Class – 12

Business Studies

Viva Questions for Practice

Principles of Management:

General Questions:

1. Who is considered the father of scientific management, and what were his key
contributions?

- Frederick Winslow Taylor is the father of scientific management. His key contributions
include:

Introducing the concept of Scientific Management to improve efficiency.

Principles like Science, Not Rule of Thumb, Harmony, Not Discord, and Division of Work.

Development of time and motion studies.

2. What are management principles, and why are they important?

- Management principles are fundamental guidelines for decision-making and behavior

in organizations.

Importance:

Provide a framework for efficient management.

Help in planning, organizing, and controlling.

Facilitate better coordination and reduce errors.

3. Can you differentiate between principles of management and techniques of

management?

- Principles of Management: Broad guidelines like division of work, equity, etc.

Techniques of Management: Practical methods like time study, work study, or budgeting.

Specific to Fayol’s Principles:

4. What is meant by Unity of Command? Why is it important?

- It means an employee should receive orders from only one superior.

Importance:

Prevents confusion.

Ensures clear communication.

Improves accountability.

5. Explain the principle of Division of Work. How does it improve efficiency?

- Dividing work among individuals based on their specialization.

Benefits:

Increases expertise.

Saves time.

Enhances productivity.

6. What do you understand by Scalar Chain?

- The formal chain of command in an organization, running from top management to

lower levels.

Importance:

Ensures communication flows smoothly.

Helps maintain hierarchy.

7. How does the principle of Equity contribute to organizational growth?

- Treating employees fairly and with respect, regardless of rank.

Benefits:

Boosts morale.

Reduces employee turnover.

Enhances loyalty and productivity.

8. Why is Espirit de Corps important in an organization?

- It refers to team spirit and unity among employees.

Importance:

Encourages collaboration.

Reduces conflicts.

Increases organizational efficiency.

Specific to Taylor’s Principles:

9. What is meant by Scientific Management?

- Scientific management involves using systematic methods to improve efficiency.

Key aspects include:

Standardizing tasks.

Time and motion studies.

Division of labour.

10. Explain the principle of Harmony, Not Discord with an example.

- There should be harmony between workers and management.

Example: If workers have grievances about working conditions, management should

address them collaboratively instead of ignoring them.

11. What is Functional Foremanship, and how does it differ from unity of command?

- Functional foremanship divides the work of supervision among specialists.

Difference: In unity of command, each worker reports to one boss, while in functional
foremanship, multiple specialists oversee different aspects of work.

12. How does Science, Not Rule of Thumb help in decision-making?

- Decisions should be based on scientific analysis, not personal judgment.

Example: Using time studies to determine the optimal way to complete a task.

Application-Based Questions:

13. Give an example of how Unity of Direction is applied in an organization.

- In a company, all employees in the marketing department work towards increasing sales
rather than pursuing unrelated goals.

14. Can you explain the principle of Initiative with a real-life example?

- A company encourages employees to suggest new ideas, like developing eco-friendly

packaging.

15. How can management ensure discipline without being harsh?

- Setting clear rules and expectations.

Leading by example.

Providing constructive feedback.

Analytical/Scenario-Based Questions:

16. If an organization violates the principle of Authority and Responsibility, what

problems might arise?
- Lack of accountability.

Misuse of authority.

Inefficiency in decision-making.

17. In a company, workers are being underpaid despite high productivity. Which
principle of management is being violated?

- Remuneration of Employees.

18. A company’s employees are unhappy because they receive conflicting

instructions from two managers. Which principle is being ignored here?

- Unity of Command.

19. What would happen if there is no proper Order in an organization?

- Chaos and confusion.

Delays in decision-making.

Inefficient use of resources.

Business Environment:

General Questions:

1. What do you understand by the term Business Environment?

- The business environment refers to all external and internal factors that
influence a company’s operations, including customers, competitors,
suppliers, economic conditions, technology, and government policies.
2. Why is it important for businesses to understand their environment?
- Helps in identifying opportunities and threats.
Aids in strategic planning.
Ensures compliance with regulations.
Facilitates adaptation to changes for long-term survival.
3. What are the main components of the business environment?
- Internal environment: Employees, management, company culture, etc.

External environment: Competitors, economic trends, technological

changes, social factors, and government policies.

4. Differentiate between internal environment and external environment.

- Internal Environment: Factors within the organization, such as employees,
culture, and management.
External Environment: Factors outside the organization, such as market
trends, government policies, and economic conditions.
Specific to Dimensions of Business Environment:

5. What is the economic environment, and how does it impact businesses?

- The economic environment includes factors like GDP, inflation, interest
rates, and consumer income that affect business operations. For example,
high inflation increases costs, while low-interest rates encourage
borrowing.
6. Explain the social environment with examples.
- The social environment involves societal values, culture, demographics,
and lifestyle trends. For example: Increasing health awareness leads to
higher demand for organic products.
Aging population increases demand for healthcare services.
7. How does the technological environment influence business operations?
- Technology impacts production, marketing, and communication. For
example:
E-commerce platforms enable global reach.
Automation increases efficiency and reduces costs.
8. What is the political environment, and why is it crucial for business?
- The political environment includes government stability, policies, and
laws. It affects taxation, trade regulations, and ease of doing business. For
instance, a stable government attracts foreign investment.
9. Can you explain the legal environment? Give examples of laws affecting
businesses.
- The legal environment refers to the laws and regulations businesses must
follow, such as:
Consumer Protection Act, Companies Act, Labour laws (e.g., minimum
wages)

Application-Based Questions

16. How can businesses adapt to changes in the technological environment?

Investing in R&D.

Adopting new technologies like AI and automation.

Training employees to use new tools effectively.

17. What would happen if a business fails to comply with legal regulations?

Fines and penalties.

Loss of reputation.

Suspension or closure of operations.

18. How does the change in customer preferences affect a business?

Businesses may need to redesign products, adjust pricing, or create new marketing
strategies. For example, a shift towards eco-friendly products requires sustainable
packaging.

19. Give an example of how a political decision (e.g., GST implementation) impacts
businesses.

GST simplified the tax structure but required businesses to upgrade accounting systems
and adapt to new compliance processes.

20. How does the economic slowdown impact small and large businesses
differently?

Small businesses may face cash flow issues due to reduced demand.

Large businesses may cut costs but have more reserves to weather the slowdown.

Stock Exchange :

General Questions

1. What is a stock exchange?

A stock exchange is a marketplace where securities such as shares, bonds, and

derivatives are bought and sold.

2. Name any two major stock exchanges in India.

Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)

3. What are the main functions of a stock exchange?

Facilitates buying and selling of securities.

Ensures liquidity and transparency.

Determines fair prices through demand and supply.

Acts as an economic barometer.

4. What is the difference between a primary market and a secondary market?

Primary Market: New securities are issued directly by the company to investors (e.g.,
IPOs).

Secondary Market: Existing securities are traded among investors.

5. Who regulates stock exchanges in India?

The Securities and Exchange Board of India (SEBI) regulates stock exchanges.
Key Concepts

6. What is meant by dematerialization of shares?

Dematerialization refers to converting physical share certificates into electronic form for
easier storage and transfer.

7. Explain the term bull market and bear market.

Bull Market: A market trend where stock prices rise consistently.

Bear Market: A market trend where stock prices decline consistently.

8. What is meant by an index in the stock market? Name any two stock market
indices in India.

An index measures the performance of a group of selected stocks.

Examples:

BSE Sensex

NSE Nifty

9. Define the term listing of securities.

Listing refers to the inclusion of a company’s shares on a stock exchange, making them
available for trading.

10. What are blue-chip companies?

Blue-chip companies are well-established, financially sound, and reputable firms with a
history of consistent performance.

Trading and Participants

11. Who are stockbrokers, and what is their role?

Stockbrokers are intermediaries who execute buy and sell orders on behalf of investors
in exchange for a commission.

12. What is the significance of a Depository Participant (DP)?

A DP acts as an agent of a depository to provide investors with electronic storage and

management of securities.

13. Explain the process of buying shares on a stock exchange.

Open a Demat and trading account.

Place a buy order through a stockbroker.

The broker matches the order with a seller.

Shares are transferred to the buyer’s Demat account.

14. What is the role of SEBI in regulating stock exchanges?

SEBI ensures transparency, protects investor interests, prevents fraudulent practices,

and regulates stockbrokers and exchanges.

15. Who are retail investors and institutional investors?

Retail Investors: Individual investors trading in small quantities.

Institutional Investors: Large entities like mutual funds, banks, and pension funds
investing on a large scale.

Specific Stock Exchange Questions

16. What is the BSE Sensex, and why is it important?

The BSE Sensex is an index of the top 30 companies listed on the Bombay Stock
Exchange, reflecting the market's overall performance.

17. What is the NSE Nifty, and how is it calculated?

The NSE Nifty represents the top 50 companies listed on the National Stock Exchange. It
is calculated based on market capitalization-weighted averages.

18. What is the importance of the National Stock Exchange (NSE)?

The NSE introduced electronic trading, ensuring faster, more transparent, and more
efficient trading.

19. What is the role of the Bombay Stock Exchange (BSE) in India’s economy?

The BSE provides a platform for raising capital, offers liquidity to investors, and acts as a
barometer of economic health.

20. What are over-the-counter (OTC) markets?

OTC markets are decentralized markets where securities are traded directly between
parties without being listed on an exchange.

Application-Based Questions

21. Why is a stock exchange important for the economy?

Facilitates capital raising for businesses.

Provides liquidity to investors.

Reflects economic growth and market confidence.

22. How does the performance of a stock exchange reflect the health of an
economy?

A rising stock market indicates economic growth, while a declining market suggests
economic challenges.

23. If a company is delisted from the stock exchange, what happens to its
shareholders?

Shareholders can still sell their shares in OTC markets but lose the convenience and
liquidity of an exchange.

24. What is the significance of the circuit breaker mechanism in stock exchanges?

Circuit breakers temporarily halt trading during extreme market volatility to prevent panic
selling or buying.

25. How do stock exchanges ensure transparency in trading?

Use of electronic trading platforms.

Disclosure of company information.

Regular monitoring by SEBI.

Analytical/Scenario-Based Questions

26. A company issues shares for the first time. In which market will this occur?

The Primary Market (through an Initial Public Offering).

27. If a company performs well financially, what happens to its stock price?

The stock price generally rises as higher profits attract more investors.

28. What is the impact of economic policies (e.g., interest rate changes) on the stock
market?

Lower interest rates encourage investment, boosting stock prices.

Higher interest rates may reduce investments, lowering stock prices.

29. What happens when there is a stock market crash?

Panic selling leads to a sharp decline in stock prices.

Investors face losses.

Economic confidence may weaken.

30. If you want to invest in a company, what factors will you consider before buying
its shares?
Financial performance (revenue, profit).

Growth potential.

Industry trends.

Management quality.

Dividend policy.

Marketing Management:

General Questions:

1. What is marketing management?

Marketing management involves planning, organizing, implementing, and controlling

marketing activities to achieve organizational goals by satisfying customer needs and
wants.

2. What are the core concepts of marketing?

Needs, wants, and demands

Products and services

Value and satisfaction

Exchange and transactions

Market and target customers

3. Differentiate between marketing and selling.

Marketing: Focuses on customer needs and building relationships.

Selling: Focuses on promoting and pushing products to customers.

4. What is the importance of marketing for businesses and

society?

For businesses: Increases sales, builds brand loyalty, and identifies customer needs.

For society: Creates employment, improves living standards, and provides information
about products.

5. Name and explain the 4 Ps of Marketing.

Product: Goods or services offered to meet customer needs.

Price: The value customers pay for a product.

Place: Distribution channels to make the product available.

Promotion: Communication strategies like advertising and sales promotion.

Key Concepts:

10. What is the meaning of branding? Why is it important?

Branding is creating a unique identity for a product or company. It builds recognition,

trust, and customer loyalty.

11. Define packaging and labelling. How do they add value to a product?

Packaging: Protects and presents the product attractively.

Labelling: Provides essential product information, influencing buying decisions.

12. What is the difference between penetration pricing and skimming pricing?

Penetration pricing: Low initial prices to gain market share quickly.

Skimming pricing: High initial prices to target premium customers.

13. Explain the concept of market segmentation.

Dividing the market into distinct groups based on similar characteristics (e.g., age,
income, behavior) for targeted marketing.

14. What are the bases of segmentation in marketing?

Demographic (age, gender, income)

Geographic (location)

Psychographic (lifestyle, values)

Behavioral (usage, loyalty)

Application-Based Questions:

15. A company launches a new product. What marketing strategies should it

use?

Conduct market research

Use promotions and advertising

Leverage digital marketing

Provide attractive pricing and offers

16. If a product’s demand is declining, how can marketing management revive it?

Rebranding or redesigning

Introducing discounts or offers

Targeting a new customer segment

Enhancing product quality

17. Why is digital marketing gaining importance in today’s world?

It offers cost-effective, targeted, and measurable ways to reach a global audience.

18. Give an example of how a company uses celebrity endorsements for promotion.

Example: Virat Kohli endorsing Puma products increases brand trust and visibility.

19. How would you price a product in a highly competitive market?

Use competitive pricing, consider cost, and offer value-added features to differentiate.

Analytical/Scenario-Based Questions:

20. If a company produces a luxury product, what pricing strategy should it adopt?

Skimming pricing to target high-income customers and maintain exclusivity.

21. A product is doing well in the urban market but not in rural areas. How should the
company address this?

Adapt marketing strategies to rural preferences, reduce prices, and improve distribution.

22. A competitor lowers their product price. What should your company do?

Analyze customer loyalty, adjust prices if needed, or emphasize product value and
quality.