CUET Business Studies Previous Year Solved Paper 2 (20 July 2022 Slot-1) - Humanities/Arts MCQ

Management is an intangible force, as it does not have any physical appearance. It can be felt, by the way an organisation functions.

These top level managers are responsible for the welfare and survival of the organisation. They analyse the business environment and its implications for the survival of the firm. They formulate overall organisational goals and strategies for their achievement

The given example, which highlights the Co-win-App helping people in registering for Covid-19 vaccines and relieving them from the hassle of standing in queues, is an example of the technological dimension of the business environment. The reasons for this are:

• Use of technology: The Co-win-App uses technology to provide a platform for people to register for vaccines, showcasing the role of technology in solving problems and improving processes.
• Efficiency: The app allows people to register for vaccines without having to visit hospitals, reducing the need for physical queues and improving the overall efficiency of the vaccine distribution process.
• Impact on businesses: This technological solution affects businesses that are involved in vaccine distribution, as they need to adapt their processes to incorporate the use of the Co-win-App and ensure smooth registration and distribution of vaccines.
• Future growth: The success of the Co-win-App demonstrates the potential for technology to address other challenges in the healthcare sector, opening up new opportunities for businesses to develop and implement similar solutions.

Relativity: Business environment is a relative concept since it differs from country to country and even region to region.

Planning is future-oriented and determines an organization’s direction

Planning may not work in a dynamic environment: The business environment is dynamic, nothing is constant.

Planning is pervasive: Planning is required at all levels of management as well as in all departments of the organisation

Divisional structure is suitable for those business enterprises where a large variety of products are manufactured using different productive resources. When an organisation grows and needs to add more employees, create more
departments and introduce new levels of management.

The correct answer is D: C, A, D, B. 

C. Identification & division of work:

• Analyzing the overall objectives of the organization
• Breaking down the objectives into smaller tasks
• Identifying the tasks that need to be performed to achieve the objectives

A. Departmentalization:

• Grouping related tasks or activities into departments or units
• This can be done based on functions, products, geography, or other criteria

D. Assignment of duties:

• Allocating tasks to individuals or teams within each department
• Ensuring that each employee has a clear understanding of their responsibilities and duties

B. Establishing reporting relationships:

• Defining the hierarchy and lines of authority within the organization
• Ensuring that each employee knows who they report to and who reports to them
• Establishing communication channels for the flow of information and decision-making

By following these steps in the given order, an organization can effectively organize its structure and operations to achieve its goals and objectives.

• Vestibule Training is a type of training that involves creating a simulated work environment for trainees. This helps them to learn and practice their job skills in a controlled setting before they move on to the actual work environment. The following aspects of Vestibule Training are true:
• Training is conducted away from the actual work floor: This type of training is usually conducted in a separate facility or room to ensure that the trainee can focus on learning the necessary skills without any distractions from the actual work environment.
• Actual work environments are created in a classroom, and employees use the same material and equipment: In Vestibule Training, the training area is set up to closely resemble the actual work environment, including the use of the same tools, equipment, and materials. This helps trainees to become familiar with the work environment and develop the necessary skills and confidence to perform their job effectively.

Transfers can also be used for training of employees for learning different jobs

For Evaluating/Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate or not by careful check on the changes taking place in the organizational environment.

Measurement of Actual Performance -There are several techniques for measurement of performance. These include personal observation, sample checking, performance reports, etc

The correct answer is D: B, C, A, D, E.

The steps of the controlling process in the correct sequence are:

1. Establishing the standards (B):

• Determine objectives and goals
• Set specific, measurable, achievable, relevant, and time-bound (SMART) targets
• Define key performance indicators (KPIs) for evaluation

2. Measuring the performance (C):

• Collect data on actual performance
• Use tools and techniques to monitor progress
• Regularly review and update measurements

3. Comparison of actual performance with standards (A):

• Compare actual performance data with established standards
• Identify gaps and deviations between expected and actual results
• Evaluate the effectiveness of strategies and processes

4. Analysing deviations (D):

• Determine the causes of deviations
• Analyse the factors contributing to performance gaps
• Assess the impact of deviations on overall objectives

5. Taking corrective action (E):

• Develop and implement corrective measures to address deviations
• Adjust strategies and processes as needed
• Monitor and evaluate the effectiveness of corrective actions

By following these steps in the correct sequence, managers can effectively control the performance of their organization and ensure that goals and objectives are met.

The size of assets, profi tabil ity and competitiveness are all affected by capital budgeting decision

The correct answer is C: Dividend decision.

Dividend Decision

• The dividend decision is a crucial financial decision that a company's management has to make regarding the distribution of profits among shareholders. This decision involves determining the proportion of earnings that should be paid out as dividends and the portion that should be retained for reinvestment in the company. The dividend decision is influenced by various factors, including:

Growth opportunities:

• Companies with high growth potential may choose to retain more earnings to fund their expansion plans, leading to lower dividend payouts. On the other hand, companies with limited growth opportunities might pay out a higher proportion of their earnings as dividends to shareholders.

Taxation policy

• The tax treatment of dividends and capital gains can influence the dividend decision. If tax rates on dividends are more favorable than capital gains, companies may choose to pay higher dividends to provide a tax advantage to shareholders.

Legal constraints

• Companies must comply with various legal regulations and requirements when deciding on dividend payouts. This includes adhering to restrictions imposed by debt covenants and maintaining a minimum level of retained earnings as per company law.

Stock market reaction

• The stock market's reaction to dividend announcements can also impact the dividend decision. A positive stock market response to a company's dividend policy may encourage the management to maintain or increase dividend payouts, while a negative reaction may lead to a reevaluation of the dividend policy.

In conclusion, the dividend decision is an essential financial decision that determines how a company distributes its earnings between dividends and reinvestment. This decision is influenced by factors such as growth opportunities, taxation policy, legal constraints, and stock market reaction.

Financial planning is an important part of overall planning of any business enterprise. It aims at enabling the company to tackle the uncertainty in respect of the availability and timing of the funds and helps in smooth functioning of an organisation.

The production cycle time refers to the time required for converting the raw materials into finished goods.

Regulation of takeover bids by companies is a regulatory function of SEBI. Regulatory functions are performed by SEBI in order to regulate the business in stock exchange. SEBI has framed rules and regulations and code of conduct to regulate the intermediaries. It also regulates the takeover of companies

Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors

It gives investors the chance to disinvest and reinvest. Providing liquidity and marketability to existing securities

The method of flotation discussed in the given statement is "Offer through prospectus." This method can be understood through the following points:

• Issuing Company: The company that wants to raise capital through the public issue of securities is known as the issuing company.
• Selling Securities: In this method, the issuing company sells securities en bloc at an agreed price to brokers.
• Brokers: The brokers play an important role as intermediaries between the issuing company and the investing public. They purchase securities en bloc from the issuing company and resell them to the public.
• Investing Public: The investing public refers to individual and institutional investors who purchase the securities from the brokers.
• Prospectus: In an offer through the prospectus, the issuing company provides detailed information about its business, financials, and the securities being offered. This document helps potential investors make informed decisions about whether to invest in the company's securities.

In summary, the "Offer through prospectus" method of flotation involves a company selling securities en bloc to brokers, who then resell the securities to the investing public using a prospectus containing essential information about the company and the securities.

Financial markets play a crucial role in the economy by performing several key functions, including:

• Mobilising savings: Financial markets help to collect and accumulate savings from households and channel them to businesses that require funds for investment. This process is essential for the efficient allocation of resources and the growth of an economy.
• Facilitating price discovery: Financial markets help in determining the prices of financial assets through the interaction of supply and demand. This price discovery mechanism enables businesses and investors to make informed decisions about investments, resource allocation, and risk management.
• Providing liquidity to financial assets: Financial markets offer a platform for the buying and selling of financial assets, such as stocks, bonds, and commodities. This liquidity enables investors to convert their assets into cash quickly and easily, which in turn encourages investment and supports economic growth.
• Reducing the cost of transactions: Financial markets facilitate the exchange of financial assets between buyers and sellers, reducing the costs associated with these transactions. This efficiency promotes investment and resource allocation, benefiting both businesses and investors.

In the given scenario, households act as suppliers of funds while business firms represent the demand. The financial market's function in this case is to mobilize the savings from households and channel them into the most productive uses, such as business investments and expansion. This process contributes to economic growth and development.