ORGANISATION OF COMMERCE AND MANAGEMENT

SOLUTIONS : MODEL PRACTICE PAPER 2

Q. 1. (A)
(1) False (2) True (3) True (4) False (5) False.

Q. 1. (B)
(a – 2); (b – 8); (c – 6); (d – 7); (e – 5).

Q. 1. (C)
(1) three
(2) planning
(3) fleet
(4) shopping cart
(5) Market research

Q. 1. (D)
(1) (a) eight (2) (a) valued (3) (b) Government of India
(4) (a) Business ethics (5) (b) Booms and Bitner.

Q. 2. (1) Motion Study :

(1) This is one of the important techniques of scientific management developed by
F. W. Taylor. Motion study refers to the movements of employees, as well as
movement of machine while completing a particular task. The motion study helps
the manager to know the movements required for a person to do a particular job.
(2) This study is useful to manager to eliminate the unnecessary movements or their
sequence for doing the job. It also helps the manager to combine some actions or
movements in the process. It increases efficiency and productivity of the employees
and helps in reducing the wastage of time, raw material and improving the usefulness
of resources.
(2) Promotion :
(1) Promotion is one of the basic elements of marketing because it makes the customers
aware of its product, creates brand recognition and sales. Promotion refers to any
type of marketing communication used to inform and persuade potential buyers or
consumers to buy the products by explaining them the regular merits of products,
service, brand, etc.
(2) Promotion mix comprises of different tools such as advertising, sales promotion,
direct marketing, personal selling, etc. Promotional strategies to be used in the

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 1

 business depend on various factors such as budget, target market and the message
it wants to communicate.
(3) Social Responsibility :
(1) Social responsibility is an obligation of the business organisation to take those
decisions and perform those actions which are desirable to fulfil the objectives and
add values to our society. The business enterprises should undertake such activities
which will protect and contribute to the interest of society and fulfil their
expectations.
(2) According to Keith Davis, “Social responsibility of business refers to the obligations
of businessman’s decisions and actions beyond the firm’s direct economic and
technical interest ”. In brief, social responsibility comprises of an element of
voluntary action taken by the business people for the benefit of the society.

(4) Lok Adalat :

(1) Lok Adalat, i.e. People’s Court is established by the government to settle the disputes
by compromise. It is the effective and economical system for quick redressal of public
complaints and grievances. In this system the aggrieved party can directly approach the
Lok Adalat with his complaint. In Lok Adalat, issues are discussed immediately
and decisions are taken without delay. The order passed by the Lok Adalat is given
statutory recognition.
(2) In public sector, some organisations such as Railways, Maharashtra State Electricity
Distribution Co. Ltd (MSEDCL), Maharashtra State Road Transport Corporation
(MSRTC), Insurance Companies, Banks, etc. regularly hold Lok Adalat to resolve
consumer’s problems through compromise.
(5) Place concept of market :
(1) The place concept of market is usually taken to mean the place where the goods
and services are bought and sold for money or money’s worth. In the place concept
of market, emphasis is given on the place where trading takes place. It is referred
to a place where buyers, sellers and other intermediaries meet and buy and sell
goods and services.
(2) In ancient days the term market was defined on the basis of place only. However
in recent era of information and technology market has wider meaning and not just
a place.

(6) Business ethics :

(1) The word ‘ethics’ is derived from Greek word ‘Ethos’ which refers to human
character and conduct. The term ‘business ethics’ refers to a system of moral
principles or rules of conduct applied to business operations or activities.

2 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

 (2) According to Wheeler, “Business ethics is an art or science of maintaining
harmonious relationship with society, its various groups and institutions as well as
reorganising the moral responsibility for the right or wrong conduct of business”.

Q. 3. (1) (i) Dream of Sachin is to become an entrepreneur.

(ii) Entrepreneur is a person who is willing to take risk in order to earn money
and start a business.
(iii) To become a successful entrepreneur, Mr. Sachin should have qualities like
being an innovator, creator, reactive and risk bearer.

(2) (i) ‘Warehousing’ is the service that helps Mr. Pawan to safeguard his goods from
any damage.
(ii) Transport service will help Mr. Pawan to remove the difficulty of place.
(iii) Mr. Pawan will get financial support from Banking sector.

(3) (i) By treating the staff with dignity and respect, the company follows the social
responsibilities towards the employees.
(ii) YR Industries Ltd. are presenting social values by showing co-operation to their
female staff.
(iii) Management takes the employees’ suggestions while taking the decisions even
though they are members of trade union. By doing this, management recognizes
the right of employees to join Trade Unions. The company also does not restrict
employees from forming Trade Union. Thus, they follow social responsibility
towards employees.
Q. 4. (1) Organising and Co-ordinating :

Organising Co-ordinating
1. Meaning
Organising refers to the process of putting Co-ordination refers to the process of
together various resources and activities developing harmony and integration of
of the organisation into a system. different activities to achieve common
organisational goals.
2. Objective
The main aim of organising is to identify The main aim of co-ordination is to ensure
and bring together all the required unity of efforts of employees and smooth
resources. functioning of the organisation.
3. Area of function
Organising involves identifying the Co-ordination involves deliberate or
activities and grouping of relative activities consistent efforts by the management to
of the organisation. create harmony and unity of action.

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 3

 4. Factors
In organising function, internal as well as In co-ordinating function, only internal
external factors are considered to make factors are considered to create unity of
arrangement of available resources. action.
5. Resources
Organising is related with all the resources Co-ordination is related with human
which are required to be arranged in resources only.
proper order.
6. Levels of management
Top level management and middle level All levels of management are responsible
managements are responsible for the for the co-ordination to achieve the given
organising of resources to achieve desired targets.
objectives.

(2) Central Bank and Commercial Bank :

Central Bank Commercial Bank

1. Meaning
The bank which regulates money supply The bank which accepts deposits from the
in the country by exercising control over public, grant loans to businessmen and
the commercial banks is called Central public is called Commercial Bank.
Bank.
2. Printing of Currency
The central bank is authorised to print The commercial bank is not authorised to
currency notes. print currency notes.
3. Acceptance of deposits
The central bank does not accept deposit The commercial bank accepts deposit from
from the public. general public.
4. Loans
The central bank provides loans and The commercial bank grants loans and
advances to banks and other financial advances to businessmen, industry and
institutions. people.
5. Ownership
The central bank is owned and controlled The commercial banks can be owned and
by the Central government of the concerned controlled by the government as well as
country. private sector organisations.

4 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

 6. Number
There can be only one central bank for the There is a large network of different
whole country. commercial banks in the country.

(3) District Commission and National Commission :

District Commission National Commission

1. Meaning
A consumer disputes redressal agency at A consumer disputes redressal agency at
the district level established by the State the national level established by Central
Government is known as District Government is known as National
Commission. Commission.
2. Nature of complaint
It can entertain only original cases which It can entertain original cases as well as
are within the local limits of district. appeals against the order of State
Commission which are within the
geographical limits of the entire nation.
3. Membership Tenure
Every member of District commission Every member of National Commission
shall hold office for a term of 5 years or shall hold office for a term of 5 years or
up to the age of 65 years whichever is up to the age prescribed whichever is
earlier. earlier.
4. Area covered
It has jurisdiction over a particular district. It has jurisdiction over the entire nation.
5. Monetary jurisdiction
It has the jurisdiction to entertain It has the jurisdiction to entertain
complaints where the value of goods and complaints where the value of goods and
services, including compensation, if any, services, including compensation, if any,
does not exceed ` 1 crore. exceeds ` 10 crore.
6. Appeal
Any person not satisfied with the order of Any person not satisfied with the order of
District Commission can appeal against National Commission can appeal against
such order to the State Commission within such order to the Supreme Court within a
45 days of the order. period of 30 days from the date of the
order.

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 5

 (4) Staffing and Directing :

Staffing Directing
1. Meaning
Staffing is a process of recruitment through Directing means instructing, guiding,
which competent employees are selected, inspiring and motivating the subordinate
properly placed and trained, effectively employees so that their efforts result in the
developed and suitably rewarded. achievement of goals.
2. Objective
The main objective of the staffing is to The main objective of directing is to
obtain the most competent and efficient ensure that the employees at different
people to improve the overall performance. levels accomplish their tasks according to
plans.
3. Area of function
Staffing involves recruitment, selection, Directing involves guiding, instructing,
training, promotion, development, transfer, inspiring, motivating and communicating
etc. of employees. with the subordinates.
4. Order
Staffing function follows organising as Directing function follows organising and
human resources are required in an staffing as direction is needed to guide and
organisation. inspire the employees.
5. Targets
Targets of staffing include allocation of Targets of direction include giving
human resources to achieve better results. guidance and inspiration to employees to
achieve better results.
6. Outcome
Staffing function helps to select right Directing function helps to maintain
persons for right jobs at right time. discipline among the staff.

Q. 5. (1) Henry Fayol, the Father of Modern Management developed the following 14
principles of management :
(1) Principle of Division of Work : According to this principle, the entire work such
as technical, financial, commercial, accounting, management and security operations
should be assigned to different employees as per their qualification, qualities,
capabilities and experience. It gives benefits of specialisation and improves
efficiency and expertise of employees. This in turn helps to attain expected
productivity level.

6 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

(2) Principle of Authority and Responsibility : Authority implies right or freedom
to take decisions. The manager should be given authority to get the work done
systematically from the subordinates. Authority should always go with corresponding
responsibility, e.g. if manager is given authority to complete a specific task within
a given time, he would be held responsible for the same. Manager should have
adequate authority to take managerial decisions on his own to achieve the goal.
(3) Principle of Discipline : Fayol insists that discipline is essential for smooth
working of an organisation. It helps to achieve the goals set in the organisation. In
relation to organisation, discipline means strictly obeying instructions of the
superiors. There should be clear and utmost understanding between management
and employees in respect to organisation’s rules. It is necessary to observe basic
discipline at all levels of management.
(4) Principle of Unity of Command : According to this principle, every employee
should receive orders and instructions from only one boss and he should be
accountable to only him. If he receives orders from more than one boss at a time,
he will not understand whose orders should be executed first. To avoid this,
organisational hierarchy should be well defined and each employee in the
organisation should know his immediate boss. He should receive orders and
instructions from only him and should report to only him.
(5) Principle of Unity of Direction : Fayol advocates “One head for One plan”. It
means that a group of employees working on similar activities should have common
objectives and must work under one head (senior). All the objectives of the different
groups should be in line with the objectives of the organisation. If this principle is
followed there will be an effective co-ordination of the individual efforts and
energies.
(6) Principle of Subordination of Individual Interest to Organisational
Interest : According to this principle, the interest of the organisation must always
be given greater importance than the interest of an employee or a group of
employees. While taking decision, the manager should always consider the interest
of whole group rather than the interest of an individual employee. Similarly,
employees should surrender their personal goals or interests before that of an
organisation e.g. while playing a game a team player should always play to win
the game and not for his individual records.
(7) Principle of Centralisation : Centralisation means concentration of authority or
power in a few hands at the top level. As number of employees is less in a smaller
organisation there is centralisation of authority. Decentralisation means even
distribution of authority or power at every level of management. As number of
employees and levels of management are more in a larger organisation, there must
be decentralisation of some authorities for its smooth functioning. According to

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 7

 Fayol, there must be a proper balance between centralisation and decentralisation,
depending upon the nature and size of an organisation.
(8) Principle of Remuneration : According to this principle, the employees must be
paid fair and appropriate remuneration to keep them satisfied financially and to
retain them within the organisation for longer period of time. While fixing
remuneration various factors such as the skill, knowledge, expertise, tenure, cost
of living, market trend, profitability of organisation, etc. should be considered. It
boosts the morale of employees and increases efficiency and productivity.
(9) Principle of Scalar Chain : According to Fayol, in the organisation decisions,
orders, instructions, messages, etc. must be passed through a chain, i.e. from the
general manager to the respective functional manager, then to the supervisor, then
to the foreman and then ultimately to the workers. Similarly, suggestions,
information, grievances, etc., must flow from the worker in the upward direction.
This is called Scalar Chain. Sometimes, following a scalar chain becomes a lengthy
process. In such cases, ‘Gang Plank’ is followed which permits speedy and direct
communication between the employees working at the same level of authority.
However, for this, permission of the proper authority is necessary.
(10) Principle of Order : The principle of order is based on ‘a place for everything
and everything in its place’. According to this principle, in every organisation there
should be proper, systematic and orderly arrangement of men and materials. There
should be a fixed place to keep every material and thing used in the organisation
and a fixed place or a seat for every employee. The purpose of this principle is to
reduce wastage of time and energy. This principle emphasises more on the proper
and optimum utilisation of physical and human resources.
(11) Principle of Equity : This principle states that the management should be fair as
well as friendly to the subordinate staff. There should be no discrimination of
employees in regard to division of work, delegation of the authorities, deciding the
monetary terms, etc. This principle also states that the remuneration should depend
not on the department but at the level at which employees are working. It means
the employees working on the same level but in separate departments must be paid
equal wages. It will also help in avoiding conflicts in an organisation.
(12) Principle of Stability of Tenure : According to this principle, at the time of
recruitment of employees, the management should assure them about the stability
of tenure (i.e. job security). This creates a sense of belonging among the employees.
Job security increases efficiency of the employees and minimises employees
turnover ratio.
(13) Principle of Initiative : Initiative means to do the work in an innovative way in
his or her personal capacity. According to this principle, managers should give
freedom, opportunity or encourage the subordinates to take initiative while working

8 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

 on given job. Their suggestions and ideas should be invited before framing the
plan. This can work as a morale booster for the employees and leads to timely
achievement of organisational goals.
(14) Principle of Esprit de corps (Team Work) : ‘Esprit de corps’ means union is
strength. This principle integrates and co-ordinates the individual and group efforts.
It emphasises the spirit of teamwork. The manager as a leader should create the
feeling of team spirit and understanding among the various groups. When entire
group of employees works as a team, their efforts get directed towards realising
the goals of the organisation.
(Write any 4 points with explanation.)
(2)
(1) Outsourcing is a process of allocation of specific business processes or functions
to a specialist external service provider or agency for certain monetary consideration.
In outsourcing, the service provider or contractor enters into an agreement or formal
contract with the company or the firm for providing services against certain
monetary charges. After this the service provider, will take the responsibility of
carrying out the tasks as per the expectation of the company.
(2) In such cases the security guards, waiters, cooks, sanitation scavangers, etc. are not
the employees of the company although they work inside the company premises.
They directly work under the control of service provider or contractor. Many
organisations, companies, corporate houses, establishments, hospitals, shops, malls,
housing societies, offices, etc. outsource their non-core (less important) areas of
business such as canteen, sanitation, security services, etc. to outside agencies.
(3) Similarly arrangements for wedding, anniversary, birthday celebration, etc. can also
be outsourced to such agencies. With increasing global competition, most of the
companies are focussing their attention on the improvement of quality of their
products. Hence, they outsource their non-core business areas so that they can
concentrate fully on their core business activities.
(4) Outsourcing benefits the organisation in two ways, viz. (i) It helps to reduce overall
costs and (ii) It can use the expertise of the specialised agencies to perform certain
tasks more efficiently.
(3) The different types of deposits are explained below :
(1) Fixed Deposits : Fixed deposit is a type bank account in which certain fixed
amount is deposited and kept in the bank for certain fixed period of time bearing
fixed interest rate. The rate of interest paid on fixed deposit is higher than the rate
of interest paid on other types of deposits. This rate of interest varies with the
deposit period. Interest may also be paid periodically or annually. On Premature
withdrawal of deposit before maturity date, lower rate of interest is given. The

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 9

 deposit holder gets Fixed Deposit Receipt (FDR) issued by the bank. Loan can be
obtained against this FDR.
(2) Recurring deposit : Recurring deposit is an account where depositor is required
to deposit certain fixed amount at regular interval, say monthly, for certain fixed
period. On the date of maturity, depositor gets the total amount deposited and
interest accrued on such deposit amount. Rate of interest paid is higher and varies
according to period of time. The depositor is given pass book to record the entries
of deposits. It is taken by salaried people and businessmen who have regular
income.
(3) Savings deposit : A bank account designed for the personal savings is called
savings account. The main aim of this deposit account is to inculcate the regular
habit of savings among the common people. This account is suitable for those
people who have fixed and regular income like salaries, wages, etc. Although there
is no restriction on the depositing of money but frequent withdrawals are not
permitted by the bank. Interest on balance amount is credited in this account
quarterly or half yearly. Pass book, cheque book, balance on SMS, account statement,
etc. are provided to the accountholders to know the position of account.
Some banks provide to their accountholders flexi deposit facility which combines
the advantages of savings account and fixed deposit account. In case of multiple
option deposit account, the excess amount above certain predetermined limit gets
automatically transferred from Savings Account to fixed deposit account. Under
this type of account, if adequate fund is not available in savings account to honour
the cheques, then the funds get transferred automatically from fixed deposit account
to savings deposit account.
(4) Current Account : A current account is a type of bank account meant for a
businessman or a firm or commercial organisations for facilitating regular trading
operations. There are no restrictions on withdrawal of money from this account as
long as there is balance in the account. Usually no interest is paid on the balance
available in this account. Overdraft and cash credit facilities are provided to the
current accountholders only. Banks provide monthly statement of account every
month in this account.
Q. 6. (1)
(1) The term ‘warehousing’ is generally used to denote all those activities which are
concerned with the storage of goods in a godown or warehouse. In modern days,
these is a time gap between production of goods and their distribution.
(2) Agricultural goods such as rice, wheat, sugar, spices, etc. are produced seasonally
but consumed throughout the year. It is necessary to store them in large quantity.
Some perishable goods are preserved in cold storage so that their quality remains
as it is.
10 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)
(3) Warehousing is essential to hold stock of goods till they have suitable demand in
the market. This also helps in price stabilisation.
(4) Warehousing helps to protect the goods from theft, deterioration, i.e. future risks.
Warehouses also provide facilities like packing, processing, grading, transporting,
etc. Therefore, warehouse is of great importance.
(2)
(1) In the year 1911, Fredrick Winslow Taylor published Principles of Scientific
Management. His primary objective was to increase efficiency of employees by
scientifically designing jobs. According to his views, management problems should
be solved through experiments and use of scientific techniques rather than rules of
thumb and trial and error approach.
(2) Taylor had conducted many experiments at workplace and as a result of those
experiments, he advocated standardisation of tools and equipment. Standard here,
means a level of quality or achievement, especially a level that is acceptable.
(3) According to him, standardised working environment and standardised methods of
production tools and equipment help to reduce spoilage and wastage of materials.
This in turn reduces the overall cost of production.
(4) Similarly use of standardised tools and equipment increases efficiency of employees
and also helps to reduce fatigue among the workers. This improves the quality of
work.

(3)
(1) e-business is run, managed and carried out with the help of information technology,
i.e. web (internet). Therefore, it is easy to set up and requires very less capital.
(2) In traditional business large, physical space is needed, to arrange and display the
variety of goods. It needs large amount of capital to have infrastructure, staff and
other required facilities.
(3) In traditional business, time is required to travel, to convince, to negotiate and to
interact with the customers. In such process lot of time, energy and money are
wasted. While in e-business required information is provided and accepted with
terms and conditions more instantly.
(4) e-business is also free from most of the problems as faced by the traditional
business. Thus, it is easy to set up e-business.

(4)
(1) NGOs organise campaigns and various programmes on consumer issues to create
social awareness.
(2) They initiate and organise training programmes for the consumers and make them
aware and conscious of their rights and various modes of redressal of their
grievances.

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 11

 (3) They publish journals and periodicals at regular interval to make the consumers
understand and keep them informed about various consumer related developments.
(4) They provide legal advice free of charge to the members on the matters of consumer
interest and help them to put up grievances before appropriate authority.
(5) NGO’s active members interact (communicate) with the businessmen and Chambers
of Commerce and Industry for ensuring better deal for the consumers.
(6) They file Public Interest Litigation (Janhit Yachika) on important consumer issues
like ban on a product or medicine injurious to public health. They also file cases
in the court of law to safeguard the rights and protect the interest of general public.

Q. 7. (1) The importance of staffing is given as follows :

(1) Effective management function : Staffing is considered an effective management
function as it deals with human resource. Employees appointed in the organisation
through staffing function perform various activities in different areas of the
organisation such as production, marketing, finance, etc.
(2) Effective utilisation of Human Resources : A well organised staffing department
discovers the talented, skilful, experienced and qualified staff. Proper care is taken
at every stage of recruitment, selection, placement, etc. It ensures smooth functioning
of all the managerial areas of the organisation.
(3) Builds relationship : A sound staffing policy creates a team spirit among the
employees. Due to team spirit, a sense of belongingness among the employees is
developed. This in turn leads to better communication and co-ordination of
managerial efforts in an organisation. A smooth human relation is the key to better
flow of co-ordination in an organisation.
(4) Helps Human Resource Development : Skilled and experienced employee is an
asset of a business organisation. Staffing function of management is mainly
concerned with human factor of production. Efforts are made to utilise the human
resources more efficiently.
(5) Helps in effective use of technology and other resources : Staffing function
trains employees to use latest technology, capital, material and method of work
more effectively. This brings competitive strength to the organisation. It also helps
in improving standard of work and productively in terms of quality and quantity.
(6) Improve efficiency : Regular training and development programmes provide to
employees to improve their performance levels. Through proper selection the
organisation gets talented and quality employees.
(7) Long term effect : Sub-functions of staffing, namely, proper selection, training,
development, motivation, etc. help to achieve long-term benefits such as increase
in productivity and efficiency, loyalty of customers and employees, etc.

12 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

 (8) Essential contribution : The selection of employees should be based on the
ability of the prospective candidates to meet the future challenges. Selection is
based on the ability of the prospective employee so that organisation can meet the
future challenges wisely. Therefore, in staff selection, the selectors should take
into account the contribution of the employees in their future roles.
(9) Provides job satisfaction : A good staffing policy creates job satisfaction in the
minds of the employees. For instance, proper placement of the individuals
according to their knowledge, experience and aptitude, timely promotions, training
etc. give job satisfaction. Fair remuneration and job security are the factors which
are important in providing job satisfaction.
(10) Maintains harmony : Proper staffing policy helps to develop good labour
relations. The performances of employees are regularly appraised and promotions
are made on merits. Due to this, employees develop positive attitude towards the
management which, in turn, helps to bring about peace and harmony in the
organisation.
(Write any 5 points with explanation.)

(2) The importance of marketing to the firm is explained as follows :

(1) Increases awareness : Marketing provides information and creates understanding
among the consumers about the existing products, new arrivals and the company
selling a particular product in the market. This in turn increases awareness among
the potential consumers and creates brand image among the consumers.
(2) Increases sales : Successful marketing campaign enables the business organisations
to enhance the sales of the organisation. Expansion in sales increases profit for the
organisation which is in turn reinvested in the business to earn more and more
profits in the future. In recent era, survival of the business organisations depends
on the effective and efficient marketing function.
(3) Create trust : Efficient and effective marketing plays significant role in creating
good relationship between the customers and the organisation. The consumers
usually prefer to buy required goods and services from those business enterprises
which have trustworthy reputation in the market. Trustworthy business enterprises
earn loyal customers. This trust worthiness creates customers loyalty. Satisfied
customers enhance the brand image of the organisation in the market. Efficient
pricing policy and appropriate after sales service improve image of the business
enterprises. Majority of marketing activities move towards building brand equity of
the business.
(4) Basis of making decisions : Every business organisation is required to take several
decisions before delivering the final products or services to the consumers. The

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 13

 business organisation is required to consider or face many problems such as what
to produce, how to produce, when to produce, and for whom to produce. When
business expands, the decision making process becomes more complex. Effective
marketing facilitates organisation to take right decisions at right time.
(5) Source of new ideas : Marketing enables the business organisations to know the
requirements of the consumers. Feedbacks received from the consumers helps the
manufacturers or producers to make improvement or desired changes in the existing
products. Due to marketing, business enterprises understand changes and new
demand patterns in the market. Accordingly, Research and Development department
develops the products. Inventions and innovations are made by the Research and
Development team of the business when the need arises.
(6) Tackling the competition : On account of increasing competition among all the
sectors of the economy, it is now difficult for any business enterprise to create
monopoly for its products or services. Marketing facilitates organisations to
communicate the salient features and advantages of products and services to
consumers and induce them to buy the same. Efficient marketing strategies depict
better image of the business than competitors and creates brand loyalty in the mind
of potential buyers.
(Write any 5 points with explanation.)

(3) The responsibilities of the consumer are explained as follows :

(1) Consumer should use his rights : The consumers have many rights in respect to
the goods and services they purchase. They must be aware of their rights while
buying the products. They can use their rights if they are misled by advertisement
or get faulty or defective articles.

(2) Cautious consumer : The consumers should be alert while dealing with the trader.
They should be aware of their responsibilities while buying goods and services.
Before buying any product or service, the consumer should make detail enquiry
about the quality, quantity available, price, date of manufacture, expiry date, utility
of goods and services, etc.

(3) Filing of complaint : If consumer has complaint about the products or services he
has purchased, he should immediately approach the officer concerned and lodge
complaints about the products or services. If consumers ignore the dishonest acts
of the traders, it may indirectly amount to encouragement to unethical business
practices.

(4) Quality conscious : It is the responsibility of the consumers to buy quality goods.
They should never compromise on the quality of goods. They should never buy

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 inferior goods out of greed at low price. It is the responsibility of the consumer to
ensure about the quality symbols like, ISI, AGMARK, Hallmark, etc.
(5) Beware from exaggerated advertisement : The sellers many a times they
exaggerate the facts of the products in their advertisements. It is the responsibility
of the consumers to find out or identify the truth of advertisement and then buy the
products, or services.
(6) Demand of Invoice, Guarantee, Warranty Card : After purchasing the products,
the consumer should ask for cash memo, guarantee or warranty card. He should
preserve the cash memo and guarantee or warranty card. If the products purchased
are of inferior quality or become defective these cards are useful to settle the
disputes and claim compensation or replacement of articles.
(7) Pre-planned buying : It is the responsibility of the consumer to make proper
planning before buying any product. He should make an estimate of products he
wants to buy and quantity required, money to spend, etc. He should also decide in
advance from which place to buy.
(8) Organised efforts : The consumer is expected to shoulder the responsibility to
promote and protect the interests of his own and other consumers. He should join
the group or organisation which is working for the welfare of consumers. It is the
responsibility of every consumer to unite for the welfare of all the consumers.
(Write any 5 points with explanation.)
Q. 8. (1)
[A] Meaning :
(1) The term ‘communication’ means any interchange of ideas, messages, facts,
information, feelings and emotions among two or more persons in a way that they
share common understanding about it. It is a process of giving away or passing on
any information by any person to some other person with the help of some medium.
Thus, receiver after receiving the message understands it in the desired form and
acts accordingly.
(2) Means of communication consist of magazines, newspaper, post and telegraphs,
telephone, internet, e-mail, television, etc. Communication facilitates transmit
business information more quickly among the businessmen. The difficulty of
distance is effectively solved by various means of communication. Effective
communication facilitates the development and growth of domestic and international
markets which bring prosperity to the country.

[B] Types of Communication : The different types of communication are explained

below :

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 15

 Communication

Postal Services Modern means of

Communication

Specialised Money
Retail
Mail Services Postal Remittance
Services Courier
Services Services Internet e-mail
Services
Inland Letter Business Post eMO Retail Post
Envelope Logistics Post iMO e-Post
Parcel Bill Mail Service IMT
Book-Post

The different types of communication are explained below :

(I) Postal Services : The postal services in India are provided by the Department of
Post which comes under Ministry of Communication and Information Technology.
India has the largest postal network in the world with 1,54,965 post offices of which
1,49,067 are in the rural areas. The different types of postal services are explained
below :
(1) Mail Services : The different types of mail services are described below :
Inland letters : The inland letter is one of the cheapest means of conveying written
message. It contains a blank sheet of paper of prescribed size and folding for writing
messages. It is folded and sealed. Only names and addresses of the receiver and sender
can be seen from outside. So, it ensures complete secrecy. Inland letters are used for
transmission of messages within India only.
Envelopes : A postal envelope is a small size paper cover with postage stamps affixed
on it having one side open to put in papers, written messages and enclosures like
cheques, photos, resumes, etc. It ensures maximum secrecy. On the front outside space
name and address of receiver are written and on the backside space name and address
of sender are written.
Parcel : Parcels help to send small articles from one place to the other by post. Parcel
post provides economical and reliable parcel delivery service. Parcels of specified
weight and size can be sent at different places within the country as well as outside the
country. Anything except those items which are banned can be sent. Parcel can be
insured by paying extra charges for insurance. In case of insured parcel is lost in transit
post office pays insured amount.
Book post : Printed materials such as publications, newspapers, printed books, wedding
cards, greeting cards, periodicals, legal documents, etc. can be mailed as book post. The
book post packets should simply be closed and should not be sealed. The words ‘Book
Post’ should be written on the face of the cover.
(2) Specialised Postal Services : The following specialised postal services are provided
by the post offices :

16 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

Business Post : Business post arranges complete mailing services right from preparation
of mail to delivery of mail. It is most suitable for small business and large companies.
As per requirement, customers can select from a range of cost effective and professional
mailing services which include printing, collating (comparing or examining), inserting,
sealing and addressing. Indian post has established Business Post centres in major cities
to handle business post consignment.
Logistics Post : Logistics post provides its business customers a cost-effective and
timely solution that manages the entire value chain from collection to storage to
transmission to distribution throughout the country.
Bill Mail Service : Communications in the nature of financial statements, bills, monthly
account statements or any such other items of similar nature are sent by service providers
to the customers by using bill mail service of post office. This service is used at least
once in 90 days. Under this service, at a time minimum 5000 articles can be posted.
The bill mail service does not include communication in the nature of letter mail or
having personal communication or exclusive commercial publicity material. The mail
is to be received at specified location provided. Bill mail is to be sorted pin code wide
and bundled delivery post office wise.
(3) Money remittance services : The money remittance services are explained as
follows :
Electronic Money Transfer (eMO) : A money order is the most convenient method
of remitting money to distant places. It is an order issued by one post office to another
to pay a certain amount of money to a person specified therein. The person to whom
money is to be paid is called ‘Payee’. Under this service of the post office, money is
delivered at the house or the place of stay of the receiver.
Instant Money Order (iMO) : Instant Money Order (iMO) is an instant web based
money transfer service by which minimum ` 1000 and maximum ` 50,000 can be
transferred to distant places from designated iMO post offices. It is the instant on-line
money transfer service which is safe, convenient, reliable and affordable. The money
can be sent to close relative residing at distant place in India. It is simple, quick and
economical to send and receive money.
International Money Transfer : International Money Transfer is the most convenient, quick
and easy way of transferring personal remittances from foreign country to family members
or other beneficiaries in India. Now this service is made available in all post offices in India
by Department of Post, Government of India with the help of Western Union Financial
Services. The remittances of money are permitted from around 195 countries to India.
(4) Retail services : The retail services are explained as follows :
Retail post : Under retail post service, the department of post offers services to general
public by making available some products and services of third party available in their
areas through selected post offices. Under this, post offices offer a range of services
including the collection of electricity bills, telephone bills, insurance premia, collection
of taxes and fee for the government, etc. The post office also sells application form.

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 17

 e-post : Recently, the department of posts has introduced e-post services. e-post service
is service under which printed messages of customers are scanned and transmissed as
email through internet. At the destination place or offices, these messages are printed,
enveloped and delivered at the postal address. Thus, it is the combination of electronic
transmission and physical delivery. Through e-post customers can send their messages
to any address in India through network of more than 1,55,000 post offices. Corporate
customers get special e-post rates and value additions.
(II) Modern means of communications : The modern means of communication are
explained as follows :
Courier Service : A courier service is a service that allows someone to send a parcel
or consignment from one place to some other distant place. Usually, courier services
are provided by a company and charge flat rates to the parties using the courier service
regularly. Courier services differ from ordinary mail services in respect to speed,
security, tracking, signature, delivery time, etc. Usually, premium courier services are
more expensive as compared to ordinary mail services. DHL, DTDC, etc. are the
examples of courier services.
Internet : The internet is one, in which users at one computer can, if it has permission,
get information from other computer. It is a networking infrastructure. It connects
millions of computers together globally, framing a network in which any computer can
communicate with any other computer as long as they are both connected to internet.
It is a network of networks that include of private, public, academic, business and
government networks of local to global scope linked by a broad array of electronic,
wireless and services such as world wide web, etc.
E-mail : E-mail stands for Electronic mail. E-mail refers to the transmission of
information, from one computer terminal to another. It is a method of exchanging mail
between the users of electronic devices. E-mail servers accept, forward, deliver and
store messages. Users are not required to be online simultaneously. They are required
to connect to a mail server briefly for as long as it takes to send or receive messages.
(2) The importance of marketing to the society and consumers is shown in the following
chart :
Importance of Marketing

[A] To the Society [B] To the Consumer

1. Increases standard of living 1. Promotes product awareness
2. Provides employment 2. Provides quality products
3. Decreases distribution costs 3. Provides variety of products
4. Consumer awareness 4. Helps in selection
5. Increase in national income 5. Consumer satisfaction
6. Managing consumer 6. Regular supply of goods
expectations

18 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

Importance of marketing to the society and consumers is explained as follows :
(A) Importance of Marketing to the Society :
(1) Increase in standard of living : The main aim of marketing is to supply goods
and services to fulfil the customers’ requirements. Marketing helps to find out the
requirements of the customers and accordingly makes efforts to supply quality
products at cheaper prices. This in turn helps to maintain and raise the standard of
living of the customers. In recent era, large scale production of products and services
have considerably reduced their prices due to which poor people also attain
reasonable level of living.
(2) Provide employment : Modern marketing undertakes almost all functions of
organisation such as buying, selling, financing, transport, warehousing, risk-bearing,
research and development, etc. which generate more job opportunities in different
capacities and helps to solve the problem of unemployment.
(3) Decreases distribution costs : Effective and proper utilisation of channel of
distribution reduces overall cost of the products and services. Thus, marketing
activities make the goods and services available to the society at cheaper prices.
Due to reduction in the cost, number of potential consumers will also increase. It
also gives guarantee of timely availability of the product.
(4) Consumer awareness : Marketing helps the society by educating consumers and
by giving them information of new products and services available to fulfil the
requirements of consumers. It not only provides relevant information, but also
goods and services to the people as per their demand and taste. Marketing also
includes information to help in making a purchase.
(5) Increase in National income : The scientifically well organised marketing
activities facilitate rapid economic development of the nation. Well organised and
effective marketing of products and services facilitates industrialisation, increases
job opportunities and develops the economy. Effective marketing integrates
agriculture and industry which in turn bring about rapid development in the country.
(6) Managing consumer expectations : Marketing research enables the business
organisations to understand the requirements of the consumers, which helps in
development of products to satisfy the customers’ expectations. The business
organisations make certain changes in the existing product by considering consumers’
review. Through marketing, business enterprises inform consumers about the major
changes such as mergers, transfer in ownership which affect product offerings.
Government regulations stop marketers from making false and misleading claims.
[B] Importance of Marketing to the Consumers :
(1) Promotes product awareness : Many companies undertake different marketing
activities to promote their products and services. Marketing makes consumers

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD XII (O. C.) 19

 aware about the different products, services, various brands and features of products
and services available in the market. Marketing facilitates the consumers to take
right decision on purchases of products and services. On the basis of marketing
information, consumers can compare product features, availability, price and other
essentials. Marketing also improves the quality of life of the consumers.
(2) Provides quality products : On account of increasing competition in the market,
consumers easily get information about the products and services available in the
market. Marketing creates moral pressure on the business enterprises to sell quality
products and services to the consumers. If business enterprises supply defective
products to the consumers, sooner or later, it will create negative image of the
business and adversely affect customers’ loyalty towards business and its products/
services.
(3) Provides variety of products : Marketing provides information to the consumers
about the product and attracts them to purchase the same Market segmentation is
becoming critical in any business on account of increase in customer population,
their wide preferences and availability of competitive options. The business
organisations are required to launch product by considering market segment. The
business organisations are required to make available variety of goods to fulfil the
requirements of different market segments of the consumers. According to price,
size and quality of products, variety may change.
(4) Helps in selection : In the competitive markets, different variety of products with
different brands are available. Marketing enables the consumers to select the best
products and services from the different options available.
(5) Consumer satisfaction : The main and primary aim of sound marketing policy is
to satisfy consumers by giving assurance of good quality product. When the
expectations and requirements of customers are fulfilled, the customers become
more comfortable and get satisfied. Marketing efforts result into customers’
satisfaction by way of honest advertising, assurance of quality products and
availability of innovative products. In this manner, marketing makes efforts to give
satisfaction to the consumers.
(6) Regular supply of goods : Regular supply of goods to the consumers is practicable
through effective and efficient distribution channel of marketing. Marketing also
helps to keep and maintain the balance between demand and supply. As a result,
prices get stabilised.
(students are expected to write any 4 points (each) from importance to society and
consumers with explanations.)

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20 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)