ans. Characteristics of a good salesman:
Salesman should be smart, interactive and physically fit.
Salesman should be good in communication, intelligent and efficient.
The most important quality about a salesman is his ability to talk with the potential consumers, style of
presenting the product before a customer and the ability to convince a customer.
The salesman should have all the necessary information about the product he is presenting to a customer.
Honesty is an essential quality in a salesman. A salesman should be honest and should have a good
character. He should be sincere and regular in his work.
A salesman is the representative of his company and so the way he approaches the consumer tells about
his company. Hence, the representative should be polite and genuine so as to create a positive image of
the company.
An ideal salesman should be always enthusiastic, disciplined and ambitious.

314. Explain the difference between selling and marketing.

ns.

Point of
Marketing Selling
difference
The identification of the needs of the consumer through
Exchange of goods or service for money
Meaning the process of creating profit and consumer satisfaction is
is known as selling
called marketing
The scope of marketing is very wide. It includes The scope of selling is limited to the
Area of Work/
understanding the requirement of consumer, develop transfer of ownership of products
Scope
new products, determining price and provide after sale from the seller to the
service consumer.
To earn profit by selling products
Objective earn profit through customer satisfaction
services
Suppliers of product, middlemen involved in sale
Parties Buyers and sellers
distribution, consumers, etc.
Sales begin after production and ends
Beginning and
Marketing process begins with market research and ends with
with providing goods or
End after sales service.
service to consumer
Storing products, gradation, packing, labeling, Since the scope of work is quite
Need for Capital
transportation of goods requires considerable working capital.
narrow, less working capital is needed.

Efforts are made in manufacturing the product as per the Efforts are made towards preparing
Direction of
need of consumer and making them reachable to consumers to accept the
Efforts
consumer. existing product.

315. Explain the role of advertisement in marketing management.

Ans. Meaning:
The various methods used by a producer to inform consumers regarding goods or services is known as
advertisement.
Advertisement is the most important, common and acceptable tool of the promotion mix.
Definition: “Advertisement is a paid form of providing nonpersonal information of goods and services
and in which the advertiser’s identity is easily traceable.”
Sources: Advertising can be done through T.V., radio, dailies, magazines, internet, hoardings, etc. Role
(Functions) of Advertisement: The following are the functions of advertisement:
(1) Creates demand:
“Advertising can be described as the art of creating a demand for goods or services.”
Advertisement creates a demand for the product by informing people about the availability as well as the
different uses of a product, e.g. use of cold coffee during summer.
Advertisements become inevitable for a new product.
When consumers get to know about the product, they initially purchase it on an experimental basis, and later,
they purchase it on a continuous basis.
Thus, advertisement helps in increasing the demand for the product.
(2) Benefits of large-scale production:
Advertisement is a medium through which producers can reach potential buyers spread over a vast
 geographical area.
It helps increase the demand for a product, which leads to large-scale production.
This helps bring down the cost of production per unit.
As a result, the business unit gets returns over and above the advertisement cost.
(3) Product awareness:
Through advertisements, information about the product and its advantages is relayed to potential users.
It brings different varieties of products to the consumer’s attention.
When a product has more than one usage, then such information can be relayed to potential consumers
through advertisements.
Producers ensure the consumer regarding the quality of the product, hence people’s faith in the product
increases.
(4) Helpful in employment generation:
As a result of advertising, the demand for goods and services increases, which leads to a rise in
production and finally, an increase in employment opportunities.
Advertisement --- Increase in Demand for Goods and Services ---- Increase in Production — Creates
Employment Opportunity
Apart from this, advertisements create job opportunities in various other fields too, e.g. for the position of
copywriters, advertising distributor, filmmakers, designer, artist, etc.
(5) Betterment of standard of living:
Through the medium of advertisement, information of better product is provided to the consumers.
Consumers can compare various products and thereby, select the product with a better quality.
As consumers use better and improved quality products, their standard of living increases.
Meanwhile, advertising creates job opportunities too, which also helps improve people’s standard of
living.
(6) Maintenance of quantum of sales:
Producers display advertisements of their products on a continuous basis through T.V. and other media.
Consumers tend to easily remember new products after watching such advertisements.
Later, at the time of purchase, the consumer shows a prompt preference for that particular brand.
This maintains a consistent level of sales.
In other words, it can be said that advertising proves very effective in withstanding competition from
competitors.
Further, the market share of the product can also be maintained with the help of advertisement.

316. Explain the role of public relation.

Ans. Role of publicity in promotion mix:
Publicity is considered to be the most reliable component of promotion mix.
The company need not pay anything for publicity of its product and hence it is the cheapest promotion
tool.
Sometimes publicity includes the task of public relations in which the marketing manager can give more
information with fewer efforts.
Mass communication along with gained reliability on the company makes publicity more effective.
Publicity creates awareness among potential customers about the product or the company. This way it
directly boosts the selling efforts of sellers and distributors.

317. State the importance of consumer protection from the viewpoint of of business.
Ans. Importance of consumer protection from the view point of business:
1. Use of public resources and wealth:
Every business unit is continuously and haphazardly utilizing public or say national resources and wealth.
Hence, it is the responsibility of these units to produce such goods and services which are useful to the
society. This way they can promote social welfare and justify the used resources.

2. Social responsibility:
It is a well-known fact that business units have social responsibility towards its stakeholders.
Consumers also form a major group of stakeholders for every business. The business earns profit by selling
the products to the consumers.
The way a business takes care of its stakeholders such as directors, creditors, etc. it should also see to it that it
remains honest and fulfills its duties towards consumers who form the most important group of
stakeholders.
3. Part of the society:
Every business is a part of the society we live in. Every business owner or a seller is customer for another
business unit. So, if consumer exploitation is inevitable then every person will have to experience
exploitation because every individual is also a consumer.
Hence, every seller should adopt such a policy which will increase the faith of the buyer and prevent his
exploitation.
4. Impression on the society:
The product that the business sells as well as the policies that it practices affects the habits of the people of
society, their lifestyle, thoughts, living standards, food habits, fashions, clothing, etc.
Advertisements and promotions play a major role in these aspects.
These aspects demand that the business units follow ethical means as a moral responsibility to the society and
create a lasting impression on the current and future generations.
5. Consumer protection is good for business:
Business units have realized that wellbeing of consumers is the wellbeing of the business.
It is quite fundamental that in the competitive market, the business must produce goods as per the preference of
the consumers. Those manufacturers / who fail to understand this, will lose market to their competitors.
These practices satisfy the consumers. A delighted and satisfied consumer not only purchases the product
again, but also recommends it to others. This will attract new consumers.
6. Principles of Trusteeship and Consumer Protection:
Gandhiji gave fine thoughts about Trusteeship and Consumer Protection. They are:
(A) Principle of Trusteeship: Whatever wealth the society has given to us should be used for the welfare
of the people of the society.
(B) On consumer: “Consumer is the most important person visiting the place of business. He is not
dependent on the seller but we (sellers) are dependent on him. He does not interfere in our work but he is
the objective of our business.
He is not an outsider for our business but he is a part of our business. We do not favour him by providing a
product of his choice but he does a favour by giving an opportunity to serve him”.

318. Write a note on the Principles of Trusteeship and Consumer Protection.

Ans. Principle of trusteeship [Doctrine of trusteeship]:
According to the principle of trusteeship given by Gandhiji, businessmen are not the owners but the trustees of
the resources that the society provides to them, therefore these resources should be used for the welfare
of society.
Gandhiji made the following observations for consumers:
(a) The consumer is the most important person visiting the business place.
(b) He is not dependent on the seller; we (sellers) are dependent on him.
(c) He does not interfere in work, but he is the objective of business.
d) He is not an outsider for business, but an integral part of the business.
(e) We do not favour him by providing a product of his choice, but he does us a favour by giving us an
opportunity to serve him.

319. What are the rights made available to consumers as per the Consumer Protection Act?
Ans. Consumer Protection Act, 1986 gives 6 rights to consumers. They are discussed below.

1. Safety:
Every consumer is entitled to get protection from products which are harmful to health. For example, sub-
standard electrical appliances can cause dangerous injuries to the consumer and hence should not be used.
Standardized and superior quality appliances should only be used so that they do not cause harm to
consumers.
2. Information:
It is the right of a consumer to get all information regarding the product he wishes to purchase. For example, he
is entitled to information such as ingredients, manufacturing date, directions for use, price, quality, weight,
purity, etc.
As per this right, a manufacturer is bound to display all information either, on the packing or on the label of the
product.
3. Choice:
Every consumer has a right to choose the product he wishes to purchase.
The consumer must get a product at a competitive price, in right quantity, right place and at right time.
The right of choice has led to production of variety of goods and services having different quality, brand,
price, size, etc.
A fine example would be the two-wheeler vehicle industry. There are a large number of options for scooter and
motorcycles in the market in a wide price-band and features. Consumer can select his choice of vehicle on
the basis of engine power, features, colour, design, price, etc.
4. Representation:
If a consumer is dissatisfied with a product or a service, he has the right to represent his problem i.e.
complain.
With this right in the mind, most business units have set-up their own complaint redressal department. The
 consumers can call up and make a complain if they receive a faulty product.
Over and above this, there are several organizations which work for protecting the consumers. These
organizations help the consumers to file complain and deal with the proceedings.
5. Redressal:
The right to redressal says that if a consumer gets sub-standard quality of goods or services as compared to
what he has been promised then he has the right to get the relief.
The consumers are eligible for various types of relieves such as replacement of goods or services or repair
of the product or part.
If at all the product has caused damage to the consumer he has the right to complain and obtain
compensation.
6. Consumer education:
Every consumer has the right to get information about the product he buys or wish to buy.
The Act says that the consumer should get right quality and quantity at the given time and place at an ideal
price. In order to see that these aspects are taken care of, the consumer has the right to get educated.
If a product or a service is sub-standard as against the assured quality, then the consumer know that he has
the legal right to claim relief and or compensation.
Most business units and organizations who work for consumer protection are also actively working on
educating consumers.
Over and above these six rights, The United Nations Organization (UNO) has issued a directive
recommending two more rights for the consumers. They are:
Basic Needs
Hygienic Environment.
1. Basic needs:
This Right says that every person is entitled to basic needs such as adequate food, water, clothing, shelter
and health care required for survival. 2. Hygienic environment:
As per this Right, every individual has the right to get pollution-free air, water, food and land.
Hygienic environment gives the person a good quality of life free from diseases.

320. How is consumer awareness created?

Ans.

The process of making consumers aware about their rights related to the products and services they buy is
called consumer awareness.
Today, many items having similar features but belonging to different brands are . available in the market.
Illiterate, ignorant and unaware consumers who do not have complete knowledge or information about such
things get fooled easily by buying fake or poor quality goods.
There are several middlemen between producers and consumers and so the consumers get exploited in many
ways.
The system which sees that the goods and services the consumer buys are of good quality, proper weight and
at a reasonable price is known as consumer protection.
Consumer protection is a movement which is undertaken to make consumers aware about their rights.
Consumer protection is a well-organized programme for the people of the society so that they become mature
consumers. The programme aims at controlling anti-consumer activities, exploitation and deception that
the consumers face.
Every year, 15th March is celebrated as World Consumer Rights Day.

321. Define consumer and state who can complain to the dispute settlement institutions?
Ans. Meaning of consumer:
According to the Consumer Protection Act, a consumer is “A person who receives goods or services
against an exchange, who pays or agrees to compensate partly or fully or promises to compensate on a
future date or has participated in some future payment plan. Any user of the product or service who uses
it on the basis of the permission of the purchaser is a consumer. But the one who purchases on a resale
basis or for further production is not included under the definition of a consumer.” Any of the following
can complain to the dispute settlement institutions:
Consumer himself
Registered consumer union on behalf of consumer
State government or central government on behalf of consumers
Legal heirs or representatives of deceased consumers

322. What is liberalization? What steps are taken by the Indian government as a part of liberalization?
Ans.

The movement of business and trade from a controlled to an open and free system is called liberalization. In
other words, liberalization is the removal of certain restrictions laid on private business units.
India, there were several restrictions on private business units between the year 1947 and 1991.
In July, 1991, the government declared the policy of liberalization and started removing several restrictions
phase wise so that business units could trade freely and prosper.
certain sectors, controls have been removed completely or to a maximum extent.
Effects of Liberalization (Steps taken by the Indian government):
The government removed barrier of foreign direct investment (FDI) in Indian industries.
The government also increased the limit of FDI which was quite low before. Moreover, to attract foreign
investors and businessmen, various economic and non-economic incentives and exemptions are being
given. 2. To attract more foreign investments in Indian equity market, the procedure of purchase and sale
of shares have been made completely transparent by taking various steps.
Dematerialization (DEMAT) service has been introduced to convert the physical shares in electronic form.
Due to this the purchase and sale of shares and the transactions of money involved therein became more
transparent. The procedure of trading has been developed as per international norms. 3.
Government took several steps to make the tax structure simpler and transparent.
Procedure for sales tax and excise duty were simplified. Recently the government removed sales tax and excise
duty and introduced a common tax called GST (Goods and Service Tax). Introduction of GST has
simplified the tax structure and made it more transparent. 4. India introduced a new symbol of T for its
currency so as to certify Indian currency. Indian currency (INR) is given few reliefs under certain terms
and conditions in forex market. 5. Before liberalization, most industries were dependent on licenses that
they had to procure from the government by undergoing a very tedious and time consuming procedure.
After 1991, the government removed the License Raj (License System) and made the registration of new
firms quite simple. 6. The government makes several efforts to increase the export. These include giving
various incentives to Indian industries to promote exports and removing several import duties. 7. Foreign
Exchange Regulation Act (FERA) is cancelled and Foreign Exchange Management Act (FEMA) has
been introduced. Under FEMA, the government diverts the foreign exchange towards the development of
trade and commerce of our country. 8. Various changes have been made in Monopolies and Restrictive
Trade Practices Act (MRTP Act) and a number of relaxations have been given in it. However, restrictions
are still there to control unethical business practices. 9. The Reserve Bank of India has given freedom to
various banks to decide their deposit and lending rate of interest, subject to certain conditions. 10.
Imports of goods and services and payment of foreign exchange have become easier. It is now quite easy to
avail foreign exchange for the purpose of foreign tours, sending children for foreign education or for the
purchase of property in the foreign country.

323. What is privatization? Write a note on effects of privatization.

Ans. Privatization:
The transfer of control and management of public sector enterprise to private sector or say, the process of
passing on the ownership and management of public sector unit to private firms is called privatization.
Advantages and disadvantages of privatization:
(A) Positive effects of privatization:
Rise in production efficiency Absence of
political interference Improved
quality goods and services
Systematic marketing
Use of modern technology Hierarchical set-
up for accountability Creation of
competitive environment
Advancement in research and development
Advancement in modernization and innovation
Maximum utilization of factors of production
Growth of infrastructural facilities
(B) Negative effects of privatization:
Exploitation of employees
Misuse of powers by top management Unequal
distribution of income and wealth Absence of
job security
Priority to profit
Consumer exploitation, etc.

324. Write notes on social and cultural factors affecting business environment.
Ans. Effect of social factors on business environment:
All the business activities originate, grow and end in the society. So naturally, society plays a major role in
the environment it gives for the business activities.
A business activity can never be separated from the society. Society represents groups of people, social
institutions, social traditions, etc.
The society of a nation constantly evolves and hence is dynamic in nature. As a result, the lifestyle,
preferences and practices also keep on changing. All these factors change the business environment too.
Beliefs and ideologies of people cannot remain same throughout. So, with time people give importance to
their decisions, ideologies and rituals to achieve their development.
Before producing several type of products the producer needs to consider religion, caste, sect, social norms,
ideologies, etc. that exists in a particular society. The decision for the economic activity will be largely
affected by these parameters.
For example, if the society is quite conservative with respect to clothing, then the producer should not
produce very bold clothes else he will face loss.
The society or a section of society which does not restrict itself to all these social constraint develops much
faster. People of such societies are open to new ideas and are ready to accept new products. As a result,
business activities have a higher chance to innovate and expand.
Effect of cultural factors on business environment:
Factors like, traditions, practices, life style, habits etc. are part of cultural factors. These factors affect the
decisions that a business unit takes.
If the business management ignores the cultural factors prevailing in a society, there are high chances for the
business to fail.
History has recorded several examples where in companies having strong management have failed by
neglecting cultural factors. And at the same, time various products which are not economically
acceptable have become acceptable because of cultural factors and they have become successful.
Cultural factors are constantly changing and these changes are constant and periodical.

325. Explain the meaning and importance of business environment.

Ans.
Each and every business is related to several factors of the society. These factors could be economic, social,
cultural, technological, political and legal. These factors include various groups like consumers,
competitors, suppliers of raw materials, employees, etc. The environment created by the group of all such
factors that directly or indirectly affect the business is called business environment.
No business can operate on its own aloof from the society i.e. the factors of the society affect the business
environment and hence the business.
Business environment is highly dynamic and also quite uncertain.

Section - E
‣ Answer the following question in Details. (Each question carries 5 Marks) (00)
326. What is planning? Explain its characteristics.
Ans. (a) Planning:
The task of collecting information for the activities to be undertaken in business, consider them in
advance and plan out how to do these activities is called planning. Planning is an intellectual process to
achieve business goals.

(b) Characteristics of planning:

1. Universal process:
Planning is a universal process. Planning is required in each and every field may it be business, politics,
education, religion or a social event.

2. Primary function:
Planning is the primary function of management. Management starts with planning.
Other functions of management like organization, staffing directing, controlling are implemented on the
basis of planning.

3. Conscious and mental process:

Planning is done using mental abilities while remaining conscious about the outcomes.
This is so because during planning decisions are taken consciously and on the basis of calculative
assumptions.

4. Flexibility:
Although planning is done so that tasks take place as per planned method, still planning holds a good
amount of flexibility.
During the execution of planned steps the business may experience certain external factors. These factors
may disturb the planned process. Hence, the unit may have to make necessary changes as per time,
circumstances and situations.
Thus, planning is dynamic and flexibility is the precondition for planning.
5. Precise:
Planning is a process done for the future.
Since, future is uncertain, the planning is to be done precisely and minutely by rigorous brain storming,
collecting and analyzing statistical data, collecting relevant information, etc.

6. Forecasting is essential:
Forecasting and planning are considered as the first function of management. Forecasting is done by
considering the uncertainties of future that will take place while making a plan for the business unit.

7. List of alternatives:
While planning for any objective there exist a variety of alternatives. For example, there can be several
alternatives (i.e. ways) to increase the sales in future. These alternatives could be increasing
advertisement, reducing prices, training to sales staff, announcing attractive offers, etc. The planners need
to select the best suitable alternative from these.

8. Concerned with future:

Planning presumes that there are uncertainties involved in future.
While remaining in present, planning evaluates future and hence we can say that planning is concerned
with the happenings of future and is focused on – taking best steps for the same.
9. Continuous process:
Planning is a continuous process.
It is such a process which begins with the establishment of the organization and continues till the end i.e.
 till the organization lasts. However, the plans and planning process keep on changing continuously as per
time and situation.
10. Objective oriented activity:
Planning is done to achieve a specific, pre-determined business objective.
Once an objective is accomplished the management decides the next objective for business.
It is desirable that realistic objectives are set so that they can be planned and achieved well. Thus
planning is an objective oriented activity.
11. Planning considers various available options and then selects the best suited one.
Since the planners need to make such decisions on a regular and continuous basis it is said that planning
is a decision oriented process.

327. Discuss types of plan

Ans. 1. Standing plan:
When there is repetition of some specific activities in an organization then the organization forms a plan to
take care of that activity. Such a plan is called standing plan.
Standing plans provide guidelines for taking decisions in repetitive situation hence standing plan can be used
repeatedly.
Standing plans help the subordinates to take prompt decision.
2. Strategic plan:
Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on
allocating its resources to pursue this strategy.
Based on their philosophies the business units decide several business objectives.
The unit then develops short term as well as long term strategies for achieving the desired objectives. This is
called strategic planning.
The effects of strategic plans can be seen in the long term. These plans shape the future of the business.
3. Tactical plan:
Tactical plan is a short-term plan prepared for maximum one year and it emphasizes the current operations of
various parts of the organization.
Since these are short term plans, they clarify short term objectives that the business aims at. Hence business
activities remain goal oriented and take place in a systematic manner.
The tactical plans or say short term plans are prepared by middle level management.
These plans guide the departmental heads and employees about the roles that they must play to achieve
tactical plans.
4. Operational plan:
An operational plan is a detailed plan which provides a clear picture of how a team, department or an
individual will contribute for achieving strategic goals of the organization. Operational plan is almost
similar to tactical plan.
Generally, operational plans are formed for short duration say about one year.
Under this, plans related to monthly or quarterly production, sales, etc. are made for achieving of objectives
of annual production.
These plans are mainly formed for performing routine work and achieving daily targets.
5. Single Use plan:
As the name suggests, single use plans are made for handling one-time, non-recurring problems. Single-use
plans are also referred ta as ‘specific plans’ since these are meant to solve a particular problem.
These plans are formulated to handle non-repetitive and unique problem. These plans cannot be used again
and again. These plans become obsolete after achieving their purpose.
The examples of these plans could be constructing a dam, making budget, organizing an event, etc.
6. Contingency plan:
A plan designed to take account of a possible future event or circumstance is called a contingency plan.
Business unit face changes like change in political, economical, social or natural factors.
If the business has to make changes in the original plan or make a new plan due to such reasons then the plan
made is called contingency plan.

328. Give the definition of planning and explain its process.

Ans. (A) Planning:
The task of collecting information for the activities to be undertaken in business, consider them in advance and
plan out how to do these activities is called planning. Planning is an intellectual process to achieve
business goals. (B) Process of planning:
The stage-wise process of framing a plan is discussed below:
1. Determination of objectives:
The first step in planning is to set the objectives.
It is said that, if objectives are determined properly then it becomes extremely useful for the
management.
Planners should set realistic, intellectual and achievable objectives.
2. Clarifying planning premises:
The forecast or the assumptions about future which provide a base for planning in present are known as
planning premises.
After determining the objective, it is important to clarify the planning premises.
Forecasting is made after considering the internal and external factors that affects the business unit. Unclear and
imprecise premises can fail a plan.
3. Collection and analysis of information:
Once the planning premises is done, the planners gather necessary information. The information may be
gathered through direct sources or indirect sources.
The information is then classified, analyzed and interpreted. This helps to make assumptions for desired
results.
4. Preparation of alternative plan:
After collecting, analyzing and interpreting information, alternative plan is to be made. An alternative plan
and list of alternatives help in case if the main plan does not work as planned or if there are some
unforeseen changes in the market.
The list of alternative steps could be whether to sale the goods by producing on our own or by purchasing and
re-selling, second alternative for the material to be used, etc.
5. Evaluation of alternatives:
Once the list of alternatives is prepared, they are evaluated to see if they are suitable alternatives or not. How
each alternative will affect the business and its processes is evaluated.
Evaluation of alternatives is an intellectual process. Mathematical and statistical methods are used for the
evaluation of alternatives.
Business, units make use of a subject called Operation Research (O.R.) to ‘ prepare the model of an ideal
plan.
6. Selection of the best alternative:
The various alternatives are evaluated, analyzed and scrutinized and then the best alternative is selected.
7. Formulation and evaluation of subsidiary plan:
Over and above the main plan, different projects or alternatives have to be considered as per basic plan or in
support of basic plan. These plans are known as subsidiary/derivative plan.
For example, a car manufacturing company is trying to make a decision to make tyres for its cars. On the
other hand, it is also thinking to buy them rather than manufacturing. Such an alternative is considered
subsidiary plan.
Even the subsidiary plan is evaluated to assess that it does not obstruct the basic plan in future.
 8. Evaluation of plan:
Once the basic plan and the subsidiary plan are formed the entire plan is thoroughly evaluated. The
business unit takes the help of experts and consultants to evaluate the plan as and when necessary.
This third-party opinion helps the unit to get a correct opinion and also mistakes if any.
The business unit follows the principle of ‘Look and Leap’ at every stage i.e. it evaluates the plan at
every stage and then moves forward accordingly.

329. Explain the limitations of planning.

Ans. Limitations of planning:
1. Uncertain future:
Planning is based on assumptions and forecasting i.e. it talks about future. But, no one knows future and
so it is uncertain.
So, one may make assumptions and frame plans based on these assumptions. But it should be well noted,
that assumptions can be wrong. Hence, uncertainties prevail in planning.
2. Expensive process:
In a large unit, experts are engaged in the planning function.
Since these experts are highly experienced and knowledgeable they charge high consultation fees for
assisting in framing the plans.
While planning several resources are also to be gathered like holding meetings, conducting surveys,
gathering data and performing analysis, etc. All these activities require .time, effort and money. Hence,
planning incurs huge expenses to the unit.
3. Time-consuming:
Planning involves collection of necessary information, its classification, analysis and interpretation to
decide alternatives for the business. Thus it is a lengthy and time-consuming process.

4. Planning is irrelevant:
Although planning is extremely important but future is uncertain. There are chances of changes in
government policies, tax slabs, price, demand, supply, etc.
Any major change can fail even a solid plan and hence planning becomes irrelevant in such a situation.
5. Tends to be rigid:
Planning is done keeping future in mind. Now, if an adverse situation occurs in the future, managers or
employees avoid taking risk,of deviating from the plan and making changes as per the new market
situation.
They stick to the plan i.e. remain rigid for making changes.
6. Uncertainty of external factors:
Business units are affected by external factors which keep on changing. This hinders the success of
planning.

7. Incomplete information:
Collecting necessary information is the pre-condition of the planning process.
If a plan is formulated and implemented on the basis of incomplete and unclear information then it may
not give the desired result.
 8. Restricts creativity of employees:
A plan is formed by manager but implemented by the employees (or say workers) of the business unit.
Although employees have creativity and experience about the processes of the business unit they do not
have the authority to make changes in the plan. Thus planning restricts the creativity of employees.
9. Use of faulty methods:
While deciding assumptions and estimates for a plan, the planners make use of different mathematical
and statistical methods. If these methods or information are faulty or say inappropriate, there are chances
that the unit may take a wrong decision. This may fail the plan.

10. Other limitations:

Over and above these limitations, many other factors that affect planning are changes in technology,
prejudice of planner, ignorance of facts, problem of leadership, etc.

330. Explain the meaning and characteristics of staffing.

Ans.
The process of recruitment i.e. acquiring employees for the work and training and maintaining them in
the organization is called staffing.
In general terms, staffing refers to just recruitment. But, the concept of staffing is much broader and it
includes all the activities of selection, training, promotion, transfer and post-retirement activities.
Characteristics of staffing:
1. Important function of management:
Just like planning, organizing, directing, co-ordinating and controlling, staffing is also one of the
important functions of management. , 2. Perennial process:
Organization cannot exist without employees. As long as organizational activities exist, employees and
staffing wili also exist. 3. Related to human relations:
The main objective of staffing is to acquire the right employees and make the best use of them to achieve
the business goals.
Out of all the factors or production, employees are the only one in living form. Humans have feelings,
emotions and self-respect.
Since staffing is related with human element, humanitarian behavior is expected towards them when they
are made to work in the organization.
4. Staffing is a dynamic process:
Appropriate staff brings dynamism in all the activities of an organization. 5. Related with other
managerial functions:
Other managerial functions like planning, organizing, directing, co-ordinating ‘ and controlling are
closely related to staffing. 6. Wide scope:
Staffing has a very wide scope and it does not end just at recruitment. It takes care of labour welfare,
training and maintaining personnel and also working for their development. 7. Capital expenditure
(Investment):
The expenditure incurred for recruitment, selection, training and development of the staff is not an
expense but an investment.

331. Explain the meaning and importance of training.

Ans. Meaning of training:
“Training means providing theoretical and practical knowledge with reference to the work of the employees.”
As stated by an expert, “Training means giving up-to-date information about the organization and also to
increase efficiency, skill, aptitude, attitude and technical skill of the employees.”
In short “Training means imparting knowledge and education with the objective of gaining proficiency in the
business.”
Importance of training:
1. To provide modern information:
Training is necessary for providing information to the employees about modern technological changes and
research. 2. Safety:
It is extremely important to provide safety training.
Safety related trainings are given to those workers who work on machines. The training modules include, safe
operation, importance of safety equipment such as helmet, gloves, etc.
Safety training improves the ability of machine handling, reduces fatigue and increases morale.
3. Increases job satisfaction:
Training helps employees to understand their work better and ways to improve their efficiency and adopt new
methods.
This increases their enthusiasm which, in turn, increases their job satisfaction.
4. Reduces labour turnover rate:
Training increases knowledge, skill and efficiency of the workers. This improves their chances of promotion
and earning higher income.
When the efficiency along with income rises, the employees do not think of changing their job and remain
loyal to the companies. This reduces the rate of labour turnover.
5. Increase in profit:
Training increases production and productivity. This reduces cost of production and increases profit. 6.
Reduction in expenses:
Training increases efficiency of the workers. This increases productivity as well as production and decreases
wastage of raw material and time.
It also reduces supervision cost.
Thus training reduces production cost.
7. Growth and development of employees:
Training increases skills, knowledge, ability and intelligence of the employees. This also results in personal
growth and development of the employees. 8. Other benefits:
Training improves quality of production. Increased quality enhances prestige of the organization and reduces
stress of sales and complaints.
Training creates an environment of co-operation, loyalty, sincerity and enthusiasm.

332. Give the meaning of development and explain its importance.

Ans.
As contrast to training, development is an organized activity in which the manpower learns and grows
through self-assessment. It is a type of educational process which develops the personnel over a period of
 time.
The concept of development is more applicable to the higher level and top-level management.
Top level management and departmental heads perform more of intellectual work than physical work.
Like workers, they do not work on machines. They play roles of leaders who lead the workers, manage
them, motivate them and take out work from them. So, their training needs are different. Hence, they
need different kind of training or say development.
The objective of this training is to increase their mental ability and their . efficiency in taking policy
decisions and leading the organization in more
and more efficient way. Such development trainings make them experts in technical knowledge which
then help in them in making strategic plans and policies. This type of training is called officer
development.
The modern world industries are developing very fast. The managers need to remain in line with these
developments so that they can stay well in the competition. So to enhance the ability of top level
management, the organization undertakes development oriented programmes. .
Development is the process of imparting theoretical and practical knowledge to top level management
and departmental heads.
The term development refers to a program which helps to achieve the predefined objectives of the
organization by improving the capabilities of heads (officers).
Importance of development:
1. Increase in technical knowledge:
Although the officers do not have to work on the machines but, with changing business conditions, it is
necessary for the officers to have technical knowledge because their functions are related with technical
aspects.
Developmental programmes provide guidance (knowledge) to use technical knowledge, machines and
methods, so that correct and positive decisions can be taken for organizations.
2. Research and new ideology:
Training increases the efficiency of departmental heads to work at the administrative level by providing
them knowledge about new researches and ideologies. 3. Development of the organization:
In present times, developmental programs are necessary to help the organization grow at national and
even international levels by adopting new changes and strategies. 4. Optimum use of resources:
Developmental programs help to make optimum use of available resources.
Moreover, training reduces unnecessary expenses, controls the cost of production and hence increase the
profit.
5. Solution to problems:
Development programs help in bringing speedy and successful solutions to newly arising, problems in
the organization. 6. Effective supervision:
Development programs enhance the skill of officers involved in technical work. This makes their
supervision more effective. 7. Reduces stress:
Management and departmental heads often have to face many challenges and problems while managing
the enterprise or business.
Taking decisions and managing daily operations creates a lot of stress on them. Developmental programs
help to reduce this stress.

333. Explain the selection procedure.

Ans. The process (steps) of selection:
 1. Welcoming and primary meeting:
When the candidate arrives at the enterprise, he is welcomed by the receptionist.
The receptionist then makes the primary investigation. If the candidate is found suitable/eligible he is given an
appointment of the recruitment officer.
The recruitment officer then gathers information about the knowledge, education, skill and the working
capability of the candidate.
The main objective at this stage is to see that only proper candidates are sent further for applying for the job.
If the candidate is found suitable in the primary meeting, he is asked to fill the application form. This saves the
time of the recruitment officer and the process becomes simple too.
2. Receiving and screening of applications:
The candidate, along with application submits various documents such as bio-data, copies of mark sheets,
experience certificates and other certificates, etc.
The enterprise screens these applications and documents. The ones that are found faulty or incorrect are
rejected.
3. Taking necessary tests:
After shortlisting the candidates based on their applications, the enterprise arranges various tests for these
candidates.
Every enterprise conducts tests in its own way. The number, difficulty level and way of conducting test vary
among organization.
These tests help the enterprise to identify mental ability, skill, aptitude, efficiency, etc. of the candidate. The
major types of tests are:
IQ test: IQ test assess the common sense, memory, smartness, power of decision making and thinking
capacity, etc.
Aptitude test: Aptitude test assesses whether the candidate is interested in the work for which he is hired.
Trade test: Trade test decides if the candidate has the necessary skills to perform the expected job or not.
Psychological test: This test is meant to know about the nature, self-confidence, attitude and habits of the
candidate.
4. Personal interview:
Candidates who succeed in the above tests are called for personal interview.
To remove any bias or preferences, the enterprise forms a selection cum recruitment committee for
interviewing the candidates.
The interviewing committee consists of representatives of the management, the departmental head, the
personnel manager and experts from various fields.
These people perform a proper work-related interview. They stick to this agenda and do not deviate. They also
clarify the terms and conditions of the job to the candidate.
5. Checking references:
To know the present and past work-related situation of the candidate, the business enterprise checks and
enquires from candidate’s present and past employers.
 This is done to know whether the information provided by the candidate is correct or not.
This also helps to obtain the right opinion about an employee before finalizing him.
6. Preliminary selection:
If the matters gathered from personal interview and the past references are positive then the selection
committee will make a list of selected candidates.
This list usually includes more number of candidates than required. These candidates are also called short
listed candidates.
7. Physical (Medical) examination:
After preliminary selection of the required candidates they are sent to a specified hospital or doctor for
medical examination.
The main objective of this examination is to know whether the candidate is suffering from any serious
illness or any other physical problem.
Serious or major illness can decrease efficiency of the candidate and hence will affect the productivity of
the organization.
The other employees are kept in waiting list. In future, if the organization needs more candidates then it
can select from this list.
8. Appointment letter:
Once the candidate passes all the tests and interviews he is given the appointment letter.
The appointment letter contains details regarding the nature of work, work place, designation, rights and
responsibilities, remuneration and other financial and non-financial details.
9. Induction into the organization and allotment of work:
In modern organizations, after giving the appointment letter and before the allotment of duties,
employees are given information regarding the policies of the organization, organization environment,
superiors, colleagues and subordinates. In other words, the to-be employees are introduced to the
organization. This is called induction.

334. What is recruitment? Discuss in detail the internal and external sources of recruitment.
Ans.
In general terms recruitment can be defined as, “The process of looking for probable employees and
making them apply for the job.”
In a broader sense “Recruitment is the process of acquiring at the right time, in the right number, in the
right place, persons with the right qualifications.”
Recruitment is not a one time job. It keeps on continuing in the organization.
Recruitment takes place when a new enterprise is established, when an existing unit is expanded or when
an employee resigns, dies or retires. Sources of Recruitment:
There are two sources of recruitment.
(A) Internal sources
Promotion
Transfer
Friends and relatives of employees
Recalling retrenched employees
Promotion with transfer
Waiting list
(B) External sources
Through advertisement
Through employment exchange
Through educational institutions
Through trade unions
Through contractors and jobbers
Recruitment at the gate
Modern methods
There are two main sources of recruitment,
(A) Internal sources arid
(B) External sources. Depending upon the need of the organization and situation, recruitment is done
from any of these sources.
(A) Internal sources:
1. Promotion:
When a post in the organization becomes vacant, it can be filled by promoting an existing staff member
after considering his work, ability, honesty, skill, loyalty and qualifications.
Promotion of employees boosts morale and loyalty of the staff.
Moreover, promotion also results in increased salaries, status, power and responsibility.
2. Transfer:
In case of shortage of staff at a particular location or department, staff member from location or
department having surplus staff can be transferred on the basis of his suitability and qualifications. 3.
Friends and relatives of employees:
Whenever a vacancy comes up in an organization, the management asks employees ask employees to
recommend their qualified friends and relatives for the post.
The applications are called from such interested candidates and are screened, interviewed and if all goes
well, are recruited.
This form of recruitment helps to boost the morale of the employees and make them feel proud to be a
part of the recruitment process.
4. Recalling retrenched employees:
Retrenchment of employees is the process of removing employees from the organization in case if they
are surplus or to cut down organizational costs.
The organization can invite former employees who were retrenched because of some or the other reasons
or employees who have left the organization and joined elsewhere voluntarily to rejoin.
5. Promotion with transfer:
Under this system, organization provides promotion along with transfer and transfers employees to a
different location on the basis of their efficiency, experience and loyalty For example, an employee can
be transferred along with promotion to his native place or any other place of his choice. This will boost
the morale and enthusiasm of the employees. Since, in many cases employees do not prefer transfer,
giving them promotion and then transferring them is a way to keep their morale high. 6. Waiting list:
Waiting list is the list of candidates who had applied in the past but were not appointed in the
organization. Such a list is useful for future recruitment.
Since, the applicant of the waiting list was thoroughly screened and tested, the organization can save time
and money to spend again on advertisement and the entire recruitment procedure.
The organization can pick the best candidates from the waiting list if they are still available and fill the
vacant posts.
(B) External sources:
1. Through advertisement:
Advertisement is an effective way for recruitment.
The organization releases advertisements in newspapers, business journals and periodicals for specific
posts and invites application from qualified candidates.
The organizations also put such advertisements on internet, TV or websites. The candidates that come
across such advertisements can apply online.
Through advertisement, the organization can receive a very large number of applications that too from
distant corners of the country.
This helps to choose the right candidate form a large pool of applicants.
2. Through employment exchange:
Unemployed people register themselves in public and private employment exchanges. These exchanges
prepare a database of all such people.
The database contains details such as name, address, qualifications, experience, skills, etc.
The organizations can approach these employment exchanges and obtain the list of candidates that can fit
into the job.
The organizations then contact suitable candidates and calls for recruiting them.
3. Through educational institutes:
In modern times many enterprises visit colleges and universities and ask them to arrange a campus
interview.
Campus interviews are held by colleges and universities themselves too wherein they invite various
organizations to visit their campus and conduct interviews and select the student as a future candidate.
Such placement camps are arranged every year at various institutes like Indian Institute of Management
(IIM) and Indian Institute of Technology (NT) and also at several colleges and universities.
4. Through trade unions:
Most of the workers are the members of trade unions. Trade unions maintain the list of these employees
working in the organization.
The organizations can contact these trade unions and take the list of such employees that are either
removed or have left the organization. They can then contact them if they are available for the job.
The concept of trade unions is quite popular in textile industries, mining industries, etc.
5. Through contractors:
There are certain employment contractors who mainly supply unskilled labourers to the organizations.
The business enterprise makes a contract with such contractors where in the contractor takes the
responsibility to supply the workers to the enterprise.
The contractor is in constant contact with various types of labourers. He recommends these workers to
the enterprise as and when the enterprise asks for.
This practice is quite popular for workers working in construction industries, mining industries, tea
plantation, etc.
This is an informal channel of recruitment and so there are chances that the contractor or the enterprise or
both together exploit the worker.
 6. Recruitment at the gate:
Workers can be recruited by business enterprises by placing a notice at the factory gate. This method is
more suitable for daily wages. 7. Modern method:
Modern method is mostly suitable for recruitment of skilled employees.
In modern times a very large amount of recruitment is done through the internet.
Search portals such as [Link], [Link], etc. are internet companies that provide a facility to
candidates to register their bio-data on these web-portals.
This database is then shared with the business enterprises worldwide. Whenever the enterprise needs to
fill a post, it contacts the candidates registered on these websites.
Moreover, the candidates can also directly apply to the company from the company’s website.
This tool is very fast, quite effective and has very wide reach.
Under the modern method, various procedures of recruitment such as application, exams (tests), results
and appointments can be done.
If the candidate is well-versed with the computers, he can take tremendous benefit from this source of
recruitment.

335. Explain the importance of staffing.

Ans. Importance of staffing:
1. Driving force:
If the employees are efficient and if the organization can satisfy their needs, then the employees can become the
driving force of the organization.
An efficient staff by making correct use of other factors of production can accomplish the objectives of
business successfully.
2. Dynamic activity:
Staffing infuses dynamism into business and helps to perform all the business activities.

3. Important for other functions of management:

Other managerial functions like coordinating, directing, controlling, planning, etc. cannot succeed
without proper staffing.

4. Limbs of business enterprise:

Planning is the brain of management and enterprise while staffing is like the limbs. Without the limbs the
body i.e. the enterprise cannot do any activity.

5. Job satisfaction among staff:

Staffing helps to listen the complaints and problems of the employees. This then helps to bring solution to
their problems speedily.
If the planning and distribution of work is done properly than the employees become more satisfied with their
jobs. As a result their efficiency increases.
6. Harmony in relations:
If staffing is done right, it can create a harmonious and satisfying environment between the employees
and employees and employers of the organization.

7. Increases prestige of the organization:

A contented and efficient staff is an invaluable asset. It increases the prestige of the organization.

8. Continuous process:
Business cannot exist without staff. As long as business activities continue, staff and staffing process will
also continue.

336. Explain barriers to effective communication.

Ans. Barriers of effective communication:
Communication is a human activity and so there are chances of problems in this process.
The factors of human limitations such as affection, mistakes, estimations, misunderstanding, distrust, fear,
etc. that affect communication are called barriers of communication.
Following barriers come in the way of effective communication:
1. Lack of planning:
If the order of information is not planned, sender will give wrong, unclear and incomplete information. 2.
Faulty translation:
Employees working at middle level receive messages from top level. At times such messages may not be in
mother-tongue. The middle level staff analyzes these messages on their own and sends them at bottom
level. The middle level person may make mistakes in translating the message. 3. Unclear messages:
At times, important matters may be presented in an unclear manner. Also, the words and sentences in the
message may be arranged in improperly.
There are chances that these messages fail to give clarity to the receiver.
4. Unclear assumptions:
Many messages depend upon guess work and assumptions. If these are not clarified while transmitting
messages, their meaning and importance might . change when at the receiver’s end. 5. Shortage of time:
Many times decisions are taken on the basis of information. After getting information, it is to be
implemented.
However, if information is not available on time, then the message loses its importance and effectiveness.
6. Overburden in communication:
There is a constant and continuous exchange of communication in large industries. A high flow of
communication over-burdens people.
If information is transmitted and received by someone who may be over-burdened, then he may not be able to
maintain precision of information and just conduct the task of communication.
This may prove quite harmful for the organization.
7. Ignorance towards messages:
Many times higher managers or bottom level employees remain inattentive and careless regarding messages.
Due to their carelessness the message may not be transmitted or understood properly further.
This can create several problems in the overall work processes.
8. Improper selection of media:
There are specific mediums of communication for fulfilling a desired task. If these mediums are not selected
properly then they may become barriers to communication. For example, if change in quantity to be
produced is mentioned orally rather than in written form then it may lead to blame-game if the production
is not done as per the desired change. 9. Distrust and fear:
If fear and distrust exists in the organization, every message is perceived with doubt. This is because people
might fear of being held responsible for things unnecessarily.
At times information is changed due to the fear that correct information will lead to punishment or fine.
Hence, based on some bitter experiences of the past, the correct information or message may be edited or not
passed.

337. Explain Financial Incentives.

Ans. Financial incentives:
Monetary benefit offered to employees to encourage behavior or actions is called financial incentive.
Financial incentives are boon for skilled and proficient employees or workers because they boost their
enthusiasm, courage, self-confidence and efficiency.
Financial incentive gives security to the employees and increases their social status.
Types of financial incentive:
1. Profit sharing:
When workers get a definite proportion of profit in the form of money other than their salary, it is called
profit-sharing.
Profit sharing is based on the concept that surplus profit of the business is the result of the joint efforts of the
workers and owner.
2. Co-partnership:
When employees or workers are taken as partners in ownership, management and distribution of profit, it is
known as co-partnership.
Since these employees or workers are taken as co-partners, it becomes easy for owner to increase production
and to maintain industrial peace.
3. Promotion:
The process of placing the staff in a higher and beneficial position is known as promotion.
Promotion increases authority, responsibility, duties and salary of the employee.
Promotion increases the efficiency of the staff and his morale.
4. Bonus:
When a business earns profits, its credit goes to workers as well.
On the basis of this thdught, the organization at the end of each year distributes ceiiain percent of profit
among works. This distributed amount is known as bonus.
5. Commission:
In order to increase sales, business units decide sales target for the employees appointed in sales department.
To see that the .sales executives achieve these targets, the business units provide them certain financial
incentive on sales. This is called commission.
6. Prizes:
When certain employees show outstanding performance or style of working, they are honoured for their
services in the form of cash prize along with certificate and medal by the business units.
Such prizes are given in annual meeting, get-together or by arranging a special felicitation programme.
Distributing prizes before all the staff members boost encouragement, zeal and efficiency of the workers.
7. Suggestions and advices:
Workers are constantly engaged in production. While working they come across several ideas and
suggestions to improve the process, reduce costs, improve productivity, etc.
They may give such suggestions and advice to the management to improve the production process and make it
more efficient.
When these ideas and suggestions prove fruitful, the workers are paid monetary incentives.

338. Define Motivation and explain its features.

Ans. Motivation:
 The process of stimulating people to perform action and to make it possible to have maximum work
satisfaction is called motivation. Characteristics of motivation:
1. internal inspiration:
Motivation is that strength or power which arises from inside of the individual.
The feeling of motivation makes the person realize that something is lacking and when he gets inspired he
marches to do .activity which can overcome that feeling of lacking.
For example, a student may feel that he lacks in mathematics which is not allowing him to reach desired
results. If he gets this realization, he may become motivated to work for it.
2. Psychological concept:
Motivation is a psychological phenomenon.
The mental status and approach of every person is different.
As a result, the need of internal inspiration and its format is also different for every person.
3. Increases efficiency of employees:
Motivated workers are encouraged to produce more.
Motivation boosts their morale. Their productivity and efficiency also increase. Overall,
these things together increase the profitability of business.
4. Continuous process:
Once motivation process has started, it remains continuous.
Employees should be motivated regularly to get the work done from them. Motivational
direction and guidance should be provided to them.
5. Reduction in labour turnover rate:
Motivation gives internal satisfaction to the employees and inspires them.
Although workers get remuneration as per their work, motivation becomes an add-on to provide them
satisfaction and respect.
This keeps them motivated to stay in the organization and remain loyal to the company.
6. Achievement of goals:
Motivation inspires the workers to function effectively. So, achievement of personal and business objectives
become possible and easier. 7. Wider scope:
Motivation is a wide concept.
Motivation includes different terms like need, motive, desire, emotion, aim, choice, will power, eagerness,
temptation, etc.
8. Adapting to changes in the organization:
In modern time changes takes place very fast in industries and organizations. These changes constantly affect
production, technology, raw material and other activities.
Generally, the workers are not prepared to accept these changes quickly. They are reluctant towards new
changes.
If they are motivated well they will be able to adapt changes faster and easily. .
9. Tool to get co-operation:
Motivation gives job satisfaction to the employees. As a result, they co-operate to their higher authorities.
10. Positive attitude:
Motivation makes the attitude of people positive.
Workers often face several problems. When these problems are heard and solved, they experience a
 feeling of respect for staffing as well as organization.
They work, as if they are a part of the organization. Such a style of work makes possible the development
of employees and business unit.
11. One of the functions of management:
Motivation is an important part of the management.
Managers have to get the work done from the living resources like employees and not from physical
resources. Therefore, to motivate, is an important function.

339. Define Direction and explain its characteristics.

Ans. Directing:
In layman language, direction means to guide the workers, make them aware of the work, supervise them and to
maintain their enthusiasm for the work.

Characteristics of directing:
1. Goal oriented activity:
The purpose of directing or say direction is to guide and motivate the employees to achieve business
goals. Thus, direction is a goal oriented activity.

2. Function at every level of management:

Direction is such a function which is used at every levels of management.
The top level managers direct departmental officers regarding target, policy and administrative matters.
Similarly, at the bottom level the supervisors give orders and instructions to the foremen and jobbers.
The jobbers and foreman direct the workers working under their control.
Thus, direction moves from top level to the bottom level of management.
3. Continuous process:
As long as the organization exists, the function of direction will also continue. Thus, direction is a
continuous process.

4. Observation of functions:
One of the chief functions of directing is observing whether employees are working as per instructions
given to them or not.

5. Wider scope:
Directing is not merely guiding and advising to the employees but also making them understand the
business decisions and encourage them to work for their implementation.

6. Communication:
It is highly important to have an effective communication channel for giving orders and guidance to the
employees.
Under ineffective communication process it is difficult to give right direction to the right employee at the
right time.
7. Motivation:
It is necessary to motivate the employees so that they put their best efforts for the organization.
Higher authorities guide the employees personally. Such guidance solves the problems and doubts of
employees, generates faith in them and motivates them to do better work.
8. Flow of direction:
Direction always moves from top level to bottom level management. Top level management gives guidance to
the managers of middle level management and middle level management directs the workers of bottom
level management. Hence, the flow of direction is downwards.

9. Managerial function:
Just like other management functions such as planning, organizing, staffing, etc., direction is also a
management function.
340. Define Communication. Explain its characteristics.
Ans. Communication:
Communication is the process of exchange of words, letters, instructions and opinions. Characteristics of
communication:
1. Goal oriented process:
The objective of communication is not only to exchange information but also to achieve objectives.
Special care is taken to confirm that the receiver of information understands the information as intended.
2. Clear words and language:
The words and language used in communication should be clear. It should not have double meaning so as
to avoid any confusion. 3. Two-way process:
Communication is a two-way or bilateral process.
Top managers send the necessary information regarding objectives, policy, method, procedure and rules
to the middle and bottom level management. While on the other hand, the middle and bottom level
management pass necessary information in the form of report to the top level management.
4. Continuous process:
Communication is a continuous and a permanent process.
It starts from the beginning of the business and continues till the end.
5. Many equipment:
Several method and equipment are used to communicate things. For example, oral or written
correspondence, telephone, fax, internet, mobile phone, SMS, telex, etc. 6. Many types and methods:
There are many types and methods of communication. These include internal communication, external
communication, written communication, oral communication, communication through signs, etc. 7.
Motivating activity:
Communication clarifies the job properly. So, the officers and employees remain motivated about what
has to be done without any confusion. 8. Related to administrative process:
Communication mainly relates to the administration of the unit.
It is used to collect information necessary to make right decisions and for proper administration.
It is also used for solving the administrative problems and difficulties.
9. Human process:
Communication is based on the behaviour of the humans.
Irrespective of the medium of communication, without the existence of human skills, communication
does not take place. Moreover, at the time of communication fear, feelings, anger, etc. also affect the
communication. Hence, communication is called a human process.

341. Explain the Maslow’s hierarchy of needs with diagram.

Ans. Hierarchy of needs as given by Maslow:
In 1943, Maslow in his article ‘Principle of Human Motivation’ in 1943 gave the five needs for those
humans seek. These needs in ascending order are,
Physiological or primary needs,
Safety needs,
Social needs,
Esteem and status needs and
Self-esteem and self-actualization needs.
The first three needs are of lower order. The last two needs are of higher order.

1. Physiological or primary
needs:
The basic needs that a human body seeks such as food water, clothing and shelter are known as
physiological needs or primary needs.
These needs are so basic that unless these are fulfilled man does not seek any other need whatever it may
be.
2. Safety needs:
After the physical needs are satisfied, the next need that comes in the hierarchy is safety.
Safety needs refer to physical safety, job safety, safety against risk, regularity of wages, etc.
To safeguard himself, man buys insurance, opens saving account and fixed deposit account, invests
money, etc.
These safety measures provide him financial mental peace.
3. Social needs:
After security needs comes the social needs. These needs include love and affection.
Man is a social animal. He always wants love and affection from his family, relatives and society at large.
Social needs include feeling of getting love and respect from the family members, friends and relatives as
well as by his colleagues at work place and by others in society.
4. Esteem and status needs:
Esteem and status needs are also known as position need or high class need.
Man longs that people should praise him, give him respect and that his reputation increases in the society.
5. Self-esteem and Self-actualization needs:
After the four needs are satisfied, man tries to satisfy his need of self-esteem or say self-actualization.
Each person wishes to rise in his life and reach the top position.
He/she wishes that society takes his name with pride and in the best way and he rises in his skills and
 work.
For example, a person feels like earning name and fame like Zakir Husain in playing tabla, Shivkumar
Sharma in playing santoor, Sachin Tendulkar in the field of cricket, Amitabh Bachchan in the field of
acting, Lata Mangeshkar in the field of music, etc.

342. What types of relief and compensation arc available to the consumer according to Consumer
Protection Act?
Ans.
Consumer Protection Act, 1986 gives 6 rights to [Link] are discussed below.

1. Safety:
Every consumer is entitled to get protection from products which are harmful to health. For example,
sub-standard electrical appliances can cause dangerous injuries to the consumer and hence should not be
used.
Standardized and superior quality appliances should only be used so that they do not cause harm to
consumers.
2. Information:
It is the right of a consumer to get all information regarding the product he wishes to purchase. For
example, he is entitled to information such as ingredients, manufacturing date, directions for use, price,
quality, weight, purity, etc.
As per this right, a manufacturer is bound to display all information either, on the packing or on the label
of the product.
3. Choice:
Every consumer has a right to choose the product he wishes to purchase.
The consumer must get a product at a competitive price, in right quantity, right place and at right time.
The right of choice has led to production of variety of goods and services having different quality, brand,
price, size, etc.
A fine example would be the two-wheeler vehicle industry. There are a large number of options for
scooter and motorcycles in the market in a wide price-band and features. Consumer can select his choice
of vehicle on the basis of engine power, features, colour, design, price, etc.
4. Representation:
If a consumer is dissatisfied with a product or a service, he has the right to represent his problem i.e.
complain.
With this right in the mind, most business units have set-up their own complaint redressal department.
The consumers can call up and make a complain if they receive a faulty product.
Over and above this, there are several organizations which work for protecting the consumers. These
organizations help the consumers to file complain and deal with the proceedings.
5. Redressal:
The right to redressal says that if a consumer gets sub-standard quality of goods or services as compared to
what he has been promised then he has the right to get the relief.
The consumers are eligible for various types of relieves such as replacement of goods or services or repair of
the product or part.
If at all the product has caused damage to the consumer he has the right to complain and obtain compensation.
6. Consumer education:
Every consumer has the right to get information about the product he buys or wish to buy.
The Act says that the consumer should get right quality and quantity at the given time and place at an ideal
price. In order to see that these aspects are taken care of, the consumer has the right to get educated.
If a product or a service is sub-standard as against the assured quality, then the consumer know that he has the
legal right to claim relief and or compensation.
Most business units and organizations who work for consumer protection are also actively working on
educating consumers.
Over and above these six rights, The United Nations Organization (UNO) has issued a directive
recommending two more rights for the consumers.
They are:
Basic Needs
Hygienic Environment.
1. Basic needs:
This Right says that every person is entitled to basic needs such as adequate food, water, clothing, shelter and
health care required for survival.
2. Hygienic environment:
As per this Right, every individual has the right to get pollution-free air, water, food and land. Hygienic
environment gives the person a good quality of life free from diseases.

343. What is the role of consumers’ unions and non-goverment organizations in the consumer
protection movement?
Ans. Introduction to NGOs:
In India, several consumer organizations and non—government organizations [NGOsJ are actively
working towards maintaining and protecting the interest of consumers.
NGOs are non—profit making organizations. NGOs
are set up to improve public welfare. They have
a constitution of their own.
They are free from government interference.
They work towards maintaining and protecting the welfare of consumers. Functions of
NGOs : The various functions of these organizations are:
(1) Educating the consumers regarding their rights through seminars, conferences and workshops. (2)
Publishing periodicals, notices, booklets, etc. to spread awareness regarding consumers’ problems, legal
awareness, eligibility of compensation and other matters of interest. (3) Consumers are informed about
the (i) comparison of various products and services available in market and (ii) quality analysis carried
out by authorized labs and their report in comparison with leading brands. (4) Providing legal assistance
to consumers by way of providing aid, legal advice, etc. in seeking legal remedy. (5) Encouraging
consumers to strongly protest and take action against unethical, exploitative and unfair trade practices of
sellers. (6) Filing complaints in appropriate consumer courts on behalf of the consumers. (7) Providing
assistance to those consumers who want to complain in the consumer court. (8) Compiling and
publishing information on consumers’ satisfaction, etc. (9) Releasing various films related to consumer
awareness, and providing information to educate consumers. (10) Organizing consumer education
programmes in schools and colleges to educate the students about consumer protection. (11) Creating
awareness against food adulteration. (12) Supporting government institutions that are working to spread
consumer awareness.

344. Explain the responsibilities of consumers according to Consumer Protection Act.

Ans. If we wish to have rights, we will have to take up some responsibilities. So, rather than just fighting
about the rights, the consumer must undertake few responsibilities before buying a product and also
while using it.

The consumer should undertake following responsibilities:

1. Conscious use of rights:
The government has given several rights to the consumer. So, the consumer should be well aware about them
and should also possess knowledge about the way to use them.

2. Beware of misleading advertisements:

In the marketing world, it is quite often that sellers and producers publish or display misleading advertisement
for promoting sales. For example, consumption of a specific product will boost energy instantly or will
increase the height of person in a short span, etc. Such misleading advertisements are also quite common
in children products.
The consumer should use his wisdom while taking the decision to purchase such products. He should also
compare that product with other and verify the claims in order to prevent being getting fooled.
If the consumer finds that the claims of the product are false or if the product is different as compared to
shown in the commercial then he should report about such advertisement.
Attempt should also be made to stop showing such inappropriate advertisement.
3. Care during purchase:
The producer or seller should never provide wrong incentive for the sake of selling the product.
Consumer should not get enchanted by the claims without verifying the details of the product. He should
emphasize on getting all the necessary information regarding the product such as name of manufacturing
unit and address, quality, quantity, direction for use, expiry date, ingredients, manufacturing date, weight,
guarantee or warranty period and other conditions.
4. Solicit for a bill:
A consumer should always insist on getting the bill for the product he purchases.
Bill plays the core role during complain redressal. If the purchased product is damaged or of a sub-
standard quality or does not fulfill the desired characteristics, and if the consumer wants to complain to
the Consumer Protection Forum, it is mandatory to submit the proof of purchase in the form of a bill.
Apart from this, legally too every seller is bound to provide a bill to the consumer as proof of his
purchase.
5. Solicit high quality:
Today it is quite common to see adulterated, duplicate and sub-standard products in the market.
Special emphasis should be laid to bring a permanent solutionfor such goods and services.
The consumer should also confirm if the product has got quality control certificate and standardization
mark. For example, one can look for ISI mark, ISO, mark, etc.
6. Registration of genuine complaints:
If the consumer rights are violated in any form, the consumer should immediately complain to the
concerned authority.
Generally, consumers ignore minor problems or violation of consumer rights and do not bother to
complain. This is not a good approach because the producer will keep on producing such products and
harm others too.
At times, consumers misuse their rights and claim much larger compensation for minor damages. This
too is inappropriate.
In short, it is the responsibility of the consumer to register genuine complains only.
7. Spread of consumerism:
The act of promoting consumer protection at large is known as consumerism.
Every consumer should take active part to promote consumerism. For this, the consumers should unite
and undertake activities for spreading knowledge about consumer protection, the rights and
responsibilities.
8. Environmental protection:
It is the duty of every consumer to protect the environment. He can even make small efforts in this
direction. For example, he should throw the waste in dustbins in order to prevent dirt and pollution.

9. No involvement in unethical activities:

When consumer is purchasing something, he should not overlook legal aspects. For example, he should
not involve in black-marketing, hoarding of goods or any such kind of unethical practices.

Conclusion:
From this discussion it can be concluded that rather than simply claiming consumer rights, the consumer
should first fulfill his responsibilities. Such an approach will automatically eliminate the use of many
rights.
345. Explain the working of Consumer Protection Institutions and Non-Government Organizations for
protection and maintenance of consumers’ interest.
Ans. Role of Consumer Union and Non-Government Organizations (NGOs):
In India, there are several consumer unions and Non-Government Organizations that are actively
working for maintaining and protecting the interests of consumer.
NGOs are non-profit organizations. They work for the welfare of the people on their own.
NGOs have their own independent constitution. The workers follow this constitution and work
accordingly for public welfare.
Government does not interfere with the workings of NGOs.
NGOs that work specially for consumer welfare perform the following functions:
Educating consumers about their rights through seminars, conferences and workshops.
Publishing periodicals, notices, booklets, etc. to spread awareness regarding problems faced by
consumers, for legal awareness, eligibility of compensation and other favourable information.
Consumers are informed about the comparison of various products and services available in the market,
quality analysis by the authorized laboratories and their reports.
Support to provide legal information to the consumers and aid for the legal formality.
Essential support is provided to the consumers to oppose unethical, exploitative and unfair sales practices
of the sellers.
Complaints are registered in the consumer court to protect the interest of the consumer.
Provide complete assistance to consumers who want to complain in the Consumer Court.
Consumer satisfaction and their related information are compiled and published.
Releasing films and information for educating consumers.
Consumer education programmes are organized in schools and colleges and students are educated for
consumer protection.
Awareness is created against food adulteration.
Providing support to government institutions which work for spreading consumer awareness.

346. Explain the 3 tier dispute settlement system according to the Consumer Protection Act.
Ans.

To see that consumers are heard for their problems, the government has formed a three-tier redressal system.
These three tire are classified as district level, state level and national level.
Based on this tire system, the redressal system can be classified as:
(a) District Forums (District Consumer Disputes Redressal Forum (DCDRF)
(b) State level commissions (State Consumer Disputes Redressal Commissions) (SCDRC)
(c) National level commission (National Consumer Disputes Redressal Commission) (NCDRC)
The main objective of maintaining the three-tier redressal system is to make it fast and economical.
Three-Tier Redressal System:

If the consumer is dissatisfied with a product and finds that the product purchased by him is either defective or
not as promised, he can take up the matter to the three-tier redressal system for getting justice. He can
take the help of dispute settlement organizations set-up within the three tier redressal system.
Depending upon compensation value, the consumer can file the complain at the concerned body.
He can register the complaint either individually or in the capacity of a representative of consumer
association at the District, State or Central level.
If the grievances are common to a group of consumers, then they can also complain collectively. If the
consumer is dead, even his legal heirs or his representative can file the complain.

347. What type of reilef and compensation is available to a consumer according to the Consumer
Protection Act?
 Ans. The government has set up a three-tier mechanism [dispute settlement organization] for complaint
redressal of the consumers.
These three tiers or layers are at the District Level —* State Level —* National Level.
If there is any defect in the product, the consumer can register a complaint with the Consumer
Association at the district, state or central level as the case may be.
If the consumer court is satisfied about the genuineness of the complaint, it can issue one or more of the
following reliefs in favour of the consumer:
(1) It can give an instruction to the seller to remove the defect in the goods or the deficiency in the service. (2)
It can direct the seller to refund the price charges paid for the product or the service. (3) It can order the
seller to replace the defective product with a new one that is free from any defect. (4) It can give an
order to pay a reasonable amount of compensation for any loss or injury suffered by the consumer
due to the negligence of the seller. (5) If necessary, a penalty can also be imposed on the seller.
(6) It can discontinue the unfair and prohibitive business practices of the seller and can order him not to repeat
the same in future. (7) It can stop the production and sale of harmful products. (8) It can instruct the
seller to deposit an amount not less than 5% of the value of the defective goods or deficient services to
the consumer welfare fund or any other organization / person, working with the objective of utilizing the
amount for a specific purpose. (9) It can direct the seller to discontinue misleading advertisement and to
telecast the improved one. (10) It can give an order to pay reasonable amount as compensation to the
affected party.

348. Give the meaning of Consumer Protection and explain the rights of consumers. (March 2018)
 Ans. Meaning : Consumer protection means providing a shield to consumers from unethical, exploitation and
unlawful practices of sellers or manufacturer.
The Consumer Protection Act provides six rights to consumers. The consumer protection forum set up
under the Act intends to promote and protect the various rights of consumers.
These rights include the following:
(1) Safety:
The right to safety means protection against goods and services that are harmful to health and hygiene.
e.g. sub—standard electrical appliances can cause injuries to the consumer, and hence such appliances
should not be used.
Standardized and better quality appliances should be used so that consumers are protected.
(2) Information:
The consumer has a right to information of goods and services that are offered.
A manufacturer is legally bound to display all information such as ingredients, manufacturing date,
directions for use, price, quality, purity etc. either on the packing or on the label.
(3) Choice:
The consumer has the freedom to choose from a variety of goods or services at competitive prices.
He should get the desired product at the right time, right place, right quantity and at a competitive price. This
right of the consumer to select has brought a wide varieties of goods and services in the market by way of
quality, brand, price, size, etc. e.g. In the two wheeler, there is a wide range of products to satisfy the
requirement of consumers. In the case of motorcycles, variety is available regarding the engine
power, colour, design, etc.
(4) Representation [Right to be Heard]:
If a consumer is dissatisfied with a good or a service, he has the right to complain.
It is because of this reason that many enlightened business firms have set up their own consumer service and
grievance cells.
In India, many consumer organizations are also working in this direction and helping consumers in the
redressal of their grievances.
(5) Redressal:
According to this right, the consumer has the right to get compensation or seek redressal against unfair
trade practices or any other exploitation.
e.g. sub—standard quality of goods or services, etc.
The right to redressal includes (i) compensation in the form of money or (ii) replacement of goods or (iii)
repair of the defective product, etc.
(6) Consumer Education:
The consumer has a right to acquire knowledge and be a well-informed consumer throughout his life. He should
be aware of his right to get the right quality and quantity at the given time and place and at an ideal
price.
If a product or service is sub—standard as against the assured quality, then the consumer should be aware that
he is entitled to legal relief.
Many government and non—government organizations are actively working to educate consumers.

349. Explain the types of non—monetaly incentives.

 [Link] of the important non—financial incentives are discussed below: (1) Job Security: For an
employee, having only monetary gains is not important. He also wants security of the job.
If employees are secured about their future income and work, they do not feel worried about these
aspects and thus, work with greater zeal.
Job security inspires them to work with enthusiasm, thus increasing the production of the business unit.
(2) Appreciation of Work and Reward: Employees who economically and efficiently surpass production,
marketing targets in time are honoured in the annual meeting or in some other function (programme).
Thus, these employees are motivated, and at the same time, other employees are also inspired. (3)
Assignment of Responsibility: Employees feel honoured and obliged when their bosses assign them the
special responsibility of training and directing subordinates or others.
Assignment of responsibility increases the confidence of employees, and it inspires them to work more.
(4) Adviser: When a worker has been efficient for a long time, his advice is sought in the formulation of
policies to take advantage of his experience.
Workers feel honoured and encouraged if their advice is accepted. They feel that they are an important part of
the company. (5) Welfare Activities and Amenities: Welfare activities and amenities (facilities) given to
employees also inspire them to work.
Many welfare facilities other than wages are given to employees, e.g. medical services, canteen facility, library,
leaves with pay, sports, entertainment activities, training facility, etc.
(6) Other Incentives: Many other types of non—monetary incentives are also provided to the employees.
e.g. Housing facility, life insurance, free education to children, books, transportation facility etc.

350. Give the meaning of staffing and explain its importance. (March 2018)
Ans. Meaning:
After selecting an organization structure, the next step is to fill up the various posts provided in the
organization. This is termed as staffing.
This includes recruitment, selection, training, promotion, transfer and post-recruitment activities. Staffing
occupies an important place in the management process.
The following points will clarify the importance of staffing
(1) Driving force:
Contented and efficient staff is the driving fc5rce of an organization.
Only an efficient staff, along with other factors of production, can accomplish the objectives of a
business.
(2) Dynamic activity:
Staffing infuses dynamism into business and performs the entire task of purchasing raw material, using it for
production, selling the finished goods and collecting money for the same.
(3) Important for other functions of management:
Other managerial functions like coordinating, directing, controlling, planning, etc. cannot succeed
without proper staffing.
(4) Limbs of the business:
In management, planning occupies the place and importance of the brain in the human body, in the same
manners, staffing is considered as limbs of an enterprise.
Without limbs, business activities cannot be operated.
(5) Job satisfaction:
Complaints and problems of employees can be understood, and a quick solution is possible.
Proper planning and distribution of work gives employees utmost satisfaction and a sense of pleasure.
(6) Harmony in relation:
Staffing creates an environment of satisfaction among employees.
It helps establish a cordial relationship between employees and employers.
(7) Increase in prestige:
A contented and efficient staff is an invaluable asset. It
increases the prestige of the organization.
(8) Continuous process:
Staffing is a never-ending function of management.
The process of recruitment, selection, transfer, promotion, retirement, etc. is on a continuous basis. As
long as business activities continue, the staff and the staffing process will also continue.
 OCM
Subject: O.C.M. (B. A.) Class-12th
Standard: 12 Marks: 100

Section - A

‣ Choose the correct option from the given options of 1 to 20 objective questions below
and write the answer. (1 mark each) (20)
01. The process of changing physical shares into electronic shares is known as
A. GST B. Demat C. INR D. GATT
02. Single level distribution is that channel where the……………
A. producer sells his goods to the consumers
B. producer sells his goods to wholesalers
C. producer sells his goods to a commercial agent
D. producer sells his goods to retailers
03......................can also be known as the garment for the product.
A. Labelling B. Pricing C. Packing D. Advertisement
04. In which period will investors prefer to invest in debentures?
A. Recovery B. Depression C. Recession D. Boom
05. What is considered as the soul of management?
A. Co—ordination B. Reporting C. Supervision D. Controlling
06. In the process of delegation of authority, authority is………..
A. entrusted B. conferred C. assigned D. created
07. Any organization without...................is like a mere skeleton without soul.
A. staff B. buildings C. capital D. machines
08. Due to more levels of management....................and co—ordination become difficult.
A. planning B. organizing C. directing D. control
09. ………….. is the proportion and magnitude of different securities issued and sources utilized
by a company to raise its finance.
A. Capital budgeting B. Capital structure C. Capital rationing D. Capitalization
10. The last stage in the controlling process is…………..
A. setting standards B. gathering information
C. making corrective measures D. measuring performance
11. Capital structure having proper ratio of equity and debts means
A. optimum capital structure B. simple capital structure
C. working capital structure D. equilibrium capital structure
12. Due to which facility of a depository is there no fear of theft or destruction of securities ?
A. Mortgage facility B. Facility of share transfer
C. Demat facility D. Facility of closing the account
13. How many women members should be appointed in a state level commission ?
A. At least 1 B. At least 2 C. At least 3 D. At least 4
14. The purpose of time study is………………
A. standardization of equipments B. removal of unnecessary movements
C. to give timely help D. to remove wastage of time
15. Because of promotion techniques………………
A. customers are inspired to buy the product quickly
B. customers don’t try to understand the product
C. the middlemen stop selling the products to customers
D. the retailers stop purchasing goods from the middlemen
16........................are/is the Life blood of business.
A. Loan B. Assets C. Debts D. Finance
17. Maslow had presented the hierarchy of needs in his article in…………..
A. 1941 B. 1942 C. 1943 D. 1944
18. Changes in the interest rate, inflation rate, credit creation, etc. are included in
A. Monetary Policy B. Fiscal Policy C. Long—term
D. Short—term
Policy
Policy
19. Communication is a human activity, so human limitations act as to it;
A. assumptions B. barriers C. motivators D. helper
20. As per Taylor, how much more wages should be paid to the efficient workers?
A. 30% to 50% B. 30% to 75% C. 30% to 100% D. 30% to 120%

Section - B
‣ Answer the following 21 to 30 questions in one sentence or two. (1 mark each) (10)
21. Which incentives cannot be measured in terms of money?
22. What do you mean by remuneration?
 23. What is man-power planning?
24. Which products get the license of Eco Mark?
25. Who is known as the father of scientific management?
26. Why is business considered an economic activity?
27. What is a marketing mix?
28. Define the term ‘salesman ‘according Prof Philip Kotler.
29. Which economy is adopted in India?
30. What is T-bills?
Section - C

‣ Write short answers to any 13 (thirteen) questions out of 17 questions numbered 31 to

47 below. (2 marks each) (26)
31. Explain “Organization as a structure.”
32. Explain the role of ‘Type and Nature of Business’ in determining the need for working capital.
33. Who was Henry Fayol? Where and when he was born?
34. Discuss various elements of distribution—mix.
35. Briefy explain the term ‘Art’ in management?
36. “Delegation of authority reduces the workload of the officer but not his responsibility.
“Explain.
37. ‘Principles of management are truth but not an absolute truth’. Explain it
38. ‘In past, controlling was a negative concept’. Explain.
39. Explain the meaning of incentives.
40. What is meant by an optimum capital structure?
41. State the intellectual qualities of a good leader. (March 2018)
42. “Even God cannot change the past, but men can change the future. Explain it
43. Who can apply to the state level commission for the redressal of grievances?
44. “Working capital means circulating capital in business.” – Explain.
45. Write the stages of human resource management that are concerned with manpower planning.
46. What are the limitations of the marketing concept?
47. “Other management functions are worthless without direction”.Explain the statement.
Section - D

‣ Write the answers to any 8 (eight) questions out of the 12 questions numbered 48 to 59
below. (3 marks each) (24)
48. What are the qualities of a good leader?
49. Give the differences between a primaly market and a secondaty market.
50. Explain the thoughts of neo—classical theory.
 51. What are the features of informal communication?
52. Give the meaning and explain the characteristics of a formal organization.
53. State the importance of consumer protection from the viewpoint of of business.
54. Discuss about Peter F. Drucker’s contribution in management field.
55. Explain the role of public relation.
56. Mention the characteristics of a ‘good salesman’.
57. Explain the selling concept in marketing management.
58. What is material order and social order?
59. Write a note on: Central Depository Services Limited [CDSLJ.
Section - E

‣ Write detailed answers to any 4 (four) questions out of 6 questions from question
number 60 to 65 given below. (5 marks each) (20)
60. “Business environment creates opportunities as well as obstacles” – Explain.
61. Explain functions of bottom levels of management.
62. Explain barriers to effective communication.
63. What is the role of consumers’ unions and non-goverment organizations in the consumer
protection movement?
64. Explain the meaning and characteristics of working capital.
65. Define management and explain its characteristics.
 OCM
Subject: O.C.M. (B. A.) Class-12th
Standard: 12 Marks: 100

Section - A

‣ Choose the correct option from the given options of 1 to 20 objective questions below
and write the answer. (1 mark each) (20)
01. When current liabilities are less than current assets, it is called…………….
A. reasonable working capital B. positive working capital
C. negative working capital D. moderate working capital
02. Organizational.................should be displayed on the notice board.
A. report B. chart C. analysis D. information
03. Which of the following is the function of a salesman in personal selling?
A. Presentation of the product before the potential customer
B. Packing the product
C. Personal use of the product
D. Appointing new salesmen
04. Which of the following is not included in welfare activities and amenities to employees?
A. Medical Services B. Life Insurance C. Canteen Facility D. Training Facility
05. What helps employees make progress in their career?
A. Transfer B. Promotion C. Training D. Development
06. On what does the success of co—ordination depend upon?
A. Delegation B. Centralization
C. Communication D. Decentralization
07. Shares that are in a paper form are known as………..
A. transferred shares B. share deposits C. share certificates D. forfeited shares
08. Dividend is a part of the...............of a company.
A. profits B. losses C. assets D. liabilities
09. In which year did Trade Mark Act came into existence?
A. 1951 B. 1955 C. 1969 D. 1986
10. Which management gurus given below have contributed to modern thought?
A. C. K. Prahlad B. Elton Mayo C. Max Weber D. Henry Gentt
11. Middle level of management is also known as…………
A. Officer’s level B. Director’s level C. Jobber’s level D. Medium level
12. Conversion of raw material into finished goods with the help of human efforts is known
as……………….
A. Production B. Purchase C. Sales D. Storage
13. Organization framed with the mixture of project structure and general structure is called
a/an………
A. matrix organization B. linear organization
C. functional organization D. informal organization
14. In direction, what is a precondition to give orders and guidance to employees?
A. Effective Supervision B. Effective Motivation
C. Effective Leadership D. Effective Communication
15. By which force are prices of securities in a secondary market determined ?
A. By the
B. By the government C. By SEBI D. By demand and
management
supply
16. Which of the following is one of the regional offices of SEBI?
A. Ahmedabad B. Nagpur C. Chennai D. Hydrabad
17...........................is considered to be the most reliable of all techniques in the promotion mix.
A. Advertisement B. Personal selling C. Sales promotion D. Publicity
18...................is the last function of management.
A. Planning B. Organization C. Staffing D. Controlling
19. Members of which commission are appointed by the Central Government?
A. District Level B. National Level C. State Level D. International Level
20. Controlling is found at which level of management?
A. Top level B. At all levels C. Middle level D. Bottom level

Section - B
‣ Answer the following 21 to 30 questions in one sentence or two. (1 mark each) (10)
21. State the names of intermediaries involved in primary capital market?
22. What is Neoclassical theory?
23. What do you understand by logical decisions?
24. Between whom is formal communication linked?
 25. Which two rights are favoured by the United Nations Organisation in its directive for the
consumer?
26. What are the various methods of capital budgeting used to take in vestment decisions?
27. What do you mean by legal factors?
28. What are the branches of neo classical theory?
29. What is financial planning ?
30. Who gave birth to the behaviour oriented thought of management and when?
Section - C

‣ Write short answers to any 13 (thirteen) questions out of 17 questions numbered 31 to

47 below. (2 marks each) (26)
31. What is direct selling and the various sources of direct selling?
32. “Direction is a continuous process. “Explain.
33. What is a financial market?
34. “A matrix organization is a multifaced structure. “Explain.
35. Explain formal communication in short.
36. Explain the meaning and characteristics of working capital.
37. What are the consequences, if an organization has more levels of management?
38. “Planning restricts the creativity of employees. “ Explain this statement.
39. Discuss various elements of price—mix.
40. What is co-ordination?
41. In how many parts is the financial market divided?
42. Management is a universal process’ Explain.
43. Discuss about staffing.
44. Define the ‘profit maximization’ objective of financial management
45. How is controlling an internal process?
46. “The marketing process does not end with the sale of the product. “Explain.
47. Explain, “Management has the characteristics of Science.”
Section - D

‣ Write the answers to any 8 (eight) questions out of the 12 questions numbered 48 to 59
below. (3 marks each) (24)
48. Explain the meaning and characteristics of/eadershi.
49. What are the features of informal communication?
50. Write a note on ‘Certificates of Deposit’ as instruments of the money market.
51. Explain the internal factors affecting the capital structure of a company.
52. Discuss the external sources of recruitment
 53. Explain limitations of planning.
54. Explain the meaning and characteristics of fixed capital.
55. Explain the importance of direction.
56. “Planning is concerned with future. “Explain.
57. Distinguish between formal and informal communication.
58. Write a note on the Principles of Trusteeship and Consumer Protection.
59. Explain the concept of financial management through various definitions.
Section - E

‣ Write detailed answers to any 4 (four) questions out of 6 questions from question
number 60 to 65 given below. (5 marks each) (20)
60. Explain the 3 tier dispute settlement system according to the Consumer Protection Act.
61. What types of relief and compensation arc available to the consumer according to Consumer
Protection Act?
62. Give the meaning of Consumer Protection and explain the rights of consumers. (March 2018)
63. Explain the types or channels of distribution.
64. Explain the factors affecting the need for fixed capital.
65. “Business environment creates opportunities as well as obstacles” – Explain.