THE INDIAN HIGH SCHOOL , DUBAI

PERIODIC TEST-1 2023-24

ANSWER KEY
DATE : 07.06 .2023 TIME : 3 HOURS
GRADE : 12 SUBJECT: BUSINESS STUDIES MARKS : 80

SET - B

Question No Expected value points Marks

1. ( b ) Scalar chain.

2. ( b ) Statement II is true and I is false.

3. ( a ) Mechanical engineer.

4. ( a ) Effective manager.

5. ( d ) P – ( ii ) , Q – ( iv ) , R – ( i ) , S – ( iii )

6. Clarity in working relationship.

7. Identifying alternative course of action.

8. Social Environment.

9. Optimum utilisation of resources and effective administration.

10. Workforce analysis would reveal the number and type of human resources
available.

11. Divisional structure.

12. Demonetisation.

13. Developing premises.

14. Motivation and Leadership.

15. Gang boss.

16. Economic Environment.

17. Management is a dynamic function.

18. Coordination.

19. Any two specialised activities and duties of Human Resource Mgt.
 Recruitment, i.e., search for qualified people.
 Analysing jobs, collecting information about jobs to prepare job description.
 Developing compensation and incentive plans.
Page 1 of 11
  Training and development of employees for efficient performance and
career growth.
 Maintaining labour relations and union management relations.
 Handling grievances and complaints.
 Providing for social security and welfare of employees.
 Defending the company in law suits and avoiding legal complications.

20. Relativity.

21. ( a ) Functional Structure.

( b ) Any two advantages of the Functional structure:

( i ) A functional structure leads to occupational specialisation since

emphasis is placed on specific functions. This promotes efficiency in
utilisation of manpower as employees perform similar tasks within a
department and are able to improve performance.

( ii ) It promotes control and coordination within a department

Because of similarity in the tasks being performed.

( iii ) It helps in increasing managerial and operational efficiency

and this results in increased profit.

( iv ) It leads to minimal duplication of effort which results in

economies of scale and this lowers cost.

( v ) It makes training of employees easier as the focus is only on a

limited range of skills.

( vi ) It ensures that different functions get due attention.

22. The various principles of scientific management that Clinton plans to apply in his
business are:

( i ) Science, not Rule of Thumb:

Taylor believed that there was only one best method to maximise efficiency. This
method can be developed through study and analysis. The method so developed
should substitute ‘Rule of Thumb’ throughout the organisation. Scientific method
involved investigation of traditional methods through work-study, unifying the best
practices and developing a standard method, which would be followed throughout
the organisation. According to Taylor, even a small production activity like loading
pigs of iron into boxcars can be scientifically planned and managed. This can result
in tremendous saving of human energy as well as wastage of time and materials.
The more sophisticated the processes, greater would be the savings.

( ii ) Harmony, not discord:

Taylor recognised that conflict helped none, the workers, the managers or the
factory owners. He emphasised that there should be complete harmony between the
management and workers. Both should realise that each one is important. To
achieve this state, Taylor called for complete mental revolution on the part of both
management and workers. It means that management and workers should transform
their thinking. In such a situation even trade unions will not think of going on strike
etc. Management should share the gains of the company, if any, with the workers.
At the same time workers should work hard and be willing to embrace change for
the good of the company. Both should be part of the family. According to Taylor,
‘Scientific management has for its foundation the firm conviction that the true
interests of the two are one and the same; that prosperity for the employer cannot
Page 2 of 11
 exist for a long time unless it is accompanied by prosperity for the employees and
vice versa’. Japanese work culture is a classic example of such a situation. In
Japanese companies, paternalistic style of management is in practice. There is
complete openness between the management and workers. If at all workers go to
strike they wear a black badge but work more than normal working hours to gain
the sympathy of the management.

( iii ) Cooperation, Not Individualism:

There should be complete cooperation between the labour and the management
instead of individualism. This principle is an extension of principle of ‘Harmony
not discord’. Competition should be replaced by cooperation. Both should realise
that they need each other. For this, management should not close its ears to any
constructive suggestions made by the employees. They should be rewarded for their
suggestions which results in substantial reduction in costs. They should be part of
management and, if any important decisions are taken, workers should be taken into
confidence.
At the same time workers should desist from going on strike and making
unreasonable demands on the management. In fact when there will be open
communication system and goodwill there will be no need for even a trade union.
Paternalistic style of management, whereby the employer takes care of the needs of
employees, would prevail as in the case of Japanese companies.
According to Taylor, there should be an almost equal division of work and
responsibility between workers and management. All the day long the management
should work almost side by side with the workers helping, encouraging and
smoothing the way for them.

23. ( a ) Management is continuous.

( b ) Any two features of management other than identified are:

( i ) Management is a goal-oriented process:

( ii ) Management is all pervasive:
( iii ) Management is multidimensional:
( iv ) Management is a group activity:
( v ) Management is a dynamic
( vi ) Management is an intangible

24. ( a ) Middle level management.

( b ) Any two functions of middle level management.

 interpret the policies framed by top management.
 ensure that their department has the necessary personnel.
 assign necessary duties and responsibilities to them.
 motivate them to achieve desired objectives.
 cooperate with other departments for smooth functioning of the
organisation. At the same time they are responsible for all the activities of
first line managers.

25. ( a ) Informal organisation.

( b ) Any three advantages of informal organisation.

( i ) Prescribed lines of communication are not followed. Thus, the

informal organisation leads to faster spread of information as
well as quick feedback.

(b) It helps to fulfil the social needs of the members and allows them
to find like minded people. This enhances their job satisfaction since
Page 3 of 11
 it gives them a sense of belongingness in the organisation.

(c) It contributes towards fulfilment of organisational objectives by

compensating for inadequacies in the formal organisation. For
example, employees reactions towards plans and policies can be
tested through the informal network.

26. Techniques of Scientific work study.

( a ) Time study
It determines the standard time taken to perform a well-defined job. Time
measuring devices are used for each element of task. The standard time is fixed for
the whole of the task by taking several readings. The method of time study will
depend upon volume and frequency of the task, the cycle time of the operation and
time measurement costs.
The objective of time study is to determine the number of workers to be
employed; frame suitable incentive schemes and determine labour costs.

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
she/he will make 3 boxes. Assuming that a worker has to put in 8 hours of work in a
shift and deducting one hour for rest and lunch, it is determined that in 7 hours a
worker makes 21 boxes @ 3 boxes per hour. Now this is the standard task a worker
has to do. Wages can be decided accordingly.

( b ) Fatigue study
A person is bound to feel tired physically and mentally if she/he does not rest while
working. The rest intervals will help one to regain stamina and work again with the
same capacity. This will result in increased productivity.
Fatigue study seeks to determine the amount and frequency of rest intervals in
completing a task.

For example, normally in a plant, work takes place in three shifts of eight hours
each. Even in a single shift a worker has to be given some rest interval to take
her/his lunch etc. If the work involves heavy manual labour then small pauses have
to be frequently given to the worker so that she/he can recharge her/his energy level
for optimum contribution.
There can be many causes for fatigue like long working hours, doing unsuitable
work, having uncordial relations with the boss or bad working conditions etc. Such
hindrances in good performance should be removed.

27. ( a ) Management as an Art.

( b ) Three points of the concept identified are:

( i ) Existence of theoretical knowledge:

A successful manager practices the art of management in the day-to-day job of
managing an enterprise based on study, observation and experience. There is a lot
of literature available in various areas of management like marketing, finance and
human resources which the manager has to specialise in. There is existence of
theoretical knowledge.

( ii ) Personalised application:
There are various theories of management, as propounded by many management
thinkers, which prescribe certain universal principles. A manager applies these
scientific methods and body of knowledge to a given situation, an issue or a
problem, in his own unique manner. A good manager works through a combination

Page 4 of 11
 of practice, creativity, imagination, initiative and innovation. A manager achieves
perfection after long practice. Students of management also apply these principles
differently depending on how creative they are.

( iii ) Based on practice and creativity:

A manager applies this acquired knowledge in a personalised and skillful manner in
the light of the realities of a given situation. He is involved in the activities of the
organisation, studies critical situations and formulates his own theories for use in a
given situation. This gives rise to different styles of management.

28. The steps in the process of organising are:

( i ) Identification and division of work:

The first step in the process of organising involves identifying and dividing the
work that has to be done in accordance with previously determined plans. The work
is divided into manageable activities so that duplication can be avoided and the
burden of work can be shared among the employees.

(ii) Departmentalisation:
Once work has been divided into small and manageable activities then those
activities which are similar in nature are grouped together. Such sets facilitate
specialisation. This grouping process is called departmentalisation. Departments
can be created using several criteria as a basis. Examples of some of the most
popularly used basis are territory (north, south, west, etc.) and products (appliances,
clothes, cosmetics etc).

(iii) Assignment of duties:

It is necessary to define the work of different job positions and accordingly allocate
work to various employees. Once departments have been formed, each of them is
placed under the charge of an individual. Jobs are then allocated to the members of
each department in accordance to their skills and competencies. It is essential for
effective performance that a proper match is made between the nature of a job and
the ability of an individual. The work must be assigned to those who are best fitted
to perform it well.

(iv) Establishing authority and reporting relationships:

Merely allocating work is not enough. Each individual should also know who he
has to take orders from and to whom he is accountable.

29. Types of plans discussed are: ( any four )

( i ) Objectives:
“ One of her objectives was to earn 10% profit on the amount invested in the first
year”.

( ii ) Policy
“ It was decided that raw materials like fruits, vegetables, spices, etc will be
purchased on three months credit from farmers cultivating only organic crops”.

( iii ) Method
“ She appointed Mohan as the production manager who decided the prescribed
ways in which the production activities were to be carried out”.

( iv ) Procedure
“ She also decided to follow the steps required for marketing of the products
through her own outlets”.

Page 5 of 11
 ( v ) Rule
“ While working on the production table, a penalty of Rs 100 per day for not
wearing caps, gloves and apron was announced”.

( vi ) Budget
“ Mohan also prepared a statement showing the number of workers that will be
required in the factory throughout the year”.

30. First four steps of staffing function of management are:

( a ) Estimating the Manpower Requirements:

understanding manpower requirements is not merely a matter of knowing how
many persons we need but also of what type.
understanding the manpower requirements would necessitate workload analysis on
the one hand and workforce analysis on the other. Workload analysis would enable
an assessment of the number and types of human resources necessary for the
performance of various jobs and accomplishment of organisational objectives.
Workforce analysis would reveal the number and type available.

( b ) Recruitment:
Recruitment may be defined as the process of searching for prospective employees
and stimulating them to apply for jobs in the organisation. The information
generated in the process of writing the job description and the candidate profile may
be used for developing the ‘situations vacant’ advertisement.

( iii ) Selection:
Selection is the process of choosing from among the pool of the prospective job
candidates developed at the stage of recruitment.

( iv ) Placement and Orientation:

Orientation is, thus, introducing the selected employee to other employees and
familiarising him with the rules and policies of the organisation.
Placement refers to the employee occupying the position or post for which the
person has been selected.

31. Features of planning identified are:

( i ) Planning focuses on achieving objectives

“ he set out specific goals along with the activities to be performed to achieve the
goals.”

Organisations are set up with a general purpose in view. Specific goals are set out in
the plans along with the activities to be undertaken to achieve the goals. Thus,
planning is purposeful. Planning has no meaning unless it contributes to the
achievement of predetermined organisational goals.

( ii ) Planning is futuristic
“He wanted to ensure that future events meet effectively the best interests of the
company.”

Planning essentially involves looking ahead and preparing for the future. The
Page 6 of 11
 purpose of planning is to meet future events effectively to the best advantage of an
organisation. It implies peeping into the future, analysing it and predicting it.
Planning is, therefore, regarded as a forward looking function based on forecasting.
Through forecasting, future events and conditions are anticipated and plans are
drawn accordingly.
Thus, for example, sales forecasting is the basis on which a business firm prepares
its annual plan for production and sales.

( iii ) Planning involves decision making.

“He not only identified but evaluated various alternatives through which the farms
could be utilised for the remaining months of the year.”

Planning essentially involves choice from among various alternatives and activities.
If there is only one possible goal or a possible course of action, there is no need for
planning because there is no choice. The need for planning arises only when
alternatives are available. In actual practice, planning presupposes the existence of
alternatives. Planning, thus, involves thorough examination and evaluation of each
alternative and choosing the most appropriate one.

( iv ) Planning is a mental exercise

“Through correct foresight and logical and systematic thinking based on analysis of
all facts all alternatives were examined and evaluated.”

Planning requires application of the mind involving foresight, intelligent

imagination and sound judgement. It is basically an intellectual activity of thinking
rather than doing, because planning determines the action to be taken. However,
planning requires logical and systematic thinking rather than guess work or wishful
thinking.

32. ( a ) Specific and General forces.

Business environment includes both specific and general forces.
Specific forces (such as investors, customers, competitors and suppliers) affect
individual enterprises directly and immediately in their day-to-day working.
General forces (such as social, political, legal and technological conditions) have
impact on all business enterprises and thus may affect an individual firm only
indirectly.

( b ) Any four points of importance of Business environment:

( i ) It enables the firm to identify opportunities and getting the

first mover advantage:
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.
For example, Maruti Udyog became the leader in the small car market because it
was the first to recognise the need for small cars in an environment of rising
petroleum prices and a large middle class population in India.

( ii ) It helps the firm to identify threats and early warning

signals:
Environmental awareness can help managers to identify various threats on time and
serve as an early warning signal.
For example, if an Indian firm finds that a foreign multinational is entering the
Indian market with new substitutes, it should act as a warning signal. On the basis
of this information, the Indian firms can prepare themselves to meet the threat by
adopting such measures as improving the quality of the product, reducing cost of
the production, engaging in aggressive advertising, and so on.

Page 7 of 11
 ( iii ) 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. They decide to
provide these resources with their own expectations to get something in return from
the enterprise. The business enterprise supplies the environment with its outputs
such as goods and services for customers, payment of taxes to government, return
on financial investment to investors and so on. Because the enterprise depends on
the environment as a source of inputs or resources and as an outlet for outputs, it
only makes sense that the enterprise designs policies that allow it to get the
resources that it needs so that it can convert those resources into outputs that the
environment desires. This can be done better by understanding what the
environment has to offer.

( iv ) 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 so important as
the pace of change. Turbulent market conditions, less brand loyalty, divisions and
sub-divisions (fragmentation) of markets, more demanding customers, rapid
changes in technology and intense global competition are just a few of the images
used to describe today’s business environment. All sizes and all types of enterprises
are facing increasingly dynamic environment. In order to effectively cope with
these significant changes, managers must understand and examine the environment
and develop suitable courses of action.

( v ) It helps in assisting in planning and policy formulation:

Since environment is a source of both opportunities and threats for a business
enterprise, its understanding and analysis can be the basis for deciding the future
course of action (planning) or training guidelines for decision making (policy).
For instance, entry of new players in the market, which means more competition
may make an enterprise think afresh about how to deal with the situation.

( vi ) It helps in improving performance:

The final reason for understanding business environment relates to whether or not it
really makes a difference in the performance of an enterprise. The answer is that it
does appear to make a difference. Many studies reveal that the future of an
enterprise is closely bound up with what is happening in the environment. And, the
enterprises that continuously monitor their environment and adopt suitable business
practices are the ones which not only improve their present performance but also
continue to succeed in the market for a longer period.

33. ( a ) Decentralisation of Authority

( b ) Any five advantages of Decentralisation of Authority.

( i ) Develops initiative among subordinates:

Decentralisation helps to promote self-reliance and confidence amongst the
subordinates. This is because when lower managerial levels are given freedom to
take their own decisions they learn to depend on their own judgment. It also keeps
them in a state wherein they are constantly challenged and have to develop
solutions for the various problems they encounter. A decentralisation policy helps
to identify those executives who have the necessary potential to become dynamic
leaders.

Page 8 of 11
 ( ii ) Develops managerial talent for the future:
Formal training plays an important part in equipping subordinates with skills that
help them rise in the organisation but equally important is the experience gained by
handling assignments independently. Decentralisation gives them a chance to prove
their abilities and creates a reservoir of qualified manpower who can be considered
to fill up more challenging positions through promotions. It also helps to identify
those who may not be successful in assuming greater responsibility. Thus, it is a
means of management education as well as an opportunity for trained manpower to
use its talent in real life situations.

(iii) Quick decision making:

The management hierarchy can be looked upon as a chain of communication. In
centralised organisation because every decision is taken by the top management the
flow of information is slow as it has to traverse many levels. Response also takes
time. This reduces the speed of decision making and makes it difficult for an
enterprise to adapt to dynamic operating conditions. In a decentralised organisation,
however ,since decisions are taken at levels which are nearest to the points of action
and there is no requirement for approval from many levels, the process is much
faster. There are also less chances of information getting distorted because it
doesn’t have to go through long channels.

(iv) Relief to top management:

Decentralisation diminishes the amount of direct supervision exercised by a
superior over the activities of a subordinate because they are given the freedom to
act and decide albeit within the limits set by the superior. Also, personal supervision
is generally replaced by other forms of control such as return on investment etc.
Decentralisation also leaves the top management with more time which they can
devote to important policy decisions rather than occupying their time with both
policy as well as operational decisions. In fact decentralisation is greatest when
checking required on decisions taken by lower levels of management is least.

(v) Facilitates growth:

Decentralisation awards greater autonomy to the lower levels of management as
well as divisional or departmental heads. This allows them to function in a manner
best suited to their department and fosters a sense of competition amongst the
departments. Consequently, with each department doing its best in a bid to outdo
the other, the productivity levels increase and the organisation is able to generate
more returns which can be used for expansion purposes.

(vi) Better control: Decentralisation makes it possible to evaluate performance at

each level and the departments can be individually

34. ( a ) Principles applied by Delilah are:

( i ) Division of work:
Work is divided into small tasks/ jobs. A trained specialist who is competent is
required to perform each job. Thus, division of work leads to specialisation.
According to Fayol, “The intent of division of work is to produce more and better
work for the same effort. Specialisation is the most efficient way to use human
effort.”

( ii ) Centralisation and Decentralisation

The concentration of decision-making authority is called centralisation whereas its
dispersal among more than one person is known as decentralisation. According to
Fayol, “There is a need to balance subordinate involvement through
decentralisation with managers’ retention of final authority through centralisation.”
The degree of centralisation will depend upon the circumstances in which the

Page 9 of 11
company is working. In general large organisations have more decentralisation than
small organisations.
For example, panchayats in our country have been given more powers to decide
and spend funds granted to them by the government for the welfare of villages. This
is decentralisation at the national level.

( iii ) Discipline
Discipline is the obedience to organisational rules and employment agreement
which are necessary for the working of the organisation.
According to Fayol, discipline requires good superiors at all levels, clear and fair
agreements and judicious application of penalties.
Suppose management and labour union have entered into an agreement whereby
workers have agreed to put in extra hours without any additional payment to revive
the company out of loss. In return the management has promised to increase wages
of the workers when this mission is accomplished. Here discipline when applied
would mean that the workers and management both honour their commitments
without any prejudice towards one another.

( b ) Principles of management violated by Delilah:

Equity:
Good sense and experience are needed to ensure fairness to all employees, who
should be treated as fairly as possible,” according to Fayol.
This principle emphasises kindliness and justice in the behaviour of managers
towards workers. This will ensure loyalty and devotion. Fayol does not rule out use
of force sometimes. Rather he says that lazy personnel should be dealt with sternly
to send the message that everyone is equal in the eyes of the management. There
should be no discrimination against anyone on account of sex, religion, language,
caste, belief or nationality etc. In practice we can observe that now a days in
multinational corporations people of various nationalities work together in a
discrimination free environment. Equal opportunities are available for everyone in
such companies to rise.

Page 10 of 11
Page 11 of 11