Business Studies: CUET Mock Test - 2 - CUET MCQ

The organizational objective Bhavya Ltd. is trying to achieve is Social Responsibility.
Explanation:
Social responsibility refers to the commitment of an organization to contribute positively to society, communities, and the environment while balancing the needs of its stakeholders. By offering employment to physically challenged persons, Bhavya Ltd. is demonstrating its commitment to inclusivity, diversity, and equal opportunities for all. This action promotes social welfare and ensures that the company is actively working to be a responsible corporate citizen, which can enhance its reputation, public image, and relationships with stakeholders.

The requirement for a doctor to obtain a certificate from the Medical Council before practicing medicine is an example of a feature of the medical profession that is related to restricted entry. Restricted entry refers to the fact that certain professions, such as medicine, require a specific set of qualifications and credentials in order to practice.

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

• Objectives:

  • Refer to the desired future position that an organization or individual aims to achieve.
  • Should be specific, measurable, achievable, relevant, and time-bound (SMART).
  • Incorrectly matched when associated with routine steps on how to carry out activities, broad contours of business, or as specific statements; objectives target end goals, not the means to achieve them.

• Rules:

  • Provide specific statements or guidelines that govern behavior or processes.
  • Designed to guide actions in a consistent manner.
  • Incorrectly associated with broad contours of business, desired future position, or routine steps on how to carry out activities; rules are about specific directives.

• Procedure:

  • Outline routine steps on how to carry out activities.
  • Detailed instructions on what needs to be done to accomplish a specific task.
  • Incorrectly linked with specific statements, broad contours of business, or desired future position; procedures are about practical, step-by-step actions.

• Strategy:

  • Involves providing the broad contours of business.
  • Encompasses overall plans and approaches to achieve objectives and navigate challenges.
  • Incorrectly connected to specific statements, routine steps on how to carry out activities, or desired future position; strategy is about overarching approach rather than specific actions or end goals.

Management is considered a profession when it exhibits characteristics such as a formal education system, a code of conduct, specialized knowledge, and a service motive aimed at benefiting society or clients rather than just profit. Among the options:

A. Service motive: This aligns with the idea of a profession, as professionals (e.g., doctors, lawyers) work to serve others, and managers often aim to serve organizational goals and stakeholders. This is a key indicator of management as a profession.
B. Personalised application: This relates more to management as an art, where individual creativity and style come into play, not a defining trait of a profession.
C. Principles based on experimentation: This reflects management as a science, emphasizing systematic study, not specifically a profession.
D. Based on practice and creativity: This also points to management as an art, not a profession.
Thus, A is correct because the service motive is a hallmark of a profession.

Policy formulation involves setting the organization’s long-term goals, strategies, and guidelines, which is a strategic function typically reserved for top-level managers (e.g., CEOs, directors).

• A. Top level managers: They are responsible for defining the organization’s vision, mission, and policies to guide overall operations.
• B. Middle level managers: They implement policies and coordinate between top and lower levels, not formulate them.
• C. Operational management: They focus on day-to-day execution, not policy creation.
• D. All of the above: Incorrect, as policy formulation is not a shared responsibility across all levels.
  Thus, A is correct.

The management process follows a logical sequence:

• Planning: Setting goals and deciding how to achieve them.
• Organising: Arranging resources and tasks to implement the plan.
• Staffing: Recruiting and placing the right people in roles.
• Controlling: Monitoring performance and correcting deviations.

(Directing is often included between staffing and controlling, but it’s not listed here.)
A: Incorrect order (controlling before staffing).
B: Incorrect (starts with staffing).
C: Correct sequence: Planning → Organising → Staffing → Controlling.
D: Incorrect (starts with organising).
Thus, C is correct.

In the case, Ajay addresses the issue of wasted time due to poor synchronization between the store and production workers. He ensures the storekeeper is informed three days in advance, aligning activities to improve efficiency.

A. Organising: Involves structuring tasks and resources, but Ajay’s action is about aligning existing processes, not restructuring.
B. Planning: Involves setting goals and actions, but Ajay’s focus is on immediate integration, not long-term planning.
C. Coordinating: Ensures harmony and unity of action across departments or functions (e.g., production and store). Ajay’s solution integrates these activities, making this the best fit.
D. Directing: Involves leading and motivating, but the emphasis here is on process alignment, not leadership.
Thus, C is correct.

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

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

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

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.

The case highlights Kavita’s MBA from Oxford, her application of management principles, and her success in achieving targets, employee satisfaction, and orderliness. Her proposal for a creche reflects a service-oriented approach.

A. Management is an Art: Focuses on personal creativity, not emphasized here.
B. Management is a Science: Involves systematic principles, partially relevant but not the main focus.
C. Management is a Profession: Emphasizes formal education (MBA), specialized knowledge, and a service motive (creche), which align with professional traits.
D. Both Science and Art: Possible, but the case stresses education and competence, pointing more to a profession.

Thus, C is correct.

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.

The statement emphasizes the company’s objective (promoting sales), which reflects management’s focus on achieving specific goals.

A. Management is an intangible force: Refers to its unseen impact, not the focus here.
B. Management is a goal oriented process: Correct, as it highlights achieving a specific objective (sales promotion).
C. Management is pervasive in nature: Refers to its universal applicability, not the key point here.
D. Management is a continuous process: Refers to ongoing activities, not emphasized in the statement.
Thus, B 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.

Scientific principles (e.g., gravity) are grounded in cause-and-effect relationships, where one event predictably leads to another.

A. Functional: Refers to operational roles, not scientific principles.
B. Economical: Relates to cost-efficiency, not science.
C. Cause and effect relationship: Correct, as science establishes causality (e.g., force causes acceleration).
D. None of the above: Incorrect, as C applies.

Thus, C is correct.

Authority: The right to command and expect obedience (per Fayol).
Responsibility: The obligation to perform tasks, which accompanies authority as its corollary (if you have authority, you’re responsible for outcomes).
A: Correct pairing.
B: Reverses the order; responsibility isn’t the right to command.
C: Accountability (answerability) follows responsibility, not authority directly.
D: Incorrect, as A is valid.

Thus, A is correct.

Fayol’s Stability of Tenure principle states that employees should have job security to perform effectively, as high turnover increases costs and disrupts operations.

A. Order: Refers to resource and personnel placement.
B. Espirit De Corps: Focuses on team spirit.
C. Stability of tenure: Correct, as it addresses turnover costs.
D. Equity: Deals with fair treatment, not turnover.

Thus, C is correct.

Decentralisation involves distributing authority across levels, which is more feasible and necessary in big organisations due to their complexity and scale.

A. Small: Limited scope for decentralisation due to fewer levels.
B. Big: Correct, as large firms need decentralisation for efficiency.
C. Both: Small firms have less need, so not equally applicable.
D. None: Incorrect, as B applies.

Thus, B is correct.

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.

Henry Fayol emphasized managerial efficiency alongside worker efficiency, focusing on administrative principles for organizational success.

A. Henry Fayol: Correct, as he highlighted management’s role.
B. F.W. Taylor: Focused on worker efficiency via Scientific Management.
C. Koontz: Modern theorist, not linked to this quote.
D. None: Incorrect, as A applies.

Thus, A is correct.

• The statement mentions that a manager has the right to punish a subordinate for not following a legitimate order. This implies that the manager possesses authority over the subordinate.
• However, it also states that the subordinate should be given a fair opportunity to present their case before any action is taken. This reflects the principle that authority must be balanced with responsibility to ensure fairness and accountability.
• According to Henri Fayol, Authority and Responsibility must go hand in hand. If a manager has the authority to give orders, they must also bear the responsibility of ensuring fairness and justice in their decisions.

1 - C: Scientific Management refers to the application of the best methods and tools to improve efficiency, as demonstrated by time and motion studies.
2 - B: The principle of "Authority and Responsibility" emphasizes the need for harmony between management and workers to avoid conflict and ensure cooperation.
3 - D: Time Study focuses on measuring and improving the time taken for tasks to improve productivity and reduce inefficiency.
4 - A: Standardization involves setting benchmarks for work methods and practices to ensure consistency and higher productivity in operations.

In Taylor’s Functional Foremanship, the Gang Boss ensures machines, materials, and tools are ready for workers to start operations.

A. Instruction Card Clerk: Prepares job instructions.
B. Gang Boss: Correct, as it involves setup for work.
C. Repair Boss: Focuses on maintenance, not preparation.
D. Route Clerk: Plans workflow, not material readiness.

Thus, B is correct.

Manufacturing standardized parts requires Standardisation of Work, a Taylor technique to ensure uniformity and efficiency.

A. Standardisation of work: Correct, as it ensures consistent parts.
B. Functional foremanship: Supervision structure, not directly relevant.
C. Method study: Finding the best method, less specific here.
D. Time study: Measuring task time, not standardization.

Thus, A is correct.

Taylor’s Harmony, not discord principle emphasizes collaboration between management and workers, including sharing gains to foster unity.

A: Focuses on individual development, not gain-sharing.
B: Correct, as it promotes mutual benefit and harmony.
C: Focuses on scientific methods, not sharing.
D: Cooperation is related but less specific to gain-sharing.

Thus, B is correct.

Standardisation and Simplification aligns with Taylor’s “Science, not Rule of Thumb” by establishing uniform, scientifically determined processes.

A: Correct, as it replaces arbitrary methods with standards.
B: Organizational structure, not a technique for this principle.
C: Optimizes methods but not directly tied to this principle.
D: Measures time, related but not the core technique.

Thus, A is correct.

Fayol’s Gang Plank allows direct communication between employees at the same hierarchical level to bypass the scalar chain for efficiency.

A: Correct, as it applies to same-level employees.
B: Too broad; it’s not for all levels.
C: Not limited to departments.
D: Incorrect, as A applies.

Thus, A is correct.

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.