Second PUC Business Studies Solved Question Papers

Second PUC Solved
Second PUC Solved Question Papers
Question Papers:
Business Studies B.Com
Prepared by,
Asst Prof Harshitha R.
Asst Prof Supreetha S.
BBA
Department of Commerce & Management
BCA
Good Luck for Your Exams!
M.Com
Maharaja Education Trust
MIT First Grade College

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ABOUT THE COLLEGE
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was established in the year 2009 by Maharaja Education Trust with the aim to provide
quality education, culturally and academically for enthusiastic and upcoming youth.
MIT First Grade College is focused to offer high quality career-oriented learning
environment with its excellent and dedicated management and staff. Our college has
earned its strong academic reputation since its inception. Every year, a good number
of students secure rank and distinction in University examination. Most of our students
have established themselves by becoming entrepreneur, joined reputed organization,
opting for higher education.
VISION OF THE INSTITUTE
Empower the individuals and society at large through educational excellence;
sensitize them for a life dedicated to the service of fellow human beings and mother
land.
MISSION OF THE INSTITUTE
To impact holistic education that enables the students to become socially responsive
and useful, with roots firm on traditional and cultural values; and to hone their skills to
accept challenges and respond to opportunities in a global scenario.
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2 | Business Studies MITFGC - MYSURU

TABLE OF CONTENTS
SL.NO TOPIC PAGE NO
1 SYLLABUS 04
2 SECTIONWISE QUESTIONS IN QUESTION PAPER 11
3 March 2019 PU Board Annual Examination Question Paper 12
with solution
4 March 2019 PU Board Supplementary Examination 31
Question Paper with solution
5 March 2020 PU Board Annual Examination Question Paper 50
with solution
6 March 2020 PU Board Supplementary Examination 69
Question Paper with solution
7 Model Question Paper -1- Revised Syllabus 87
8 Model Question Paper -2 – Revised Syllabus 108
9 Bibliography 124

SYLLABUS CHAPTER
1: INTRODUCTION TO MANAGEMENT 10 Hours:

Introduction
1.1 Meaning, Definitions and Features of Management,
1.2 Objectives: Organisational, Social and Personal,
1.3 Importance of Management,
1.4 Management as Science, Art and Profession,
1.5 Levels of Management – Top level Middle level Meaning only Lower
level,
1.6 Management functions – Planning, Organising, Staffing, Directing and
Controlling – Meaning
1.7 Co-ordination – Meaning and Features.
CHAPTER 2: PRINCIPLES OF MANAGEMENT 08 Hours:

Introduction
2.1 Principles of Management – Meaning and Features,
2.2 Fayol’s Principles of Management,
2.3 Taylor’s Scientific Management – Meaning and Principles
CHAPTER 3: PLANNING 10 Hours:

Introduction
3.1 Meaning and Definitions of Planning,
3.2 Importance of Planning,
3.3 Limitations of Planning,
3.4 Planning process:
a. Setting objectives

b. Developing premises.
c. Identifying alternative courses of action.
d. Evaluating alternative courses.
e. Selecting an alternative.
f. Implementing the plan.
g. Follow-up action.
3.5 Types of plans - Objectives, Strategies, Policies, Procedures, Methods,
Rules, Programmes, Budget.
CHAPTER 4: ORGANISING 12 Hours:

Introduction
4.1 Meaning and Definitions of Organising,
4.2 Importance of Organising,
4.3 Organising Process.
a. Identification and Division of work
b. Departmentalisation
c. Assignment of duties
d. Establishing reporting relationships,
4.4 Organisation Structure –Functional and Divisional (Meaning, Suitability
and Chart)
4.4.1 Formal and Informal Organization (Meaning and chart of Formal
organisation)
4.4.2 Distinction between Formal and Informal Organisation,
4.4.3 Delegation – Meaning, Elements and Importance,
4.5 Decentralisation – Meaning and Importance
4.6 Centralisation – Meaning.

CHAPTER 5: STAFFING 14 Hours:
Introduction
5.1 Meaning and Definitions of Staffing,
5.2 Importance of Staffing,
5.3 Staffing as a part of Human Resource Management,
5.4 Staffing process: Meaning and Steps.
a. Manpower Planning
b. Recruitment
c. Selection
d. Placement and Orientation
e. Training and Development
f. Performance Appraisal
g. Promotion and Career planning
h. Compensation (Salaries and Wages Administration),
5.4.1 Recruitment: Meaning and Sources of recruitment Internal sources:
Transfers, Promotions (Meaning only) External sources: Direct Recruitment,
Casual Callers, Advertisement, Employment Exchange, Placement Agencies,
Campus Recruitment, Web Publishing, Labour Contractors, Telecasting
(Meaning Only).
5.4.2 Selection Process: Meaning of Selection Process, Selection Process:
a. Preliminary Screening
b. Selection Tests
i) Intelligence test
ii) Personality test
iii) Trade test
iv) Aptitude test
v) Interest test
c.Interview
d.Reference and Background checks

e. Selection Decision
f. Medical Examination
g. Job Offer h. Contract of Employment
5.4.3 Training and Development - Meaning and Importance Methods of
Training: On and Off the job training (Meaning only), On the job training.
i) Apprenticeship
ii) Coaching
iii) Internship training
iv) Job rotation Off the job training
i) Classroom lectures
ii) Case study
iii) Computer modelling
iv) Vestibule training (Meaning only for each method of training)
CHAPTER 6: DIRECTING 10 Hours:

Introduction
6.1 Meaning and Definitions of Directing.
6.2 Importance of Directing.
6.3 Elements of Direction- Supervision, Motivation, Leadership and
Communication.
6.4 Supervision – Meaning and Importance.
6.5 Motivation – Meaning, Maslow’s hierarchy of needs.
6.6 Leadership – Meaning, Leadership styles (Meaning only), Qualities of a
successful leader.
6.7 Communication: Meaning and Importance of Communication.
6.7.1 Formal and Informal Communications (Meaning only).
6.7.2 Barriers to effective communication.
6.7.3 How to overcome the barriers of communication?

CHAPTER 7: CONTROLLING 06 Hours:
Introduction
7.1 Meaning and Definitions.
7.2 Importance of Controlling.
7.3 Controlling Process.
a. Setting Performance Standards
b. Measurement of Actual Performance
c. Comparing Actual Performance with Standards
d. Analysing Deviations
e. Taking Corrective Action
CHAPTER 8: FINANCIAL MANAGEMENT AND FINANCIAL MARKETS

24 Hours
(A) FINANCIAL MANAGEMENT
8.1 Meaning & Definitions, Role and Objectives of Financial
Management,
8.1.1 Meaning of Financial Management
8.1.2 Definitions of Financial Management,
8.1.3 Role or Importance of Financial Management,
8.1.4 Objectives of Financial Management,
8.2 Financial Decisions or Decision- Making in Financial Management
8.3 Financial Planning-Meaning and Importance,
8.4 Fixed and working capital-Meaning and factors affecting their
requirements,
8.4.1 Fixed Capital-Factors affecting fixed capital requirement.
8.4.2 Working Capital-Factors affecting working capital requirements.
(B) FINANCIAL MARKETS

8.5 Meaning and types of Financial Markets,
8.6 Money Market,

8.6.1 Money Market Instruments,
8.7 Capital Market,
8.8 Stock Exchange: Meaning, Definition, Features and Functions
8.9 Trading Procedure on a Stock Exchange
8.10 Demat Account and Depository Services,
8.11 Securities and Exchange Board of India (SEBI) - Meaning,
Objectives and Functions,
8.12 Relevant Terms in Stock Exchange:
a) NSEI: (National Stock Exchange of India)
b) NASDAQ: (National Association of Securities Dealers
Automated Quotations)
c) Dow Jones Industrial Average
d) Bull
e) Bear
f) Lame duck
g) Stag
h) Spot delivery
i) Forward delivery
j) BSE SENSEX
k) NSE NIFTY
l) Blue Chips
CHAPTER 9: MARKETING 20 Hours:

Introduction
9.1 Meaning and Definitions of Market and Marketing,
9.2 Marketing Functions,
9.3 Marketing Mix – Meaning and Elements of Marketing Mix,

9.3.1 Product: Meaning - Elements of Product mix - Branding,
Grading, Packing, Labelling, Guarantee. Warramtu. Afters Sales
Service, Home Delivery
9.3.2 Price: Factors affecting pricing decisions.
9.3.3 Place (Distribution): Physical Distribution, Channels of
distribution,
9.3.4 Promotion: Meaning and Elements of Promotion: Advertising,
Personal Selling, Sales Promotion and Publicity
9.4 Advertising – Meaning and Definitions
9.4.1 Objectives
9.4.2 Merits and Demerits
9.4.3 Objections to Advertising
9.4.4 Advertisement copy – meaning and its essentials.
9.5 Personal Selling - Meaning and Features
9.5.1 Distinction between Advertising and Salesmanship
9.5.2 Qualities of a successful salesman
9.6 Sales promotion – Meaning and Objects.
9.6.1 Methods of Sales Promotion
CHAPTER 10: CONSUMER PROTECTION 06 Hours:
Introduction 10.1 Meaning of Consumer and Consumer Protection
10.2 Importance
10.3 Consumer Protection Act, 1986
10.4 Rights of Consumers
10.5 Consumers’ Responsibilities
10.6 Who can file a complaint?
10.7 Consumer Grievances Redressal Agencies (Machinery) District
Forum, State Commission National Commission
10.8 Remedies Available
TOTAL: 120 Hours

SECTIONWISE QUESTIONS IN A QUESTION PAPER
SECTION QUESTION GIVEN QUESTION TO BE

ANSWERED
A 12 10
B 12 10
C 10 7
D 6 4
E 3 2
TOTAL 43 33

MARCH 2019 PU BOARD ANNUAL EXAMINATION QUESTION PAPER
WITH SOLUTUON
SECTION A
I. Answer any ten of the following questions in a word or a sentence each. While answering
multiple choice questions, write the serial number/alphabet of the correct choice and write
answer corresponding to it.
Each question carries 1 mark: (10 * 1 = 10)
1. Which of the following is not a feature of management?

a. Planning
b. Staffing
c. Co-operating
d. Controlling.
c. Co-operating.
2. Who is known as the father of scientific management?
F W Taylor
3. Give the meaning of rule.

Rules are specific statements that inform what is to be done. They are simplest type of
plans.
4. Which of the following is not an element of delegation?

a. Accountability
b. Responsibility
c. Authority
d. Informal organization
d. Informal organization
5. State any one internal source of recruitment.
Promotion or transfer is one of the internal sources of recruitment.
6. The software company promoted by Narayan Murthy is Infosys.

a. Wipro
b. Infosys
c. Sathyam
d. HCL

7. Give the meaning of control.
Controlling means ensuring that activities in an organization are performed as per the
plans.
8. What is business finance?
Money required for carrying out business activities is called business finance.
Or
Funds needed to establish, to run, to modernize, to expand and to diversify the business is
called business finance.
9. Primary and secondary markets

a. Compete with each other.
b. Complement each other.
c. Function independently
d. Control each other.
b. Complement each other.
10. What is publicity?
Publicity is a non-personal & nonpaid of communication of some favourable news

presented in the mass media about a product or service. It has some more credibility.
11. Who can file a complaint in consumer court?
Any registered Consumer association can file a complaint in consumer court.
12. Who is an Entrepreneur?
NOTE: THIS HAS BEEN REMOVED IN SYLLABUS!!!
A person who set up his business is called an entrepreneur.
OR
According to Richard Cantillon, “entrepreneur is the agent who buys means of production
at certain prices in order to sell the produced at uncertain prices in the future”.

SECTION – B
ll. Answer any ten of the following questions in 2 to 3 sentences each.
Each question carries 2 marks: (10 * 2 = 20)
13. State any two organisational objectives of business.

The two organizational objectives are as follows.
1. Survival
2. Profit
3. Growth (any two points}
14. What is gang plank?

Gang plank is a shorter route in a scalar chain which allows employees at the same level to
communicate with each other directly to avoid delay in communication. It can be used in
the case of emergency.
15. What is privatisation?

Privatization is the process of transfer of ownership & management of a public sector
enterprises to private sector through the process of disinvestment.
16. State any two features of planning.

The two features of planning are,
1. Planning is a primary function of a management.
2. Planning is a continues process.
17. Give the meaning of formal organization.

Formal organization refers to the organization structure which is designed by the
management to accomplish a particular task. It clearly specifies the boundaries of authority
& responsibility & there is a systematic coordination among the various activities to
achieve the organizational goals.
18. Define leadership.

According to Glueck, “leadership is a set of interpersonal behaviours designed to influence
the employees to cooperate in the achievement of objectives.
OR
According to George Terry, “leadership is the activity of influencing people to strive
willingly for group objectives.”
19. State any two traditional techniques of management control.

The two traditional techniques of management control are,
1. Statistical report
2. Personal observation

20. State any two types of financial decisions.
The two types of financial decision are as follows,
1. Financial decision
2. Working capital decision
21. What is marketing?

Marketing is a process whereby people exchange goods & services for money or for
something of value to them. In other words, marketing is a social process where in
people interact with others in order to persuade them to act in a particular way, say to
purchase a product or services.
22. Write any two rights of consumers.
1. Right to be informed:
A consumer has the right to get true & complete information about the quality, quantity,
price, contents, directions for use, date of manufacture & expiry date of the goods &
services which he intense to buy.
2. Right to choose:
The consumer has the right to choose the product of his choice out of the available
alternative products.
23. State any two characteristics of entrepreneurship.

Characteristics of entrepreneurship
a. Systematic & purposeful activity:

Entrepreneurship is a systematic step by step & purposeful activity.
b. Lawful activity:
The objective of entrepreneurship is to run a lawful business.
24. Expand KASH.

K = Knowledge
A = Attitude
S = Skills
H = Habits

SECTION - C
Ill. Answer any seven of the following questions in 10 to 12 sentences each.
Each question carries 4 mark: (7 x 4 = 28)
25. Explain any four nature of principles of management.

Features or characteristics of principles of management: the main features of principles of
management are:
a. Universal applicability:
Management principles have universal applicability. They can be applied in all types of
organisations, business as well as non-business, small as well as large, public sector as
well as private sector. However, the extent of their application varies from concern to
concern. For example, the principle of division of work is applicable to all
organisations.
b. General guidelines:
The principles of management act as general guidelines to the managers. They play an
advisory role in solving the problems.
c. Formed by practice and experimentation:

The principles of management are formed by experience and collective wisdom of
managers as well as experimentation. For example, principle of discipline is formed by
experience.
d. Flexible:
The principles of management are flexible and can be modified by the managers
according to the situation. For example, the degree of centralisation and decentralisation
may be different in each enterprise depending upon the situations.
26. Briefly explain any four dimensions of business environment.

Dimensions (or factors or elements) or business environment consists of economic, social,
technological, political and legal conditions which are considered relevant for decision
making and improving the performance of an enterprise.
a. Economic environment
Interest rates, inflation rates, changes in disposable income of people, stock market
indices, and the value of rupee are some of the economic factors that can affect
management practices in a business enterprise. For example, in case of construction
companies and automobile manufactures, low long-term interest rates are beneficial
because they result in increased spending by consumers for buying homes and cars on
borrowed money.

b. Social environment:
The social environment of business includes the social forces like customs and
traditions, values, social trends, societies expectations from business etc. for example,
the celebration of Diwali, Id and Christmas in India provides significant business
opportunities for greetings cards companies, sweets and confectionary manufactures,
tailoring outlets and many other related businesses.
c. Technological environment:
Technological environment includes forces relating to scientific improvements and
innovations which provide new ways of producing goods and services and new methods
and techniques of operating a business. For example, there was shift in demand from
typewriters to computers due to technological improvement.
d. Political environment:
It includes political condition such as general stability and peace in the country and
specific attitudes that elected government representatives hold towards business.
Political stability builds up confidence among businesspeople, while political instability
can shake that confidence.
e. Legal environment:
It includes various legislation passed by the government administrative orders issued by
government authorities, court judgements as well as the decisions rendered by various
commissions & agencies at every level of the government – central, state or local.
27. Explain the importance of planning with any four points.

Importance of planning:
Planning is deciding in advance what is to be done & how s to be done. The benefits of
planning are:
1. Planning provides direction:

Planning provides direction for action by stating in advance how a work is to be done.
Planning ensures that the goals or objectives are clearly stated so that the employees of
organizations are aware of what the organization must do and what they must to do to
achieve these goals.
2. Planning reduces the risk of uncertainty:

Planning helps business enterprise to predict (i.e., foresee) its future uncertain events &
enables the organization to face these uncertainties in the best possible manner. Thus,
planning helps to develop a remedial action against future uncertainties & reduce the
risk of business.
3. Planning reduces overlapping & wasteful activities:

Planning facilitates the coordination of the activities & efforts of different divisions,
departments & individuals & avoids duplication of activities. Thus, unless & wasteful
activities are minimized or eliminated.

4. Planning promotes innovative ideas:
Planning is basically thinking & decision-making process. During the process of
planning, many new ideas come to the minds of managers. These innovative ideas can
take the shape of concrete plans leading to growth & prosperity of the business.
28. Explain the four methods of on-the-job training.

Training is any process by which the aptitudes skills & abilities of employees to perform
specific jobs are increased. There are various methods of training. They are:
On the job training methods: where workers learn by doing the work under the guidance &
supervision of superiors.
1. Apprenticeship programmes:
Apprenticeship or understudy is a method of training under which the trainee is
required to work under the supervision & guidance of a master worker (an expert) for a
specified period. This method helps the employees to know about the complications &
complexities of the job.
This type of training is commonly used to train up employees like electricians,

plumbers, iron workers or carpenters who require higher level of skills.
2. Coaching:
Under this method, the superior guides & instructs the trainees (employees) as a coach.
The superior familiarises the employee with the methods of using the equipment, tools
& materials. This helps the learner to pick up the skills & speed in work. The coach or
counsellor (i.e., superior) sets goals & suggests how to achieve these goals.
He also reviews the work and provide regular feedback to the trainee on his
performance & offers him suggestions for improvement.
3. Internship training:
It is a joint programme of training in which educational institutions & business firm
cooperate. Under this internship training, professional institutes send their students to
big industrial or business enterprises to gain practical work experience.
E.g., engineering students may be sent to industrial enterprises from time to time to
gain practical work experience. Internship training is common in medical, engineering,
management, auditing, & legal profession.
4. Job rotation:
Job rotation is a method of training which involves rotation (or movement or shifting)
of the employee (trainee) from department to another from one job to another so that
he may learn the working of various departments or jobs. Under this method, the
trainee gets a chance to test his/her own aptitude and abilities. It allows trainees to
interact with other employees.

29. Explain the limitations of controlling.
Although controlling is an important function of management it suffers from the following
limitations:
a. Difficulty in setting quantitative standards:

Control system loses some of its effectiveness when standards cannot be defined in
quantitative terms. Employee morale, job satisfaction & human behaviour are such
areas where this problem arises. This makes measurement of performance and their
comparison with the standards a difficult task.
b. Little control or no control:

Generally, an enterprise cannot control external factors such as government policies,
technological changes, competition, etc.
c. Resistance from employees:

Control is often resisted by employees. They see it as a restriction on their freedom. For
instance, employees may object the setting up of CCTV.
d. Costly affair:
Control is a costly affair as it involves a lot of expenditure, time and effort. A small
enterprise cannot afford to install an expensive control system.
30. Explain any four factors affecting financing decision.

Factors affecting the financing decisions are,
1. Cost: the cost of rising funds through different sources is one of the factors affecting
financing decisions. Usually, a prudent financial manager chooses a source which is
the cheapest.
2. Risk: risk associated with each of the sources is to be evaluated and the source with
least risk should be preferred.
3. Floatation costs: the flotation or fund rising cost are to be considered. The source with
lower flotation costs is to be preferred.
4. Cash flow position of the company:

An enterprise with stronger financial position can go for debt financing than funding
through equity.

31. State any four differences between capital market & money market.
Sl. Basis of Capital market Money market

No. difference
1. Participants Financial institutions, banks, The RBI, banks, financial

corporate entities, foreign institutions, & finance companies.
investors & retail investors.
2. Instruments Equity shares, debentures, Treasury bills, trade bills,
bonds, & preference shares commercial papers, & certificate of
deposits.
3. Investment A huge amount of financial Huge sum of money is required
outlay outlay is not required by an
individual investor
4. Duration It deals with medium & long- The duration of securities is up to
term securities one year
32. Briefly explain any four characteristics of industrial product.

Characteristics of industrial product are as follows,
a. Number of buyers:
The number of buyers of industrial products is limited. E.g., sugarcane is purchased
by few producers of sugar.
b. Channel levels:
The sale of industrial product is generally made with the help of shorter channels of
distribution. i.e., direct selling or one level selling.
c. Derived demand:
The demand for industrial product is derived from the demand for consumer
products.
E.g., the demand for cotton will be derived from demand for clothes.
d. Role of technical consideration:

Technical consideration assumes greater significance in the purchase of industrial
products because these products are complex products bought for use in business
operation.

33. Explain the elements of marketing mix.
Marketing mix consists of the following elements (popularly known as 4Ps of marketing):
➢ Product > Price > Place > Promotion
➢ Product: product means goods or services or ‘anything of value’ which is offered to the
market for sale. For example, AMUL, milk, ghee, butter, cheese, chocolates, etc. are the
food products offered to the market for sale by AMUL.
The concept of product relates to not only the physical product but also the benefits offered
by it. It also includes other aspects likes after sales service, availability of spare parts,
handling complaints etc. the important product decision includes deciding about the
features, quality, packaging, labelling & branding of the products.
➢ Price: Price is the amount of money that the customers must pay to obtain the product.
Marketers must analyse the factors determining the price such as, cost of the product,
profit expected elasticity of demand. Competitors price etc. and fix a price for the firm’s
products. Decisions have also to be taken in respect of discounts to customers, credit terms
etc.
➢ Place: Place or physical distribution include activities that make firm's products available
to the target comers. Important decision areas in this respect include selection of dealers
(e.g., wholesaler, retailers etc.) to reach the customers and providing support to the
intermediaries (e.g., by way of discounts). The other decision areas include managing
inventory, storage & transportation of goods from the place it is produced to the place it is
required by the users.
➢ Promotion: Promotion of products and services include activities that communicate

availability, features, merits etc. of the products to the target customers and persuade them
to buy it. Most marketing organizations undertake various promotional activities through
using number of tools such as advertising, personal selling and sales promotion techniques
(like price discounts, free samples etc.)
The success of a market offer will depend on how well these ingredients are mixed to
create superior value for the customers and simultaneously achieve their sale and profit
objectives.
34. State any four consumer responsibilities.
Consumer responsibilities: A consumer should keep in mind the following

responsibilities while chasing, using and consuming goods and services.
Be aware about various goods and services available in the market so that an intelligent
and wise choice can be made.
Buy only standardized goods as they provide quality assurance. Thus, look for ISI mark
on electrical goods, FPO mark on food products, Hallmark on jewellery etc.
Read labels carefully to have information about prices, net weight, manufacturing, and
expiry dates.

Ask for a cash memo on purchase of goods or services. This would serve as a proof of the
purchase made. Be honest in your dealings. choose only from legal goods and services and
discourage unscrupulous practices like black-marketing. Boarding etc.
Learn about the risks associated with products and services, follow manufacturer's
instructions, and use the products safely.
Assert yourself to ensure that you get a fair deal.
File a complaint in an appropriate consumer forum in case of a shortcoming in the

quality of goods purchased or services availed. Do not fail to take an action even when the
amount involved is small.
Form consumer societies which would play an active part in educating consumers and
safeguarding their interests.
Respect the environment: Avoid waste, littering and contributing to pollution.
(Write any four points)
SECTION - D
IV. Answer any four of the following questions in 20 to 25 sentences each.
Each question carries 8 marks: (4 x 8 = 32)
35. 'Management is considered to be both an Art and Science'. explain
Management is considered to be both a science and an art. They are not mutually exclusive
but complement to each other. The following explanation justifies this point.
Management as an art: Art is the skilful and personal application of existing knowledge to
achieve desired results.
Management is said to be an art since it has the following features of an art:
Existence of theoretical knowledge: Like any other art (e.g.., dancing or music), in
management, there is existence of theoretical knowledge. Lot of literature is available in
various areas of management like marketing, finance and human resources. Further, various
theories of management were developed by management thinkers, which prescribe certain
universal principles.
Personalized applications: Like an artist (e.g.., dancer or actor), every manager has his
own way (style and approach) of managing the things depending upon his knowledge and
experience. A manager applies management principles to a given situation, or a problem in
his own unique manner. Thus, the ability of managers to put management principles into
practice distinguishes a successful manager from a less successful one.

Based on practice and creativity: Like any art, management involves the creative practice
of existing theoretical knowledge. A good manager works through a combination of
practice, creativity, imagination initiative and innovation. A manager achieves perfection
after long practice.
Goal oriented: Like any other art, management is also directed towards completion of the
predetermined goals.
Therefore, we can conclude that management is an art.
Management as a science: Science is a systematic body of knowledge. Management is a

science since it has the following features of science:
➢ Systematized body of knowledge: Like science, management has a systematized body

of knowledge. It has its own theory and principles. Management has its own vocabulary
of terms and concepts.
➢ Principles based on experimentation: Like scientific principles, management

principles are also based on repeated experiments and observations indifferent types of
organizations. E.g., Scientific Management principles by F.W. Taylor.
➢ Universal validity: Since management deals with human beings and human behaviour,
application and use of management principles is not universal. They must be modified
according to a given situation. However, they provide managers with certain
standardized techniques that can be used in different situations.
➢ Cause and effect relationship: Like principles of science, management principles also
establish cause and effect relationship in dealing with various situations in the
organization. E.g.., Division of labour (Cause) results in increased productivity (effect)
Since management deals with human beings and human behaviour, management can be
called an inexact science.
Conclusion: The practice of management is an art. The practice of manager is based on

the principles - it is a science. Thus, management is both a science and an art. Further,
management as an art and a science are not mutually exclusive but complement each
other.
36. What is organizing explain the importance of organizing.
Organizing is the process of defining and grouping the activities of the enterprise and
establishing authority relationships among them.
OR
Organizing is the process of identifying and grouping the work to be performed, defining
and delegating responsibility and authority, and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing objectives.

The following are importance of organizing,
1. Benefits of specialization:
Organization leads to a systematic allocation pf job among the workforces. Right person
is placed in the right job. It leads to specialization & increases the efficiency and
productivity of the employees.
2. Clarity in working relationship:

Organizing helps in working relationships. It clearly defines the authority &
responsibilities of everyone in the organization. Every individual has clarity as to whom
he can give orders and from whom he must receive orders.
3. Optimum utilization of resources:

Organizing ensures proper allocation of job. It leads to optimum utilization of material,
human resource, & financial resources. This also avoids duplication of work & helps in
minimizing the wastage of resources.
4. Adoption to change:
The process of organizing allows business enterprises to accommodate changes in the
business environment. It allows the organization structure to be suitably modified.
5. Effective administration:
Organising provides a clear description of jobs. This helps to avoid confusion &
duplication. Clarity n the working relationships enables proper execution of work. Thus,
management of an enterprise becomes easy & this brings effectiveness in administration.
6. Development of personnel:
Organizing stimulates creativity among managers, by providing well defined areas of
work & ensuring delegation of authority, organizing provides sufficient freedom to the
mangers & encourages their initiative & creativity. Thus, it helps the managers to grow
& develop to their full potential.
7. Organizing promotes growth & diversification of an enterprise. It enables the

enterprise to take up new challenges. It allows the business enterprise to add more job
positions, departments, new products, & new geographical territories. This will help to
increase customer base, sales, profit.
Thus, organizing is a process by which the manager brings order out of chaos, removes
conflict among people over work or responsibility sharing and creates an environment
suitable for teamwork.
37. Explain the external sources of recruitment.
External recruitment provides wide choice and brings new blood in the organisation. The
commonly used external sources of recruitment are:
1. Direct recruitment: Under the direct recruitment, a notice is placed on the notice board of
the enterprise specifying the details of the jobs available. Job seekers assemble outside the
premises of the organisation on the specified date and selection is done on the spot. The

practice of direct recruitment is followed usually for casual vacancies of unskilled or
semiskilled jobs.
2. Casual callers: Many qualified persons visit the offices of reputed companies and apply
for jobs on their own. Management preserves such unsolicited applications, and the
candidates may be called for interview, whenever the need arises.
3. Advertisement: Advertisement of vacancies in newspapers and trade journals, is one of

the popular external sources of recruitment. The advertisements give information about the
number of vacant posts, nature of required qualifications, skills needed, and remuneration
offered for the jobs. Advertisement brings respond from many numbers of suitable
candidates and gives the management a wider range of candidates for selection.
4. Employment Exchanges: Employment exchanges run by the government are an important

source recruitment of personnel for unskilled and skilled operative jobs. Job seekers
register their names with employment exchanges. The employment exchanges supply the
names of suitable persons to the business enterprises when there is a requisition from them.
5. Placement Agencies and management consultants: Placement agencies are private

agencies which collect biodata of many candidates and recommend suitable candidates to
the business enterprises on their request. Management consultancy firms help the
organizations to recruit technical, professional and managerial personnel. They specialize
in middle level and top-level executive placements.
6. Campus recruitment (Educational institutions): Universities, colleges and institutes of

management and technology are a popular source of recruitment for technical, professional
and managerial jobs. These institutions offer an opportunity to the business enterprises to
conduct interview of the qualified students for various jobs in their campus, i.e.., campus
recruitment.
7. Recommendations of employee: Applications introduced by present employees or their

friends and relatives may also prove to be a good source of recruitment.
8. Labour contractors: Labour contractors are generally employees of the organisation, who
maintain close contacts with labourers and can provide the required number of unskilled
workers at short notice.
9. Advertising on television: Telecasting of vacant posts over television is a widely used

source of recruitment these days. Information about number of vacant posts, required
qualifications, job description and remuneration offered etc. is given in these
advertisements. Generally, this type of telecasting is popular in big cities.
10. Web publishing: Internet is becoming a common source of recruitment these days. There
are certain websites which are specifically meant for providing information about both job
seekers and jobs available. Websites such as www.naukri.com,www.jobstreet.com etc. are
very commonly visited by job seekers and the organizations searching for suitable people.
11. Conclusion: Thus, different external sources are available for recruitment of staff. The
management must select an appropriate source for recruiting its staff.

38. Explain the qualities of a good leader.
A good leader can influence the behaviour of his/her subordinates positively & can take
the organization to the success. To be a good (successful) leader, a person should process
certain qualities. Some of these qualities are:
1. Physical feature:
Physical features like height, weight, health & appearance determine the physical
personality of an individual. A leader with good physical features can attract people.
Health & endurance help a leader to work hard which inspires others to work with
same spirit.
2. Knowledge:
A good leader should have required knowledge & competence. He or she should have
knowledge about the organization, procedure of work, products & other details. Only
such person can instruct subordinates correctly and influence them.
3. Integrity:
A leader should possess high level of integrity & honesty. He should be a role model to
others regarding the ethics & values.
4. Initiative:
A leader should have courage & initiative. He should not wait for opportunities comes
to his way, rather he should grab the opportunity & use it to the advantage of
organization.
5. Communication skill:
A leader should be a good communicator; he should have the capacity to clearly
explain his ideas & make the people to understand his ideas. Also, he should be a good
listener. He should have the patience to listen to both the superiors & the subordinates.
6. Motivation skills:
A leader should be an effective an effective motivator. He should understand the needs
of people and motivate them through satisfying their needs.
7. Self-confidence:
A leader should have high level of self-confidence & should be able to create
confidence in his subordinates. He should not lose his confidence even in most difficult
times.
8. Decisiveness:
Leader should be decisive in managing the work. Once, he is convinced about the fact,
he should be firm & should not change opinions frequently.
9. Social skills:
A leader should be sociable and friendly with his colleagues and followers. He should
understand people & maintain good human relations with them.
All good leaders may not necessarily possess all the qualities of a good leader, but they
can try to acquire them through training & conscious efforts. A good leader can see

that work is completed on time & goals are achieved at minimum cost. Thus, a good
leader can bring effectiveness & efficiency in the organization.
39. What is Stock Exchange? Explain the functions of Stock Exchange.
A stock exchange is an institution which provides a platform for buying and selling of
existing securities.
According to Securities Contracts (Regulation) Act, 1956, Stock exchange means,

"anybody of individuals. whether incorporated or not, constituted for the purpose of
assisting, regulating or controlling the business of buying and selling or dealing in
securities".
Functions of Stock Exchange:
Following are some of the important functions of a stock exchange.
1) Providing liquidity and marketability to existing securities: The basic function of

a stock exchange is the creation of a continuous market where securities are bought
and sold. It gives investors the chance to disinvest and reinvest. This provides both
liquidity and easy marketability to already existing securities in the market.
2) Pricing of securities: Share prices in a stock exchange are determined by the forces
of demand and supply. A stock exchange is a mechanism of constant valuation
through which the prices of securities are determined. Such a valuation provides
important instant information to both buyers and sellers in the market.
3) Safety of transaction: The membership of a stock exchange is well regulated, and its
dealings are well defined according to the existing legal framework. This ensures that
the investing public gets a safe and fair deal on the market.
4) Contributes to economic growth: Stock exchange is a market in which existing

securities are resold or traded. Through this process of disinvestment and
reinvestment savings get channelized into the most productive investment avenues.
This leads to capital formation and economic growth.
5) Spreading of equity cult: The stock exchange can play a vital role in ensuring wider
share ownership regulating new issues, better trading practices and taking effective
steps in educating the public about investments.
6) Providing scope for speculation: The stock exchange provides sufficient scope
within the provisions of how for speculative activity in a restricted and controlled
manner. It is generally adopted that a certain degree of healthy speculation is
necessary to ensure liquidity and price continuity to the stock market.
Thus, "Efficient functioning of a stock exchange creates a positive environment among

investors and leads to the growth of primary market for new issues”.

40. Explain the importance of personal selling to customers & society.
Importance of personal selling to customers:
The customers are benefited by personal selling in the following ways.

1. Help in identifying needs:
Personal selling helps the customers in identifying their needs & wants and in knowing
how this can best be satisfied.
2. Latest market information:

Customers get latest market information regarding price changes, product availability,
shortages & new product introduction, which help them in taking the purchase
decisions in a better way.
3. Expert advice:
Customers get expert advice and guidance in purchasing various goods & services,
which help them in making better purchase.
4. Induces customers:
Personal selling induces customers to purchase new products, that satisfy their needs in
a better way & there by helps in improving their standards of living.
Importance of selling to society:
1. Converts latent demand.

Personal selling coverts latent demand into effective demand. It is through the cycle
that the economic activity in the society forester leading to more jobs, more incomes &
more products & services. That is how economic growth is influencing personal
selling.
2. Employment opportunities:
Personal selling offers greater income & employment opportunities to the
unemployment youth.
3. Carrier opportunities:
Personal selling provides attractive career with greater opportunities for advancement
and job satisfaction as well as security, respect, variety, interest, and independence to
young men & women.
4. Mobility of salespeople:
There is a greater degree of mobility in salespeople, which promote travel & tourism in
the country.
5. Product standardization:
Personal selling increases product standardization and uniformity in consumption
pattern in diverse society.

SECTION - E
(PRACTICAL ORIENTED QUESTIONS)
V. Answer any two of the following questions. Each question carries 5 marks: (2 x 5 =20)
41. Assuming that you are the manager of an organization, draw the neat diagram of
different levels of management to specify that authority responsibility relationships
create different levels of management.
Diagram showing levels of management.
42. Draw the organisation chart showing divisional and functional structure.
Organisation chart showing divisional and functional structure.

43. As a financial consultant,give the list of any 10 factors which affect the choice of
capital struture
Following is the list of factors which affect the choice of capital structure.
1. Cash flow position

2. Interest covergae ratio (ICR)
3. Debt service coverage ratio (DSCR)
4. Return on investment (ROI)
5. Cost of debt
6. Tax rate
7. Cost of eqity
8. Floatation cost
9. Risk consideration
10. Flexibilty
11. Control
12. Regulatory framework
13. Stock market condition
14. Capital structure of other companies.
******

2019 SUPPLEMENTARY EXAM QUESTION PAPER WITH SOLUTION
BUSINESS STUDIES
SECTION-A
Answer any ten of the following questions in a word or a sentence each. While answering multiple
choice questions, write the serial number/alphabet of the correct choice and write the answer
corresponding to it. (10 x 1= 10)
1. What is efficiency?
Efficiency means doing the task correctly by using minimum quantity of resources and
with minimum cost.
2. Who strongly advocated piece wage system?

Frederick Winslow Taylor
3. State the first step in planning process.

Establishing Objectives

a. Accountability
b. Authority
c. Responsibility
d. Informal Organisation
5. Name any one internal source of recruitment.
Promotions
6. The software company promoted by Narayana Murthy is

a. Wipro
b. Infosys
c. Satyam
d. HCL
b. Infosys
7. Expand CPM
Critical Path Method
8. The decision of acquiring a new machine is an example for

a. Financing decision
b. Working capital decision
c. Investment decision
d. None of the above.
C. Investment decision

9. The settlement cycle in NSE is
a. T 5
b. T+3
c. T+2
d. T+1
c. T+2
10. A brand is a name, sign, symbol, design used to identify the product/ service. [State
True/False]
TRUE
11. In which year, the Consumer Production Act was enacted?

1986
12. Who introduced the term 'Entrepreneur for the first time?
Jean-Baptiste Say
SECTION - B
Answer any ten of the following questions in 2 to 3 sentences.
Each question carries 2 marks (10 x 2 =20)
13. Define Management.
According to Harold Koontz, “Management is the process of designing and maintaining an
environment in which individuals, working together in groups, efficiently accomplish selected
aims”.
14. What is Scalar Chain?
Scalar chain is a chain of all supervisors from the top management to the person working in
the lowest rank.
15. Give the meaning of Globalisation.
Globalization means the integration of the various economies of the world leading towards the
emergence of a cohesive global economy.
16. State any two features of Planning.
• Planning focuses on achieving objectives:
Companies are set up with a common goal in view. Explicit purposes are placed out in the
projects along with the ventures to be initiated to accomplish the goals. Therefore, planning is
helpful.

• Planning is futuristic:
Planning typically includes looking forward and outlining for the future. The idea of planning
is to coincide future results efficiently to the valid advantage of an association.
17. Write any two differences between Authority and Accountability.

Authority Accountability
Authority is the power to command Accountability means being answerable
employees and instruct them to for the results
perform a job
Authority can be delegated Accountability cannot be delegated
Authority arises from formal position Accountability arises from
of individuals. responsibility.
Accountability flows from subordinates
Authority flows from superior to to superior.
subordinates
18. Name any two styles of Leadership.

I. Autocratic Style
II. Authoritative Style
19. State any two traditional techniques of managerial control.
I. Budgetary Control
II. Financial Ratio Analysis
20. Give the meaning of Dividend decision.

It refers to the decision-making mechanism of the management to declare dividends. It is
crucial for the top management to determine the portion of earnings distributable as
the dividend at the end of every reporting period.
21. State any two examples for the things that can be marketed other than Product. Services
and Ideas.
22. Name any two parties who can file a complaint before the appropriate Consumer forum.
I. Any registered consumer's association
II. A legal heir or representative of a deceased consumer
23. What is Entrepreneurship?
Entrepreneurship is the process of setting up one’s own business as distinct from pursuing any
other economic activity.

24. Draw the SVO analogy figure.
SVO ANALOGY FIGURE
The person/The The process/The The outcome

actor act
Object
Subject Verb
SECTION -C
Answer any seven of the following questions in 10 to 12 sentences each.
Each question carries 4 marks: (7 x 4= 28)
25. What are the four aspects of work study developed by F.W. Taylor?
Scientific management refers to the use of scientific and standardized tools, methods and
trained workers in all organisational activities in order to increase the total production with
minimum cost and wastage. Following are the principles of scientific management
contributed by FW Taylor.
a. Science not Rule of Thumb:

Taylor was the first person to introduce the method of scientific inquiry into the domain of
management practice. He believed that there was only one best method to maximise
efficiency Le. By scientific way. Scientific management includes scientific selection of
workers, placement and training, work – study motion study fatigue study, time study.
Gradation of equipment and machinery, payment wages according to work done etc.
b. Harmony, not discord:

There should be harmonious relationship between management and workers. Both should
realise that each one is important. This avoids class – conflict. To achieve this, Taylor
introduced mental revolution. Both management and workers should transform their
thoughts to achieve harmonious relationship amongst them.

c. Cooperation, not individualism:
There should be complete cooperation between the labour and the management instead of
individualism. Competition should be replaced by cooperation. Both should realise that
they need each other. To achieve this fact, the management should consult their employees
while taking important decisions. There should be a two-way communication between
management and workers. According to Taylor, there should be almost equal division of
work and responsibility between workers and management.
d. Development of each and every person to his or her greatest efficiency and
prosperity:
Industrial efficiency depends on personnel competencies. According to Taylor, efficiency
could be achieved from the beginning i.e., from the time of selection of employees. Each
person must be scientifically selected. Work should be assigned according to his mental
and intellectual capabilities Proper training should be given to improve his/her skill. This
will contribute to their greatest efficiency and prosperity for both organisation and
workers.
26. Explain any four features of Business Environment.

Features of Business Environment are:
• Totality of external forces:

Business environment is the sum of all things external to business firms and, as such, is
aggregative in nature.
• Specific and general forces: Business environment includes both specific and general
forces. Specific forces such as investors, customers, etc., affect individual enterprises
directly and immediately in their day-to-day working. General forces such as social.
Political conditions have impact on all business enterprises and thus may affect an
individual firm only indirectly.
• Inter-relatedness: Different elements of business environment are closely interrelated.

One element of the environment affects the other. For example, new health aware
products such as diet coke, fat-free cooking oil etc. changed people’s lifestyles.
• Dynamic nature: Business environment is dynamic. It keeps on changing whether in

terms of technological improvement, shifts in consumer preferences etc.
• Uncertainty: Business environment is largely uncertain because it is difficult to

predict future happenings.
• Complexity: Since business environment consists of numerous interrelated and

dynamic forces which arise from different sources, it is relatively easier to understand
in parts but difficult to grasp in its totality.
• Relativity: Business environment is a relative concept. It differs from country to

country and even from region to region.

27. Explain any four limitations of Planning.
The limitations of planning are:
• Planning leads to rigidity: In an organization, a well-defined plan is drawn up with

specific goals to be achieved within a specific time frame. These plans then decide the
future course of action. The managers may not be in a position to change these plans.
This kind of rigidity in plans may create difficulty. This rigidity restricts the individual
freedom, initiative and creativity.
• Planning may not work in a dynamic environment: The business environment is

dynamic. Planning anticipates future. It takes into consideration the possible changes in
economic, political, legal and social dimensions. But it becomes difficult to accurately
assess the future trends. Competition in the market can also upset the plans. Planning
cannot foresee everything and thus, there may be obstacles to effective planning.
• Planning reduces creativity: Planning is an activity which is done by the top

management. Usually, the rest of the members just implement these plans. Middle
management and other decision makers are neither allowed to deviate from plans nor
are they permitted to act on their own. Thus, much of the initiative or creativity
inherent in them also gets lost or reduced.
• Planning involves huge costs: When plans are drawn up, huge costs are involved in
their formulation. These may be in terms of time and money. The cost incurred
sometimes may not justify the benefits derived from the plans.
• Planning is a time-consuming process: Sometimes plans to be drawn up take so

much of time that there is not much time left for their implementation.
28. How does training and development of employees benefit the organization?
The benefits of training and development activity to the employees are as follows:
• Improved skills and knowledge due to training lead to better career of the individual.
• Increased performance by the individual helps him to earn more.
• Training makes the employee more efficient to handle machines. Thus, less prone to
accidents.
• Training increases the satisfaction and morale of the employees.
29. Briefly explain first four steps involved in controlling process.

➢ Establishing performance standards:
Although setting of goals and standards are part of the planning process, it also plays an
important role in controlling.
The main objective of controlling is to guide the business towards the desired target.
Therefore, if the employees or members of a business are well aware of the target, it
will result in more awareness about the target.

The managers must communicate the goals and objectives clearly to the employees
without any ambiguities. An organisation in which everyone is working towards a
common objective has a better chance to grow and prosper.
➢ Measuring actual performance against the set standards:
The immediate action that managers need to take after being made aware of the goals, is
to measure their actual performance and compare that with the standards already set.
This helps in identifying if the plan is working as was thought to be.
Once a plan is implemented, the task of managers is to monitor the plans and evaluate.
Managers must be ready with an alternative plan or suggest corrective measures in case
the plan is not going as was intended.
This can be done only when managers are measuring their actual performance. The way
performance can be evaluated is to measure it in monetary terms, hiring financial
experts.
This step of controlling is helpful in detecting future problems and issues and is
essential for taking decisions immediately so that the company can recover from the
losses.
➢ Determining if the performance matches with the standard: Checking if the

performance matches with the standards is very important. It is an important step in
controlling. In this step, the results are measured with the already set standards.
➢ Taking corrective action and re-evaluating the standard: Corrective measures need
to be taken when there is a discrepancy. Correct actions provide protection against loss
and stop them from reappearing in future.
30. Explain any four factors affecting the working capital requirement of organization.
The factors affecting the working capital requirement of a business are:
• Nature of Business: The basic nature of business influences the amount of working capital
required. A trading organization usually needs a smaller amount of working capital
compared to a manufacturing organization. Similarly, service industries which usually do
not have to maintain inventory require less working capital.
• Scale of Operations: for organizations which operate on a higher scale of operation, the
quantum of inventory and debtors required is generally high. Such organizations, therefore,
require large amount of working capital as compared to the organizations which operate on
a lower scale.
• Business Cycle: Different phases of business cycles affect the requirement of working
capital by a firm. In case of a boom, the sales and production are likely to be larger and
therefore larger amount of working capital is required. Working capital requirement will be
less during the period of depression as the sales and production will be small.

• Seasonal Factors: Most business have some seasonality in their operations. In peak
season, because of higher level of activity, larger amount of working capital, is required.
When the level of activity is less, working capital requirement will be less.
31. Explain any four methods of floating new issues in the primary market.
There are various methods of floating new issues in the primary market which are as
follows:
• Offer through Prospectus: it is the most popular method of raising funds by the public
companies in the primary market. This involves inviting subscription from the public
through the issue of prospectus.
.
• Offer for Sale: Under this method, securities are not issued directly to the public but are
offered for sale through intermediaries like issuing ‘house or stockbrokers. In this case, a
company sells securities and block at an agreed price to brokers who in turn resell them to
the investing public.
• Private Placement: It is the allotment of securities by a company to institutional investors

and some selected individuals. It helps to raise capital more quickly than a public issue. As
the primary market can be expensive, some companies choose to use private placement.
• Rights Issue: This is a privilege given to existing shareholders to subscribe to a new issue
of shares according to the terms and conditions of the company. The shareholders are
offered the right to buy new shares in proportion to the number of shares they already
possess.
• E-IPOs: A company proposing to issue capital to the public through the on-line system of
the stock exchange must enter into an agreement with the stock exchange which is known
as IPO (Initial Public Offer). The lead manager coordinates all the activities amongst
intermediaries connected with the issue.
32. Explain the elements of Marketing Mix.

Marketing mix is described as the set of marketing tools that a firm uses to pursue its
marketing objectives in a target market. This term ‘marketing mix’ is given by Neil Il
Borden. It refers to aggregate of strategies formulated to achieve various marketing
objectives. Marketing mix is the combination of four inputs that revolve around the
consumer satisfaction as the focal point. These four elements are product, price, promotion
and the place physical distribution.

These elements are popularly known as 4 P’s of marketing.
Element of marketing mix:
The marketing mix consists of various elements, which have been broadly classified into four
categories popularly known as four Ps of marketing which are as follows:
• Product mix: Product means anything of value’ which is offered to the market for sale.
Product is one of the main elements of marketing mix. In marketing terms, product refers
to anything that satisfies the needs of the consumers. It may be a good, a service or an idea.
The product mix has the following important components: Brand, Style, colour, design,
product line, Package, warranty etc. The concept of product also includes the extended
product or what is offered to the customers by way of after sale services, handling
complaints, availability of spare parts etc.
• Price mix: Price represents the value of a product expressed in terms of money it is the
amount of money customers have to pay to obtain the product. The price mix is concerned
with fixing a reasonable price to the product or services that covert’s the cost and
distribution expenses as well gets reasonable profits to the manufacture. The basic
variables related to price mix include pricing strategy, pricing policy, and credit terms,
Discounts, allowances etc.,
• Promotion mix: Promotion of product and services include activities that communicate
availability, features, merits etc., of the products to the target customer and persuade them
to buy it. The promotion mix includes personal selling, publicity, advertising and sales
promotion. Most marketing organisations, undertake various promotional activities and
spend money on the promotion of their goods using promotional tools such as advertising,

personal selling etc., the success of a market offer will depend on how well these
ingredients are mixed to create superior value for the customers and achieve their sale and
profit objective.
• Place: Place or physical distribution include activities that make firm’s products available
to the target customers. It is concerned with making available of the goods and services at
right time, at right place, in right quantity. It enables for the smooth flow of goods and
services from the producers to the customers. It creates place, time and possession utilities.
The place mix includes distribution channels like agents, wholesaler’s retailers etc. and
physical distribution which includes transport, warehousing, inventory etc.
Conclusion: Thus, process of marketing involves creating a market offering, to satisfy the
needs and wants of the present and potential buyers. From several alternatives available a
firm chooses a particular combination to develop a market offering the combination of
variables chosen by a firm to prepare its market offering is called as marketing mix.
33. State any four features of Speciality Products.

Speciality products are those consumer goods which have certain special features because
of which people make special efforts in their purchase.
The demand for speciality products is limited as relatively small number of people buy
these products.
• These products are generally costly, and their unit price is very high.
• These products are available for sale at few places as the number of customers is small
and are willing to take extra efforts in the purchase of these products.
• An aggressive promotion is required for the sale of speciality products, in order to
inform people about their availability, features etc.
• After sales services are very important for many of the speciality products.
34. Explain any four Rights of Consumers.

The Rights of the Consumer
• Right to Safety- Before buying, a consumer can insist on the quality and guarantee of
the goods. They should ideally purchase a certified product like ISI or AGMARK.
• Right to Choose- Consumer should have the right to choose from a variety of goods
and in a competitive price.
• Right to be informed- The buyers should be informed with all the necessary details of
the product, make her/him act wise, and change the buying decision.
• Right to Consumer Education- Consumer should be aware of his/her rights and avoid
exploitation. Ignorance can cost them more.
• Right to be heard- This means the consumer will get due attention to express their
grievances at a suitable forum.
• Right to seek compensation- This defines that the consumer has the right to seek
redress against unfair and inhumane practices or exploitation of the consumer.

SECTION – D
IV. Answer any four of the following questions in 20 to 25 sentences each. Each
Question carries 8 marks (4 x 8 =32)
35. Explain the characteristics of Management.
• Totality of external forces: Business environment is the sum of all things external to
business firms and, as such, is aggregative in nature.
• Specific and general forces: Business environment includes both specific and general
directly and immediately in their day-to-day working. General forces such as social,
political conditions have impact on all business enterprises and thus may affect an
individual firm only indirectly.
• Inter-relatedness: Different elements of business environment are closely interrelated.

One element of the environment affects the other. For example, new health aware
products such as diet coke, fat-free cooking oil etc. changed people’s lifestyles.
• Dynamic nature: Business environment is dynamic. It keeps on changing whether in

terms of technological improvement, shifts in consumer preferences etc.
• Uncertainty: Business environment is largely uncertain because it is difficult to

predict future happenings.
• Complexity: Since business environment consists of numerous interrelated and

dynamic forces which arise from different sources, it is relatively easier to understand
in parts but difficult to grasp in its totality.
• Relativity: Business environment is a relative concept. It differs from country to

country and even from region to region.
36. Explain the importance of Organizing.

Organising is a process which coordinates human efforts, assembles resources and
integrates both into a unified whole to be utilized for achieving specified objectives.
The following points highlight the importance of organising in any business enterprises.
• Benefits of specialization: Organising leads to a systematic allocation of jobs among the
workforce (employees). Right person is placed in the right job. It leads to specialization
and increases the efficiency and productivity of employees.
• Clarity in working relationship: Organising helps in establishing working relationships.
It clearly defines the authority and responsibility of everyone in an organization. Every
individual has clarity as to whom he can give orders and from whom he must receive
orders.
• Optimum utilization of resources: Organising ensures proper allocation of jobs. It leads

to optimum (i.e., efficient) use of material, financial and human resources. This also avoids
duplication of work and helps in minimising the wastage of resources.

• Adaptation to change: The process of organising allows a business enterprise to
accommodate changes in the business environment. It allows the organization structure to
be suitably modified.
• Effective administration: Organising provides a clear description of jobs. This helps to

avoid confusion and duplication. Clarity in the working relationships enables proper
execution of work. Thus, management of an enterprise becomes easy, and this brings
effectiveness in administration.
• Development of personnel: Organising stimulates creativity among managers. By

providing well defined areas of work and ensuring delegation of authority, organising
provides sufficient freedom to the managers and encourages their initiative and creativity.
Thus, it helps the managers to grow and develop to their full potential.
• Expansion and growth: Organising promotes growth and diversification of an enterprise.

It enables the enterprise to take up new challenges. It allows a business enterprise to add
more job positions, departments, new products and new geographical territories. This will
help to increase customer base, sales and profit.
• Thus, organising is a process by which the manager brings order out of chaos, removes
conflict among people over work or responsibility sharing and creates an environment
suitable for teamwork.
37. Describe the steps involved in selection process.

Employee selection is the process of putting right men on right job. It is a procedure of
matching organizational recruitments with the skills and qualifications of people. The
following steps are generally followed by all business organizations during selection
process:
• Preliminary Screening: After receiving the applications from the candidates through
recruitment process, the same must be examined to decide, which ones deserve to be
considered and followed up. The main purpose of screening is to prepare a list of
eligible candidates who are to be evaluated further. Screening exercise involves
checking the contents of the application, to find out whether or not the minimum
eligibility conditions are fulfilled by the applicants.
• Selection Tests: Selection tests are given to discover and measure, the skill and
abilities of the candidates in terms of the requirements of the job. The following tests
are usually conducted to measure the intelligence, aptitude, proficiency, personality
etc.
• Intelligence tests: These tests are used to judge the mental capacity of the applicant.
Intelligence tests evaluate the ability of an individual to understand instructions and
make decisions.

• Aptitude tests: Aptitude means the potential which an individual has for learning new
skills. Aptitude tests indicate the person’s capacity and his potential for development.
• Trade or proficiency tests: These tests are designed to measure the skills already
acquired by the individuals. They measure the level of knowledge and proficiency in
profession or technical training.
• Personality tests: These tests probe for the overall qualities of a person as a while.
They provide clues to a person’s emotional reactions, maturity level, value system etc.
• Interest tests: These tests identify the areas in which a candidate has special concern,
fascination; involvement etc. These tests suggest the nature of job liked by a candidate
which may bring him job satisfaction.
• Interview: Interview is a face-to-face conversation and observation, Interview helps

the employer to evaluate the candidate regarding the personality, smartness,
intelligence, attitude etc. There are different kinds of interviews conducted by the
employers. Some of them are as follows:
▪ Direct Interview: Under this method, direct questions are asked to the applicant, to
identify his skills, character, area of interest, attitudes etc., The in-depth knowledge of
applicant is not observed under this type of interview.
▪ Indirect Interview: Under this method, the applicant is asked to express his opinion
on any topic he likes. Here the interviewer listens to the views of the applicant without
any intervention. This interview helps the interviewer to assess the personality of the
applicant.
▪ Patterned or Structural Interview: In this type of interview, the interviewer is

looking for information in a particular area of interest of the organization. Several
standard questions are framed in advance which is to be answered by the applicant.
These questions focus on the experience, skills and personality of the ideal candidate
would possess.
▪ Stress Interview: In this Interview, the interviewer will intentionally try to upset the
applicant, to see his reactions under pressure. Uncomfortable or irritating questions
may be asked to the applicant to test his patience. This type of interview may be more
commonly used in high stress jobs.
▪ Board or Panel Interview: In this interview a group of persons called interviewers

ask the applicant, questions in different subjects or area of interest of the candidate.
Immediately after the interview, they meet, discuss and evaluate the performance of the
applicant based on answers given by him. This type of interview is common in case of
professional jobs.
▪ Group Interview: A group interview occurs when several candidates for a position are
interviewed simultaneously. A common topic presented before the candidates for
discussion. Group interview offers candidates to express their leadership potential and
style.

▪ Reference and Background checks: In addition to the required educational
qualifications, skill and experience, the candidates must also possess other qualities
liked honesty, loyalty etc. These qualities can be judged by the information obtained
from the heads of educational institutions where the candidates have studies or from
the persons whose names are given by the candidates as reference or from their
previous employers.
• Selection Decision: After a candidate has cleared all the hurdles in the selection
procedure, the employer may take a decision of selection after consulting the
concerned manager who Is responsible for the performance of the new employee.
• Medical examination: Candidates finally selected for the job are asked to undergo
medical examination to see whether they are physically fit for the job. The physical
fitness of employees reduces labour turnover, absenteeism, accidents etc., and ensure
higher standard of health of employees in the organization.
• Job Offer: Candidates finally selected are offered to join the organization, for which a
formal appointment order is issued by the organization. It contains the nature of the
job, the remuneration, pay scale and other terms and conditions relating to
employment. Usually, a reasonable time is given to the candidates to join the
organization.
• Contract of Employment: If the selected candidate decides to join the organization,

he must report to the concerned authority and formally join the organization by giving
his consent in writing. This is known as acceptance of job offer. Then, the
organization will open a service register in the name of the candidate and records all
details like qualification, particulars of employment, pay scale etc.
• Conclusion: Thus, Workers are essential, active and sensitive factor of production.
The above process assists in proper selection of the workers who will remain the
permanent assets of the organization.
38. Suggest any eight suitable measures to improve effectiveness of communication.
Following are the ways to overcome barriers to effective communication:

• Clarity of ideas: The problem to be communicated to subordinates should be clear in
all aspects. The entire problem should be studied in depth, analysed and stated in such
a manner that is clearly conveyed to subordinates.
• Communicate according to the needs of receiver: The level of understanding of

receiver should be crystal clear to the communicator. Manager should adjust his
communication according to the education and understanding levels of subordinates.
• Consult others before communicating: Before communicating the message, it is

better to involve others in developing a plan for communication. Participation and
involvement of subordinates may help to gain ready acceptance and willing
cooperation of subordinates.

• Be aware of languages, tone and content of message: The contents of the message,
tone, and language used, manner in which the message is to be communicated are the
important aspects of effective communication. The language used should be
understandable to the receiver and should not offend the sentiments of listeners.
• Convey things of help and value to listeners: While conveying message to others, it
is better to know the interests and needs of the people with whom you are
communicating. the message relates directly or indirectly to such interests and needs it
certainly evokes response from communicate.
• Ensure proper feedback: The communicator may ensure the success of

communication by asking questions regarding the message conveyed. The receiver of
communication may also be encouraged to respond to communication. The
communication process may be improved by the feedback received to make it more
responsive.
• Communicate for present as well as future: Generally, communication is needed to

meet the existing commitments to maintain consistency; the communication should
aim at future goals of the enterprise also.
• Follow up communications: There should be regular follow up and review on the

instructions given to subordinates. Such follow up measures help in removing hurdles
if any in implementing the instructions.
• Be a good listener: Manager should be a good listener. Patient and attentive listening
solves half of the problems. Managers should also give indications of their interest in
listening to their subordinates.
39. Explain any four Money Market Instruments.

Various instruments available in the money market are:
1. Treasury bills (T Bills):
It is a short term borrowing instrument issued by the government of India. RBI issues it
on behalf of government of India.
Features:
a. It is also known as zero coupon bonds
b. It has a maturity of less than a year
c. It is issued at discount and repaid at par.
E.g. a treasury bill of face value of Rs. 100000 will be sold at Rs.96000 and at the
time of maturity the investor will get Rs.100000.
Thus. Rs.4000 is the interest received by hm.
d. It is in the form of promissory note.
e. It is highly liquid & have negligible risk.
f. It is available in denominations of Rs.25000 and its multiples.
2. Commercial paper:
Commercial paper is issued by large creditworthy companies to raise short-term funds at
lower rates of interest than the market rate.

Features:
a. It is an unsecured promissory note, having a maturity of 15 days to one year.

b. It is a negotiable instrument, transferable by endorsement and delivery.
c. It is sold at discount and redeemed at par.
d. It is an alternative to bank borrowing. The original purpose of commercial
Paper was to meet working capital needs of the company.
e. It is used by companies for bridge financing, a method of financing used by
companies before issuing shares or debentures, to cover the expenses associated
with the issue of’ such securities, i.e. flotation costs (e.g. brokerage, commission,
printing of applications, advertising, etc.)
3. Call money
Call money is a method used by commercial banks to borrow funds from each other, to
maintain the Cash Reserve Ratio (CRR). Cash Reserve Ratio is the minimum balance of
cash to be maintained by banks, according to RBI guidelines.
Features:
a. It is a short term repayable on demand.
b. Maturity of call money is 1 day to 15 days.
c. The interest paid on call money is called the call rate.
d. Call rate is highly fluctuating, which varies from day-to-day or even from hour-to-
hour.
e. There is an inverse relationship between call rates and return on other short-term
money market instruments. Increase in call rates make the demand for call money
decrease, and increase in demand for other short-term instruments, as they become
cheaper in relation to call money.
4. Certificate of Deposit
Certificate of deposits are issued by commercial banks or developmental financial
institutions to individuals, institutions, corporations and companies.
Features:
It is an unsecured, negotiable instrument in bearer form.
i. It is issued in periods of tight liquidity, when the deposits by individuals and
households is less, but the demand for credit is high.
ii. They help to mobilise large amounts of money in a short time period.
5. Commercial Bill
It is a bill of exchange used by business firms to meet their working capital needs.
a) It is a short-term, self-liquidating, negotiable instrument, used for financing credit
sales of a firm.
b) When goods are sold on credit, the seller (drawer) draws a bill of exchange on the
buyer (drawee), who accepts it.
c) When he accepts the bill, it becomes a marketable instrument, which is called a
trade bill.
d) When the seller presents it to the bank for discounting it, to get the funds. before the
maturity of the bill and the bank accepts it, it is called a commercial bill.

40. State any eight differences between Advertising and Personal Selling.
ADVERTISING PERSONAL SELLING
Advertising is an impersonal form of Personal selling is a personal form of
communication. communication.
Advertising involves mass communication. Personal selling involves face to face direct
personal communication.
Advertising involves transmission of standard In personal selling the sales talk is adjusted
messages i.e., same message is sent to all the keeping view customer’s background and
customers in a market segment. needs.
It involves one-way communication. It involves two-way communication
Advertising is inflexible because the message Personal selling is highly flexible as the
cannot be adjusted to the needs of the buyer. message can be adjusted.
It has a wider coverage at a time it reaches It covers only individual or a small group of
masses. people at a time.
In advertising the cost per person reached is very The cost per person is quite high in the case of
low. personal selling
It covers the market in a short – time Personal selling takes a lot of time to cover the
entire market.
Advertising does not provide feedback It provides feedback immediately.
immediately.
The object of advertising is to create customers. It aims at selling the product or service.
Doubts cannot be clarified early. Here, doubts can be clarified easily

SECTION- E
V. Answer any two of the following questions.
Each question carries 5 marks. (2 x 5=10)
41) Show the different elements of Business Environment that influence the
Success of Business Enterprises with a neat diagram
BUSINESS
ENVITONMENTNT
42) Draw the triangular diagram of Maslow's Need Hierarchy theory.
MASLOW’S NEED HIERARCHY

43) As a Marketing manager, suggest any five Sales Promotion activities to boost up sales.
• Rebate: Offering products at special prices
• Discount: Offering products at less than list price
• Refunds: Refunding a part of price paid by customer
• Product Combinations: Offering another product as gift along with the purchase of a
product.
• Quantity Gift: Offering extra quantity of the product.
******

MARCH 2020 - PU BOARD ANNUAL EXAMINATION QUESTION PAPER
WITH SOLUTUON
SECTION A
choice questions, write the serial number/alphabet of the correct choice and write answer
corresponding to it. (10*1=10)
Each question carries 1 mark:
1. What is meant by Management?
Management is a process of getting things done with the aim of achieving goals effectively
& efficiently.
OR
Management is an art of getting things done through & with the help of others in order to
achieve the specific organizational objective.
2. Who is the father of general management?
▪ Henry Fayol.
3. Which of the following is not a dimension of business environment?

a. Economic environment
b. Social environment
c. Technological environment
d. Natural environment
d) Natural environment
4. Give one example for rule.
▪ Wear ID cards in the workplace.

a. Accountability
b. Responsibility
c. Authority
d. Rights
d. Rights
6. Which of the following is off-the-job training method?

a. Coaching
b. Films
c. Job rotation
d. Internship training.
b. Films

7. Name any one element of direction.
▪ Supervision
8. Expand ROI
▪ ROI = Return on Investment
9. What is meant by capital structure?
▪ Capital structure refers to the mix between owner’s funds (i.e., equity) & borrowed funds
(i.e., debts)
10. Which of the following are money market instruments?
a. Treasury bills
b. Debentures
c. Equity shares
d. reference shares
a. Treasury bills
11. Who is a marketer?
▪ Marketer refers to any person who takes more active part in the process of exchange.
12. Write any one consumer right.
▪ Right to safety
SECTION – B
ll. Answer any ten of the following questions in 2 to 3 sentences each.
13. State any two importance of co-ordination.
1) Growth in size: as organizations grow, it is through proper coordination, management can

ensure that all individuals work towards common goal of the organization.
2) Functional differentiation: Coordination helps to link the activities of various

departments (based on functions) such as finance, production, marketing and so on.
3) Specialization: Coordination is required to reconcile the differences in approach, interest

or opinion of the specialists.
(Write any two points)

14. Write any two significance of principles of Management.
1) Providing managers with useful insights into reality: The principles of management
provide the managers with useful insights into real world situations.
2) Optimum utilization of resources and effective administration: Management principles

enable the managers to make optimum utilization of resources and leads to increased
productivity.
15. Write two difference between unity of command and unity of direction.
SL.NO BASIS UNITY OF COMMAND UNITY OF DIRECTION
1. Meaning One subordinate should receive Each group of activities having

orders from one superior & should be same objective must have one
responsible to only one superior. head & one plan
2. Aim It prevents dual subordination. T prevents overlapping of

activities
16. What is planning?
Planning means setting objectives and targets and formulating an action plan (i.e..,
determining appropriate course of action) to achieve them. In simple, planning is deciding in
advance what to do and how to do. It is one of the basic managerial of functions.
17. Define organizing.
According to Theo Haimman, “Organizing is the process of defining and grouping the
activities of the enterprise and establishing authority relationships among them."
OR
According to Louis Allen, “Organizing is the process of identifying and grouping the work to
be performed, defining and delegating responsibility and authority, and establishing
relationships for the purpose of enabling people to work most effectively together in
accomplishing objectives."
18. Name any two important tests used for selection of employees.
1) Intelligence tests: It is a psychological test which is used to measure the level of

intelligence quotient (I.Q.) of an individual. It is an indicator of a person’s learning ability
or the ability to make decisions and judgements.
2) Aptitude test: It is a test which tries to measure individual’s potential for learning new
skills. It indicates a person's capacity to develop in future.
3) Personality tests: Personality tests are the tests which discover and measure the overall
qualities of a person such as emotional reaction, maturity levels, confidence, courage etc.

4) Trade test (Proficiency tests): These tests measure the existing skills of an individual.
They measure the level of knowledge and proficiency in the area of professions or
technical training.
5) Interest tests: Interest tests are the tests used to know the pattern of interests or
involvement of a person in a particular kind of work. These tests suggest the nature of job
liked by a candidate which may bring him job satisfaction.
19. Mention any two features of Motivation.
Features of motivation:
a) Motivation is an internal feeling, the urge, drives, desires, aspirations, striving or needs of
human being which are internal, influence human behaviour. [For example, people may
have the urge or desire for possessing a car or a comfortable house. These urges are
internal to an individual]
b) Motivation produces goal directed behaviour.
c) Motivation is a complex process as the individuals differ in their expectations, perceptions

and reactions. Example: a particular type of motivation may not have uniform effect on all
the members.
d) Motivation can be either positive or negative: Positive motivation provides positive

rewards like increase in pay. promotion etc. Negative motivation uses negative means like
punishment, stopping increments etc.., which may also induce a person to act in the desired
way. (Write any two points)
20. Give the meaning of Break-even analysis.
Break even analysis is a technique used by managers to study the relationship between costs,
volume and profits. it determines the probable profit and losses at different levels of activity.
Sales volume at which there is no profit, no loss is known as break-even point.
Break-even point = fixed costs / Selling price per unit - variable cost per unit
21. State two objectives of financial planning.
The two objectives of financial planning are:
1. To ensure availability of funds whenever required.

2. To see that the firm does not raise resources (i.e., funds) unnecessarily.
22. Write any two development functions of SEBI.
a. Training of intermediaries of the securities market.

b. Conducting research and publishing information useful to all market participants.
c. Undertaking measures to develop the capital markets by adopting a flexible approach.

23. List out any two differences between Marketing and Selling.
The major differences between selling and marketing are:
1) Part of the process vs wider term: Selling is only a part of the process of marketing. But
marketing is a much wider term consisting of number of activities such as identification of
the customer's needs, developing the products to satisfy these needs, fixing prices and
persuading the potential buyers to buy the same.
2) Transfer of title v/s satisfying customer needs: Selling is concerned with affecting
transfer of title and possession of goods from sellers to buyers (i.e., consumers or users).
But marketing activities concentrate on satisfaction of the customers' needs and wants.
3) Profit through maximizing sales vs customer satisfaction: The main aim of selling is
profit maximization through maximization of sales. But marketing is concerned with
customer satisfaction and thereby increasing profit in the long run.
4) Start and end of the activities: Selling activities start after the product has been
developed. But marketing activities start much before the product is produced and continue
even after the product has been sold.
5) Difference in the emphasis: In selling, the emphasis is to make the customer to buy the
product. But in marketing, the attempt is to develop the product as per the customer needs.
6) Difference in the strategies: Selling involves efforts like promotion and persuasion. But
marketing uses integrated marketing efforts involving strategies in respect of product,
promotion, pricing and physical distribution.
24. Write any two importance of consumer protection from consumer point of view.
Reasons to emphasise the importance of consumer protection from consumers ‘point of view’:
1. Widespread Exploitation of consumers: Consumers might be exploited by unscrupulous,

exploitative an unfair trade practices like defective and unsafe products, adulteration, false
and misleading advertising hoarding, black marketing etc. Consumers need protection
against such malpractices of the sellers.
2. Consumers' ignorance: The consumers are ignorant and not aware of their right and
reliefs available to them therefore, it is necessary to educate them about their rights to fight
against exploitation.
3. Unorganized consumers: As the consumers are not properly organized in the form of
consumer organization (which protects their rights), they need to be protected.
(Write any 2 points)

SECTION - C
III. Answer any seven of the following questions in 10 to 12 sentences each.
25. Briefly explain any four techniques of Scientific work study.
Four techniques of Scientific work study:
1) Method study: The objective of method study is to find out one best way of doing the job.
Method study involves the study of all activities starting from procurement of raw
materials till the delivery of final product to the customer. For this purpose, many
techniques like process charts and operations research are used.
2) Motion study: Motion study involves the study of movements like lifting, putting objects,
sitting and changing positions etc. which are undertaken while doing a typical job. Motion
study is conducted to eliminate unnecessary (unproductive) movements so that a job can be
completed efficiently by taking less time. Through motion study, by concentrating only on
productive motions, Taylor was able to show 4 times increase in productivity.
3) Time study: Time study is conducted to determine the standard time required to perform a
well-defined job. Time measuring devices such as stop watch are used to measure the time
required for each element of task the standard time is fixed for the whole of the task by
taking several readings.
For example, on the basis of several observations it is determined that standard time taken
by the worker to make one cardboard box is 20 minutes. So, in one hour a worker will
make 3 boxes. Assuming that a worker has to put in 8 hours of work per day and one hour
is deducted for rest and lunch, it is determined that in 7 hours (8 - 1) a worker makes 21
boxes. Now this is the standard task a worker has to do. Wages can be decided
accordingly.
4) Fatigue study: Fatigue study is conducted to determine the amount and frequency of rest
intervals in completing a task. A worker has to be given some rest interval to take his/her
lunch. If the work involves heavy manual labour, then small pauses have to be frequently
given to the worker so that he / she can recharge his/her energy level for optimum
production.
Business environment has the following features.
1) Totality of external forces: Business environment is the sum total of all things external to
business firms. It is aggregative in nature.
2) Specific and general forces: Business environment includes both specific and general
forces. Specific forces such as customers, suppliers, competitors and investors affect
individual enterprises directly and immediately in their day to day working. General forces
such as social, political, legal and technological conditions affect an individual firm
indirectly.

3) Inter - relatedness: Different elements or parts of business environment are closely
interrelated. For example, increased awareness for health care has increased the demand
for many health products and services like fat free cooking oil and health resorts.
4) Dynamic nature: Business environment is dynamic in nature. It keeps on changing. For

example, there may be shift in consumer preferences, there may be entry of new
competitor in the market and so on.
5) Uncertainty: Business environment is largely uncertain. In some areas like information

technology fashion industries, environment changes are taking place too frequently making
it very difficult to predict future happenings.
6) Complexity: Business environment is a complex phenomenon. It is easier to understand in

parts but difficulty grasp in its totality. For example, if may be difficult to know the extent
of the relative impact of the social economic, political, technological or legal factors on
change in demand of a product in the market.
7) Relativity: Business environment is a relative concept since it differs from country to

country and even region to region. For example, demand for sarees is fairly high in India
while demand for sarees is almost nil in France.
27. Explain any four features of Planning.
Features (or nature) of planning, Planning function of the management has the following
features.
1) Planning focuses on achieving objectives: Planning is purposeful function of

management. It is concerned with setting up of objectives along with the activities to be
undertaken to achieve the objectives.
2) Planning is a primary function of management: Planning is a primary function of

management as it lays down the base for other functions of management. All other
managerial functions are performed within the framework of the plans drawn.
3) Planning is pervasive: Planning function is performed by all levels of management as

well as in all departments of the organization.
4) Planning is continuous: Planning is a continuous process. One plan, after its

implementation, is being followed by another plan (which is drawn on the basis of new
requirements and future conditions).
5) Planning is futuristic: Planning involves looking ahead and preparing for the future. The
purpose of planning is to meet future events effectively to the best advantage of an
organization. Thus, planning is a forward-looking function based on forecasting. For
example, based on sales forecasting, a business firm prepares its annual plan for production
and sales.

6) Planning involves decision making: Planning essentially involves choice from among
various alternatives and activities. Each alternative is evaluated and finally the decision is
taken to select the best alternative.
7) Planning is a mental exercise: Planning requires application of the mind. It is basically an

intellectual activity of thinking. Thus, planning involves logical, systematic and orderly
thinking based on the analysis of facts and forecasts which is necessary for determining the
action to be taken.
28. Write the benefits of training and development to employee.
1) Benefits of training and development to employee:

2) Improved skills and knowledge due to training lead to better career of the individual.
3) Increased performance by an individual helps him to earn more.
4) Training makes the employee more efficient to handle machines. Thus, it reduces the
chances of industrial accidents.
5) Training increases the satisfaction and morale of employees.
29. Briefly describe first four steps involved in controlling process.
Controlling is a systematic process involving the following steps.
1) Setting performance standards: The first step in the controlling process is setting up of
standards. Standards are the criteria (Yardstick) against which actual performance would
be measured. Standards can be set in both quantitative as well as qualitative terms. For
instance, standards set in terms of cost he incurred, revenue to be earned, product units to
be produced and sold, all represent quantitative Improving motivation level of employees.
Improving consumer satisfaction level, all represent standards.
2) Measurement of actual performance: The next step is measurement of actual

performance. Measurement actual performance can be made by a study of various reports
and statements received from the subordinates. It also be made by personal observation
when the subordinates are at work. Sample checking is another method measurement of
performance in large organizations. Efficiency of production can be measured by counting
number of pieces produced and number of defective pieces in a batch.
3) Comparing actual performance with standards: This step involves comparison of

actual performance with the standard. Such comparison will reveal the deviation between
actual and desired (i.e.., standard) results.
4) Analysing deviations: Deviation means variation from the standard. Deviations which are
beyond the acceptable range of deviations and deviations in key areas of business need to
be determined and attended urgently. Critical point control and Management by exception
should be used by a manager in this regard.

After identifying the deviations that demand managerial attention, these deviations need to be
analysed for their causes. The causes of deviations may be due to unrealistic standards,
defective process, inadequacy of resources, inefficiency of an employee or environmental
factors. Effort should be made to identify, the exact cause or causes of deviations to facilitate
corrective action to be taken.
30. Briefly explain any four factors affecting financing decisions.
1) Setting performance standards: The first step in the controlling process is setting up of
standards. Standards are the criteria (Yardstick) against which actual performance would
be measured.
2) Standards can be set in both quantitative as well as qualitative terms. For instance,
standards set in terms of cost he incurred, revenue to be earned, product units to be
produced and sold, all represent quantitative Improving motivation level of employees.
Improving consumer satisfaction level, all represent standards.
3) Measurement of actual performance: The next step is measurement of actual

performance. Measurement actual performance can be made by a study of various reports
and statements received from the subordinates. It also be made by personal observation,
when the subordinates are at work. Sample checking is another method measurement of
performance in large organizations. Efficiency of production can be measured by counting
number of pieces produced and number of defective pieces in a batch.
4) Comparing actual performance with standards: This step involves comparison of actual
performance with the standard. Such comparison will reveal the deviation between actual
and desired (i.e.., standard) results.
5) Analysing deviations: Deviation means variation from the standard. Deviations which are
beyond the acceptable range of deviations and deviations in key areas of business need to
be determined and attended urgently. Critical point control and Management by exception
should be used by a manager in this regard.
After identifying the deviations that demand managerial attention, these deviations need to
be analysed for their causes. The causes of deviations may be due to unrealistic standards,
defective process, inadequacy of resources, and inefficiency of an employee or
environmental factors. Effort should be made to identify, the exact cause or causes of
deviations to facilitate corrective action to be taken.
31. Explain any four factors affecting the requirements of fixed capital.
Factors affecting the fixed capital requirements of an organisation.

1) Nature of business: The nature of the business determines the amount of fixed capital
requirement to a great extent. For example, a trading concern needs lower investment on
fixed assets; while manufacturing concerns and public utility undertakings such as
railways, electricity supply companies etc. require more fixed capital to be invested on
fixed assets.
2) Scale of operations: A business concern with large scale operations requires more fixed
capital as it needs bigger plant, more space etc.., while a business concern with small scale
operations requires less fixed capital.
3) Choice of technique or method of production: A capital intensive organisation requires

higher investment in fixed assets such as machinery and thus it needs more fixed capital.
While labour intensive organisation requires less investment in fixed assets resulting in
lower fixed capital requirements.
4) Technology up gradation: The organization using assets which are prone to obsolescence
require higher fixed capital to purchase new assets.
5) Growth prospects: An organization having higher growth prospects generally requires

higher investments in fixed assets and needs more fixed capital.
6) Diversification: A concern which chooses to diversify its production requires more fixed
capital. E.g., a textile factory is diversifying and starting a cement manufacturing plant, and
then it needs more fixed capital investment.
7) Financing alternatives: Organisations purchasing fixed assets on cash basis require a

large amount of fixed capital. Those organisations which acquire fixed assets on hire
purchase or instalment system or on lease basis require lesser amount of fixed capital.
8) Level of collaboration: Certain business concerns may share each other's facilities, e.g. A
bank may use ATM of another bank. Such collaboration reduces the level of investment in
fixed assets.
32. Briefly describe the elements of Marketing Mix.
Marketing mix consists of the following elements (popularly known as 4Ps of marketing):
➢ Product > Price > Place > Promotion
• Product: product means goods or services or ‘anything of value’ which is offered to the
market for sale. For example, AMUL, milk, ghee, butter, cheese, chocolates, etc. are the
food products offered to the market for sale by AMUL. The concept of product relates to
not only the physical product but also the benefits offered by it. It also includes other
aspects likes after sales service, availability of spare parts, handling complaints etc. the
important product decision includes deciding about the features, quality, packaging,
labelling & branding of the products.

• Price: Price is the amount of money that the customers must pay to obtain the product.
Marketers have to analyse the factors determining the price such as, cost of the product,
profit expected elasticity of demand. Competitors price etc. and fix a price for the firm’s
products. Decisions have also to be taken in respect of discounts to customers, credit terms
etc.
• Place: Place or physical distribution include activities that make firm's products available
to the target comers. Important decision areas in this respect include selection of dealers
(e.g., wholesaler, retailers etc.) to reach the customers and providing support to the
intermediaries (e.g. by way of discounts). The other decision areas include managing
inventory, storage & transportation of goods from the place it is produced to the place it is
required by the users.
• Promotion: Promotion of products and services include activities that communicate

availability, features, merits etc. of the products to the target customers and persuade them
to buy it. Most marketing organizations undertake various promotional activities through
using number of tools such as advertising, personal selling and sales promotion techniques
(like price discounts, free samples etc.)
The success of a market offer will depend on how well these ingredients are mixed to
create superior value for the customers and simultaneously achieve their sale and profit
objectives.
33. Explain the types of channels of distribution.
Manufacturer Customer.
Manufacturer Retailer Customer
Manufacturer Wholesaler Retailer Customer
Manufacturer Agent Wholesaler Retailer Customer
(with brief explanation)
34. Explain any four consumer responsibilities.
1) Consumer responsibilities: A consumer should keep in mind the following

responsibilities while chasing, using, and consuming goods and services.
2) Be aware about various goods and services available in the market so that an intelligent
and wise choice can be made.
3) Buy only standardized goods as they provide quality assurance. Thus, look for ISI mark
on electrical goods, FPO mark on food products, Hallmark on jewelry etc.
4) Read labels carefully so as to have information about prices, net weight, manufacturing
and expiry dates.
5) Ask for a cash memo on purchase of goods or services. This would serve as a proof of the
purchase made. Be honest in your dealings. choose only from legal goods and services and
discourage unscrupulous practices like black-marketing. Boarding etc.

6) Learn about the risks associated with products and services, follow manufacturer's
instructions and use the products safely.
Assert yourself to ensure that you get a fair deal.
7) File a complaint in an appropriate consumer forum in case of a shortcoming in the

quality of goods purchased or services availed. Do not fail to take an action even when the
amount involved is small.
8) Form consumer societies which would play an active part in educating consumers and
safeguarding their interests.
9) Respect the environment: Avoid waste, littering and contributing to pollution.
SECTION - D
IV Answer any four of the following questions in 20 to 25 sentences each.
Each question carries 8 marks (4 x 8 = 32)
35. 'Management is considered to be both an Art and Science'. Discuss.
Management is considered to be both a science and an art. They are not mutually exclusive
but complement to each other. The following explanation justifies this point.
Management as an art: Art is the skilful and personal application of existing knowledge
to achieve desired results.
Management is said to be an art since it has the following features of an art:
Existence of theoretical knowledge: Like any other art (e.g.., dancing or music), in
management, there is existence of theoretical knowledge. Lot of literature is available in
various areas of management like marketing, finance and human resources. Further,
various theories of management were developed by management thinkers, which prescribe
certain universal principles.
Personalized applications: Like an artist (e.g.., dancer or actor), every manager has his own
way (style and approach) of managing the things depending upon his knowledge and
experience. A manager applies management principles to a given situation, or a problem in
his own unique manner. Thus, the ability of managers to put management principles into
practice distinguishes a successful manager from a less successful one.
Based on practice and creativity: Like any art, management involves the creative practice
of existing theoretical knowledge. A good manager works through a combination of
practice, creativity, imagination initiative and innovation. A manager achieves perfection
after long practice.

Goal oriented: Like any other art, management is also directed towards completion of the
predetermined goals.
Therefore, we can conclude that management is an art.
Management as a science: Science is a systematic body of knowledge. Management is

considered to be a science since it has the following features of science:
1) Systematized body of knowledge: Like science, management has a systematized body of

knowledge. It has its own theory and principles. Management has its own vocabulary of
terms and concepts.
2) Principles based on experimentation: Like scientific principles, management principles

are also based on repeated experiments and observations indifferent types of organizations.
E.g. Scientific Management principles by F.W. Taylor.
3) Universal validity: Since management deals with human beings and human behaviour,
application and use of management principles is not universal. They must be modified
according to a given situation. However, they provide managers with certain standardized
techniques that can be used in different situations.
4) Cause and effect relationship: Like principles of science, management principles also
establish cause and effect relationship in dealing with various situations in the
organization. E.g.., Division of labour (Cause) results in increased productivity (effect)
Since management deals with human beings and human behaviour, management can be
called an inexact science.
Conclusion: The practice of management is an art. The practice of manager is based on the
principles - it is a science. Thus, management is both a science and an art. Further,
management as an art and a science are not mutually exclusive but complement each other.
36. State the advantages and disadvantages of Formal Organization.
Formal organization enables smooth functioning of the enterprise by properly providing job
description and rules and procedures related to work processes.
Advantages of formal organization:
1) It is easier to fix responsibility since mutual relationships are clearly defined.
2) There is no ambiguity in the role that each member must play as duties are specified. This
also helps in avoiding duplication of effort.
3) Unity of command is maintained through an established chain of command.
4) It leads to effective accomplishment of goals by providing a framework for the operations

to be performed.
5) It provides stability to the organization.

Disadvantages (or limitations) of formal organization:
1) The formal communication may lead to procedural delays as the established chain of
command has to be followed which increases the time taken for decision making.
2) Poor organization practices may not provide adequate recognition to creative talent, since
it does not allow any deviations from rigidly laid down policies.
3) It is difficult to understand all human relationships in an enterprise as it places more

emphasis on structure and work. Hence, the formal organization does not provide a
complete picture of how an organization works.
37. Discuss any eight commonly used external sources of recruitment.
External recruitment provides wide choice and brings new blood in the organisation. The
commonly used external sources of recruitment are:
1) Direct recruitment: Under the direct recruitment, a notice is placed on the notice board of
the enterprise specifying the details of the jobs available. Job seekers assemble outside the
premises of the organisation on the specified date and selection is done on the spot. The
practice of direct recruitment is followed usually for casual vacancies of unskilled or
semiskilled jobs.
2) Casual callers: Many qualified persons visit the offices of reputed companies and apply
for jobs on their own. Management preserves such unsolicited applications, and the
candidates may be called for interview, whenever the need arises.
3) Advertisement: Advertisement of vacancies in newspapers and trade journals, is one of

the popular external sources of recruitment. The advertisements give information about the
number of vacant posts, nature of required qualifications, skills needed, and remuneration
offered for the jobs. Advertisement brings respond from many numbers of suitable
candidates and gives the management a wider range of candidates for selection.
4) Employment Exchanges: Employment exchanges run by the government are an important

source recruitment of personnel for unskilled and skilled operative jobs. Job seekers
register their names with employment exchanges. The employment exchanges supply the
names of suitable persons to the business enterprises when there is a requisition from them.
5) Placement Agencies and management consultants: Placement agencies are private

agencies which collect biodata of many candidates and recommend suitable candidates to
the business enterprises on their request. Management consultancy firms help the
organizations to recruit technical, professional, and managerial personnel. They specialize
in middle level and top-level executive placements.
6) Campus recruitment (Educational institutions): Universities, colleges and institutes of

management and technology are a popular source of recruitment for technical, professional
and managerial jobs. These institutions offer an opportunity to the business enterprises to
conduct interview of the qualified students for various jobs in their campus, i.e ., campus
recruitment.

7) Recommendations of employee: Applications introduced by present employees or their
friends and relatives may also prove to be a good source of recruitment.
8) Labour contractors: Labour contractors are generally employees of the organisation, who
maintain close contacts with labourers and can provide the required number of unskilled
workers at short notice.
9) Advertising on television: Telecasting of vacant posts over television is a widely used

source of recruitment these days. Information about number of vacant posts, required
qualifications, job description and remuneration offered etc. is given in these
advertisements. Generally, this type of telecasting is popular in big cities.
10) Web publishing: Internet is becoming a common source of recruitment these days. There
are certain websites which are specifically meant for providing information about both job
seekers and jobs available. Websites such as www.naukri.com, www.jobstreet.com etc. are
very commonly visited by job seekers and the organizations searching for suitable people.
Conclusion: Thus, different external sources are available for recruitment of staff. The
management must select an appropriate source for recruiting its staff.
38. Explain the principles of Directing.
Principles of Directing.
Following are certain guiding principles of directing which help the managers in directing
process:
1) Maximum individual contribution: This principle emphasizes that directing techniques

must help every individual in the organization to contribute to his maximum potential for
achievement of organization. Objectives. It should bring out untapped energies of
employees for the efficiency of the organization. For " purpose management may have a
good motivation plan with suitable monetary and non-monetary rewards
2) Harmony of objectives: Good directing should provide harmony of individual objectives

of employees ". the organizational objectives. This can be ensured by convincing that
employee rewards and work efficient" are complimentary to each other.
3) Unity of command: This principle insists that a person in the organization should receive
instructions from one superior only. Adherence to this principle ensures effective direction.
4) Appropriateness of direction techniques: According to this principle, depending upon

situations, appropriate motivational and leadership techniques should be used while
directing the people. For example, for some people money can act as powerful motivator
while for others promotion may act as effective motivator.
5) Managerial communication: Effective managerial communication across all the levels in

the organization makes direction effective. Directing should convey clear instructions to
create total understanding to subordinates. Through proper feedback, the manager should
ensure that subordinate understands his instructions clearly.

6) Use of informal organization: A manager should identify the informal groups or
organizations present in the enterprise and make use of such organizations for effective
directing.
7) Leadership: While directing the subordinates, managers should exercise good leadership
as it can influence the subordinates positively without causing dissatisfaction among them.
8) Follow through: Mere giving of an order is not sufficient. Managers should follow it up
by reviewing continuously whether orders are being implemented accordingly or any
problems are being encountered. If necessary, suitable modifications should be made in the
directions.
While directing, a manager has to follow these principles to make directing process
effective. This helps him to deal with people of diverse background and expectations
with ease and comfort.
39. What is Stock Exchange? Explain the functions of Stock Exchange.
A stock exchange is an institution which provides a platform for buying and selling of
existing securities.
According to Securities Contracts (Regulation) Act, 1956, Stock exchange means, "anybody
of individuals. whether incorporated or not, constituted for the purpose of assisting,
regulating or controlling the business of buying and selling or dealing in securities".
Functions of Stock Exchange:
Following are some of the important functions of a stock exchange.
1) Providing liquidity and marketability to existing securities: The basic function of a stock
exchange is the creation of a continuous market where securities are bought and sold. It
gives investors the chance to disinvest and reinvest. This provides both liquidity and easy
marketability to already existing securities in the market.
2) Pricing of securities: Share prices in a stock exchange are determined by the forces of
demand and supply. A stock exchange is a mechanism of constant valuation through which
the prices of securities are determined. Such a valuation provides important instant
information to both buyers and sellers in the market.
3) Safety of transaction: The membership of a stock exchange is well regulated, and its
dealings are well defined according to the existing legal framework. This ensures that the
investing public gets a safe and fair deal on the market.
4) Contributes to economic growth: Stock exchange is a market in which existing securities

are resold or traded. Through this process of disinvestment and reinvestment savings get
channelized into the most productive investment avenues. This leads to capital formation
and economic growth.

5) Spreading of equity cult: The stock exchange can play a vital role in ensuring wider share
ownership regulating new issues, better trading practices and taking effective steps in
educating the public about investments.
6) Providing scope for speculation: The stock exchange provides sufficient scope within the
provisions of how for speculative activity in a restricted and controlled manner. It is
generally adopted that a certain degree of healthy speculation is necessary to ensure liquidity
and price continuity to the stock market.
Thus, “Efficient functioning of a stock exchange creates a positive environment among

investors and leads to the growth of primary market for new issues”.
40. Explain any four merits and any four limitations of advertising.
Advertising is the most commonly used tool of promotion. It is used to promote some goods
or service.
Merits or advantages advertising
Advertising, as a medium of communication to promote sales has the following merits:
1) Mass reach: Advertising is a medium through which a large number of people can be
reached over a vast geographical area. For example, an advertisement message placed in a
national daily reaches lakh of its subscribers.
2) Enhancing Customer Satisfaction and Confidence: Advertising creates confidence

amongst prospective buyers as they feel more comfortable and assured about the product
quality and hence feel more satisfied.
3) Expressiveness: With the developments in art, computer designs, and graphics,

advertising has developed into one of the most forceful medium of communication. With
the special effects that can be created, even simple products and messages can look very
attractive.
4) Economy: Advertising is a very economical mode of communication if large number of

people is to be reached. Because of its wide reach, the overall cost of advertising gets
spread over numerous communication links established. As a result, the per-unit cost of
reach comes low.
Limitations of Advertising
The following are the limitations of advertising as a tool of promotion:
1) Less Forceful: Advertising is an impersonal form of communication. It is less forceful

than the personal selling as there is no compulsion on the prospective buyers to pay
attention to the message.
2) Lack of Feedback: The evaluation of the effectiveness of advertising message is very

difficult as there is no immediate and accurate feedback mechanism of the message that is
delivered.

3) Inflexibility: Advertising is less flexible as the message is standardised and is not tailor
made to the requirements of the different customer groups.
4) Low Effectiveness: As the volume of advertising is getting more and more expanded it is
becoming difficult to make advertising messages heard by the target prospects (customers).
This is affecting the effectiveness of advertising.
The advantages of advertising outweigh the limitations. Hence, it is considered as an important

tool of promotion.
SECTION - E
V. Answer any two of the following questions. Each question carries 5 marks: (2*5 =10)
41. As a manager what logical steps you follow in planning process before executing a
project.
PLANNING PROCESS

42. Draw the organization chart showing, divisional and functional structure.
MANAGING DIRECTOR
GARMENTS FOOTWEAR SKINCARE

COSMETICS
HUMAN MARKETING PURCHASING RESEARCH &

RESOURCE DEVELOPMENT
43. As a marketing manager, suggest any five-sales promotion activity to boost the sales.
As a marketing manager I would like to suggest following five sales promotion activity to
boost the sales.
1) Rebate: Offering products at special prices
2) Discount: Offering products at less than list price
3) Refunds: Refunding a part of price paid by customer
4) Product Combinations: Offering another product as a gift along with the purchase of a
product.
5) Quantity Gift: Offering an extra quantity of the product.
**********

2020 SUPPLEMENTARY EXAM QUESTION PAPER WITH SOLUTIONS
BUSINESS STUDIES
SECTION-A
Answer any ten of the following questions in a word or a sentence each. While answering
multiple choice questions, write the serial number/alphabet of the correct choice and write
the answer corresponding to it. (10 x 1= 10)
1. Management is
a. An art
b. A science
c. Both art and science
c. Both art and science
2. Who is the father of Scientific Management?
3. Liberalisation means:
a. Integration among economies
b. Reduced government controls and restrictions
c. Policy of planned disinvestments
b. Reduced government controls and restrictions
4. State the first step in Planning Process.
Establishing Objectives
5. Which of the following is not an element of Delegation?

a. Accountability
b. Authority
c. Responsibility
d. Informal organization.
6. What is 'Training?
Training refers to the teaching and learning activities carried on for the primary purpose of
helping members of an organization acquire and apply the knowledge, skills, abilities, and
attitudes needed by a particular job and organization.

7. Motivational theory which classifies needs into hierarchical order was developed by
a. Fred Luthans
b. Scott
c. Abraham Maslow
d. Peter F. Drucker
c. Abraham Maslow
8. What is 'Controlling'?
Controlling is the basic managerial function. It is the process of ensuring the actual activities
confined to planned activity. It is an essential function for all levels of management.
Controlling is defined as a measurement of Actual performance and expected performance
and taking corrective action.
9. Give an example of 'Fixed Asset.
Land and building
10. Expand SEB1.
Security exchange board of India
11. Name any one Distribution Channel.
Wholesaler
12. State the monetary limit of claim in District Consumer Disputes Redressal Forum.
“The District Commission (earlier referred to as District Forum) can now

entertain consumer complaints having value up to ₹1 crore.

SECTION-B
Answer any ten of the following questions in 2 or3 sentences each.
Each carries two marks question (10 x 2=20)
13. Write any two organizational objectives of Management.

1. Survival of the organisation.
2. Profit Maximization.
3. Growth of the organisation.
14. State any two differences between Unity of Command and Unity of Direction.
Differential Unity of Command Unity of Direction

factor
Definition A subordinate must have one Means activities aimed at
superior and receive orders the same objective
only form him
Objectives Preventing dual All the activates aimed at
subordination and creating the elected goad or plan
accountability
Subject Activates and decisions One head and one plan
matter made in light of the plan and for a group of activities
objectives with the same objective
Relation Shows the relation among Indicated relationship of
superior and Subordinate activates with the
organizational plan and
goals
15. What is 'Gang Plank'?
Gang-plank is the technique of shortening the route of communication which is usually

followed through all channel of hierarchy. Fayol suggested that in case of urgencies, by
jumping the prescribed line of authority, these officials could deal with one another at one
sitting and sort out several problems quickly.
16. What is 'Policy?
Policies are the guidelines developed by an organization to govern its actions. They define
the limits within which decisions must be made.
17. Write the meaning of 'Organizing.
Organizing involves coordinating and allocating a firm's resources in order to carry out its
plans. It includes developing a structure for the people, positions, departments, and activities
within the firm.

18. What is 'Orientation' in staffing process?
Orientation it implies introducing the selected employee to other employees and familiarising
him with the rules and policies of the organisation.
19. State any 2 elements of Communication process.

1. The sender
2. The message
3. Encoding
4. The communication channels.
5. The receiver
6. Decoding and
7. Feedback.
20. Write the first two steps in controlling process.

Setting standards, measure performance, compare performance to standards, determine the
reasons for deviations and then take corrective action as needed.
21. State the twin objectives of Financial Planning.

A. To ensure availability of funds whenever required.
B. To see that the firm does not raise resources unnecessarily.
22. Distinguish between Primary Market and Secondary Market with any two points.
Primary Market Secondary Market

There is a sale of securities by new companies There is trading of existing shares
or new issues of securities by existing only.
companies directly to the investors.
Securities are sold by the company to the Ownership of existing securities is
investor directly. exchanged between the investors. The
company is not involved at all.
The flow of funds is from savers to investors. It only promotes liquidity among the
Thus, it helps in capital formation. shareholders.
It is also known as new-issue market. It is also known as stock exchange.
There is no fixed geographical location. These are located at specified places.
23. State any two elements of Marketing Mix.
The marketing mix consists of various elements, which have been broadly classified into four
categories popularly known as four Ps of marketing which are as follows:
Price, Product, Promotion and Place.
• Product mix: Product means anything of value’ which is offered to the market for sale.
Product is one of the main elements of marketing mix. In marketing terms, product refers to
anything that satisfies the needs of the consumers. It may be a good, a service or an idea. The
product mix has the following important components: Brand, Style, colour, design, product
line, Package, warranty etc. The concept of product also includes the extended product or

what is offered to the customers by way of after sale services, handling complaints,
availability of spare parts etc.
• Price mix: Price represents the value of a product expressed in terms of money it is the
amount of money customers have to pay to obtain the product. The price mix is concerned
with fixing a reasonable price to the product or services that covert’s the cost and distribution
expenses as well gets reasonable profits to the manufacture. The basic variables related to
price mix include pricing strategy, pricing policy, and credit terms, Discounts, allowances
etc.,
• Promotion mix: Promotion of product and services include activities that communicate
availability, features, merits etc., of the products to the target customer and persuade them to
buy it. The promotion mix includes personal selling, publicity, advertising and sales
promotion. Most marketing organisations, undertake various promotional activities and spend
money on the promotion of their goods using promotional tools such as advertising, personal
selling etc., the success of a market offer will depend on how well these ingredients are mixed
to create superior value for the customers and also achieve their sale and profit objective.
• Place: Place or physical distribution include activities that make firm’s products available to
the target customers. It is concerned with making available of the goods and services at right
time, at right place, in right quantity. It enables for the smooth flow of goods and services
from the producers to the customers. It creates place, time and possession utilities. The place
mix includes distribution channels like agents, wholesaler’s retailers etc. and physical
distribution which includes transport, warehousing, inventory etc.
Conclusion: Thus process of marketing involves creating a market offering, to satisfy the
needs and wants of the present and potential buyers. From a number of alternatives available a
firm chooses a particular combination to develop a market offering the combination of
variables chosen by a firm to prepare its market offering is called as marketing mix.
24. State any two consumer responsibilities while purchasing, using and consuming goods
and services.
A) Awareness: A consumer must be aware with regard to the availability of various goods
and services such that he can take wise decisions.
B) Looking for Quality Marks: Consumers must always purchase goods and services which
have the concerned quality certification marks.

SECTION- C
Answer any seven of the following questions in 10-12 sentences each.
Each question carries 4 marks. (7x 4 = 28)
25. Discuss the significance of Principles of Management by explaining any four points.
A. Providing mangers with useful insight into reality: The principle of management
provide the managers with useful insight into reality world situation. They add to their
knowledge ability and understanding of managerial situation.
B. Scientific decisions: Management principle helps in thoughtful decision-making

management decision taken on the basis of principle is free from bias and prejudices. It is
based on the objective assessment of the situation.
C. Meeting changing environment requirement: management principle being flexible help

managers to meet changing requirement of the environment.
D. Fulfilling social responsibility: Management principles also help mangers to fulfil the
social responsibility of the business.
E. Ex: The principle of Equity is fair wages to employees.
26. Explain briefly any four features of Business environment.
A. Totality of external forces: Business environment is the sum total of all things external to
business firms.
B. Specific and general forces: Business environment includes both specific and general
forces. Specific forces such as customers, suppliers, competitors affect individual’s
enterprise directly and immediately in day to day working.
C. General forces such as social, political, legal conditions affect an individual’s directly.
D. Dynamic nature: Business environment is dynamic in nature. It keeps on changing.
E. Ex: There may be shift in customer’s preferences.
F. Uncertainty: Business environment is largely uncertain in some areas like information

technology and fashion industry.
27. Briefly explain any four limitations of Planning.
A. Planning Leads to Rigidity
• The plans are rigid in nature and have to be complied with throughout the organisation.
• Such rigidity of plans may be internal as well as external.
• Internal rigidity relates to plans, policies, programs, rules, and methods, etc.
• External rigidity relates to political, industrial, technological, legal and economic changes,
etc.

• Example: A super speciality hospital has fine branches in a city. Whatever the top
management of the hospital decides the head of the branch of the hospital and their
subordinates have to follow. Though on occasions they know they could have done better
on their own but the plan laid out provides rigidity to their approach.
(B) Planning May Not Work in Dynamic Environment
• The environment in which a business survives is dynamic as it keeps on changing.

• It is difficult for an organisation to access future trends, the taste of customers, natural
calamity, competitors’ policies and effects of changes in the different components of the
environment.
• The organisation has to constantly adapt itself to changes because it is difficult to forecast
the future changes with absolute accuracy.
• The dynamic environment may sometimes lead to failure of plans.
• Example: Nestle, a very successful producer was very proactive in deciding strategies for
Maggi noodles. Maggi noodles were in a lot of demand but they were off the shelf due to
political and legal dimensions. This was due to the high content of lead in Maggi noodles.
(C) Planning Reduces Creativity
• Planning is mostly done by the top management and other members

• like middle and lower levels of management have to follow these plans.
• They can’t deviate or change the plans made by their seniors.
• Under such circumstances, employees become orders following machines and don’t
involve creative thinking from their side.
• Such rigidity to comply with the laid plans kills the creativity of some talented persons.
• Example: The need for a branch of a renowned shoe manufacturing company sees a lot of
scope in customized shoes. The top management is not interested in this idea as the
company manufactures standardised shoes.
(D) Planning Involves Huge Cost
• Formulation of plans can be too much costly because there is a lot of time and money is
involved.
• Some costs are incidental in nature like- expenses on boardroom meetings, discussions
with professional experts and preliminary investigations to find out the feasibility of the
plan.
• Checking the accuracy of facts and scientific calculations may involve lots of time.
• Sometimes, cost incurred may not justify the benefits derived from the plans; it may leave
a harmful effect on the enterprise.
• Example: Companies like IBM spend a lot of research. Many world-class levels give their
advice to this company and change their fee. However, without so much of painstaking
such a huge company will not be able to sustain itself. So, planning in case of IBM
becomes necessary.

(E) Planning is a Time-consuming Process:
• Planning is a very lengthy process as it consumes a lot of time for collection, analysis, and
interpretation of data.
• Due to such a lengthy process, sometimes decisions get delayed, opportunities are lost and
there is not much time left for the implementation of plans.
• Example: Health is wealth Ltd. plans to organise 25 health check-up camps on the World
Health Day and send a requisition to the top management, but management could send its
approval just a day before and the sales manager could organise only 5 camps and thus
huge opportunity is lost. Here the implementation was delayed.
28. Explain any four types of tests used for selection of employees
After screening the applications, eligible candidates are asked to appear for selection tests.
The following tests are usually conducted to measure the intelligence, aptitude,
proficiency, personality etc.
• Intelligence tests: These tests are used to judge the mental capacity of the applicant.
Intelligence tests evaluate the ability of an individual to understand instructions and make
decisions.
• Aptitude tests: Aptitude means the potential which an individual has for learning new
skills. Aptitude test indicate the person’s capacity and his potential for development.
• Trade or proficiency tests: These tests are designed to measure the skills already acquired
by the individuals. They measure the level of knowledge and proficiency in the area of
profession or technical training.
• Personality tests: These tests probe for the overall qualities of a person as a while. They
provide clues to a person’s emotional reactions, maturity level, value system etc.
• Interest tests: These tests identity the areas in which a candidate has special concern,
fascination; involvement etc. These tests suggest the nature of job liked by a candidate
which may bring him job satisfaction.
29. 'A good control system helps an organization in many ways' - Justify this statement
with any four points.
Control is an indispensable function of management. A good control system helps an

organisation in the following ways:
• It helps in accomplishing organizational goals: It helps in proper implementation of

plans and thereby contributes to achieve the organizational goals. It also helps in finding
out deviations immediately and to take corrective actions.
• It helps in judging accuracy of standards: A good control system enables management

to verify whether the standards set are accurate and objective. Thus, it helps to review and
revise the standards, if necessary.

• It helps in making efficient use of resources: Controlling helps to reduce wastage and
spoilage of resources. Thus, it ensures that resources are used in the most effective and
efficient manner.
• It helps in improving employee motivation: A good control system motivates the

employees and helps them to give better performance by enabling them to know well in
advance what they are expected to do and what are the standards of performance.
• It helps in ensuring order and discipline: Controlling creates an atmosphere of order and
discipline in the organisation. It helps to minimize dishonest behaviour on the part of the
employees by keeping a close check on their activities.
• It helps in facilitating coordination in action: By providing direction to all activities and

efforts for achieving organizational goals, controlling coordinates all the activities in the
organisation.
30. Explain any four factors affecting financing decisions.
A. Cost: The cost of raising funds through different sources is one of the factors affecting
financing decision. Usually finance manager chooses a source which is cheapest.
B. Risk: It is associated with each source; it has to be evaluated and the source with least risk
should be preferred.
C. Floatation Cost: The floatation rising cost are to be considered. The sources with lower
floatation cost are to be considered.
D. Cash flow position of the company: An enterprise with stronger cash flow position can
go for debt financing than funding through equity.
31. Briefly explain any four factors affecting the Fixed Capital requirements of an
organisation.
A. Nature of business: It determines the amount of fixed capital requirement to a great

extent.
Ex: A trading concern needs lower investment on fixed assets while manufacturing
concern requires more fixed capital to be invested on fixed assets.
B. Scale of operation: A business concern with large scale operations requires more fixed
capital as it needs bigger plant, more space etc.
C. Technology upgradation: The organisation using assets which are prone to obsolescence
require higher fixed capital to purchase new asset.
D. Diversification: A concern which choose to diversify its production requires more fixed
capital.

32 Discuss briefly any four differences between Selling and Marketing.
Basis Selling Marketing

Scope It is only part of marketing process. It is a wider term and includes selling also. It
It is limited to exchange of goods covers all the activities concerned with
or services for some consideration. identifying and satisfying the wants of the
customers.
Focus It focuses on transfer of title of It focuses on the needs of customers.
goods from seller to buyers.
Objective It aims to maximise profit through It aims to earn profit through customer
increase in sales volume. satisfaction.
Start and It starts after production and end It starts much before production continues
End with the sale of the product. even after sale.
33. Explain briefly any four objections against advertising
1. Adds to cost: Some argue that advertising unnecessarily adds to the cost of the product,
which is ultimately passed on the buyers in the form of high prices.
2. Undermines social values: Another important criticism of advertising is that it

undermines social values and promotes materialism. It breeds discontent among people
when they come to know about new products and feel dissatisfied with their present
situation.
3. Confuses the Buyers: So many products are being advertised which makes similar claims
that the buyer gets confused as to which one is true and which one should be relied upon.
4. Encourages sale of inferior goods: Advertising does not distinguish between superior and
inferior products. Hence it persuades people to buy even the inferior products.
5. Some advertisements are in bad taste: some advertisements are in bad taste. These show
something which is not approved by some people. They also distort the relationship like
employer employee and are quite offensive.
34. Explain any four rights of Consumers
The consumer protection council set up under the Act is intended to promote and protect
the various rights of consumers which are as follows:
1. Right to Safety: The consumer has a right to be protected against goods and services
which are hazardous to life and health.
2. Right to be informed: The consumer has a right to have complete information about the
product he intends to buy including its ingredients, date of manufacture, price, and
directions for use etc.
3. Right to Choose: The consumer has the freedom to choose from a variety of products at
competitive prices. This implies that the marketers should offer a wide variety of products
to allow the consumer to make a choice.

4. Right to be heard: The consumer has a right to file a complaint and to be heard in case of
dissatisfaction with a good or a service.
5. Right to seek Redressal: The consumer has a right to get relief in case the product or
service falls short of his expectations.
6. Right to Consumer Education: The consumer has a right to acquire knowledge and to be
a well-informed consumer throughout life.
SECTION- D
V. Answer any four of the following questions 20-25 sentences each.
Each question carries 8 marks. (4x8= 32)
A. Management is a goal-oriented process: Every organisation is established achieve

certain goals of the organisation.
B. Management is all pervasive: the activities involved in managing an enterprise are

common to all organisations whether economic social or political what manager do in
India Japan or Germany is the same.
C. Management is multidimensional: management is complex activity which has three main

things
i. Management of people: Management is concerned with getting work done through

people therefore management takes necessary steps to recruit train up and motivate the
staff.
ii. Management of work: all organisation exists for the performance of some work
example in a factory a product is manufactured.
iii. Management of operation: management will ensure that various operations of the
business such as finance purchase production is solved.
D. Management is a continuous process: management is a continuous process consisting of

series of functions such as planning organising staffing directing and controlling.
E. Management is a group activity: management is a group effort. All managers and their
subordinates work as root in order to achieve the objectives of the organisation.
F. Management is an intangible force: management is an intangible force that cannot be

seen but its presence can be felt in terms of increased production, increased sales,
revenues, employee satisfaction and wealth creation.

36. What is Decentralisation? Explain the importance of Decentralisation.
Decentralisation is referred to as a form of an organisational structure where there is the

delegation of authority by the top management to the middle and lower levels of
management in an organisation.
Importance of Decentralisation
1) Rapid decision making – Most of the decisions are taken on the spot, and approval from
the higher authority is not required. The ability to make a prompt decision allows an
organisation to function its operation quickly and effectively.
2) Administrative development – The decentralisation process questions the manager’s
judgement and techniques, when responsibility and challenges to develop solutions are
given to them. This questioning method grows confidence, encourages self-reliance, and
make them a good decision-maker resulting in the development of the organisation.
3) Development of executive skills – It allows the employee to perform task individually,
giving them invaluable exposure. This individual performance creates an environment
where an individual can enhance their expertise, take ownership & more significant
responsibilities, and be suitable for promotion.
4) Promotes growth – Decentralisation also allows the heads of the department to work
independently. This independence helps the department to grow, have a healthy
competition between other departments. Ultimately, the competition will lead to an
improvement and enhancement in productivity.
5) Higher control – It also evaluates and reviews the performances of each department and
gives them a comprehensive perspective of their work. However, controlling is the biggest
challenge of decentralisation and stabilised management and scorecard are being
developed.
38. Explain the four methods of 'on-the-job' and any four methods of 'off-the-job training.
Training is any process by which aptitude skill and ability of employees to perform specific
jobs are increased. On-the-Job training methods refer to the methods that are
applied to the workplace, while the employee is actually working and he will be
trained in actual working place.
On-the-job training Methods:

a) Apprenticeship: Apprenticeship is a system of training a new generation of practitioners
of a skill. This method of training is in vogue in those trades, crafts and technical fields in
which a long period is required for gaining proficiency. The trainees serve as apprentices
to experts for long periods. They have to work in direct association with and also under
the direct supervision of their masters.
b) Coaching: Coaching is a one-to-one training. It helps in quickly identifying the weak

areas and tries to focus on them. It also offers the benefit of transferring theory learning
to practice. The biggest problem is that it perpetrates the existing practices and styles. In
India most of the scooter mechanics are trained only through this method.
c) Internship Training: It is a joint programme of training in which
educational institutions and business firms cooperate. Selected candidates
carry on regular studies for the prescribed period. They also work in some
factory or office to acquire practical knowledge and skills.

d) Job Rotation: It is the process of training employees by rotating them through a series of
related jobs. Rotation not only makes a person well acquainted with different jobs, but it
also alleviates boredom and allows to develop rapport with a number of people. Rotation
must be logical
Off-the-Job methods are used far away from the real workplace. It is a concept
of learning before doing.
Off-the-job training methods:
a) Case Study: Case studies are complex examples which give an insight into the context of
a problem as well as illustrating the main point. Case Studies are trainee cantered activities
based on topics that demonstrate theoretical concepts in an applied setting.
b) Vestibule Training: Vestibule Training is a term for near-the-job training, as it offers

access to something new (learning). In vestibule training, the workers are trained in a
prototype environment on specific jobs in a special part of the plant.
c) Lectures and Conferences: Lectures and conferences are the traditional and direct
method of instruction. Every training program starts with lecture and conference. It’s a
verbal presentation for a large audience. However, the lectures have to be motivating and
creating interest among trainees. The speaker must have considerable depth in the subject.
In the colleges and universities, lectures and seminars are the most common methods used
for training.
d) Computer Modelling: It simulates the work environment by programming a

computer to imitate some of the realities of the job and allows learning to take
place without the risk or high costs that would be incurred if a mistake were
made in real life situation.
38. Explain the qualities of a good leader.
• Physical features: Physical features like height, weight, health, appearance determine the
physical personality of an individual. It is believed that good physical features attract
people.
• Knowledge: A good leader should have required knowledge and competence. Only such
person can instruct subordinates correctly and influence them.
• Integrity: A leader should possess high level of integrity and honesty. He should be a role
model to others regarding the ethics and values.
• Initiative: A leader should have courage and initiative. He should not wait for
opportunities come to his way, rather he should grab the opportunity and use it to the
advantage of organization.
• Communication skills: A leader should he a good communicator. He should have the
capacity to clearly explain his ideas and make the people to understand his ideas. He
should be not only a good speaker but also a good listener, teacher, counsellor and
persuader.

• Motivation skills: A leader be an effective motivator. The should understand the needs of
people and motivate them through satisfying their needs.
• Self-Confidence: A leader should have high level of self-confidence. He should not lose
his confidence even in most difficult times. In fact, if the leader lacks self-confidence, he
cannot provide confidence to his followers.
• Decisiveness: Leader should be decisive in managing the work. Once he is convinced

about a fact, he should be firm and should not change opinions frequently.
• Social skills: A leader should be sociable and friendly with his colleagues and followers.
He should understand people and maintain good human relations with them.
39.What is Stock Exchange? Explain the functions of Stock Exchange.
Stock Exchange means anybody of individuals, whether incorporated or not, constituted

for the purpose of assisting, regulating or controlling the business of buying and selling or
dealing in securities. The following are the important functions of stock exchange:
a. Providing liquidity and marketability to existing securities: The basic function of a

stock exchange is the creation of a continuous market where securities are bought and
sold. It gives investors the chance to dis-invest and reinvest. This provides both liquidity
and easy marketability to already existing securities in the market.
b. Pricing of Securities: share prices on a stock exchange are determined by the forces of
demand and supply. A stock exchange is a mechanism of constant valuation through
which the prices of securities arc determined. Such a valuation provides important instant
information to both buyers and sellers in the market.
c. Safety of Transaction: The membership of a stock exchange is well regulated and its
dealings are well defined according to the existing legal framework. This ensures that the
investing public gets a safe and fair deal on the market.
d. Contributes to Economic Growth: A stock exchange is a market in which existing

securities are resold or traded. Through this process of disinvestment and reinvestment,
savings get channelized into their most productive investment avenues. This leads to
capital formation and economic growth.
e. Spreading of Equity Cult: The stock exchange can play a vital role in ensuring wider
share ownership by regulating new issues, better trading practices and taking effective
steps in educating the public about investments.
f. Providing scope for speculation: The stock exchange provides sufficient scope within
the provisions of law for speculative activity m a restricted and controlled mannet. It is
generally accepted that a certain degree of healthy speculation is necessary to ensure
liquidity and price continuity in the stock market.
g. Regulates company management: Listed companies have to comply with rules and
regulations of concerned stock exchange authorities. Thus. stock exchanges put the
burden on the company to have healthy practices.

40. Explain any eight functions of Marketing.
Marketing is concerned with exchange of goods and services from producers to consumers
in such a way that maximises the satisfaction of customers’ needs. The various functions of
marketing include.
i. Gathering and Analysing marketing information: One of the important functions of a

marker is to gather and analyse market information. This is necessary to identify the needs
of the customers and take various decisions for the successful marketing of the product and
services.
ii. Marketing planning: Another important area of work of a marketer is to develop

appropriate marketing plans so that the marketing objectives of the organisation can be
achieved A complete marketing plan covering aspects like plan for increasing production.
promotion of the products etc., and action programmes to achieve these objectives are to be
developed.
iii. Product Designing and Development: The design of the product contributes to making the
product attractive to the target customers: A good design can improve performance of a
product and also give it a competitive advantage in the market.
iv. Standardisation and Grading: Standardisation refers to producing goods of Pre-

determined specifications, which helps in achieving uniformity and consistency in the
output. Standardisation ensures the buyers that goods confirm to the pre-determined
standards of quality, price and packaging. Grading is the process of classification of
products into different groups, on the basis of some of the important characteristics such as
quality, size etc., Grading ensures that goods belong to a particular quality and helps in
realising higher prices for high quality output.
v. Packaging and Labelling: Packaging refers to designing and developing the package for
the products. Labelling refers to designing and developing the label to be put on the
package. Packaging and labelling have become so important in marketing that these are
considered as the pillars of marketing. Packaging protects the products and also acts as an
effective promotion tool.
vi. Branding: brand name helps in creating product differentiation. It provides basis for
distinguishing the product of a Firm with that of the competitor- Branding also helps in
building customer’s loyalty and promotes sales of a product.
vii. Customer support services: These include after sales services, handing customer
complaints procuring credit services, maintenance services, technical services and consumer
information. All these services aim at providing maximum satisfaction to the customers.
Which is the key to marketing success in modern days.
viii. Pricing of product: Price of product refers to the amount of money customers have to pay
to obtain a product the marketers have to properly analyse the factors determining the price
of a product and then take several other decision such as setting the pricing objectives,
determining the pricing strategies, determining the price and changing the prices etc.

ix. Promotion: It involves informing the customers about the firms product, its lecture etc and
persuading them to buy these products. The four important methods of promotion include
advertising personal selling, publicity and sales promotion. Deciding the budget for
promotion, promotional tools to be used etc, are important decisions to be taken by a
marketer in this area.
x. Physical Distribution: The two major areas under this function include
xi. Decision regarding channels of distribution
xii. Physical movement of the product from the place of its production to the ultimate
consumer’s place. Managing Inventory, storage and warehousing, transportation etc, are key
areas under this physical distribution.
xiii. Conclusion: The modern function of marketing emphasises more on customer satisfaction.
Customer satisfaction itself leads to survival and growth of an organisations.

SECTION –E
(PRACTICAL-ORIENTED QUESTIONS)
V. Answer any two of the following questions. Each question carries 5 marks: (2 x 5 = 10)
41. Assuming that you are the manager of an organisation, draw a neat diagram of different
levels of management to specify that Authority Responsibility Relationships create different
levels of Management.
42) As a HR manager, list out any ten sources of recruitment, to fill in the vacancies in your
organisation.
SOURCES OF RECRUITMENT
INTERNAL SOURCE EXTERNAL SOURCE
PROMOTIONS DIRECT RECRUITMENT
ADVERTISEMENT
TRANSFERS EMPLOYMENT EXCHANGE
PLACEMENT AGENCIES
CAMPUS RECRUITMENT
LABOUR CONTRACTORS
WEB PUBLISHING
CASUAL CALLERS

43. As a Marketing manager suggest any five sales promotion activities to boost up the sales.
• Rebate: Offering products at special prices
• Discount: Offering products at less than list price
• Refunds: Refunding a part of price paid by customer
• Product Combinations: Offering another product as gift along with the purchase of a
product.
• Quantity Gift: Offering extra quantity of the product
**********

2021 MODEL QUESTION PAPER 1 WITH SOLUTUON
SECTION - A
choice questions, write the serial number/alphabet of the correct choice and write answer
corresponding to it. Each question carries 1 mark: (10*1=10)
1. Management is _______
a. an art
b. a science
c. both art and science
d. neither
c. both art and science
2. Who is the father of general management?
▪ Henry Fayol.
3. Give the meaning of rule.
Rules are specific statements that inform what is to be done. They are simplest type of
plans.
4. A network of a social relationship that arises spontaneously due to interaction at

work is called__________
a. Formal Organization
b. Informal Organization
c. Decentralization
d. Delegation
b. Informal Organization
5. State any one internal source of recruitment.
Transfer or Promotion is internal source of recruitment.
6. Grapevine is__________
a. Formal Communication
b. Barrier to Communication
c. Lateral Communication
d. Informal Communication
d. Informal Communication

7. What is ‘Standard’?
Standards are the criteria against which actual performance would be measured.
Standards become basis for comparison and the manager insists on following of
standards.
8. Give the meaning of Capital Structure?
Capital structure refers to the mix between owners and borrowed funds.
These shall be referred as equity and debt in the subsequent text.
9. The settlement cycle in NSE is________?

a. T+5
b. T+3
c. T+2
d. T+1
c. T+2
10. State anyone Marketing Philosophy.
Production Concept or Product Concept, Selling Concept, Marketing Concept and Societal
Concept. (Anyone)
11. State any one regulation which provides legal protection to the consumers.
The Consumer Protection Act 1986 is one regulation which provides legal protection to the
consumers.
12. Name any one type of grapevine network?
Single strand network
SECTION– B
II. Answer any ten of the following questions in two or three sentences each.
Each question carries 2 marks: (10x2=20)
According to Robert L. Trewelly and M. Gene Newport, “Management is defined as the

process of planning, organizing, actuating and controlling an organization’s operations in
order to achieve coordination of the human and material resources essential in the effective
and efficient attainment of objectives.”
14. What is Scalar Chain?

The formal lines of authority from highest to lowest ranks are known as scalar chain. In
other words, it is the chain of superiors ranging from top management to the lowest rank
which means there should be a clear line of authority from top to bottom linking all
managers at all levels.

15. Give the meaning of Business Environment.
The term ‘business environment’ means the sum of all individuals, institutions and other
forces that are outside the control of a business enterprise but that may affect its
performance. As one writer has put it– “Just take the universe, subtract from it the subset
that represents the organization, and the remainder is environment”.
16. State any two features of Planning.
Two features of Planning are.

a. Planning focuses on achieving objectives.
b. Planning is a primary function of management.
17. Differentiate between Delegation and Decentralization by taking any two

factors as basis.
The major differences between delegation and decentralization are as follows.
BASIS DELEGATION DECENTRALIZATION

Nature Delegation is a compulsory. Act Decentralization is an optional
because no individual can perform all policy decision. It is done at the
tasks on his own. discretion of the top management.
Freedom of More control by superiors hence less Less control over executives hence
action freedom to take own decisions. greater freedom of action.
Status It is a process followed to share tasks. It is the result of the policy decision
of the top management.
Scope It has narrow scope as it is. Limited It has wide scope as it implies
to superior and his immediate extension of delegation to the lowest
subordinate. level of management.
Purpose To lessen the burden of the manager. To increase the role of the
subordinates in the organization by
giving them more autonomy.
18. What do you understand by Supervision?
Supervision can be understood as the process of guiding the efforts of

employees and other resources to accomplish the desired objectives. It means
overseeing what is being done by subordinates and giving instructions to
ensure optimum utilization of resources and achievement of work targets.
19. What is Budgetary Control?
Budgetary control is a technique of managerial control in which all operations

are planned in the form of budgets and actual results are compared with

budgetary standards. This comparison reveals the necessary actions to be taken
so that organizational objectives are accomplished.
20. State the twin objectives of Financial Planning.
a. To ensure availability of funds whenever these are required.

b. To see that the firm does not raise resources unnecessarily.
21. How do you describe Marketing Mix?
The marketing mix refers to the ingredients or the tools or the variable which the marketer
mixes in order to interact with a particular market in other words marketing mix means it is
the combination of Product mix, Place mix, Price mix and Promotion mix.
According to Philip Kotler, “Marketing mix are the set of marketing tools that firm uses to
pursue its marketing objectives in the target market.”
22. Write any two Rights of Consumers.
Consumer protection Act, 1986 has provided six rights to the consumer, which are as
follows:
a. Right to Safety: The consumer has a right to be protected against goods and
services which are hazardous to life and health. For instance, electrical
appliances which are manufactured with substandard products or do not
conform to the safety norms might cause serious injury. Thus, consumers are
educated that they should use electrical appliances which are ISI marked
as this would be an assurance of such products meeting quality
specifications.
b. Right to be Informed: The consumer has a right to have complete

information about the product he intends to buy including its
ingredients, date of manufacture, price, quantity, directions for use, etc. It
is because of this reason that the legal framework in India requires the
manufactures to Provide such information on the package and label of
the product.
23. Give the meaning of mental revolution as propounded by Taylor.
According to Taylor, mental revolution means a complete transformation in the

attitude between management and workers. Both should realize that they need each other.
24. What is job rotation?
Job Rotation is a management approach where employees are shifted between two or more
assignments or jobs at regular intervals of time in order to expose them to all verticals of
an organization.

SECTION – C
III. Answer any seven of the following questions in 10-12 sentences each.
Each question carries 4 marks: (7x4=28)
25. Explain F.W. Taylor’s Scientific Management Principles.
The following are the principles of management contributed by F.W. Taylor.
a. Science does not rule of thumb: -Taylor believed that there was only one best method
to maximize efficiency. One method should be developed through study and analysis, it
should substitute “Rule of thumb” throughout the organization scientific method
involved investigation of traditional methods through work study, unifying the best
practices and developing a standard method.
b. Harmony not Discard: -Taylor emphasized that there should be complete harmony
between the management and workers. Both should realize that each one is Important.
To achieve this state, Taylor called for complete mental revolution on the part of both
management and workers should transform their thinking.
c. Co-operation, not individualism: -There should be complete co-operation between the

labour and the management instead of individualism. This principle is states that
competition should be replaced by co-operation both should realize that they need each
other. Employees should be rewarded for their suggestions which results in reduction of
costs and if any important decisions are taken into confidence.
d. Development of each person to his or her greatest efficiency and prosperity: -

According to Taylor each person should be scientifically selected. Then work assigned
should suit her/his physical, mental intellectual capabilities. To increase efficiency, they
should be given the required training. Efficient employees would produce more and
earn more. This will ensure their greatest efficiency and prosperity for both company
and workers.
26. Explain any four points to explain how important the understanding of Business
Environment is for the managers.
The importance of business environment and its understanding by managers are as follows:
a. It enables the firm to identify opportunities and getting the first mover advantage:
Opportunities refer to the positive external trends or changes that will help affirm to
improve its performance. Environment provides numerous opportunities for business
success. Early identification of opportunities helps an enterprise to be the first to exploit
them instead of losing them to competitors.
b. It helps the firm to identify threats and early warning signals: Threats refer to the
external environment trends and changes that will hinder a firm’s performance. Besides
opportunities, environment happens to be the source of many threats. Environmental

awareness can help managers to identify various threats on time and serve as an early
warning signal.
c. It helps in tapping useful resources: Environment is a source of various resources for

running a business. To engage in any type of activity, a business enterprise assembles
various resources called inputs like finance, machines, raw materials, power and water,
labour, etc., from its environment including financiers, government and suppliers.
d. It helps in coping with rapid changes: Today’s business environment is getting

increasingly dynamic where changes are taking place at a fast pace. It is not the fact of
change itself that is as important as the pace of change.
27. Explain any four limitations of Planning.

Limitation of Planning are as follows: -
a. Planning leads to rigidity: In an organization, a well-defined plan is drawn up with

specific goals to be achieved within a specific time frame. These plans then decide the
future course of action and managers may not be able to change it. This kind of rigidity
in plans may create difficulty. Managers need to be given some flexibility to be able to
cope with the changed circumstances.
b. Planning may not work in a dynamic environment: The business environment is

dynamic, nothing is constant. The environment consists of several dimensions,
economic, political, physical, legal and social dimensions. The organization must
constantly adapt itself to changes. It becomes difficult to accurately assess future trends
in the environment if economic policies are modified or political conditions in the
country are not stable or there is a natural calamity. Competition in the market can also
upset financial plans, sales targets may have to be revised and, accordingly, cash
budgets also need to be modified since they are based on sales figures.
c. Planning reduces creativity: Planning is an activity which is done by the top

management. Usually, the rest of the members just implement these plans. Therefore,
middle management and other decision makers are neither allowed to deviate from
plans nor are they permitted to act on their own. Thus, much of the initiative or
creativity inherent in them also gets lost or reduced. Most of the time, employees do not
even attempt to formulate plans. They only carry out orders. Thus, planning in a way
reduces creativity since people tend to think along the same lines as others. There is
nothing new or innovative.
d. Planning involves huge costs: When plans are drawn up huge costs are involved in
their formulation. These may be in terms of time and money for example, checking
accuracy of facts may involve lot of time. Detailed plans require scientific calculations
to ascertain facts and figures. The costs incurred sometimes may not justify the benefits
derived from the plans. There are several incidental costs as well, like expenses on
boardroom meetings, discussions with professional experts and preliminary
investigations to find out the viability of the plan.
e. Planning is a time-consuming process: Sometimes plans to be drawn up take so much

of time that there is not much time left for their implementation.

f. Planning does not guarantee success: The success of an enterprise is possible only
when plans are properly drawn up and implemented. Any plan needs to be translated
into action or it becomes meaningless. Managers tend to rely on previously tried and
tested successful plans.
28. Explain any four important tests used for the selection of employees.
a. Intelligence Tests: Intelligence tests measure general ability for intellectual

performance. The core concept underlying in intelligence test is mental age. It is
presumed that with physical age, intelligence also grows. Exceptions to this may be
there.
b. Aptitude Test: Aptitude tests measure ability and skills of the teste. These tests
measure and indicate how well a person would be able to perform after training and not
what he/she has done. Thus, aptitude tests are used to predict the future
ability/performance of a person.
c. Interest Tests: These tests are designed to discover a person’s area of interest, and to
identify the kind of work that will satisfy him. Interest is a prerequisite to successfully
perform some tasks. These tests owe their origin to the vocational efforts.
d. Achievement Tests: Achievement / Proficiency tests measure a person’s potential in

each area/job. In other words, these tests measure what a person can do based on skill or
knowledge already acquired by him/her.
e. Personality Tests: These tests are also known as ‘personality inventories. These tests
are designed to measure the dimensions of personality i.e., personality traits such as
interpersonal competence, dominance- submission, extroversions-introversions, self-
confidence, ability to lead and ambition.
29. Explain briefly the steps involved in Controlling Process.
a. Setting performance standards
b. Measurement of actual performance
c. Comparison of actual performance with standards
d. Analysing deviations
e. Taking corrective action

Step 1: Setting Performance Standards: The first step in the controlling
process is setting up of performance standards. Standards are the criteria against
which actual performance would be measured. Thus, standards serve as
benchmarks towards which an organization strives to work. Standards can be
set in both quantitative as well as qualitative terms. For instance, standards
set in terms of cost to be incurred, revenue to be earned, product units to be
produced and sold, time to be spent in performing a task, all represents
quantitative standards. Sometimes standards may also be set in qualitative
terms. Improving goodwill and motivation level of employees are examples of
qualitative standards.
Step 2: Measurement of Actual Performance: Once performance standards
are set, the next step is measurement of actual performance. Performance should
be measured in an objective and reliable manner. There are several techniques
for measurement of performance. These include personal observation, sample
checking, performance reports, etc. As far as possible, performance should be
measured in the same units in which standards are set as this would make their
comparison easier.
Step 3: Comparing Actual Performance with Standards: This step involves
comparison of actual performance with the standard. Such comparison will reveal
the deviation between actual and desired results. Comparison becomes easier
when standards are set in quantitative terms. For instance, performance of a
worker in terms of units produced in a week can be easily measured against the
standard output for the week.
Step 4: Analysing Deviations: Some deviation in performance can be
expected in all activities. It is, therefore, important to determine the acceptable
range of deviations. Also, deviations in key areas of business need to be attended
more urgently as compared to deviations in certain insignificant areas. Critical
point control and management by exception should be used by a manager in this
regard.
Step 5: Taking Corrective Action: The final step in the controlling process is
taking corrective action. No corrective action is required when the deviations are
within acceptable limits. However, when the deviations go beyond the
acceptable range, especially in the important areas, it demands immediate
managerial attention so that deviations do not occur again and standards are
accomplished.
30. Explain any four factors affecting Working Capital Requirements of a
business.
The major factors affecting the working capital requirement of an organization are as
follows.
a. Nature of Business: The basic nature of a business influences the amount of working
capital required. A trading organization usually needs a lower amount of working capital
compared to a manufacturing organization. This is because there is, usually no processing,
therefore, there is no distinction between raw materials and finished goods.

b. Scale of Operations: For organizations which operate on a higher scale of operation, the
quantum of inventory, debtors required is generally high. Such organizations, therefore,
a lower scale.
c. Business Cycle: Different phases of business cycles affect the requirement of working
capital by a firm. In case of a boom, the sales as well as production are likely to be higher
and therefore, higher amount of working capital is required. As against this the
requirement for working capital will be lower during period of depression as the sales as
well as production will be low.
d. Seasonal Factors: Most business have some seasonality in their operations. In peak
season, because of higher level of activity, higher amount of working capital is required.
As against this, the level of activity as well as the requirement for working capital will be
lower during the lean season.
e. Production Cycle: Production cycle is the time span between the receipt of raw material
and their conversion into finished goods. Some businesses have a longer production cycle
while some have a shorter one.
f. Credit Allowed: Different firms allow different credit terms to their customers. These
depend upon the level of competition that a firm face as well as the credit worthiness of
their clientele. A liberal credit policy results in higher amount of debtors, increasing the
requirement of working capital.
g. Credit Availed: Just as a firm allows credit to its customers it also may get credit from its
suppliers. To the extent, it avails the credit on its purchases, the working capital
requirement is reduced.
h. Operating Efficiency: Firms manage their operations with varied degrees of efficiency.
For example, a firm managing its raw materials efficiently may be able to manage with a
smaller balance. This is reflected in a higher inventory turnover ratio.
i. Availability of Raw Material: If the raw materials and other required materials are
available freely and continuously, lower stock levels may suffice. If, however, raw
materials do not have a record of un-interrupted availability, higher stock levels may be
required.
j. Growth Prospects: If the growth potential of a concern is perceived to be higher, it will

require higher amount of working capital so that is able to meet higher production and
sales target whenever required. (Any four)

31. Briefly explain any four differences between Capital Market and Money
Market
The major differences between Capital market and Money market

FACTOR CAPITAL MARKET MONEY MARKET
Maturity Period Capital market deals in the The money market deals in the
lending and borrowing of long- lending and borrowing of short-
term finance (i.e., for more than term finance (i.e., for one year
one year). or less)
Credit Instruments On the other hand, the main The main credit instruments of
instruments used in the capital the money market is call
market are stocks, shares, money, collateral loans,
debentures, bonds, securities of acceptances, bills of exchange.
the government.
Nature of Credit
Instruments Instruments are heterogeneous Instruments are Homogenous
Institutions Important institutions of the Important institutions operating
capital market is stock in the' money market are
exchanges, commercial banks central banks, commercial
and nonbank institutions, such banks, acceptance houses,
as insurance companies, nonbank financial institutions,
mortgage banks, building bill brokers, etc.
societies, etc.
Purpose of Loan The capital market, on the other The money market meets the
hand, caters the long-term short-term credit needs of
credit needs of the industrialists business: it provides working
and provides fixed capital to capital to the industrialists
buy land, machinery, etc.
Risk The risk is much greater in The degree of risk is small in the
capital market money market
Basic Role The basic role of capital market The basic role of money market
is that of putting capital to is that of liquidity adjustment
work, preferably to long-term,
secure and productive
Employment
32. Explain any four factors that affect the fixation of price of a product.
The important factors affecting price determination are as follows.
a. Product Cost: One of the most important factors affecting price of a product or service is
its cost. This includes the cost of producing, distributing and selling the product. The cost
sets the minimum level or the floor price at which the product may be sold. Generally, all
marketing firms strive to cover all their costs, at least in the long run.
b. The Utility and Demand: While the product costs set the lower limits of the price, the
utility provided by the product and the intensity of demand of the buyer sets the upper limit
of price, which a buyer would be prepared to pay. In fact, the price must reflect the interest
of both the parties to the transaction—the buyer and the seller.

c. Extent of Competition in the Market: Between the lower limit and the upper limit where
would the price settle down? This is affected by the nature and the degree of competition.
The price will tend to reach the upper limit in case there is lesser degree of competition
while under conditions of free competition, the price will tend to be set at the lowest level.
d. Government and Legal Regulations: In order to protect the interest of public against
unfair practices in the field of price fixing, Government can intervene and regulate the
price of commodities. Government can declare a product as essential product and regulate
its price.
e. Pricing Objectives: Pricing objectives are another important factor affecting the fixation
of the price of a product or a service. Generally, the objective is stated to be maximize the
profits. But there is a difference in maximizing profit in the short run and in the long run. If
the firm decides to maximize profits in the short run, it will tend to charge maximum price
for its products. But if it is to maximize its total profit in the long run, it would opt for a
lower per unit price so that it can capture larger share of the market and ear n greater
profits through increased sales.
f. Marketing Methods Used: Price fixation process is also affected by other elements of
marketing such as distribution system, quality of salesmen employed, quality and amount
of advertising, sales promotion efforts, the type of packaging, product differentiation,
credit facility and customer services provided. For example, if a company provides free
home delivery, it has some of flexibility in fixing prices. Similarly, uniqueness of any of
the elements mentioned above gives the company a competitive freedom in fixing prices of
its products.
33. Explain any two advantages and any two limitations of Advertising.
Advertising means creating awareness about the product existing in the market or new to
the market for a specified sponsor and it is paid form.
Advantages of Advertising
Advertising, as a medium of communication, has the following merits:
a. Mass Reach: Advertising is a medium through which many people can be reached over a
vast geographical area. For example, an advertisement message placed in a national daily
reaches lakh of its subscribers.
b. Enhancing Customer Satisfaction and Confidence: Advertising creates confidence

amongst prospective buyers as they feel more comfortable and assured about the product
quality and hence feel more satisfied.
c. Expressiveness: With the developments in art, computer designs, and graphics,

advertising has developed into one of the most forceful media of communication. With the
special effects that can be created, even simple products and messages can look very
attractive.

d. Economy: Advertising is a very economical mode of communication if large number of
people are to be reached. Because of its wide reach, the overall cost of advertising gets
spread over numerous communication links established. As a result, the per unit cost of
reach comes low.
Limitations of Advertising
The following are the major limitations of advertising as a tool of promotion:
a. Less Forceful: Advertising is an impersonal form of communication. It is less forceful
than the personal selling as there is no compulsion on the prospects to pay attention to the
message.
b. Lack of Feedback: The evaluation of the effectiveness of advertising message is very

difficult as there is no immediate and accurate feedback mechanism of the message that is
delivered.
c. Inflexibility: Advertising is less flexible as the message is standardized and is not tailor
made to the requirements of the different customer groups.
d. Low Effectiveness: As the volume of advertising is getting more and more expanded it is
becoming difficult to make advertising messages heard by the target prospects. This is
affecting the effectiveness of advertising.
34. State any four responsibilities of consumers while purchasing, using and
consuming goods and services.
A consumer should keep in mind the following responsibilities while
purchasing, using and consuming goods and services.
a. Be aware about various goods and services available in the market so that
an intelligent and wise choice can be made.
b. Buy only standardized goods as they provide quality assurance. Thus, look for
ISI mark on electrical goods, FPO mark on food products, Hallmark on
jewellery etc.
c. Learn about the risks associated with products and services, follow
manufacturer’s instructions and use the products safely.
d. Read labels carefully to have information about prices, net weight,
manufacturing and expiry dates, etc.
e. Assert yourself to ensure that you get a fair deal.
f. Be honest in your dealings. Choose only from legal goods and services
and discourage unscrupulous practices like black-marketing, hoarding
etc.
g. Ask for a cash memo on purchase of goods or services. This would serve as a
proof of the purchase made.
h. File a complaint in an appropriate consumer forum in case of a short coming in
the quality of goods purchased or services availed. Do not fail to take an action
even when the amount involved is small.
i. Form consumer societies which would play an active part in educating
consumers and safeguarding their interests.
j. Respect the environment. Avoid waste, littering and contributing to pollution.

SECTION – D
IV. Answer any four of the following questions in 20-25 sentences each.
Each question carries 8marks: (4x8=32)
1. Management is a goal-oriented process: An organization has a set of basic goals which

are the basic reason for its existence. These should be simple and clearly stated. Different
organizations have different goals. Commonly managerial success is measured by the
extent to which the objectives are achieved.
2. Management is all pervasive: Management is relevant for all types of organization

whether economic, social or political.
3. Management is multidimensional: Management is a complex activity that has three

main dimensions. These are:
4. Management of work: All organizations exist for the performance of some work. In a
factory, a product is manufactured, in a garment store a customer’s need is satisfied and
in a hospital a patient is treated. Management translates this work in terms of goals to be
achieved and assigns the means to achieve it.
Management of people: Human resources are an organization’s greatest asset. Managing

people has two dimensions.
(i) It implies dealing with employees as individuals with diverse needs and behaviour.
(ii) It also means dealing with individuals as a group of people. The task of
management is to make people work towards achieving the organization’s goals,
by making their strengths effective and their weaknesses irrelevant.
5. Management of operations: Every organization has some basic product or service to
provide in order to survive. This requires a production process which has the flow of
input material and the technology for transforming this input into the desired output for
consumption. This is interlinked with both the management of work and the management
of people.
6. Management is a continuous process: The process of management is a series of

continuous, composite, but separate functions (planning, organizing, directing, staffing
and controlling). These functions are simultaneously performed by all managers all the
time.
7. Management is a group activity: An organization is a collection of diverse individuals

with different needs. Every member of the group has a different purpose for joining the
organization. Management implies group of persons working in association for the
achievement of common objectives. The result of group efforts affects all the person of
the group.
8. Management is a dynamic function: Management is a dynamic function and has to

adapt itself to the changing environment. An organization interacts with its external

environment which consists of various social, economic and political factors. In order to
be successful, an organization must change itself and its goals according to the needs of
the environment.
9. Management is an intangible force: Management cannot be seen. One may not see
with the naked eye the functioning of management, but its presence can be felt through
orderliness, enthusiastic employees, and adequate work output. Quite often, the identity
of management is brought in focus by its absence or by the presence of its direct opposite,
mismanagement.
36. What is Organizing? Explain its importance.
‘Organizing is the process of identifying and grouping the work to be performed, defining
and delegating responsibility and authority and establishing relationships for the purpose
of enabling people to work most effectively together in accomplishing objectives.’
The importance of Organizing are as follows:
a. Benefits of specialization: In organizing every individual is assigned apart of total work
and not the whole task. This division of work into smaller units and repetitive performance
leads to specialization. Thus, organizing promotes specialization which in turn leads to
efficient & speedy performance of tasks.
b. Clarity in working relationship: It helps in creating well defined jobs and clarifying the
limits of authority and responsibility of each job. The superior-subordinate relationship is
clearly defined in organizing.
c. Effective Administration: It provides a clear description of jobs and related duties which
helps to avoid confusion and duplication. Clarity in working relationships enables proper
execution of work which results ineffective administration.
d. Optimum utilization of resources: The proper assignment of jobs avoids

overlapping/duplication of work. This helps in preventing confusion and minimizing the
wastage of resources and efforts.
e. Adoption to Change: A properly designed organizational structure is flexible which

facilitates adjustment to changes in workload caused by change in external environment
related to technology, products, resources, and markets.
f. Development of Personnel: Sound organization encourages initiative and relative

thinking on part of the employees. When managers delegate their authority, it reduces their
workload so they can focus on more important issues related to growth & innovation. This
also develops the subordinates’ ability and helps him to realize his full potential.
g. Expansion and growth: It help in growth & diversification of an enterprise by adding

more job positions, departments, products lines, new geographical territories etc.
37. Explain the four methods of On-the-Job and any four methods of Off-the-Job
Training.

On-the-Job training methods refer to the methods that are applied to the
workplace, while the employee is working, and he will be trained in actual
working place.

a) Apprenticeship: Apprenticeship is a system of training a new generation of practitioners
of a skill. This method of training is in vogue in those trades, crafts and technical fields in
to experts for long periods. They must work in direct association with and under the direct
supervision of their masters.
b) Coaching: Coaching is a one-to-one training. It helps in quickly identifying the weak

areas and tries to focus on them. It also offers the benefit of transferring theory learning to
practice. The biggest problem is that it perpetrates the existing practices and styles. In
c) Internship Training: It is a joint program of training in which educational

institutions and business firms cooperate. Selected candidates carry on regular
studies for the prescribed period. They also work in some factory or office to
acquire practical knowledge and skills.
d) Job Rotation: It is the process of training employees by rotating them through a series of
related jobs. Rotation not only makes a person well acquainted with different jobs, but it
also alleviates boredom and allows to develop rapport with several people. Rotation must
be logical.
Off-the-Job methods are used far away from the real workplace. It is a concept of
learning before doing.

a) Case Study: Case studies are complex examples which give an insight into the context
of a problem as well as illustrating the main point. Case Studies are trainee cantered
activities based on topics that demonstrate theoretical concepts in an applied setting.
b) Vestibule Training: Vestibule Training is a term for near-the-job training, as it offers

access to something new (learning). In vestibule training, the workers are trained in a
prototype environment on specific jobs in a special part of the plant.
c) Lectures and Conferences: Lectures and conferences are the traditional and direct method
of instruction. Every training program starts with lecture and conference. It’s a verbal
presentation for a large audience. However, the lectures have to be motivating and creating
interest among trainees. The speaker must have considerable depth in the subject. In the
colleges and universities, lectures and seminars are the most common methods used for
training.
d) Computer Modelling: It simulates the work environment by programming a

computer to imitate some of the realities of the job and allows learning to take
place without the risk or high costs that would be incurred if a mistake were
made in real life situation.

38. Suggest the suitable measures to improve communication effectiveness.
The barrier to effective communication exists in all organizations to a greater or

lesser degree. Organizations keen on developing effective communication
should adopt suitable measures to overcome the barriers and improve
communication effectiveness. Some such measures are explained below:
1. Clarify the ideas before communication: The problem to be communicated to

subordinates should be clear in all its perspective to the executive himself. The entire
problem should be studied, analysed and stated in such a manner that is clearly conveyed to
subordinates.
2. Communicate according to the needs of receiver: The level of understanding of receiver

should be crystal clear to the communicator. Manager should adjust his communication
according to the education and understanding levels of subordinates.
3. Consult others before communicating: Before communicating the message, it is better to

involve others in developing a plan for communication. Participation and involvement of
sub-ordinates may help to gain ready acceptance and willing cooperation of subordinates.
4. Be aware of languages, tone and content of message: The contents of the message, tone,
and language used, way the message is to be communicated are the important aspects of
effective communication. The language used should be understandable to the receiver and
should not offend the sentiments of listeners. The message should be stimulating to evoke
response from the listeners.
5. Convey things of help and value to listeners: While conveying message to others, it is
better to know the interests and needs of the people with whom you are communicating. If
the message relates directly or indirectly to such interests and needs it certainly evokes
response from communicator.
6. Ensure proper feedback: The communicator may ensure the success of communication by
asking questions regarding the message conveyed. The receiver of communication may also
be encouraged to respond to communication. The communication process may be improved
by the feedback received to make it more responsive.
7. Communicate for present as well as future: Generally, communication is needed to meet

the existing commitments, to maintain consistency, the communication should aim at future
goals of the enterprise also.
8. Follow up communications: There should be regular follow up and review on the

instructions given to subordinates. Such follow up measures help in removing hurdles if any
in implementing the instructions.
9. Be a good listener: Manager should be a good listener. Patient and attentive

listening solves half of the problems. Managers should also give indications of
their interest in listening to their subordinates.

39. Explain the steps involved in the Screen based Trading and Settlement
Procedure of securities.
The steps in the Screen based Trading and Settlement procedure in a Stock Exchange are
as follows.
1. If an investor wishes to buy or sell any security, he has to first approach a registered broker
or sub-broker and enter into an agreement with him. The investor has to sign a broker-
client agreement and a client registration form before placing an order to buy or sell
securities. He has also to provide certain other details and information. These include:
• PAN number (This is mandatory)

• Date of birth and address.
• Educational qualification and occupation.
• Residential status (Indian/NRI).
• Bank account details.
• Depository account details.
• Name of any other broker with whom registered.
• Client code number in the client registration form.
The broker then opens a trading account in the name of the investor.
2. The investor must open a ‘demat’ account or ‘beneficial owner’ (BO) account with a
depository participant (DP) for holding and transferring securities in the demat form. He
will also have to open a bank account for cash transactions in the securities market.
3. The investor then places an order with the broker to buy or sell shares. Clear instructions
must be given about the number of shares and the price at which the shares should be
bought or sold. The broker will then go ahead with the deal at the above-mentioned price
or the best price available. An order confirmation slip is issued to the investor by the
broker. The broker then will go on-line and connect to the main stock exchange and match
the share and best price available.
4. When the shares can be bought or sold at the price mentioned, it will be communicated to
the broker’s terminal and the order will be executed electronically. The broker will issue a
trade confirmation slip to the investor.
5. After the trade has been executed, within 24 hours the broker issues a Contract Note. This
note contains details of the number of shares bought or sold, the price, the date and time of
deal, and the brokerage charges. This is an important document as it is legally enforceable
and helps to settle disputes/claims between the investor and the broker. A Unique Order
Code number is assigned to each transaction by the stock exchange and is printed on the
contract note.
6. Now, the investor must deliver the shares sold or pay cash for the shares bought. This
should be done immediately after receiving the contract note or before the day when the

broker shall make payment or delivery of shares to the exchange. This is called the pay-in
day.
7. Cash is paid or securities are delivered on pay-in day, which is before the T+2 day as the
deal has to be settled and finalized on the T+2 day. The settlement cycle is on T+2 day on
a rolling settlement basis, w.e.f. 1 April 2003.
8. On the T+2 day, the exchange will deliver the share or make payment to the other broker.
This is called the pay-out day. The broker then must make payment to the investor within
24 hours of the pay-out day since he has already received payment from the exchange.
9. The broker can make delivery of shares in demat form directly to the investor’s demat
account. The investor must give details of his demat account and instruct his depository
participant to take delivery of securities directly in his beneficial owner account.
40. Explain any eight functions of Marketing.
Marketing is concerned with exchange of goods and services from producers to consumers
or users in such a way that maximizes the satisfaction of customers ‘needs. From the
viewpoint of management function, number of activities is involved, which have been
described as below:
1. Gathering and Analysing Market Information: This is necessary to identify the needs of
the customers and to take various decisions for the successful marketing of the products
and services. This is important for making an analysis of the available opportunities and
weaknesses of the organization and help in deciding that what opportunities can best be
pursued by it.
2. Marketing Planning: Business must develop a complete marketing plan covering various
important aspects including the plan for increasing the level of production, promotion of
the products, etc. and specify the action programs to achieve these objectives.
3. Product Designing and Development: The design of the product contributes to the target
customers and gives a competitive advantage in the market. It requires decision regarding
the size, design, colour, weight, quality, & other features of product to meet the
expectations of the customers.
4. Standardization and Grading: Standardization refers to producing goods of

predetermined specifications so that buyers conform to the quality, price, and packaging
and reduces the need for inspection, testing and evaluation of the products. Grading is the
process of classification of products into different groups according to similar
characteristics.
5. Packaging and Labelling: Packaging is the act of designing and producing the package
for a product. A package is a wrapper or container in which product is enclosed, encased or
sealed. Packaging reduces the risks of spoilage, breakage, leakage, etc. in the process of
storage and transportation of goods. Packaging is important not only for protection of the
products but also serves as a promotional tool.

Labelling refers to designing the label to be put on the package, which indicates
ingredients including name of product & manufacturer, quality, quantity, price, date of
manufacturing & expiry, process of use and precautions etc.
6. Branding: Branding means giving a specific name, symbol or design to a product by

which it will be known. By branding, a manufacturer distinguishes his product from the
competitors’ product so that consumers may identify it easily and become loyal to it.
7. Customer Support services: Customer support services such as after sale services,
handling customer complaints, procuring credit services, maintenance services, technical
services and consumer information are providing maximum satisfaction to the customers,
which is the key to marketing success in modern days.
8. Pricing of Product: Pricing means the process of fixing the price of a product or services.
Pricing is an important function because the prices of a firm’s products determine the
volume of sales & the amount of profit.
9. Promotion: Promotion is the process of informing customers about the availability and
uses of products and services and persuading them to buy. It includes all the activities such
as advertising, personal selling, sales promotion and publicity which are intended to
influence buyer’s behaviour.
10. Physical Distribution: The two major decision areas under the managing physical
distribution include –
a. Decision regarding channels (intermediaries) of distribution
b. Physical movement of the product from where it is produced to a place where it is
required.
11. Transportation
12. Storage or Warehousing

SECTION – E
V. Answer any two of the following questions: (2x5=10)
41. Assuming that you are the manager of an organization, draw the neat diagram of
different levels of management to specify that authority responsibility relationships
create different levels of management.
Diagram showing levels of management.
42. Draw the neat diagram of Maslow’s Need Hierarchy.

43. As an exploited consumer, write a complaint letter to your nearest District
Consumer Forum claiming reasonable redressal.
10/10/2018
Mysore
From,
Mr. Chirag,
#123, 4th Cross, 5th Main,
Chamundi Temple road,
Sharadha Devi Nagar,
Mysuru- 570023
To
The Registrar (KSCDRC),
Mysore District Consumer Dispute Forum,
Court road,
Mysuru- 570001.
Dear Sir,
Sub: Compliant against the Sun Electronics- KT Street, Mysore.
With reference to the above subject, I would like to bring to your kind notice that, I had
purchased a DTH set up box on 28th July 2018 for Rs. 2,500/- for which a warrantee of 1 year
was provided (copy of the bill attached for quick reference) on 6th August 2018 I had filed a
complaint about the performance of the DTH set up box to the customer care center. A service
personal had visited my place and resolved the issue.
After two days on 8th August 2018 the same problem with DTH set up box raised, and the
complaint was registered on the same day. The company provided the service personal on 10th
August 2018 and refused to provide the service under warrantee &demanded for the service
fees.
Though complaint was registered before the closure of the warrantee period the company fails
to provide the service as promised. Till today the problem is unsolved despite repeated
complaints.
I hereby request you to kindly look into the issue and provide redressal on the same.
Thanking you
Yours faithfully
Chirag
***********

2021 MODEL QUESTION PAPER 2 WITH SOLUTUON
SECTION – A
I. Answer any ten of the following questions in a word or sentence each. While answering
multiple choice questions, write the serial number of the correct choice and write the answer
corresponding to it. Each question carries 1 mark: (10 x 1 = 10)
1. What is Efficiency?
Efficiency is about doing the job in cost effective manner i.e. getting maximum output
with minimum input.
2. Who is called the Father of Scientific Management?
3. How are principles of management formed?
a. In a laboratory
b. By experiences of managers
c. By experiences of Customers
d. By Propagation of social scientists
b. By experiences of managers
4. State the meaning of Business Environment.
The word ‘business environment’ indicates the aggregate total of all people, organisations
and other forces that are outside the power of industry but that may affect its production.
5. Which of the following is an example for the single use plan?
a. Policy
b. Procedure
c. Budget
d. method
c. Budget
6. What is organization structure?
Organizational structure is a way or method by which. organizational activities are divided,
organized and coordinated. The organizations created the structures to coordinate the.
activities of work factors and control the member performance
7. Can Accountability be delegated?
NO

8. Which one of the following is not a function of staffing?
a. Recruitment
b. training
c. Compensation
d. Directing
d. Directing
9. State any one leadership style.
Autocratic Style
10. Name any one type of Grapevine Network.
Single strand network
11. Expand PERT.

Program Evaluation and Review Technique
12. The decision of acquiring a new machine or opening a new branch is an example
for
a. Financing decision
b. Working capital
c. Investment decision
d. None of the above
c. Investment Decision

SECTION – B
II. Answer any ten of the following question in 2 or 3 sentences.
Each question carries 2 marks. 10x2=20)
Management in all business and organizational activities is the act of getting people
together to accomplish desired goals and objectives using available resources efficiently
and effectively
14. State any two differences between Unity of Command and Unity of Direction.
UNITY OF COMMAND UNITY OF DIRECTION
This principle advocates that there should This principle advocates that all units of
be only one boss for every individual an organization should be moving
employee. towards the same objectives of the
organization.
This principle is related to the people and This principle relates to the work and the
their relationship in the organization. direction of the work towards the
objectives of the organization.
15. What is Gang Plank?

Gang plank is a shorter route in a scalar chain which allows employees at the same level to
communicate with each other directly Gang plank is used in case of emergency.
16. Give the meaning of Globalisation.

Globalisation implies the opening of local and nationalistic perspectives to a broader
outlook of an inter connected and interdepended world with free transfer of capital, goods
and services across national frontiers.
17. Give the meaning of ‘Programme’.
A programme is precise plan laying down the operations to be carried out to complete a
given task within a specified period of time.
18. What do you mean by Formal Organisation?
Formal Organisation is one which has a system of well defined positions, authority,
responsibility, policies, principles etc.
19. What is ‘Placement’ in Staffing?
Placement refers to the employee occupying the position or post for which the he / she has
been selected.
20. State the meaning of Selection.
Selection is the process of differentiating between applicants in order to identify and select
the best and eliminating the rest

21. Write any two features of Leadership.
1. Leadership indicates ability of an individual to influence others.
2. Leadership is a continuous process.
3. Leadership tries to bring change in the behaviour of others.
22. State any two Psychological barriers to communication.

Perception, Filtering, Emotions
23. What is Responsibility Accounting?
Responsibility accounting is a system of accounting in which different sections, divisions
and departments of an organisation are set up as Responsibility Centres. The purpose is to
review the efficiency and effectiveness of management and to improve its performance in
future periods.
24. State the twin objectives of financial planning.
• To ensure availability of funds whenever required.
• To see that the firm does not raise resources (i.e., funds) unnecessarily.
SECTION – C
II. Answer any Seven of the following question in 10 to 12 sentences each.
Each question carries 4 Marks. (7X4=28)
25. State importance of management with any four points.
Importance of management:
• Achieving Group Goals: Management encourages collaboration and coordination

amongst workers. A general control must be provided to the organisational and personal
objectives in order to favourably accomplish the aims.
• Increases Efficiency: Management improves productivity by managing resources in a
reliable conceivable way in order to decrease cost upscale potency.
• Creates Dynamic organisation: Management undertakes the conditions by assuring that
these variations are well accepted privately and that objection to change is controlled.
• Achieving personal objectives: Management promotes leadership and furnishes
motivation to the employees to operate effectively in order to accomplish their personal
aims while working towards the organisational goals.
• Development of Society: Management helps in the enhancement of community by
manufacturing reliable quality commodities, establishing employment chances and
fostering innovative technologies.

26. Is Management a Science? Prove.
Management as a science: Science is a systematic body of knowledge. Management is
considered to be a science since it has the following features of science:
1) Systematised body of knowledge: Like science, management has a systematized body of

knowledge. It has its own theory and principles. Management has its own vocabulary of terms
and concepts.
2) Principles based on experimentation: Like scientific principles, management principles are

also based on repeated experiments and observations in different types of organizations. E.g.,
Scientific Management principles by F.W. Taylor.
3) Universal validity: Since management deals with human beings and human behaviour,
application and use of management principles is not universal. They have to be modified
according to a given situation. However, they provide managers with certain standardized
techniques that can be used in different situations.
4) Cause and effect relationship: Like principles of science, management principles also
establish cause and effect relationship in dealing with various situations in the organization.
E.g., Division of labour (Cause) results in increased productivity (effect)
Since management deals with human beings and human behaviour, management can be called
an inexact science.
27. Explain briefly Principles of Scientific Management.

Scientific management refers to the use of scientific and standardized tools, methods and
trained workers in all organisational activities in order to increase the total production with
minimum cost and wastage. Following are the principles of scientific management
contributed by FW Taylor.
a. Science not Rule of Thumb: Taylor was the first person to introduce the method of
scientific inquiry into the domain of management practice. He believed that there was only
one best method to maximise efficiency i.e., by scientific way. Scientific management
includes scientific selection of workers, placement and training, work – study motion study
fatigue study, time study, gradation of equipment and machinery, payment of wages
according to work done etc.
b. Harmony, not discord: There should be harmonious relationship between management and
workers. Both should realise that each one is important. This avoids class conflict. To
achieve this, Taylor introduced mental revolution, both management and workers should
transform their thoughts in order to achieve harmonious relationship amongst them.
c. Cooperation, Not Individualism: There should be complete cooperation between the

labour and the management instead of individualism. Competition should be replaced by
cooperation. Both should realise that they need each other. To achieve this fact, the
management should consult their employees while taking important decisions. There should
be a two way communication between management and workers. According to Taylor, there

should be almost equal division of work and responsibility between workers and
management.
d. Development of each and every person to his or her greatest efficiency and prosperity:
Industrial efficiency depends on personnel competencies. According to Taylor, efficiency
could be achieved from the beginning i.e., from the time of selection of employees. Each
person must be scientifically selected. Work should be assigned according to his mental and
intellectual capabilities Proper training should be given to improve his/her skill. This will
contribute to their greatest efficiency and prosperity for both organisation and workers.

Features of business environment are:
1. Totality of external forces: Business environment is the sum total of all things external to
business firms and, as such, is aggregative in nature.
2. Specific and general forces: Business environment includes both specific and general
directly and immediately in their day-to-day working. General forces such as social.
political conditions have impact on all business enterprises and thus may affect an individual
firm only indirectly.
3. Inter-relatedness: Different elements of business environment are closely interrelated. One

element of the environment affects the other. For example, new health aware products such
as diet coke, fat-free cooking oil etc. changed people’s life styles.
4. Dynamic nature: Business environment Is dynamic. It keeps on changing whether in terms

of technological improvement, shifts in consumer preferences etc.
5. Uncertainty: Business environment Is largely uncertain because it is difficult to predict

future happenings.
6. Complexity: Since business environment consists of numerous interrelated and dynamic

forces which arise from different sources, it is relatively easier to understand in parts but
difficult to grasp in its totality.
29. Explain any four limitations of planning.

The limitations of planning are:
a. Planning leads to rigidity: In an organization, a well-defined plan is drawn up with specific

goals to be achieved within a specific time frame. These plans then decide the future course
of action. The managers may not be in a position to change these plans. This kind of rigidity
in plans may create difficulty. This rigidity restricts the individual freedom, initiative and
creativity.
b. Planning may not work in a dynamic environment: The business environment is

dynamic. Planning anticipates future. It takes into consideration the possible changes in

economic, political, legal and social dimensions. But it becomes difficult to accurately
assess the future trends. Competition in the market can also upset the plans. Planning cannot
foresee everything and thus, there may be obstacles to effective planning.
c. Planning reduces creativity: Planning is an activity which is done by the top management.
Usually the rest of the members just implement these plans. Middle management and other
decision makers are neither allowed to deviate from plans nor are they permitted to act on
their own. Thus, much of the initiative or creativity inherent in them also gets lost or
reduced.
b) Planning involves huge costs: When plans are drawn up, huge costs are involved in their
formulation. These may be in terms of time and money. The cost incurred sometimes may
not justify the benefits derived from the plans.
c) Planning is a time-consuming process: Sometimes plans to be drawn up take so much of

time that there is not much time left for their implementation.
30. State any two advantages and two disadvantages of Informal Organisation.
A network of social relationships among employees’ that arise spontaneously due to
interaction among people at work is called informal organization.
Advantages of informal organization:
1. The informal organisation leads to faster spread of communication since prescribed lines
of communication are not followed. It also enables to get quick feedback.
2. It helps to fulfil the social needs of the members and allows them to find likeminded
people. This enhances their job satisfaction since it gives them a sense of belongingness in
the organization.
Disadvantages of informal organization:

1. It acts as a disruptive force against the interest of the formal organization.
2. The management may not be successful in implementing changes if the informal

organisation opposes them. Such resistance to change may delay or restrict growth.
31. Explain briefly any four external sources recruitment.

"Recruitment is the process of searching for prospective employees and stimulating them
to apply for jobs in the organisation.
External sources of recruitment:
(i) Recommendation of Employees: Many firms encourage their employees to recommend the
names of their relatives, friends for employment. Such applicants are likely to be good
employees because their background is sufficiently known.

(ii)Management Consultants: Management consultancy firms help organisations to recruit
technical, professional and managerial persons. They specialise in middle level and top
level executive placements. They maintain the data of persons with different qualifications
and skills and advertise the jobs on behalf of their clients.
(iii) Campus Recruitment: Universities, colleges, institutes of management and technology,

etc., provide technicians, engineers, chemists, accountants etc. Many big organisations
maintain a close link with the universities, technical & management institutes to recruit
qualified personnel for jobs. This is referred to as campus recruitment.
(iv) Advertisement: Advertisement in newspapers and journals is a common method of

encouraging people to apply for the jobs. The main advantage of this method is that
sufficient information about the organisation and the job can be given to allow self-
screening by the applicants. It attracts a large number of candidates.
(v) Recruitment agencies: An agency may be hired to perform the task of selection. They are
also called placement agencies. These agencies work for a charge.
32. Explain any four points which emphasise the importance of Directing.
Importance of directing.
1. Directing helps to initiate action by people in the organisation towards attainment of

desired objectives.
2. Directing ensures that the individuals work for organizational goals.
3. Directing guides employees to fully realize their potential and capabilities by motivating
and providing effective leadership.
4. Directing facilitates introduction of needed changes in the organization.
5. Effective directing helps to bring stability and balance in organization.
33. Briefly explain the steps involved in controlling process.

Controlling is regarded as one of the most important management functions. In fact, without
the presence of a control function, the entire management function will become obsolete. The
management will not be able to determine if the plan is working properly or not, or if it is
properly implemented or not.
The main objective of the control process is to make sure that the activities within an
organisation are going as per the planning. Control process helps the managers in determining
the level of performance of their respective organisations.
A. Establishing performance standards: Although setting of goals and standards are part of
the planning process, it also plays an important role in controlling.

The main objective of controlling is to guide the business towards the desired target.
Therefore, if the employees or members of a business are well aware of the target, it will
result in more awareness about the target.
The managers must communicate the goals and objectives clearly to the employees
without any ambiguities. An organisation in which everyone is working towards a
common objective has a better chance to grow and prosper.
B. Measuring actual performance against the set standards: The immediate action that
managers need to take after being made aware of the goals, is to measure their actual
performance and compare that with the standards already set. This helps in identifying if
the plan is working as was thought to be.
Once a plan is implemented, the task of managers is to monitor the plans and evaluate.
Managers must be ready with an alternative plan or suggest corrective measures in case
the plan is not going as was intended.
This can be done only when managers are measuring their actual performance. The way
performance can be evaluated is to measure it in monetary terms, hiring financial experts.
This step of controlling is helpful in detecting future problems and issues and is essential
for taking decisions immediately so that the company is able to recover from the losses.
C. Determining if the performance matches with the standard: Checking if the
performance matches with the standards is very important. It is an important step in
controlling. In this step, the results are measured with the already set standards.
D. Taking corrective action and re-evaluating the standard: Corrective measures need to
be taken when there is a discrepancy. Correct actions provide protection against loss and
stop them from reappearing in future.
34. Explain with any four points the importance of financial planning.
Importance of financial planning:
• It helps in forecasting what may happen in future under different business situations.
• Accordingly, it develops alternative financial plans to face different situations. Thus, it
makes the firm better prepared to face the future.
• It helps in avoiding business shocks and surprises and helps the company in preparing for
the future.
• It helps in coordinating various business functions e.g., sales and production functions, by
providing clear policies and procedures.
• Detailed plans of action prepared under financial planning helps to reduce waste and
duplication of efforts.
• It tries to link the present with the future.
• It provides a link between investment and financing decisions on a continuous basis.

SECTION – D
IV. Answer any Four of the following question in 20 to 25 sentences.
Each question carries 8 Marks (4X8=32)
35. ‘Management is a series of continuous interrelated functions’ – Comment.
Management is described as the process of planning, organizing, staffing, directing and
controlling the efforts of organizational members and of using organizational resources to
achieve specific goals.
Following are the important functions of management:
(1) Planning: Planning is the basic function of management. It is the function of determining
in advance what is to be done and who is to do it. It involves setting the goals in advance
and developing a way of achieving them efficiently and effectively. It requires the
formulation of policies, procedures and budgets. It is an intellectual activity and is being
performed continuously by managers at all levels. The main objective of planning is to
ensure proper utilization of all available resources. It helps to avoid confusion, wastages,
risk etc,,
(2) Organising: Organising is another important function of management. It is the

management function of grouping tasks, assigning duties, arranging and allocating
resources and establishing authority responsibility relationships. Thus, organizing involves:
• Identification of the activities (i.e., tasks) and resources required to implement the plan.
• Grouping of the required tasks into manageable departments or work units.
• Assignment of duties.
• Arranging and allocating resources (i.e., men, money, materials and machinery) required
to carry out a specific plan.
• Establishment of authority and reporting relationships within the organizational
hierarchy.
(3) Staffing: Staffing is finding the right people for the right job. The main purpose of
staffing function is to put the right people with the right qualifications at the right place and
time to accomplish the goals of the organization effectively and efficiently. This function is
also known as the human resource function.
Staffing involves
• Manpower planning
• Recruitment, selection and placement
• Training and development
• Remuneration
• Performance appraisal
• Promotion and transfer.

(4) Directing: Directing is one of the important functions of management. While planning,
organizing and staffing are merely the preparations for doing the work, directing function
actually starts the work. It guides, leads, influences and motivates the subordinates (i.e.,
employees) to perform the tasks assigned to them. This enables the subordinates to work
effectively and efficiently for the implementation of plans.
It has the following elements:
• Supervision: It involves supervising employees at work.

• Motivation: It involves creating an environment that makes them want to work.
• Leadership: It involves influencing employees to do what the leader wants them to do.
• Communication: It involves communicating effectively with the employees.
(5)Controlling: Controlling is the management function of monitoring organizational

performance towards the attainment of organizational goals. The purpose of controlling is to
ensure that everything occurs in accordance with the plants (i.e., standards set)
Controlling involves
• Establishing standards of performance.

• Measuring current (actual) performance.
• Comparing actual performance with the standard performance and finding out deviation, if
any.
• Taking corrective action.
Thus, in order to achieve the objectives of the organization, starting from planning till
controlling, management has to perform a series of continuous interrelated functions.
36. What is planning? Explain the various features of planning.

Planning means setting objectives and targets and formulating an action plan (i.e.,
determining appropriate course of action) to achieve them. In simple, planning is deciding in
advance what to do and how to do.
1. Planning focuses on achieving objectives: Planning is purposeful function of management.

It is concerned with setting up of objectives along with the activities to be undertaken-to
achieve the objectives.
2. Planning is a primary function of management: Planning is a primary function of

management as it lays down the base for other functions of management. All other managerial
functions are performed within the framework of the plans drawn.
3. Planning is pervasive: Planning function is performed by all levels of management as well as

in all departments of the organization.
4. Planning is continuous: Planning is a continuous process. One plan, after its implementation,
is being followed by another plan (which is drawn on the basis of new requirements and
future conditions).

5. Planning is futuristic: Planning involves looking ahead and preparing for the future. The
purpose of planning is to meet future events effectively to the best advantage of an
organization. Thus, planning is a forward looking function based on forecasting. For example,
based on sales forecasting, a business firm prepares its annual plan for production and sales.
6. Planning involves decision making: Planning essentially involves choice from among
various alternatives and activities. Each alternative is evaluated and finally the decision is
taken to select the best alternative.
7. Planning is a mental exercise: Planning requires application of the mind. It is basically an

intellectual activity of thinking. Thus, planning involves logical, systematic and orderly
thinking based on the analysis of facts and forecasts which is necessary for determining the
action to be taken.
37. Explain the importance of organizing.

‘Organizing is the process of identifying and grouping the work to be performed, defining and
delegating responsibility and authority and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing objectives.’
The importance of Organizing are as follows:
1. Benefits of specialization: In organizing every individual is assigned apart of total work
and not the whole task. This division of work into smaller units and repetitive performance
leads to specialization. Thus organizing promotes specialization which in turn leads to
efficient & speedy performance of tasks.
2. Clarity in working relationship: It helps in creating well defined jobs and also clarifying
the limits of authority and responsibility of each job. The superior-subordinate relationship is
clearly defined in organizing.
3. Effective Administration: It provides a clear description of jobs and related duties which
helps to avoid confusion and duplication. Clarity in working relationships enables proper
execution of work which results ineffective administration.
4. Optimum utilization of resources: The proper assignment of jobs avoids
overlapping/duplication of work. This helps in preventing confusion and minimizing the
wastage of resources and efforts.
5. Adoption to Change: A properly designed organizational structure is flexible which
facilitates adjustment to changes in workload caused by change in external environment
related to technology, products, resources and markets.
6. Development of Personnel: Sound organization encourages initiative and relative thinking
on part of the employees. When managers delegate their authority, it reduces their workload
so they can focus on more important issues related to growth & innovation. This also
develops the subordinates’ ability and helps him to realize his full potential.
7. Expansion and growth: It helps in growth & diversification of an enterprise by adding
more job positions, departments, products lines, new geographical territories etc.

38. Explain the four methods of on-the-Job and any four methods of off-the-Job training.
On-the-Job training methods refer to the methods that are applied to the
workplace, while the employee is working, and he will be trained in actual
working place.
A. Apprenticeship: Apprenticeship is a system of training a new generation of practitioners
of a skill. This method of training is in vogue in those trades, crafts, and technical fields in
to experts for long periods. They must work in direct association with and also under the
direct supervision of their masters.
B. Coaching: Coaching is a one-to-one training. It helps in quickly identifying the weak
areas and tries to focus on them. It also offers the benefit of transferring theory learning to
practice. The biggest problem is that it perpetrates the existing practices and styles. In
C. Internship Training: It is a joint programme of training in which educational
institutions and business firms cooperate. Selected candidates carry on regular
studies for the prescribed period. They also work in some factory or office to
acquire practical knowledge and skills.
D. Job Rotation: It is the process of training employees by rotating them through a series of
related jobs. Rotation not only makes a person well acquainted with different jobs, but it also
alleviates boredom and allows to develop rapport with several people. Rotation must be
logical.
Off-the-Job methods are used far away from the real workplace. It is a concept of learning
before doing.
a) Case Study: Case studies are complex examples which give an insight into the context of
a problem as well as illustrating the main point. Case Studies are trainee centred activities
based on topics that demonstrate theoretical concepts in an applied setting.
b) Vestibule Training: Vestibule Training is a term for near-the-job training, as it offers access
to something new (learning). In vestibule training, the workers are trained in a prototype
environment on specific jobs in a special part of the plant.
c) Lectures and Conferences: Lectures and conferences are the traditional and direct method of
instruction. Every training program starts with lecture and conference. It’s a verbal
presentation for a large audience. However, the lectures have to be motivating and creating
interest among trainees. The speaker must have considerable depth in the subject. In the
colleges and universities, lectures and seminars are the most common methods used for
training.
d) Computer Modelling: It simulates the work environment by programming a computer to
imitate some of the realities of the job and allows learning to take place without the risk or
high costs that would be incurred if a mistake were made in real life situation.

39. Explain the qualities of good leader.
• Physical features: Physical features like height, weight, health, appearance determine the
physical personality of an individual. It is believed that good physical features attract
people.
• Knowledge: A good leader should have required knowledge and competence. Only such
person can instruct subordinates correctly and influence them.
• Integrity: A leader should possess high level of integrity and honesty. He should be a role
model to others regarding the ethics and values.
• Initiative: A leader should have courage and initiative. He should not wait for
opportunities come to his way, rather he should grab the opportunity and use it to the
advantage of organization.
• Communication skills: A leader should be a good communicator. He should have the

capacity to clearly explain his ideas and make the people to understand his ideas. He
should be not only a good speaker but also a good listener, teacher, counsellor and
persuader.
• Motivation skills: A leader be an effective motivator. They should understand the needs
of people and motivate them through satisfying their needs.
• Self-Confidence: A leader should have high level of self-confidence. He should not lose
his confidence even in most difficult times. In fact, if the leader lacks self-confidence, he
cannot provide confidence to his followers.
• Decisiveness: Leader should be decisive in managing the work. Once he is convinced

about a fact, he should be firm and should not change opinions frequently.
• Social skills: A leader should be sociable and friendly with his colleagues and followers.
He should understand people and maintain good human relations with them.
40. Explain the factors affecting the working capital requirement of an organization.
The factors affecting the working capital requirement of a business are as follows:
A. Nature of Business: The basic nature of business influences the amount of working capital
required. A trading organization usually needs a smaller amount of working capital
compared to a manufacturing organization. Similarly, service industries which usually do
not have to maintain inventory require less working capital.
B. Scale of Operations: for organizations which operate on a higher scale of operation, the
quantum of inventory and debtors required is generally high. Such organizations, therefore,
a lower scale.

C. Business Cycle: Different phases of business cycles affect the requirement of working
capital by a firm. In case of a boom, the sales and production are likely to be larger and
therefore larger amount of working capital is required. Working capital requirement will be
less during the period of depression as the sales and production will be small.
D. Seasonal Factors: Most business have some seasonality in their operations. In peak
season, because of higher level of activity, larger amount of working capital, is required.
When the level of activity is less, working capital requirement will be less.
SECTION – E
V. Answer any Two of the following Questions. Each question carries 5 marks. (2*5=10)
41. Show the different Elements of Business Environment that influence the success of
business enterprises with a neat diagram.
BUSINESS
ENVIRONMENT
42. As a Manager of an organization what logical steps you follow in planning process before
executing a project?
• Setting up of objectives.
• Developing planning premises.
• Identification of alternative courses of action.
• Evaluating alternative courses of action.
• Selecting the best alternative.
• Implementing the plan.
• Follow up action.

43. Draw the neat diagram of Maslow’s Need Hierarchy.
***********

BIBILIOGRAPHY
Books Referred:
1. Business Studies – II Pre University book, Karnataka
2. II Pre University Commerce Hand Book (2014) –step to success- Supreetha & Sharath V
3. II PUC Business studies text book- BS Raman
4. II PUC Business studies text book- Vedamurthy
Websites:
1. https://kseebsolutions.in/2nd-puc-business-studies-model-question-paper-4/
2. https://www.kseebsolutions.com/2nd-puc-business-studies-question-bank/
3. https://byjus.com/ncert-solutions-class-12-business-studies/

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Maharaja Education Trust

MIT First Grade College

MIT First Grade College previously Gopalaswamy College of Professional Studies

have established themselves by becoming entrepreneur, joined reputed organization,

opting for higher education.

VISION OF THE INSTITUTE

Empower the individuals and society at large through educational excellence;

MISSION OF THE INSTITUTE

accept challenges and respond to opportunities in a global scenario.

Join us for a better future ahead!

2 | Business Studies MITFGC - MYSURU

2 SECTIONWISE QUESTIONS IN QUESTION PAPER 11

3 March 2019 PU Board Annual Examination Question Paper 12

4 March 2019 PU Board Supplementary Examination 31

Question Paper with solution

5 March 2020 PU Board Annual Examination Question Paper 50

6 March 2020 PU Board Supplementary Examination 69

Question Paper with solution

7 Model Question Paper -1- Revised Syllabus 87

8 Model Question Paper -2 – Revised Syllabus 108

3 | Business Studies MITFGC - MYSURU

1: INTRODUCTION TO MANAGEMENT 10 Hours:

CHAPTER 2: PRINCIPLES OF MANAGEMENT 08 Hours:

CHAPTER 3: PLANNING 10 Hours:

4 | Business Studies MITFGC - MYSURU

CHAPTER 4: ORGANISING 12 Hours:

5 | Business Studies MITFGC - MYSURU

6 | Business Studies MITFGC - MYSURU

CHAPTER 6: DIRECTING 10 Hours:

7 | Business Studies MITFGC - MYSURU

CHAPTER 8: FINANCIAL MANAGEMENT AND FINANCIAL MARKETS

(B) FINANCIAL MARKETS

8 | Business Studies MITFGC - MYSURU

CHAPTER 9: MARKETING 20 Hours:

9 | Business Studies MITFGC - MYSURU

TOTAL: 120 Hours

10 | Business Studies MITFGC - MYSURU

SECTION QUESTION GIVEN QUESTION TO BE

11 | Business Studies MITFGC - MYSURU

1. Which of the following is not a feature of management?

2. Who is known as the father of scientific management?

3. Give the meaning of rule.

4. Which of the following is not an element of delegation?

5. State any one internal source of recruitment.

Promotion or transfer is one of the internal sources of recruitment.

6. The software company promoted by Narayan Murthy is Infosys.

12 | Business Studies MITFGC - MYSURU

8. What is business finance?

9. Primary and secondary markets

b. Complement each other.

10. What is publicity?

Publicity is a non-personal & nonpaid of communication of some favourable news

11. Who can file a complaint in consumer court?

Any registered Consumer association can file a complaint in consumer court.

12. Who is an Entrepreneur?

NOTE: THIS HAS BEEN REMOVED IN SYLLABUS!!!

A person who set up his business is called an entrepreneur.