DΕLΗΙ CΟΜΡΑRΤΜΕΝΤ – 2015
SET - II
(Q1) Give the meaning of ‘Method’ as a type of plan.
(A1) Method is the manner of work performance and follows the set procedure. Objectives and policies will lose much a significance, if the planning cannot lay down the procedures and methods for work performance.
(Q2) How does co-ordination ensures unity of action? State.
(A2) Co-ordination can only be achieved if there is unity of action among the different acitvities of all the departments. Therefore, co-ordination at all levels is essential in order to bring unity of action.
(Q3) What is meant by “Efficiency’ in management ?
(A3) Efficiency refers to do the job in a cost effective manner. It is relationship between inputs and outputs.
(Q4) A textile company is diversifying and starting a steel manufacturing plant. State with reason the effect of diversification on the fixed capital requirements of the company.
(A4) Now, the business requires high fixed capital as business now engages in steel manufacturing.
(Q5) Besides financing decision the finance function is concerned with two other broad decisions. Name these decisions.
(A5) (i) Investment decision : Investment decision relates to the careful selection of asset in which funds will be invested by the firm.
(ii) Dividend decision : Dividend decision relates to the appropriation of profits earned. This decision involves how much profit is to be distributed to shareholders and how much it should be retained in the business.
(Q6) To make the annual function of the school successful, the principal of the school divided all the activities into task groups each dealing with a specific area like rehearsals, decoration, stage management, refreshments etc. Each group was placed under the overall supervision of a senior teacher. Identify the function of management performed by the Principal in doing so.
(A6) Directing : Directing is the guidance, the inspiration, the leadership of those men and women that constitute the real core of responsibilities of management.
(Q7) On the eve of Diwali, Ravi purchased two kilograms of sweets from Nandan Sweets. On consumption of sweets his wife fell sick and was to be hospitalized.
Ravi wanted to file a case in the consumer forum but could not do so because he did not have any proof of buying the sweets from Nandan Sweets. Name the document that Ravi could had obtained for filing the complaint, in the consumer forum.
(A7) Bill / Invoice.
(Q8) A T.V. manufacturing company is spending substantial amount of money to persuade the target customers to buy its T.V. sets through advertisements, personal selling and sales promotion techniques. Identify the element of marketing mix referred here.
(A8) Place mix : It refers to all the decisions relating to make products available to the customers.
(Q9) State any three advantages of informal organization.
(A9) (i) There is free flow of communciation as well as quick feedback because the prescribed lines of communication are not to be followed.
(ii) It gives mental satisfaction to the members. This enhance their job satisfaction.
(iii) In the informal organisation, the subordinates put their ideas before the superiors without any fear and hesitation. It helps to understand their difficulties.
(Q10) “Sometimes advertising confuses the buyers.” Do you agree with this ? Give reasons in support of your answer. Also state the arguments of supporters of advertisement regarding the above statement.
(A10) Yes, we agree that sometimes advertising confuses the buyers.
(i) Less Forceful : Advertising is an impersonal form of communication. It is less forceful than the personal selling because through personal selling the buyer can be convinced to buy the product. So, advertising is less effective because sometimes no attention is paid by the prospective buyer.
(ii) Inflexibility : Advertising is less flexible because the message is standardised, it cannot be changed according to the requirements of the customers.
(iii) Lack of Feedback: It is very difficult to evaluate the effectiveness of advertising message. There is not any mechanism to measure the effectiveness which is very easy to measure in personal selling technique.
(iv) Low Effectiveness : The effect of advertising is low because there is no two way communication system. Sometimes the advertisement in the newspaper is not read by the persons. If there is any doubt to the customer, it is not possible to remove.
(Q11) Name and define the process in which candidates are eliminated at every stage and a few move on to the next stage till the right type of candidate is found.
(A11) Selection Process
(i) Preliminary Screening: Preliminary screening helps the manager to eliminate unqualified or unfit job seekers based on the information supplied in the application forms. Preliminary interview helps to reject misfits for reasons, which did not appear in the application forms.
(ii) Selection Tests: An employment test is mechanism (either paper and pencil test or an exercise) that attempts to measure certain characteristics range from aptitude, such as manual dexterity to intelligence to personality.
Employment Interview : Interview is a formal, in depth conversation conducted to evaluate the applicants suitability for the job. The role of the interview is to seek information is to provide the same. Though, in present times, the interview also seeks information from interview.
(iii) Reference Checks: Many employees request names, address, and telephone numbers of references, for the purposes of verifying information and gaining additional information on an applicant.
(iv) Selection Decision : The final selection decision has to be made from the candidates who have cleared the tests, interviews and reference a checks.
(v) Medical Examination The candidate undergone for a medical fitness test as to check the physical and mental fitness of a candidate.
(vi) Job offer : Letter of appointment mentioning the date by which a candidate has to report on duty is handed over to the appointee who has cleared all hurdles.
Contract of employment : It includes various details such as pay, allowances, leave rules, sickness, work rules, hours of work, disciplinary procedure etc. It is prepared after the acceptance of job offer by the candidate and attestation from attested by him.
(Q12) Neha was a regional sales manager in ‘Good Look Garments Ltd’ for ten years. On the retirement of the marketing manager Neha applied for the same post as she was extremely ambitious and had dedicated all her energies to obtain the post of marketing manager. However, the top management of the company decided to fill this post by selecting a better person from outside the company. Because of this, Neha was heart-broken and her performance declined.
When the new marketing manager joined, one of her major problems was how to motivate and inspire Neha to her former level of performance ?
Suggest any three non-financial incentives that the new marketing manager may use to motivate Neha.
(A12) Status : Status means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfills the psychological, social and esteem related needs.
(2) Career advancement opportunity: Everybody wants to grow to the higher level in the organisation. Therefore, opportunity to develop skills and get promoted to higher levels is an important motivation.
(3) Employee Participation : It means involving employees in decision-making of the issues related to them e.g. encourage participation in joint management committees, work committees, canteen committees, etc.
(Q13) “Efficient functioning of stock exchange creates a conducive climate for active and growing primary market for new issues, as well as for an active and healthy secondary market.” In the light of this statement state any three functions of a stock exchange.
(A13) The following are the important functions of stock exchange :
(i) Providing Liquidity and Marketability to Existing Securities: The basic function of a stock exchange is the creation of a continuous market where securities are bought and sold. The investors can invest his money through this market into securities and can re-convert this investment into cash.
(ii) Pricing of Securities : A stock exchange provides a market place to deal in securities. The forces of demand and supply work freely in the stock exchange. In this way, the prices of securities are determined.
(iii) Safety of Transaction : The membership of a stock exchange is well regulated and its dealings are well defined according to the existing legal framework. This ensures that the investing public gets a safe and fair deal in the market.
(iv) Contribution to Economic Growth : A stock exchange is a market in which existing securities are bought and sold. The investors can disinvest and reinvest into securities through this market to their most productive investment proposal. This leads to capital formation and economic growth.
(v) Spreading of Equity Cult : The stock exchange encourage the people to invest in ownership securities by regulating new issues better trading practices and taking effective steps in educating the public about investment.
(vi) Providing Scope for Speculation: To ensure liquidity and demand and supply of securities, the stock exchange permits the healthy speculation of securities.
(Q14) Your company has setup a food processing unit in Kashmir with a production capacity of 10,000 litres of apple juice per day. The company plans to market the apple juice in tetra pack of 100 mili-litres. Design a label for the Same.
(Q15) State any four factors which affects the requirements of working capital of a company.
(A15) The factors determining the working capital needs of an enterprise are stated below :
(i) Nature of Business : Nature of business plays an important role in deciding the working capital requirements of a business. A trading organisation requires lower amount of working capital as compared to a manufacturing organisation. Similarly, the working capital requirements of service industries are also low because they do not have to maintain inventories.
(ii) Scale of Operation : Those organisations which operate on higher scale of operations. The quantum of inventory debtors required generally high. Such organisations need large amount of working capital as compared to organisations which operate on a lower scale.
(iii) Business Cycles : Different phases of business cycles also affect the requirement of working capital of a firm. In the period of boom, the sales as well as production are higher and therefore, higher amount of working capital is needed. During the period of depression, working capital requirement is lower due to fall in sales as well as production.
(iv) Seasonal Factors : Some industries are influenced by seasonal variations. During the peak season, the level of operations is higher and hence, there is higher need of working capital and vice-versa.
(v) Production Cycle : Production cycle is the time span between the receipt of raw material and their conversion into finished goods. Business organisations having longer production cycle will require more working capital where as business organisations having shorter production cycle will require lower working capital.
(vi) Credit Allowed : Different firms allow different credit terms to their customers. These depend upon the level of competition as well as credit worthiness of the clientele. A liberal credit policy results in higher amount of debtors and hence, increasing the requirement of the working capital.
(Q16) Mr. Naresh recently completed his M.B.A. from one of the Indian Institutes of Management in Human Resource Management. He has been appointed as Human Resource Manager in a Truck Manufacturing Company. The company has 1,500 employees and has an expansion plan in hand that may require additional 500 persons for various types of jobs. Mr. Naresh has been given the complete charge of the company’s Human Resource Department.
List out the specialized activities that Mr. Naresh is supposed to perform as the Human Resource Manager of the Company.
(A16) Activities of Human Resource Manager are as follows:
(i) Human Resource Planning ensures the availability of right number and right quality of people at the right place and at the right time.
(ii) Employing people i.e. recruitment, selection and placement of personnel.
(iii) Training and developing employees.
(iv) Developing compensation and incentive plans.
(v) Motivation of workforce, by providing financial incentives, avenues of promotion, etc.
(vi) Providing social security and welfare facilities to employees.
(vii) Review and audit of personnel policies, procedures and practices of the organisation.
(Q17) It is deciding in advance what to do and how to do 2. It is one of the basic managerial functions. It requires that before doing something, the manager must formulate an idea of how to work on a particular task. This function is closely connected with creativity and innovation. It seeks to bridge the gap between where we are and where we want to go and is performed at all levels of management.
Inspite of this the function of management referred above has a number of limitations. Explain any two such limitations.
(A17) (i) Unsuitable for small firms : Small firms prefer to function without long term comprehensive planning as they find planning rather costly and time consuming. They prefer to face the situations as they come. Similarly, quick decisions and prompt actions are necessary in the case of certain business activities. So, planning is unsuitable for small firms.
(ii) Ineffective due to environmental changes : Business environment is dynamic in nature and plans are required to be adjusted as per the changes in the situation through suitable modifications such revision creates a number of problems. Such adjustments in the operational plans are always time consuming and costly.
(iii) Planning does not guarantee success : Planning is done for achieving a well defined objectives. However, there is no guarantee that the objectives will be achieved within the specified time. Planning has an element of uncertainly because the actual performance may not be as per expectation due to one or other reason. Thus, there is no guarantee that planning will give hundred percent positive/expected results.
(Q18) An environmental conscious multinational company “AXN Ltd.” follows certain well defined business principles that result to minimize the employee turnover. Following are some of the important environmental factors followed by ‘AXN Ltd.”
(1) Honour the law of every country in which it operates.
(2) Respect the culture and customs of all nations.
(3) Provide clean and safe products to enhance the quality of life throughout the world.
(4) Develop a culture in the company that enhances individual creativity and team work while honouring mutual trust and respect between management and labour.
From the above :
(i) Identify and state any one general principle of management and any one dimension of business environment.
(ii) Also identify any two values which the above guiding principles and environ-mental factors are conveying to the society.
(A18) (i) (a) Initiative : According to this principle, the employees working in an organisation at all levels should be encouraged or motivated to take initiative in work related matters. Here, initiative means eagerness to take the first step without being asked to do so. Management should encourage initiative i.e., they should encourage employees to make and execute their own plans. This is because an initiative gives satisfaction to employees and bung success to the organisation.
(b) Social Dimension : Social environment consists of social and cultural forces within which firms operates. It consists of social customs, values and traditions.
(ii) (a) Obey the law & order. (b) Mutual Trust.
(Q19) Explain how does the understanding of business environment help the management in the following: (a) Tapping useful resources; and (b) Coping with rapid changes.
(Q20) ‘i-phone India Ltd.” is a manufacturer of advanced category of mobile phones. The company trained its engineers from Japan. It markets its mobile phones domestically as well as internationally. The company had a substantial market share and had a loyal customer following because of quality of its I phone. From the last financial year, the company had been unable to achieve its targets because of competition in the market. The company is planning to revamp its controlling system.
(i) Identify the concepts of management involved in the above para.
(ii) State the steps of the revamped controlling process to be followed by the company to solve this problem.
(iii) Also, state any one value which the company wants to communicate to the society.
(A20) (i) Functional Concept : Management basically is the task of planning, coordinating, motivating and controlling the efforts of others towards the goals and objectives of the organisation. According to this concept, management is what a manager does planning, executing and controlling.
(ii) Steps in Controlling Process :
(i) Setting Performance : The first step of controlling to set performance standards. The standards are those criteria on the basis of which the actual performance is measured. Standards can be set in both quantitative and qualitative terms.
(ii) Measurement of Actual Performance: After establishing standards the next step in the control process is to measure the actual performance.
Following are points while measuring the actual performance:
(a) The figures regarding work progress should, as far as possible, be completely true.
(b) These figures should be continuously prepared.
(c) The standards for measuring progress should be the same as were adopted at the time of determine standards.
(d) Progress measuring system should be quick to point out deviations.
(iii) Comparison of actual performance with standards : In this step, actual performance is compared with the standards and deviations are found. Deviations can be of two types : (i) Negative Deviation and (ii) Positive Deviation.
(iv) Analysing Deviations : The term Deviation in controlling means the difference between the actual performance and standards. It is important to determine the acceptable range of deviations. Also, deviation in key area of business need to be attended more urgently as compared to deviation in certain insignificant area.
(v) Taking Corrective Action: The last but the most important step in the process of controlling is taking corrective action. By now, the deviations and there causes become known. Now, is the time for removing the hurdles in the actual work progress.
(vi) Providing better quality product to its consumer.
(Q21) A company has been registered under the Companies Act with an authorized share capital of Rs. 20,000 crores. Its registered office is situated in Delhi and manufacturing unit in a backward district of Rajasthan. Its marketing department is situated in Bhopal. The company is manufacturing Fast Moving Consumer Goods (FMCG).
(i) Suggest with the help of a diagram a suitable organisation structure for the company.
(ii) State any three advantages of this organisation structure.
(A21) (i) Functional organisation structure : A functional structure is an organisational design where in similar and related jobs are grouped together into major functions. There is separate department for each major function. For instance: In a manufacturing firm, production, marketing, finance and personnel may be the key functions.
(ii) Three advantages of this structure :
(a) Flexibility : Functional organisation permits changes in organisation without disturbing the whole work. The span of supervision can also be adjusted according to the requirements.
(b) Specialisation : In functional structure, the employees perform specific tasks within a department. Such specialisation not only promotes efficiency but also improves performance.
(c) Economy: The use of specialists helps in controlling the wastage of material, money and time. The duplication of work is also avoided which ensures economy in operation.
(Q22) Explain any five points of importance of directing function of management.
(A22) (i) Initiates action : All organisational activities are initiated through direction. Along with planning, organising and staffing, managers must stimulate action by issuing instructions to subordinates and by supervising their work. The aim of direction is to activate employees to work towards the realisation of predetermined goals of the organisation.
(ii) Means of Motivation : It motivates the employees to work efficiently and effectively and to contribute their maximum efforts to the best of their abilities for the achievement of organisational goals. A good leader can always identify the potential of his employees and motivate them to extract work up to their full potential.
(iii) Integrates employees efforts : Directing integrates employees efforts in the organisation in such a way that every individual effort contributes to the achievement of organizational goals.
(iv) Balance in the organisation : Effective directing helps in bringing balance in the organisation as it fosters cooperation and commitment among the people and helps to achieve balance among various groups, activities and the departments.
(v) Facilitates changes : It enables the organisation to cope with the changing conditions of the environment through effective communication and persuasive leadership. Managers through the medium of direction shapes the mind set of the employees in a manner that they wilfully accept changes.
(Q23) Aman, Ahmad and Ally are partners in a firm engaged in the distribution of dairy products in Maharashtra state. Aman is a holder of Senior Secondary School Certificate from Central Board of Secondary Education with Business Studies as one of his elective subjects. Ahmad had done his post graduation in History and Ally in dairy farming. One day their was a serious discussion between Ahmad and Ally regarding the nature of management. Ahmad argued that management was a profession, where as Ally argued against it saying that the legal and medical profession are the only professions because they fulfill all the conditions of profession.
Aman on the basis of his knowledge of business studies explained the nature of management as a profession to Ahmad and Ally.
Explain, how Aman would have satisfied both Ahmad and Ally ?
(A23) (i) Well-defined Body of knowledge : All professions have well-defined body of knowledge and this knowledge is acquired through instructions.
(ii) Restricted Entry: A person can enter into profession only after getting through the examination or acquiring a professional degree or diploma. If any one wants to become a chartered accountant, he has to clear the examination conducted by the Institute of Chartered Accountants of India.
(iii) Professional Association Professional association makes rules, applies them, issues certificate of practice etc. Every profession is associated to such association. e.g., In India Bar Council regulates of activities of Indian lawyers.
(iv) Ethical Code of Conduct: For every profession, some ethical standards are provided and every individual/ professional is expected to follow these standards. For example, All India Management Association (AIMA) regulates the activities of managers and management associations.
(v) Service Motive : The main aim of every professional should be to provide service to the client than making money.
(Q24) The choice of an appropriate channel of distribution depends upon a number of factors. Explain any four such factors.
(A24) The following factors affect the choice of channels of distribution:
(i) Product related factors:
(a) Unit Value : If the unit value of the product is high or expensive, direct sale is preferred whereas in case of less costly products, longer channels are preferred.
(b) Technical Nature : Products of technical nature are sold directly, consumer products like television, refrigerator etc. are sold through retailers.
(c) Perishability : Perishable products are sold through short channels whereas non-perishable products are sold through long channels.
(d) Standardisation : Non standardised or customers made products require short channe whereas standardised goods are distributed through middlemen.
(ii) Market related factors:
(a) Nature of the market : Industrial goods are supplied directly whereas consumer goods are supplied through intermediaries.
(b) Size of market : If the number of customers is large, the more intermediaries are used. If the of customers is small the direct channel can be used.
(c) Geographical concentration : If the buyers are concentrated in a small place, short channels may be used, if the buyers are scattered then more channels are used.
(d) Size of order : If the size of market is big, direct supply is preferred and in case of small orders, intermediaries are used.
(iii) Company related factors:
(a) Financial Strength: A financial strong firm prefers direct selling whereas a financial weak firm depends upon intermediaries.
(b) Degree of Control : If the business want to have greater control on the channels of distribution it can use short channels. If the business do not want more control over the channels of distribution it can use longer channels.
(Q25) Distinguish between Money market and Capital market on the basis of:
(a) Investment outlay
(c) Liquidity and
DΕLΗΙ CΟΜΡΑRΤΜΕΝΤ – 2015
SET – III
(Q4) Besides the investment decision the finance function is concerned with two other broad decisions. Name these decisions.
(Q7) How does co-ordination integrates group efforts ? State.
(Q9) State any three limitations of informal organisation.
(Q13) There are some characteristics that should be kept in mind while choosing a brand name. Explain any two such characteristics that a good brand name should have.
(Q18) State any four factors except diversification which affects the fixed capital requirements of a company.
(Q21) “The organizations which are keen on developing effective communication, should adopt suitable measures to overcome the barriers to communication and improve communication effectiveness.’ Suggest and explain any such five measures.
(Q24) Describe the role of public relations in sales promotion.
(Q25) Explain the functions of financial market.