NCERT Solutions - Directing Commerce Notes | EduRev

Business Studies (BST) Class 12

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Commerce : NCERT Solutions - Directing Commerce Notes | EduRev

The document NCERT Solutions - Directing Commerce Notes | EduRev is a part of the Commerce Course Business Studies (BST) Class 12.
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Multiple Choice Questions
Question 1. Which one of the following is not an element of direction?

(a) Motivation
(b) Communication
(c) Delegation
(d) Supervision
Answer (c) Delegation is not en element of direction.

Question 2. The motivation theory which classifies needs in hierarchical order is
 developed by

(a) Fred Luthans
(b) Scott
(c) Abraham Maslow
(d) Peter F Drucker
Answer (c) Abraham Maslow gave the hierarchy of five human needs.

Question 3. Which of the following is a financial incentive?
(a) Promotion
(b) Stock incentive
(c) Job security
(d) Employee participation
Answer (b) Stock incentive is a financial incentive which is a employee stock option
 with a tax benefit.

Question 4. Which of the following is not an element of communication process?
(a) Decoding
(b) Communication
(c) Channel
(d) Receiver
Answer (b) Communication is not the element of communication process, it is
 understood as a process of exchange.

Question 5. Grapevine is
(a) Formal communication
(b) Barrier to communication
(c) Lateral communication
(d) Informal communication
Answer (d) Informal system of communication is referred as “Grapevine” .

Question 6. Status comes under the following type of barriers
(a) Semantic barrier
(b) organisational barrier
(c) Non semantic barrier
(d) Psychological barrier
Answer (b) Status related to organisation, Thus, it is a organisational barrier.

Question 7. The software company promoted by Narayan Murthy is
(a) Wipro
(b) infosys
(c) Satyam
(d) HCL
Answer (b) Narayana Murthy promoted Infosys.

Question 8. The highest level need in need Hierarchy of Abraham Maslow
(a) Safety need
(b) Belongingness need
(c) Self actualisation need
(d) Prestige need
Answer (c) Self actualisation need is the highest level of need as it refers to the drive to
 become what one is capable of becoming.

Question 9. The process of converting the message into communication symbols is
 known as

(a) Media
(b) Encoding
(c) Feedback
(d) Decoding
Answer (b) The process of converting message into symbol is known as Encoding.

Question 10. The communication network in which all subordinates under a supervisor
 communicate through supervisor only is

(a) single chain
(b) inverted
(c) wheel
(d) free flow
Answer (c) In the wheel network, the communication takes place in such a manner that
 subordinates under a supervisor communicate through supervisor only.

Short Answer Type Questions

Question 1. Distinguish between leaders and managers.

Answer Difference between Managers and Leaders

NCERT Solutions - Directing Commerce Notes | EduRev


Question 2. Define Motivation.
 Answer 
Motivation is defined as inducing, inspiring and stimulating a person to perform
with their best ability, to accomplish the goal. It depends upon satisfying needs of
people. In the words of Farland, “motivation is the way in which urges, desires,
aspirations or needs, direct control and explain the behaviour of human beings”.

Question 3. What is informal communication?
 Answer
The social interactions, gossips, friendly talks and non officiat matters which
are discussed among different members of organisation who are not officially
recognised is known as informal communication or we can say the communication that
takes place without following the formal guidelines of communication Is said to be
informal communication. This type of communication establishes the personal
relationship among employees. It is flexible, dynamic and no records of information
communication are maintained under this Informal communication system is generally
referred to as “Grapevine”.

Question 4. What are semantic barriers of communication?
 Answer 
While communicating a message, misrepresentation of communication causes
misunderstanding on account of use of wrong words lack of vocabulary skills, faulty
translations, different interpretations is known as semantic barriers. It is concerned with
the problems which arises in the process of encoding and decoding of message into
words or impressions. Main causes of semantic barriers are listed below
(i) Badly expressed message
(ii) Symbols with different meanings
(iii) Faulty translations
(iv) Unclarified assumptions
(v) Technical jargon
(vi) Body language and gesture decoding

Question 5. Who is a supervisor?
 Answer
Supervision means instructing, guiding, monitoring motivating and observing
the activities of employees from over and above. The person who is performing the
work of supervision is known as supervisor. Supervisor is the link between management
and subordinates. He is the person who translates the policies and plan of management
to the subordinates and revert back the complaint, suggestions and feedback of
subordinates to management.

Question 6. What are the elements of directing?
 Answer
Directing comprises of four elements
(i) Supervision It can be understood as the process of guiding and instructing the efforts
of employees.
(ii) Motivation The process of encouraging the employees in order to help them in
achieving the desired goals is known as motivation
(iii) leadership It is the process of mtluencmq the behaviour of people by making them
strive voluntarily towards achievement of organisational goals.
(iv) Communication It is the process of exchange of ideas, Views, facts, feelings etc
between or among people to create common understanding.

Question 7. Explain the process of motivation.
 Answer 
Motivation process is based on how unsatisfied human need gets satisfied and
results in reduction of tension.
The steps of motivation process are as follows

NCERT Solutions - Directing Commerce Notes | EduRev
(i) Unsatisfied Need The need of an individual which is not satisfied.
 

(ii) Tension Unsatisfied need creates tension

(iii) Drive This tension creates drive and an Individual starts looking for alternatives to
satisfy the need.

(iv) Search Behaviour Then he starts behaving as per chosen option.

(v) Satisfied Need After opting the chosen behaviour his need got satisfied.

(vi) Reduction of Tension The fulfillment of need results in relieving of tension.

Question 8. Explain different networks of grapevine communications.
 Answer 
Grapevine communications may follow different types of network they are

(i) Single Strand Network Each person communicates to the other in sequence.

NCERT Solutions - Directing Commerce Notes | EduRev

(ii) Gossip Network Each person communicates with all on non-selective basis.

NCERT Solutions - Directing Commerce Notes | EduRev

(iii) Probability Network The Individual communicates randomly with other Individual

NCERT Solutions - Directing Commerce Notes | EduRev

(iv) Cluster Network The individual communicates with only those people whom he trusts

NCERT Solutions - Directing Commerce Notes | EduRev
 

Long Answer Type Questions

Question 1. Explain the principles of Directing.
 Answer 
Principles of Directing

(i) Maximum Individual Contribution This principle emphasises that directing
techniques must help every employee to contribute to his maximum potential in order to
achieve the organisational goals. It should help In bringing out unused or dormant
potential of an employee to improve the efficiency of the organisation. e.g., suitable and
appropriate Incentives should be given to encourage employees to improve their
performance.

(i) Harmony of Objectives Most of the lime It happens that the organisational
objectives and Individual objectives move in opposite directions, The person In charge
of a team of workers should guide and Instruct his team In such a manner that they
realise the Importance 0f both the objectives

(ii) Unity of Command This principle insists that a person in the organisation should
receive Instructions from one superior only. If Instructions are received from more than
one, it creates confusion, conflict and disorder In the organisation Adherence to this
principle ensures effective direction.

(iv) Appropriateness of Direction Technique According to this principle. appropriate
motivational and leadership technique should be used while directing the people based
on subordinate needs capabilities. attitudes etc, e.g .. combination of both monetary and
non-monetary Incentives should be used to elicit the right response from the
employees.

(v) Managerial Communication Directing should convey clear Instructions to create
total understanding to subordinates Through proper feed back the manager should
ensure that subordinate understands his instructions clearly.

(vi) Use of Informal Organisation Informal groups or organisations exist within every
formal organisation and every manager should spot and make use of such
organisations for effective directing
(vii) Leadership While directing the subordinates managers should exercise good
leadership as it can influence the subordinates positively without causing dissatisfaction
among them.

(viii) Follow Through Mere giving of an order is not sufficient Managers should follow It
up by reviewing continuously whether orders are being implemented accordingly or any
problems are being faced by the subordinates.

Question 2. Explain the qualities of a good leader. Do the qualities alone ensure
 leadership success?
 Answer
Some 01the qualities required by all leaders are

(i) Physical Features It IS believed that good physical features attract people. Height.
weight. health. appearance determine the physical personality of an individual.

(ii) Knowledge A good leader should have required knowledge and competence Only
such person can Instruct subordinates correctly and Influence them

(iii) Integrity He should be a role model to other regarding the ethics and values A
leader should possess high level of integrity and honesty.

(iv) Initiative A good leader never waits for opportunities to come to his way rather he
grabs the opportunity and use it to the advantage of organisation.

(v) Communication and Motivation Skills A leader should be a good communicator.
He should have the capacity to explain his Ideas and make the people to understand his
Ideas. He should also understand the needs of people and motivate them through
satisfying their needs.

(vi) Self Confidence A high level of self confidence is very important for any leader He
should not loose his confidence even in most difficult times A person who is not himself
confident will never be successful in providing confidence to his followers

(vii) Decisiveness Leader should be able to take decisions while managing the work.
Once he is convinced about a fact, he should be firm and should not change opinions
frequently.

(viii) Social Skills A leader should be sociable and friendly with his colleagues and
followers. He should understand people and maintain good human relations WIth them.
Many times, the success of an organisation is attributed to the leader, but due credit is
not given to the followers. Many followers related factors like their skills, knowledge.
commitment, willingness to co-operate team spirit etc make a person an effective leader
It is said that followers make a person, a good leader by acceptance of leadership.
Therefore both followers and leaders are playing an vital role in leadership process.

Question 3. Discuss Maslow’s Need Hierarchy theory of motivation.
 Answer 
Maslow’s need Hierarchy Theory of Motivation Motivation IS a psychological
term and the needs of an employee plays an important role In motivation. In order to
study motivation various researchers developed theories on them. Among them
Abraham Maslow’s need Hierarchy theory IS considered of worth. As per him, their
exists a Hierarchy of five needs these are

(i) Basic Physiological Needs These needs are most basic in the hierarchy and
corresponds to primary needs. Food, clothing shelter are a few examples of this type of
need Basic salary helps to fulfill these needs.

NCERT Solutions - Directing Commerce Notes | EduRev
(ii) Safety/Security Needs When the basic needs satisfied, people start thinking of
future. These needs provide security and protection from

(iii) Affiliation/Belonging Need These needs refer to human feeling of belongingness.
We all as human beings look forward to being accepted In the society e.g.. friendship.

(iv) Esteem Needs These include factors such as self-respect, autonomous status,
attention An individual wants a respect and recognition from others in this need

(v) Self-actualisation Needs It is the highest level of need in the hierarchy It refers to
the drive to become what one is capable of becoming The needs include growth selffulfillment
and achievement of goals etc.

Question 4. What are the common barriers to effective communication suggest
 measures to overcome them?
 Answer
Common Barriers to Effective Communication Managers in all
organisations face problems due to communication barriers These barriers may prevent
a communication or filter part of it or carry Incorrect meaning due to which
misunderstanding may be created. Therefore all managers should take some steps to
overcome these barriers.

There are broadly four groups of barriers

(i) Semantic Barriers Semantic barriers are concerned with problems and obstructions
In the process of encoding and decoding of message Into words or -expressions
Normally such barriers result on account of use of wrong words, faulty translations.
different interpretations etc. These are discussed below

(a) Badly Expressed Message Sometimes the message is not communicated correctly
by the manager because of inadequate vocabulary, usage of wrong words. omission of
needed words etc.

(b) Symbols with Different Meaning A word may have several meanings Receiver has
to perceive one such meaning for the word used by communicator.

(c) Faulty Translations Sometimes while translating If incorrect translation is done due
to poor command over both the languages then meaning of the message changes This
leads to cause different meanings to the communications.

(d) Unclarified Assumptions Sometimes communication may have certain
assumptions which are subject to different interpretations the one should always clear
the meaning of what he is instructing the worker to do, so that the worker has no doubts
in his mind.

(e) Technical Jargon Sometimes specialists may use technical words in their
communication by which the receiver IS not aware Therefore, they may not understand
the complete conversation.

(f) Body Language and Gesture Decoding The body movement and body gestures
plays an important role in conveying the message. If there is no match between what is
said and what is expressed In body movements, communications may be wrongly
perceived.

(ii) Psychological Barriers Emotional or psychological factors acts as barrier to
communications e.g., a person who is warned cannot understand what is being told.
Some of the psychological barriers are

(a) Premature Evaluation Sometimes people evaluate the meaning of message before
the sender completes his message. Such premature evaluation may be due to
preconceived notions.

(b) Lack of Attention If the mind is pre-occupied then the result is non-listening of
message by receiver act as a major psychological barrier.

(c) Lon by Transmission and Poor Retention When message passes through various
levels. successive transmission of message results in loss of information. It happens
mostly with oral communication. Also people cannot retain the information for a long
time if they are inattentive or not interested.

(d) Distrust If the communicator and communicate do not believe on each other. they
can not understand each others message in its original sense as they are not giving
importance to the information exchanged.

(iii) Organisational Barriers The factors related to organisation structure, authority
relationships, rules and regulations may sometimes act as barriers to effective
communication some of these
barriers are

(a) Organisational Policy If the organisational policy is not supportive to free flow of
communication, it may hamper effectiveness of communications.

(b) Rules and Regulations Rigid rules and cumbersome procedures may be a hurdle
to communication similarly, communication through prescribed channel may result in
delays.

(c) Status Status of superior may create psychological distance between him and his
subordinates The people working at higher level may not allow his subordinates to
express their feelings freely.

(d) Complex Organisational Structure In an organisation where there are number of
managerial levels, communications gets delayed and distorted as number of filtering
pomts are more

(e) Organisational Facilities For smooth clear and timely communication proper
facilities are required like frequent meetings suggestion box. internet connection, Intercom
facility. Lack or ineffectiveness of these facilities may create communication
problems

(iv) Personal Barriers The personal factors of both sender and receiver may exert
influence on effectiVe communication. Some of the personal barriers are

(a) Fear of Challenge to Authority If a supenor feels that a particular communication
may effect his authority negatively then he/she may not speak it out clearly and openly.

(b) Lack of Confidence of Superior on his Subordinate If superiors do not have
confidence on their subordinates, they may not seek their advice or opinions.

(c) Unwillingness to Communicate Sometime subord nator may not be prepared to
communicate with their superiors if they think that it may adversely affect their interests.

(d) Lack of Proper Incentives If there is no reward for communication then employees
may not be motivated to communication e.q., if there IS no reward or appreciation for
a good suggestion, the subordinate may not be willing to offer useful suggestions again
Some measures which can be adopted by organisations to improve communications
are

(i) Clarify the Ideas Before Communication The entire message to be communicated
should be studied in depth analysed and stated in such a manner that It is clearly
conveyed to subordinates. The message should be encoded In simple language which
is understandable.

(ii) Communication According to the Needs of Receives All managers should be
aware of the understanding level of his/her subordinates. He should adjust his
communication and select the words according to the education and understanding
levels of subordinates

(iii) Consult Others Before Communicating Before communicating anything. others
who are linked with it In some way or the other should be taken Into confidence for
developing a better pian.

(iv) Be Aware of Languages, Tone and Content of Message The language used for
communication should be understandable to the listener. The tone of the appropriate
and the matter should not be offending to anyone

(v) Convey Things of Help and Value to Listener It is always better to know the
interests of the people with whom you are communicating. If the message relates
directly or Indirectly to such interests and needs II certainly evokes response trom
communicate.

(vi) Ensure Proper Feedback The receiver of communication may be encouraged to
respond process may be Improved to communication. The communication by the
feedback received to make it more responsive

(vii) Follow up Communication There should be a regular follow up and review on the
instructions given to subordinates Such follow up measures help in removing hurdles If
any In implementing the instructions.

(viii) Be a Good Listener Manager should be a good listener. Patient and attentive
listening solves half of the problems. Managers should also give Indications of their
Interest in listening to their subordinates

Question 5. Explain different financial and non-financial incentives used to motivate
 employees of a company.
 Answer
Financial Incentives Financial incentives refer to incentives which are in direct
monetary form or measurable in monetary term and serve to motivate people for better
performance. The financial incentives used in organisations are listed below

i) Pay and Allowances For every employee, salary is the basic monetary incentive It
Includes basic pay, DA and other allowances Salary system consists of regular
increments In the pay every year and enhancement of allowances from time to time.

(ii) Productivity Linked Wage Incentives Several wage incentives aim at linking
payment of wages to increase in productivity at Individual or group level.

(iii) Profit Sharing Profit sharing is meant to provide a share to employees In the profits
of the organisation Trus serves to motivate the employees to improves their
performance and contribute to Increase in profits

(v) Co-Partnership/Stock Option Under these Incentives schemes, employees are
offered company shares at a set price which is lower than market price The allotment of
shares creates a peeling of ownership to the employees and makes them to contribute
more for the growth of the organisation.

(vi) Retirement Benefits Several retirement benefits such as provident fund, pension
and gratuity provide financial security to employees after their retirement. This act as an
Incentive when they are In serv-es in the organisation.

(vii) Perquisites In many companies perquisites and fringe benefits are offered such as
car allowance, housing, medical aid, and education etc over and above the salary.

These measures help to provide motivation to the employees/managers

Non-financial Incentives Incentives which help in fulfilling our psychological emotional
and social needs are known as non-financial incentives Some of the non-financial
Incentives are

(i) Status Status means ranking or high positions In the organisation. Whatever power
position prestige an employee enjoys in the organisation are indicated by his status
Psychological, social and esteem needs of an Individual are satisfied by status given
to their job.

(ii) Organisational Climate This indicates the characteristics which describe an
organisation and distinguish one from the other. Individual autonomy. reward
orientation, consideration to employees,
etc are some of the positive features of an organisation. If managers try and Include
more of these In an organisation helps to develop better organisational climate

(iii) Career Advancement Opportunity Managers should provide opportunity to
employees to improve their skills and be promo-eo to the higher level Jobs appropriate
skill development programmes and sound promotion policy Will help employees 10
achieve promotions. Promotions have always worked as tonic and encourages
employees to exhibit improved performance

(iv) Job Enrichment Job enrichment is concerned with designing jobs that include
greater variety of work contentment require higher of knowledge and Skill, give workers
more autonomy level and responsibility and provide opportunity for personal growth and
a meaningful work experience

(v) Employee Recognition Programmes Recognition means acknowledgement With a
show of appreciation. When such appreciation is given to the work performed by
employees, they feel
motivated to perform/work at higher level. e g.,
(a) Congratulate the employee
(b) Displaying names of star performers
(c) Installing awards
(d) Distributing mementos

(vi) Job Security Employees want their job to be secure. They want certain stab lily
about future income and work so that they do not feet warned on these aspects and
work with greater zeal There is only one problem with this Incentive i.e., when people
feel that they are not likely to lose their jobs. they may become relaxed.

(vii) Employee Participation It means Involving employees In decision making of the
Issues related to them. In many companies, these programmes are In practice In the
form of joint management committees. work committees canteen committees etc.

(viii) Employee Empowerment Empowerment means giving more autonomy and
powers to subordinates. Empowerment makes people feel that their Jobs are important.
This feeling contributes positively to the use of skills and talents n the Job performance

Application Type Questions

Question 1. The workers always try to show their inability when any new work is given
 to them. They are always unwilling to take up any kind of work. Due to sudden rise in
 demand a firm wants to meet excess orders. The supervisor is finding it difficult to cope
 up with the situation. Suggest ways for the supervisor to handle the problem.
 Answer 
“he superv sor can take help of monetary incentives to motivate the workers
Their wages can be linked to productivity they can earn more incentives besides wages
by producing goods. Supervisor should also play the role of a good leader and
encourage them to accept any kind of work as It would lead to Increase exposure to tre
industry and better job prospects.

Question 2. Workers of a factory often come to the production manager with the
 grievances. The production manager finds himself overburdened with so many tasks
 advise a way to relieve the production managers.
 Answer
To overcome the problem the production manager should take the follOWing
measures
(i) Arrange necessary training programmes
(ii) Prepare a work schedule
(iii) Recommend the cases of the workers for promotion, rewards. transfer, punishment
etc.
(iv) Proper availability of materials. machines and tools for the workers
(v) Delegate sum of rus authorities.

Question 3. In an organisation employees always feel they are under stress. They take
 last initiative and fear to express their problems before the manager. What do you think
 is wrong with the manager?
 Answer 
The manager should adopt more friendly approach towards the workers. The
manager should encourage a system of two-way communication, provide an outlet to
workers to share their feelings, suggestions and problems.

Question 4. In an organisation all the employees take things easy and are free to
 approach anyone for minor queries and problems. This has resulted in everyone taking
 to each other and thus resulting in inefficiency in the office. It has also resulted in loss of
 secrecy and confidential information being leaked out. What system do you think the
 manager should adopt to improve communication?
 Answer 
Excess of everything is bad. More use of Informal communication IS resulting
in this problem. A proper chain of command should be established. Only the necessary
information should be passed through chain of command The employees will not be
allowed to communicate at all levels. This Will save time and more discipline.

Case Problem

Y limited is a bank functioning in India. It is planning to diversify into increase business.
Lately, the Government of India has allowed the private sector to gain entry in the
increase business. Previously, it was the prerogative of LIC and GICto do insurance
business. But now with liberalisation of the economy and to make the field competitive
other compnies have been given licenses to start insurance business under the
regualtion of 1nsurance Regulatory and Development Authority’.
Y limited plans to recruit high quality employees and agents and exercise effective
direction to capture a substantial part of life and non-life insurance business.

Question 1. Identify how the company can supervise its employees and agents
 effectively. What benefits will the company derive from effective supervision?
 Answer The company can supervise I(S employees and agents by taKing the
 follOWing steps

(i) Training programmes should be organised
(ii) Make them understand the various policies so that they can convince their clients.
(iii) Establishing targets for them and also monetary incentives.
(iv) Regularised system for submission of periodical reports of their performance.
The benefits of the above steps will be
(i) Trained personnel will give better performance. They can Improve upon their skills
(ii) Knowledge of the products of the Insurance company will ensure better satisfaction
tor the clients.
(iii) They will compete to give better performance and earn higher incentives.
(iv) It will help in identifying the areas where workers and agents need specialised
training programmes.

Question 2. What financial and non financial incentives can the company use for
 employees and agents separately to motivate them. What benefits company will get
 from them?
 Answer
Incentives for Employees

(i) Financial

(a) Productivity linked wage incentive
(b) Bonus
(c) Co-partnership
(d) Employee stock option

(ii) Non-financial

(a) Job-security
(b) Status
(c) Employee empowerment
(d) Employee recognition programme

Incentives for Agents

(i) Financial
(a) CommisSion
(b) Bonus ike paid vacation
(ii) Non-financial Incentive
(a) Cordial relationship
(b) Career advancement opportunity
(c) Job enrichment
(d) Recognition programmes like certificate of merit etc.
(e) Company achieves the motivation among the employees and they will contribute
more in achieving targets.

Question 3. How can the company ensure that higher order needs i.e., the esteem and
 self actualisation needs are met?
 Answer 
The higher order needs can be satisfied through
(i) Career advancement opportunity
(ii) Assignment of challenging job
(iii) Perquisites
(iv) Participation in management decisions

Question 4. Identify the qualities of leadership in this line of business that the company
 manager must possess to motivate employees and agents.
 Answer
The qualities of leaders which the manager of the Insurance company must
possess are
(i) Intelligence
(ii) Good communication skills
(iii) Self confidence, integrity and honesty
(iv) Good listener
(v) Pleasing personality

Question 5. Give a model of formal communication system that the company can follow.
 Identify the barriers in this model, how can they be removed?
 Answer 
The most suitable model for formal communication

NCERT Solutions - Directing Commerce Notes | EduRev
Barriers to Effective Communication

(i) Barriers Due to Organisational Structure An organisational structure is complex
with numerous levels in between which creates distance between the top management
and the workers. With long lines of communication, there is possibility of message
losing its significance.
(ii) Psychological Barriers Everyone perceives information in the light of their own
experiences, prejudices and thinking.
(iii) Inability to Communicate The lack of ability to communicate leads to
misunderstanding and confusion. Different people have different meaning for same
words.
(iv) Status and Position Sometimes, effective flow of communication is hampered by
status and position of the sender and receiver.
Measures to Overcome the Barriers
(i) Clarity in the thoughts of the sender is must for effective communication.
(ii) The sender should try to make the message meaningful and understandable.
(iii) Message should be precise and to the point.
(iv) The sender should always take the feedback from the receiver.

Question 6. How can informal communication help to supplement formal communication
 model given by you in answer to question?
 Answer
Informal communication takes place outside the official channels of
communication It fills the gaps that might exist in the formal communication. Merits of
Informal communication are
(i) It helps the members to discuss the matters which cannot be discussed at the official
level.
(ii) It is a way of knowing the reactions and opinions of the people about a change.
(iii) It helps in building team splnt,
(iv) The information flows at a faster speed.

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