CUET Business Studies Previous Year Solved Paper 5 (30 August 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

Directing refers to a process or technique of instructing, guiding, inspiring, counselling, overseeing and leading people towards the accomplishment of organizational goals.

Controlling can be defined as that function of management which helps to seek planned results from the subordinates, managers and at all levels of an organization.

Division of Work. The first henry fayol principle of management is based on the theory that if an employee is given a specific task to do, they will become more efficient and skilled in it. This is opposed to a multi-tasking culture where an employee is given so many tasks to do at once.

Subordination of Individual Interests to General Interest is one of Fayol’s fourteen administrative principles where any individual’s interest that conflicts with an organizational interest must be subordinated to the interests of the organization

Social Environment consists of social forces like traditions, values, social trends, level of education, the standard of living etc. All these forces have a vast impact on business. Impact: More demand during festivals provides opportunities for various businesses.

Business Environment and Establishing Standard for Controlling

Although the business environment plays a significant role in various aspects of an organization's operations, it does not directly help in establishing a standard for controlling. Here's why:

• External factors: The business environment primarily deals with external factors, such as political, economic, social, technological, legal, and environmental aspects. These factors are beyond the control of an organization and can influence its operations. However, establishing standard for controlling is an internal process that focuses on setting performance benchmarks and monitoring the activities within the organization.
• Dynamic nature: The business environment is dynamic and constantly changing. It may not provide a stable foundation for establishing standard for controlling, which requires consistency and predictability.
• Organizational structure: Establishing standard for controlling is closely linked to an organization's structure, processes, and policies. These internal factors are not directly influenced by the business environment.
• Customization: Every organization has unique goals, objectives, and strategies. Therefore, the standards for controlling need to be customized according to the specific needs of the organization. The business environment does not provide tailored information for each organization to establish such standards.

In conclusion, while the business environment plays a crucial role in planning, policy formulation, coping with changes, and tapping useful resources, it does not directly contribute to establishing standard for controlling within an organization. The process of setting and monitoring performance standards is primarily influenced by internal factors and requires customization according to the specific needs of the organization.

A dynamic environment is a business environment that is rapidly changing. In a dynamic market, businesses have to adapt quickly to changes and develop new ideas, products and services to keep up with technology and new trends.

Setting objectives, Developing premises, Identifying alternative courses of action, Evaluating alternative courses are the steps followed in the planning process

Planning leads to rigidity: Once plans are made to decide the future course of action the manager may not be in a position to change them. Following predefined plan when circumstances are changed may not bring positive results for organisation. This kind of rigidity in plan may create difficulty

Planning is futuristic: This means that business’ goals and objectives need to be achieved at a particular time frame in the future and thus it is futuristic.

Span of control (or span of management) is the number of subordinates who report directly to a manager or leader. The more employees assigned to a manager, the wider their span of control.

The Manager shall be responsible for the performance of the assigned task and even accountable for the same

The correct sequence of the staffing process is as follows:

1. Estimating the Manpower Recruitment:

• Assessing the organization's current workforce
• Identifying future workforce needs
• Analyzing the gap between current and future needs

2. Recruitment:

• Advertising job vacancies
• Receiving applications from potential candidates
• Screening and shortlisting candidates

3. Selection:

• Conducting interviews
• Assessing candidates' skills and qualifications
• Selecting the most suitable candidate for the job

4. Placement and Orientation:

• Onboarding new employees
• Introducing them to the organization's policies and procedures
• Ensuring a smooth transition into their new role

5. Training and Development:

• Identifying skill gaps and training needs
• Providing necessary training and development opportunities
• Monitoring progress and evaluating the effectiveness of training programs

So, the most appropriate answer is C: A, D, E, B, C.

Recruitment is the process of finding, screening, hiring and eventually on boarding qualified job candidates.

Lack of Confidence in Subordinates: Top-level superiors think that the lower-level employees are less capable and, therefore, they ignore the information or suggestions sent by them. They deliberately ignore the communication from their subordinates in order to increase their own importance.

The correct process in communication is Sender, Message, Encoding, Media, Decoding, Receiver, and Feedback.

The purpose of the control function is to ensure that the organization makes progress towards the established goals.

Management by Exception: This technique of management is based on the belief that ‘an attempt to control everything results in controlling nothing’. According to this, only the essential and significant deviations that are beyond the acceptable limit should be controlled.

(1) establish standards, (2) measure performance, (3) compare actual performance with standards and identify any deviations, (4) determine the reason for deviations, and (5) take corrective action if needed.

Ensuring Order and Discipline: Controlling ensures a close check on the activities of the employees. Hence, it helps in reducing the dishonest behaviour of the employees and in creating order and discipline in an organization.

The correct answer is B: Composition of long-term and short-term funds.

Financial markets serve various functions, and the following are some of the key roles they play:

A: Facilitating Price Discovery

• Financial markets help determine the prices of financial assets and securities.
• They enable buyers and sellers to interact and negotiate, resulting in a fair market price for assets.

C: Mobilisation of Savings and Channeling Them into the Most Productive Uses

• Financial markets encourage individuals and businesses to save and invest by providing them with opportunities to earn a return on their savings.
• They channel these savings into investments in various sectors, promoting economic growth and development.

D: Providing Liquidity to Financial Assets

• Financial markets provide a platform for buying and selling financial assets, allowing investors to convert their assets into cash when needed.
• This liquidity facilitates smooth financial transactions and the efficient allocation of resources.

However, the composition of long-term and short-term funds is not a direct function of financial markets. Instead, this composition is determined by the various financial instruments available within the market and the preferences of investors and borrowers. Financial markets facilitate transactions between those seeking funds and those providing funds but do not directly influence the composition of these funds.

The depository participant (DP) serves as an intermediary between the investor and the Depository (NSDL or CSDL) who is authorised to maintain the accounts of dematerialised shares.

Commercial Papers is issued by large and creditworthy companies to raise short-term funds at lower rates of interest than market rates. It usually has a maturity period of 15 days to one year

Rights issue is a privilege given to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company.

Financial markets provide valuable information about securities being traded in the market. It helps to save time, effort and money that both buyers and sellers of a financial asset would have to otherwise spend to try and find each other

Answer B: C and D only

The factors affecting dividend decisions can be classified into several categories. However, among the given options, only Shareholder's Preference and Taxation Policy are directly related to dividend decisions.

Shareholder's Preference:

• The preferences of shareholders play a significant role in determining the dividend decision.
• Some shareholders prefer receiving regular dividends, while others prefer reinvestment of profits for the growth of the company.
• The management needs to consider these preferences while making dividend decisions to keep shareholders satisfied and maintain investor confidence.

Taxation Policy:

• Taxation policies can have a significant impact on dividend decisions.
• If dividend income is taxed at a higher rate compared to capital gains, companies might prefer retaining earnings or repurchasing shares instead of paying dividends.
• Changes in taxation policiescan lead to changes in dividend policies to minimize the tax burden on shareholders.

State of Capital market, Control Consideration, and Floatation Cost may indirectly influence dividend decisions but are not considered primary factors affecting dividend decisions.