Business Studies: CUET Mock Test - 2 - CUET MCQ

Diwali
The candles produced by Namchi Designer Candles are in high demand during Diwali, as noted in the passage.

Decorative candles
Namchi Designer Candles mainly produces decorative candles, as mentioned in the passage.​​​​​​​

 Through perseverance and support from various stakeholders 
Smita overcame challenges through her persistence and the support from financial institutions, stakeholders, and various others. 

North East Women Entrepreneur of the Year 
Smita Rai received the North East Women Entrepreneur of the Year award for her success with Namchi Designer Candles.

To provide job opportunities for women
Smita’s main goal was to provide job opportunities for women in her rural district, as described in the passage

The principle of management referred to in the statement "Taylor believed that the management should share the gain with workers" is  Harmony, not discord.

Explanation: Taylor's principle of "Harmony, not discord" emphasizes that management should work cooperatively with employees, ensuring mutual benefit and aligning their interests to achieve a harmonious working environment. 

The correct answer is (A) - (IV), (B) - (I), (C) - (II), (D) - (III)
Key Points

• Departmentalisation and Grouping of similar activities (A - IV):
  • Departmentalisation refers to the process of dividing an organization into different departments, which perform tasks according to the departments' specializations. This leads to the grouping of similar activities under one manager or department, enhancing efficiency and specialization.
• Functional Structure and Leads to occupational specialisation (B - I):
  • The functional structure organizes a company based on the functions performed. It focuses on job roles and functions leading to occupational specialization. This structure enhances operational efficiency by grouping similar specialties and tasks.
• Divisional Structure and Leads to product specialisation (C - II):
  • In a divisional structure, the organization is divided into semi-autonomous units or divisions, each focused on a particular product or market. This structure fosters product specialization since each division operates almost as a separate business unit with its own resources.
• Informal Organisation and Network of social relationship (D - III):
  • The informal organization represents the network of personal and social relationships that naturally form within an organization. These relationships are not established formally but emerge from the interactions among employees, leading to an organic network of social relationships.

Additional Information

• Incorrect Options Explained:
  • Option 2 suggests a mismatch by associating functional structure with product specialization and divisional structure with occupational specialization, which contradicts their core principles.
  • Option 3 and 4 misalign the concepts by incorrectly associating departmentalisation and informal organization with unrelated aspects, thus failing to accurately represent the fundamental characteristics of these organizational structures.

A (Economic Environment): Economic factors like interest rates, inflation, and income affect business operations by influencing demand and costs.
B (Social Environment): Social factors such as changes in consumer behavior and trends, which impact product demand.
C (Technological Environment): Technology-driven changes influence production methods and operational efficiency.
D (Political Environment): Government policies, political stability, and regulations directly impact how businesses operate.

The organising process includes identifying and dividing work (A), grouping similar activities into departments (B), and assigning duties based on skills (C). However, establishing informal communication channels (D) is not a step in the formal organising process, as it pertains to informal organisation. Hence, Option A is the correct choice.

The selection process starts with preliminary screening to eliminate unqualified candidates based on application forms. This is followed by selection tests to assess candidates’ abilities, an employment interview to evaluate suitability, and a medical examination to ensure fitness for the job. Thus, the correct sequence is Preliminary Screening, Selection Tests, Employment Interview, Medical Examination. Hence, Option B is the correct choice.

The business environment is the totality of external forces affecting a firm (A), is dynamic due to changes like technological advancements (B), and includes specific forces like customers and suppliers (D). However, it is not predictable (C), as it is characterized by uncertainty, making forecasting difficult. Hence, Option A is the correct choice.

The principle of Authority and Responsibility is highlighted in the text. This principle, as proposed by Henri Fayol, states that managers or leaders must have the authority to make decisions and be held responsible for the outcomes of those decisions. In this case, Krishan’s ability to set deadlines of less than 10 days, due to his superior understanding of the business, demonstrates his authority. The two managers, with limited authority, can only set deadlines within the 10-15 day range, indicating that Krishan holds greater decision-making power and responsibility in the jewellery design process.

Maslow’s hierarchy of needs is a motivational theory that arranges human needs in a pyramid from the most basic to the highest level. It starts with Physiological Needs (e.g., food, shelter), followed by Safety Needs (e.g., security), Belongingness Needs (e.g., relationships), and culminates in Self-Actualization Needs (e.g., personal fulfillment). This sequence reflects the progression of needs satisfaction. Hence, Option A is the correct choice.

Fayol’s Initiative principle encourages employees to suggest improvements and be recognized for them. Ignoring Aman’s suggestion violates this.

A. Remuneration: Relates to fair pay, not suggestions.
B. Initiative: Correct, as it’s about valuing employee input.
C. Equity: Fairness in treatment, not directly relevant here.
D. Division of Work: Specialization, unrelated to suggestions.

Thus, B is correct.

The principle of discipline suggests that employees should be judiciously penalized for their actions against the organization in order to maintain order and adherence to rules and regulations. This principle emphasizes the importance of maintaining a level of discipline within the organization to ensure that employees are held accountable for their actions and that they understand the consequences of violating organizational policies.

Fredrick W. Taylor is recognised as the father of scientific management. He advocated for the division of work and responsibility between workers and management to enhance productivity.

• Taylor believed in breaking down tasks into smaller parts to find the most efficient way to perform them.
• He conducted time and motion studies to measure work processes and improve efficiency.
• Taylor argued that management should work closely with employees, fostering cooperation to eliminate the need for trade unions.
• He introduced the concept of scientific selection of workers, ensuring that tasks matched their skills and capabilities.
• His principles emphasised training and development to maximise both employee efficiency and company productivity.
• Taylor's ideas were published in his influential work, The Principles of Scientific Management, in 1911.

Overall, Taylor's approach aimed to create a partnership between management and a skilled workforce, leading to mutual benefits.

Planning is a mental exercise as it requires intellectual process so that logical plans and sound judgments could be made.

The paragraph emphasizes mutual trust, open communication, and workers’ involvement in decisions, aligning with Taylor’s Cooperation, not individualism principle.

A: Focuses on scientific methods, not collaboration.
B: Harmony is related but less specific to active cooperation.
C: Correct, as it stresses teamwork and mutual reliance.
D: Focuses on individual growth, not the main theme here.

Thus, C is correct.

Principles of pure science (e.g., physics) are universal, fixed, and rigid, while management principles are contingent and adaptable to situations.

A. Flexible: Management principles are flexible, unlike science.
B. Dynamic: Management principles evolve, unlike rigid science principles.
C. Rigid: Correct, as scientific principles are rigid, while management principles are not.
D. Fluctuate: Implies instability, not applicable to science.

Thus, C is correct.

In the planning process, evaluating alternative courses comes first to assess the pros and cons of each option. Next, selecting an alternative involves choosing the best course of action. Then, implementing the plan puts the chosen plan into action. Finally, follow-up action monitors the plan to ensure objectives are achieved. Thus, the correct sequence is (B), (D), (A), (C). Hence, Option A is the correct choice.

Increasing sales by 15% is an objective.
Explanation:
Increasing sales by 15% is a goal or objective that a company sets to achieve. It is a specific target to increase the revenue generated from sales by 15%. Here is a detailed explanation:
Objective:
An objective is a specific and measurable goal that a company aims to achieve. It provides direction and focus for the organization and helps in evaluating the success of its actions. In this case, increasing sales by 15% is the objective.
Importance of Increasing Sales:
Increasing sales is crucial for the growth and profitability of a business. It allows the company to generate more revenue, expand its customer base, and improve market share. By increasing sales, a company can also achieve economies of scale, reduce costs, and enhance its competitive position in the market.
Methods to Increase Sales:
To achieve the objective of increasing sales by 15%, companies can employ various methods and strategies, such as:
- Marketing and advertising campaigns to reach a wider audience and attract new customers.
- Enhancing the quality of products or services to increase customer satisfaction and loyalty.
- Offering promotions, discounts, or incentives to encourage more sales.
- Expanding distribution channels to reach new markets or regions.
- Improving sales techniques and training for sales teams.
- Conducting market research to identify customer needs and preferences.
- Building strong relationships with existing customers through excellent customer service.
- Utilizing technology and digital platforms for online sales and marketing.
Evaluation and Monitoring:
To ensure progress towards the objective of increasing sales by 15%, it is essential to regularly evaluate and monitor sales performance. This can be done by analyzing sales data, tracking key performance indicators (KPIs), and comparing results against targets. Adjustments and improvements can then be made based on the evaluation findings to further optimize sales strategies and achieve the desired sales increase.
In conclusion, increasing sales by 15% is an objective that requires strategic planning, implementation of various methods, and ongoing evaluation to ensure success.

Answer: B

Management control is done by the Managers at all levels:
- Top-level managers: These managers are responsible for setting the overall direction and goals of the organization. They develop strategic plans and policies and are involved in decision-making at a higher level. They exercise management control by monitoring the performance of the organization as a whole and ensuring that it aligns with the strategic objectives.
- Middle-level managers: These managers are responsible for implementing the strategies and policies set by the top-level managers. They coordinate the activities of different departments or units within the organization. They exercise management control by monitoring and evaluating the performance of their respective departments or units and taking corrective actions if necessary.
- Lower-level managers: These managers are responsible for supervising the day-to-day operations of the organization. They are directly involved in managing the employees and ensuring that the tasks are completed efficiently. They exercise management control by monitoring the performance of their subordinates, providing guidance and feedback, and making sure that the work is carried out according to the established standards and procedures.
Therefore, management control is carried out by managers at all levels of an organization to ensure effective performance and attainment of organizational goals.

The requirement for a doctor to obtain a certificate from the Medical Council to practice the medical profession. Restricted entry means that professions like medicine require specific qualifications and credentials to ensure only qualified individuals can practice.

Planning is continuous, as plans are made for specific periods and new plans are drawn afterward. It involves decision making by selecting alternatives and is a mental exercise requiring foresight and judgment. However, it is not exclusive to top management; it is pervasive across all levels. Thus, (A), (C), and (D) are correct. Hence, Option A is the correct choice.

A → 3: Planning involves setting goals in advance and determining the actions required to achieve them.
B → 2: Organizing involves assigning tasks, grouping activities, and allocating resources to achieve goals.
C → 1: Directing involves motivating and influencing employees to perform tasks effectively.
D → 4: Controlling involves monitoring performance and taking corrective actions to ensure goals are met.

The correct answer is HR Department
Key Points

• The HR Department is responsible for managing employee relations, which includes addressing concerns related to performance issues, employee dissatisfaction, and workplace culture.
• Given that Mr. Rahul's decreasing performance might be linked to broader issues within the organization such as leadership, pay system, and communication, these are areas typically under the purview of HR.
• HR is tasked with developing and implementing policies that enhance employee satisfaction and performance.
• The passage suggests that there's a need for intervention at an organizational level, which HR is best positioned to manage.
• The HR Department often conducts performance appraisals and is involved in resolving any issues that may arise during these evaluations.
• Concerns related to leadership style, compensation concerns, and ineffective communication directly affect employee morale and performance, areas directly managed by HR interventions.
• HR would be responsible for undertaking efforts to understand employee grievances, including Mr. Rahul's, and work towards addressing them.
• The reference to "recent months some employees had shown disappointment on present leadership, pay system and communication" underscores organizational culture issues, further highlighting the role of HR in addressing and rectifying these issues.

The correct answer is Leadership
Key Points

• Leadership involves guiding, inspiring, and motivating employees toward achieving organizational goals, fitting the description provided.
• The essence of leadership lies in its ability to influence behavior and attitudes through vision, communication, and example, encouraging voluntary commitment to shared objectives.
• Effective leadership creates an environment where employees are motivated to contribute their best efforts willingly.
• The process entails understanding employees' needs and aspirations, aligning them with organizational goals, and fostering a sense of purpose and belonging.
• Leaders play a pivotal role in shaping organizational culture, values, and ethics, directly impacting employee satisfaction and performance.
• The passage hints at dissatisfaction with leadership among some employees, implying leadership's critical role in influencing performance and morale.
• Leadership, as described, is not about coercion but about inspiring and enabling individuals to contribute positively towards collective ambitions.
• This approach to leadership contrasts with merely directing or supervising tasks; it's about nurturing an organizational climate conducive to growth and achievement.

The correct answer is Employee Recognition Programmes
Key Points

• The passage mentions Mr. Rahul receiving the 'Best Employee' Award multiple times, indicating that recognition played a significant role in motivating him.
• Employee Recognition Programmes are designed to acknowledge and reward outstanding performance and contributions, validating the individual's efforts.
• Such programmes can significantly impact morale, productivity, and loyalty by making employees feel valued and appreciated.
• Recognition is a non-monetary incentive that often leads to increased motivation and job satisfaction, contributing to a positive work environment.
• The relationship between receiving awards and consistent performance highlights the effectiveness of recognition as a motivator for Mr. Rahul.
• By focusing on recognition, the organization addresses intrinsic motivators such as feeling valued and achieving a sense of accomplishment.
• The reference to his performance being consistently high until recent years suggests that the recognition he received was a critical factor in his motivation.
• In contrast, other incentives like Bonus, Profit Sharing, and Perquisites are primarily financial and do not directly relate to the recognition aspect mentioned in the passage.

The correct answer is Poor Supervision
Key Points

• The passage discusses issues related to leadership, pay system, and communication but does not mention poor supervision as a factor affecting Mr. Rahul's performance.
• Leadership concerns are often differentiated from supervision in that they encompass broader organizational vision and direction, while supervision is more directly related to day-to-day management and oversight of work.
• A decrease in performance due to leadership might involve a lack of clear direction, inspiration, or support rather than the immediate supervisory practices.
• Compensation (pay system) and communication are highlighted as areas of disappointment among some employees, suggesting they could be contributing factors to the decline in performance.
• In contrast, the absence of any reference to poor supervision implies that the immediate managerial support and guidance Mr. Rahul received was not at issue.
• It is also possible that effective supervision was in place, but other organizational and leadership issues overshadowed the positive impact of supervision.
• Given the lack of evidence pointing to poor supervision, it stands as the factor not responsible for Mr. Rahul's performance decline, according to the provided context.
• Identifying and addressing the correct contributing factors is crucial for organizational leadership to effectively remedy performance issues.

The correct answer is Participative leader gives order and expects his subordinates to obey that order
Key Points

• Participative leadership style involves including employees in the decision-making process, which contradicts the notion of simply giving orders for subordinates to obey.
• This style contrasts with autocratic leadership, where decisions are made at the top and directives are issued without seeking input from subordinates.
• The essence of participative leadership is collaboration and sharing of power and decision making, aiming to increase employee satisfaction and involvement.
• The statement is incorrect because it misrepresents participative leadership as being directive and authoritarian, which is the opposite of its true characteristic of fostering openness and shared decision making.
• Participation in decision making is believed to lead to increased understanding of organizational goals, higher engagement, and better performance, emphasizing two-way communication rather than mere obedience.
• Participative leadership is recognized for enhancing team spirit, motivation, and innovation by valuing and acting upon input from team members.
• The mischaracterization undermines the benefits associated with participative leadership, such as improved job satisfaction, motivation, and organizational commitment.
• Correctly understanding leadership styles is crucial for implementing effective management strategies that align with organizational values and employee expectations.