APSET Paper 2 Mock Test - 1 (Management) - AP TET MCQ

Marketing Myopia occurs when a business is just focussed on selling the product and does not focus on customer needs at all.
So, its known as Marketing Myopia.
Transactional marketing is a business strategy that focuses on single interaction emphasising on improving efficiency and does not focus on building relation with the buyer.
Value signifies the benefit the customer gets from a product and value is dependent on three factors quality service and price referred to as customer value triad.
Ambush marketing or ambush advertising is a marketing strategy in which an advertiser “ambushes” an event to compete for exposure against competing advertisers.
Example: when Pepsi and coca cola make advertisements showing one’s superiority and demeaning the other.

Exclusive dealing refers to an arrangement whereby a retailer or wholesaler is ‘tied’ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area.
Exclusive dealing arrangement occurs when a manufacturer or wholesaler restricts a retailer into carrying only its products and nothing from competing vendors.
Example: Safeway-Coca-Cola

According to the concept of financial signalling, management behavior results in new debt issue being recorded as Non-event news by investors. In this case company makes a commitment to pay interest on the debt.
It means company is in stable position. But when the amount of future debt is reduced investors may feel that company is not in stable position. The study shows that it does occur in real life.

Attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand is known as points-of-difference. Differentiation is the way in which the goods or services of a company differ from its competitors. Indicators of the point of difference's success would be increased with customer benefit and brand loyalty.

Quick Reference. Are 'overarching' competencies that are relevant to a wide range of work settings and which facilitate adaptation and flexibility on the part of the organization. Meta-competencies are usually said to include learning, adapting, anticipating, and creating change.

The Micro, Small & Medium Enterprises Development Act, 2006 is an Indian legislation that aims to promote and facilitate the growth of micro, small, and medium enterprises (MSMEs) in the country. The act provides a legal framework for the classification, registration, and support of these enterprises.

Under the act, MSMEs are categorized based on their investment in plant and machinery or equipment for manufacturing enterprises, and investment in equipment for service enterprises. The act defines the criteria for micro, small, and medium enterprises based on their investment in these assets.

Micro enterprises are defined as enterprises where the investment in plant and machinery or equipment does not exceed 25 lakh Indian rupees. Small enterprises are those where the investment is more than 25 lakh rupees but does not exceed 5 crore rupees. Medium enterprises are defined as enterprises where the investment is more than 5 crore rupees but does not exceed 10 crore rupees.

The act also provides various benefits and support to MSMEs, such as financial assistance, credit facilities, tax incentives, and preferential treatment in government procurement. It aims to promote the competitiveness and growth of MSMEs and encourage entrepreneurship and job creation in the country.

Overall, the Micro, Small & Medium Enterprises Development Act, 2006 plays a crucial role in defining and categorizing MSMEs in India and providing them with necessary support and incentives to thrive and contribute to the economy.

Contingency theory suggests that management approaches and practices should be flexible and adaptable to the specific context and situation of the organization, including the informal social life of workers.
Classical management theory, which emerged in the early 20th century, emphasized a strict hierarchy, standardized processes, and formal communication channels.

However, contingency theory argues that this approach may not be effective in all situations, as different organizations and employees have unique characteristics and contexts that may affect their behavior and performance.

One important factor that contingency theory emphasizes is the role of informal social structures and relationships in the workplace. Informal social structures, such as friendship groups, cliques, and informal communication channels, can have a significant impact on employee behavior, motivation, and productivity. Therefore, management approaches need to take into account these informal structures and relationships in order to effectively motivate and manage employees.
Contingency theory suggests that effective management requires a flexible and adaptable approach that takes into account the specific context and situation of the organization, including the informal social life of workers.
 

Hence the correct answer is Management approaches need to take into account the informal social life of workers at work.

The income elasticity of demand is defined as the percentage change in quantity demanded due to certain percent change in consumer's income. In the case of an inferior commodity, the income elasticity of demand is negative. It is because as the income of consumers increases, they either stop or consume less of inferior goods.

In the given figure, quantity demanded and consumer's income is measured along X-axis and Y-axis, respectively. When the consumer's income rises from OY to OY1, the quantity demanded of inferior goods falls from OQ to OQ1 and vice versa. Thus, the demand curve DD shows negative income elasticity of demand.

Cross-functional groups that operate across space, time and organisational boundaries with members who communicate mainly through information technologies are called virtual teams.

For virtual teams to perform well, three enabling conditions need to be established:

• Shared understanding
• Integration
• Mutual trust

Benefits of virtual teams include reduction in travelling expenses, inclusion of more people in labour pool, decrease in air pollution; moroever, physical handicaps are not a concern.

The promotional mix describes a blend of promotional variables chosen by marketers to help a firm reach its goals. It has been identified as a subset of the marketing mix. Activities identified as elements of the promotional mix vary, but typically include the following:
1) Advertising
2) Publicity
3) Personal selling
4) Sales promotion

Manager Inventory Chart is a partial organization chart that shows managerial positions, current incumbents, potential replacements for each position, and the age of each person.

However, it does not show the position to which a manager may be promoted.

Hence, option (c) is not an advantage of Manager Inventory Chart.

Options (a), (b), (d) are all advantages of Manager Inventory Chart.

According to Maslow, an employee who has a need for more self-respect, has unmet Esteem needs.Hence from above discussion, we can infer that option (a) is correct.

Raj, Ramesh and Rajesh are all making decisions about how to approach the team project and they will probably rely on Bounded rationality, which is defined as a concept that suggests that the ability of managers to be perfectly rational in making decisions is limited by such factors as cognitive capacity and time constraints. (a) In rational decision-making, managers possess and understand all the information that is relevant to their decisions at the time they make them. (b) Break-even analysis is a measure by which the level of sales, which is necessary to cover all fixed costs, can be determined. (c) Intuition is "direct perception of truth, fact, etc., independent of any reasoning process; immediate apprehension." (e) Garbage-can model is a non-rational model of managerial decision-making stating that managers behave in virtually a random pattern in making nonprogrammed decisions.

The correct answer is Formulating a mechanism for employees to report unethical activities. 

• Unethical behaviors can plague a workplace, whether an executive steals money from the company or an associate falsifies documents.
• Unethical behaviors can damage a company's credibility, causing the business to lose customers and ultimately shut down.
• However, business owners and their management teams can work with employees to prevent unethical behaviors.

Key Points

Ways to Promote Ethical Behavior in the Workplace:

• Establish straightforward guidelines: You should develop an easily understood yet comprehensive code of conduct that outlines company expectations for ethical behavior at work. Identify common missteps and how to avoid them while unambiguously relating the consequences of ethical failings.
• Promote knowledge: Don’t just offer a code of conduct or ethics training to new hires as one of the ways to prevent unethical behavior in the workplace. Routinely provide refresher courses to your existing staff. Bring in guest speakers to help employees build problem-solving skills so that they can react appropriately to employee misconduct.
• Provide tools: Consider implementing a reporting system that allows your employees to disclose conduct violations anonymously, and identify procedures for staff to request private meetings with supervisors responsible for ethics oversight.
• Be proactive: Organizations that lacked anti-fraud controls suffered greater average losses—often twice as much—from ethics violations.
• Employ data monitoring: Another effective way to prevent unethical behavior in the workplace is to establish management review boards to investigate possible violations to the code of conduct. Set up reporting hotlines or email accounts that are capable of capturing relevant details including corresponding documentation or the names of potential witnesses.
• Foster ethical behavior: When evaluating candidates during the hiring process, you should consider their values and whether they fit into the company’s vision. Distribute responsibilities across employees and departments, creating a system of checks and balances that reduce the risk of unethical behavior.
•  

Hence, the best way to curb illegal activities in an organization is formulating a mechanism for employees to report unethical activities. 

The main function of educational management is to make educational institution more effective And efficient. Effectiveness of any institution is perceived in terms of achievement of goals, development of its people, growth of the institution and impact on the community.

Decision making is the heart of the management process. It may be defined as the process of making choices from among several alternatives. The ability to make timely decisions, to exercise independent judgement and to gain positive results is the basic nature of effective decision making.

Decision making at various levels of the Institutional Management Cycle:

• Planning: It includes the vision of the institution such as strategic objectives, policies and guidelines and criteria for measuring the progress.
• Organizing: When the plan and guidelines are in place, the whole operational system needs to be organized. The decisions at this stage includes budget allocation, school calendar, procedures for leaves, substitution, creation of task group, etc.
• Implementing: At this level, each stakeholder will take decisions related to their own role and scope of work in the institution.

In large scale decisions, educational management is concerned with the operational practices of the educational organization involved in imparting education.

An ethics programme helps communicate your company's business philosophy to employees, vendors, investors and customers. A good ethics programme can help strengthen your relationship with employees and customers and improve your company's reputation. Following are the steps of a simple ethics programme:
(1) Size up your company's current ethics
(2) Create a code of conduct
(3) Train your people
(4) Solicit feedback from your employees
(5) Walk the talk

A lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienee and the person who has the benefit of the lien is referred to as the lienor or lien holder.
A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.
Hypothecation is the practice where a debtor pledges collateral to secure a debt or as a condition precedent to the debt, or a third party pledges collateral for the debtor. A letter of hypothecation is the usual instrument for carrying out the pledge.
A pledge is a bailment that conveys possessory title to property owned by a debtor to a creditor to secure repayment for some debt or obligation and to the mutual benefit of both parties. The term is also used to denote the property which constitutes the security. The pledge is a type of security interest.

The value of the firm is maximised when the market price of equity share is maximum. The value of the firm is maximised by optimum capital structure. The optimum structure has a proportion of debt and equity which will maximise the wealth of the firm. At this capital structure, the market price per share is maximum and cost of capital is minimum.

Direct marketing is a form of communicating an offer, where organisations communicate directly to a pre-selected customer and supply a method for a direct response. Among practitioners, it is also known as direct response marketing. Direct marketing has various types:

In franchise organization, stages of production and distribution process are linked by a channel member called franchiser.
The franchise is further divided into the following three forms:
Manufacturer Sponsored Retailer Franchise System
Manufacturer Sponsored Wholesaler franchise System
Service Firm Sponsored Retailer Franchise System
Manufacturer Sponsored Retailer Franchise System: Automobile industry is composed of this form of the franchise system.
Manufacturer Sponsored Wholesaler franchise System: Soft drink industry adopts this form of the franchise system.
Service Firm Sponsored Retailer Franchise System: In this form of franchises, certain retailers are given license by the service firm to provide the services of that firm to the consumers.
So, the car maker Ford has opted for Manufacturer Sponsored Retailer Franchise System.

A current account transaction has been defined as a transaction other than capital account transaction.
This means that all transactions that do not alter assets or liabilities outside India of residents or assets or liabilities in India of non-residents are termed as current account transactions.
FEMA allows free selling/drawal of foreign exchange to/from authorised dealer (AD); however, it empowers the Union government to notify certain restrictions for current account remittances, in consultation with the Reserve Bank of India (RBI).
So, Under FEMA all current account transactions are free unless specifically restricted.

A business idea can become business opportunity if it is attractive. People can get something different.
Customer will get satisfaction after using that product. It should be on reasonable price. There should be a time frame to work on idea.
There must be durability. There should be potential in business idea and product cost must be low and product should be durable.

Various theories on Foreign Direct Investment are given.
Out of them, Industrial Organization Theory is given by Stephen Hymer,
Location Specific Theory is given by Hood and Young,
Product Cycle Theory is given by Raymond Vernon whereas
Two-Country Model theory of FDI is given by Kemp & McDougall.

The life cycle of a product is broken into four stages—introduction, growth, maturity, and decline. This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging.
Hence, the option is D. 

Therefore, from the above explanation, it is clear that option b) is the correct answer.

Demand 

• Demand is just a consumer's desire to buy products and services immediately and to pay the price associated with them.
• Demand can be defined as the quantity of goods that consumers are prepared and willing to purchase at various prices within a specific time period.
• Hence, option 4 is True.

Important Points Law of demand

• The law of demand asserts that providing all other demand-affecting variables remain constant, there is an inverse relationship between a commodity's price and the quantity produced.
• It means that when an item's price decreases, demand for the good rises, and when a good's price increases, demand contracts.
• Hence, Option 1 is true as consumers prefer to buy less at high price and more at low price.
• Demand theory is helpful in deciding the type of product to be produced as it gives an idea about at what price the consumer is ready to buy the product and which product the consumer is demanding more. 
• Hence, option 3 is true.

• As can be seen from the graph, when the price is 2 rs. individual buys 400 units of commodity and when the price rose to 5 rs., the demand falls to 100 units.
• So, the 'DD' is the demand curve that slopes downward due to the inverse relationship between price and demand.
• Hence, Option 2(Demand Curve is Upward Sloping)  is false, and the correct answer is Option 2.

• Working capital is a measure of a financial health of a company. It is a liquidity of a company. Gross working capital is sum of all current assets invested by a company whereas net working capital is excess of current assets over current liabilities. Therefore, it tells lot about profitability and risk of the firm. It is excess of cash or stock etc. therefore, it is financial through a portion of long-term funds.
• Regular working capital is a permanent capital invested in any business. Floating working capital are also called circulating capital. In this, capital invested in raw-material and that raw-material when converted into finished goods; again that working capital turns into cash after selling that product.
• Therefore, Net working capital is financial through a portion of long-term funds?

• Correlation is independent of change of scale and origin both. Correlation denotes co-variability between the variables.
• Regression is a relative measure of relationship between variables. Regression is independent to change its origin but not scale.
• Both techniques are used to determine the relationship between two variables. Correlation shows positive relation while regression inverse relation.

Conflict Management at Workplace:

• A conflict arises when individuals have different opinions, thought processes, attitudes, interests, and needs and find it difficult to adjust to each other. When individuals perceive things in dissimilar ways and cannot find the middle way, a conflict starts. 
• No organization can survive if the employees are constantly engaged in fights and conflicts. The individuals have to give their hundred percent at the workplace to generate revenue and profits for the organization.
• Conflicts must be avoided at workplaces for a healthy and competitive environment. Employees must ensure that precautionary measures are taken in advance to prevent conflicts at the workplace.
• Employees are the assets of any organization and they must feel motivated and elated to perform well. Conflicts only lead to tensions and depression and nothing productive comes out of it. No individual can work alone; he has to depend on his fellow workers for the maximum output. Every individual has to work in a team and can’t afford to fight with his team members.
• Conflict Management prevents the eruptions of fights and also allows the employees to be serious about their work.
• Conflicts also lead to unnecessary tensions and disagreements among individuals.
• Conflict Management reduces tensions and employees feel motivated to give their level best to the organization. No one gains from conflicts. One should avoid fighting over petty issues and criticizing fellow employees at the workplace.
• Conflict Management plays a very important role at workplaces as it prevents unnecessary fights and makes offices a better place to work.

The correct answer is Both (A) and (R) are correct and (R) is the correct explanation of (A).

Demand Forecasting: 

• Demand forecasting is a technique for the estimation of probable demand for a product or service in the future.
• It is based on the analysis of past demand for that product or service in the present market condition.
• Demand forecasting should be done on a scientific basis and facts and events related to forecasting should be considered.

Key Points

•  Demand plays a vital role in the decision-making of a business.
• In competitive market conditions, there is a need to take the correct decisions and make planning for future events related to business like a sale, production, etc.
• The effectiveness of a decision taken by business managers depends upon the accuracy of the decision taken by them.
• Demand forecasting reduces risk related to business activities and helps it to take efficient decisions.
• Thus Assertion (A) is correct. 
• Good forecast helps in appropriate production planning, process selection, capacity planning, facility layout planning, inventory management, etc.
• Thus Reason (R) is also correct and (R) is the correct explanation of (A).

Hence, the correct answer is Both (A) and (R) are correct and (R) is the correct explanation of (A).