Sure Shot Questions: Nature and Significance of Management | Business Studies (BST) Class 12 - Commerce PDF Download

Based on a careful analysis of the previous years' questions and trends, we've put together a list of questions that are most likely to appear in the  Class 12 Business Studies Board exams. These predictions aren’t just guesses—they’re based on how often these questions show up and how CBSE usually frames its papers.

Q1: Give the meaning of Management and explain how it ‘creates a dynamic organisation’ and ‘helps in the development of society’.
Ans: According to Trewelly and Newport, “Management is defined as the process of planning, organising, actuating and controlling an organisation’s operations in order to achieve coordination of the human and material resources essential in the effective and efficient attainment of objectives.” 

• Management creates a dynamic organisation: An organisation operates in a consistently changing environment. To survive and grow, it must adapt to the environment. To implement such changes, management convinces employees that they will benefit their future prospects.
• Management helps in the development of society: While achieving organisational development, management also focuses on social obligations. Efficient management improves living standards by creating employment opportunities, providing good quality products, and using the latest technology, leading to growth and development through optimum resource utilisation.

Q2: What is meant by efficiency in management? How is it different from effectiveness?
Ans: Efficiency means doing things in the best possible manner with the least cost & waste; effectiveness means doing the right things which achieve the goals. Efficiency focuses on inputs; effectiveness focuses on outputs.

Q3: “Management is termed as an Art by some, as a Science or as an inexact Science by others. The truth seems to be somewhere in between.” In light of this statement, explain the true nature of Management.
Ans: 

• Management is an art as well as a science, though an inexact science. 
• Art is the skilful and personal application of existing knowledge to achieve desired results. Management is an art because, like any other art, it involves theoretical knowledge and personalised application based on continuous practice. 
• Science is a systematised body of knowledge explaining certain general truths. Like science, management principles are derived through observation and repeated experiments. However, since management deals with human beings, the outcomes cannot be accurately predicted and must be modified according to the situation, making it an inexact science.
  
  

Q4: “Management does not satisfy all the requirements of a profession, yet it is considered professional in character.” In light of this statement, explain the nature of management as a profession.
Ans: Management possesses some features of a profession:

• Well-defined body of knowledge – Management has a systematic body of knowledge which can be taught in institutions like IIMs.
• Restricted entry – Unlike medicine or law, anyone can become a manager without a formal degree, though management qualifications are desirable.
• Professional associations – Bodies like AIMA exist but membership is not mandatory.
• Ethical code of conduct – Associations prescribe codes, but enforcement is weak compared to established professions.
• Service motive – Management ultimately serves society by providing quality goods/services at reasonable prices.

Thus, management is not a full-fledged profession but has many professional features.

Q5: Kamal, Khan and David are partners in a firm engaged in the distribution of dairy products in Madhya Pradesh. Kamal is a holder of a Senior Secondary School Certificate from the Central Board of Secondary Education with Business Studies as one of his elective subjects. Khan had done his post-graduation in History, and David in dairy farming. One day, there was a serious discussion between Khan and David regarding the nature of ‘Management as a Science’. Khan argued that Management was not a science, whereas David was of the opinion that Management was a science. Kamal intervened and corrected both Khan and David about the nature of management as a science with the help of his knowledge gained from the classroom discussions. Describe briefly any three features that will be highlighted by Kamal in his conversation.
Ans: Kamal would highlight that management is a science, but an inexact or soft science because: 

• Systematised body of knowledge: Management has its own theory and principles that have developed over a period of time. 
• Principles based on experimentation: Management principles have been developed through observation and experimentation. 
• Universal validity: Management principles are not as exact as the principles of science as they can be applied in all situations but their results may vary from one situation to another.

Q6: Management is a series of continuous interrelated functions. Comment.
Ans: Management involves continuous, interrelated functions: planning (deciding in advance), organising (grouping activities and establishing authority), staffing (recruitment and training), directing (guiding and motivating), and controlling (measuring performance against standards and correcting deviations). These functions are interdependent, ensuring effective goal achievement.

Q7: "Management includes a number of functions which are interrelated." Are you agree with this statement? Present comment for your answer.
Ans: Yes, I agree. Management includes planning, organising, staffing, directing, and controlling, which are interrelated. Planning sets goals, organising arranges resources, staffing fills roles, directing guides efforts, and controlling ensures alignment with plans. Each function depends on the others for effective organisational performance.

Q8: What is the importance of management?
Ans: The importance of management can be explained as follows:

• Helps in achieving group goals – Management unites the efforts of individuals and directs them towards achieving common organisational objectives.

• Increases efficiency – By proper planning, organising, staffing, directing and controlling, management ensures optimum use of resources and reduction of costs.

• Creates a dynamic organisation – Management enables the organisation to adapt to changing business environments and overcome resistance to change among employees.

• Helps in achieving personal objectives – Through motivation and leadership, management helps individuals to achieve their personal goals like growth, development, and recognition, while working towards organisational goals.

• Helps in the development of society – By providing quality products and services, generating employment, adopting new technology, and ensuring fair business practices, management contributes to social welfare and development.

Q9: Why is management known to be pervasive?
Ans: The tasks required in managing a company are the same for all businesses, whether they are for-profit or non-profit, social or political. That is why management is called pervasive.

Q10: Explain any of the five features of management.
Ans: Here are five features of management: All pervasive (used in all forms of organizations, across all disciplines, and at all levels), Intangible force (felt when goals are met in accordance with predetermined plans), Goal-driven procedure (helps achieve social and economic objectives efficiently), Multidimensional (involves managing work, people, and operations), Group activity (channels various talents and initiatives to achieve common organisational objectives).

Q11: A company manufacturing laptops is facing the problem of decreasing sales in the market. What steps should each level of management take to give effect to this decision?
Ans: Modernisation of the product is required to raise its market share. Hence, to modernise the product, each level must work as follows: 

• Top-level management: Concentrate on research and development and add new features to their products or begin a new product line; Drafting sales plan, sales targets and sales incentives; Increase promotional and marketing pursuits. 
• Middle-level management: Implementation of the plans that are outlined by the top level; Recruiting candidates with required qualifications; Continuously assess all the activities and take corrective actions for any deviations, and keep the top-level management informed. 
• Lower or Supervisory level: Analysis of targets and plans to the workforce of an enterprise; Assign the task relying upon the qualification and efficiency of the employees; Maintain the stability of the quality of work and decrease wastage by efficient utilisation of the available resources.

Q12: What should top-level management do to modernise a product facing decreasing sales?
Ans: Top-level management should concentrate on research and development and add new features to their products or begin a new product line; draft sales plan, sales targets and sales incentives; and increase promotional and marketing pursuits.

Q13: What is the role of middle-level management in implementing plans for product modernisation?
Ans: Middle-level management should implement the plans that are outlined by the top level; recruit candidates with required qualifications; continuously assess all the activities and take corrective actions for any deviations; and keep the top-level management informed.

Q14: How does the lower or supervisory level contribute to product modernisation in response to decreasing sales?
Ans: The lower or supervisory level should analyse targets and plans for the workforce of an enterprise; assign the task relying upon the qualification and efficiency of the employees; and maintain the stability of the quality of work and decrease wastage by efficient utilisation of the available resources.

Q15: “Management attempts to attain particular objectives, which must result from the fundamental goal of the firm.” Give an explanation of the organisational and social goals of management in light of the aforementioned statement.
Ans: Organisational objectives include: 

• Survival: Ensuring business operations continue by generating enough revenue. 
• Profit: Motivates entrepreneurs and covers business expenses and risks. 
• Growth: Ensures long-term success through increased sales, earnings, and production. 

Social objectives include: 

• Availability of high-quality goods at fair prices. 
• Use of environmentally friendly production techniques. 
• Providing job opportunities to underprivileged sections of society.