MH SET Paper 2 Mock Test - 1 (Management) - MAHA TET MCQ

• A Horizontal Marketing system is a form of distribution channel wherein two or more companies at the same level unrelated to each other come together to gain the economies of scale.
• In other words, Horizontal marketing system is the merger of two unrelated companies who have come together to exploit the market opportunities. Example Johnson & Johnson, a health care company, have joined hands with Google, with an objective of having a robotic-assisted surgical platform. That will help in the integration of advanced technologies, thereby improving the healthcare services.
• Generally, this type of marketing system is followed by companies who lack in capital, human resources, production techniques, marketing programs and are afraid of incurring the huge losses.

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.

The correct answer is disinflation. 

Inflation:

• Inflation is a rise in prices, which can be translated as the decline of purchasing power over time.
• The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time.
• The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods. 

Key Points Disinflation: 

• Disinflation is a temporary slowing of the pace of price inflation and is used to describe instances when the inflation rate has reduced marginally over the short term.
• Unlike inflation and deflation, which refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation.
• A healthy amount of disinflation is necessary since it prevents the economy from overheating.
• Disinflation is not considered problematic because prices do not actually drop, and disinflation does not usually signal the onset of a slowing economy.
• Deflation is represented as a negative growth rate, such as -1%, while disinflation is shown as a change in the inflation rate, say, from 3% one year to 2% the next. 
• Disinflation benefits certain segments of a population, such as people who are inclined to save their earnings.

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.

The term 'Business Ethics' refers to the system of moral principles and rules of the conduct applied to business. Anything dealing with ethics in business is good, bad or both to the business gains.

Organisational behaviour reflects the behaviour of the people and management all together, it is considered as field study not just a discipline. There are four different types of models in OB. We will throw some light on each of these four models.

Autocratic Model: The root level of this model is power with a managerial orientation of authority. The employees in this model are oriented towards obedience and discipline. They are dependent on their boss. The employee requirement that is met is subsistence.

Custodial Model: The root level of this model is economic resources with a managerial orientation of money. The employees in this model are oriented towards security and benefits provided to them. They are dependent on the organisation. The employee requirement that is met is security.

Supportive Model: The root level of this model is leadership with a managerial orientation of support. The employees in this model are oriented towards their job performance and participation. The employee requirement that is met is status and recognition. The performance result is awakened drives.

Collegial Model: The root level of this model is partnership with a managerial orientation of teamwork. The employees in this model are oriented towards responsible behaviour and self-discipline. The employee requirement that is met is self-actualisation. The performance result is moderate zeal.

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.

Balanced Scorecard:

• The term balanced scorecard (BSC) refers to a strategic management performance metric used to identify and improve various internal business functions and their resulting external outcomes.
• The balanced scorecard includes financial measures that tell the results of actions already taken.
• It complements the financial measures with operational measures on customer satisfaction, internal processes, and the organization’s innovation and improvement activities—operational measures that are the drivers of future financial performance.

Hence, a balanced Scorecard includes both Financial measures and Operational measures.

A) Classical approach- Classical approach is divided into mainly two categories that are a scientific approach and the Administrative approach 

B) Behavioural approach-its management theory that emerged in 1950, Hawthrone studies is one of the important elements in behavioral studies.

C) Quantitative approach -it is a research method  that focuses on collecting and analyzing numerical data, operational management is the important element under the quantitative approach

D) Modern approach -Modern approach refers to the contemporary and evolving set of management theories and practices that aims to address the challenges faced by organizations, quality management is one of the elements under the modern approach.

Hence the correct answer is (1) - (c), (2) - (b), (3) - (a), (4) - (d)

Conglomerate strategy:

• Conglomerate diversification refers to the development of new products that are unrelated to your original lines.
• For example, your t-shirt company has now decided to start stocking apple products. 
• Conglomerate diversification is a much riskier strategy than both concentric diversification and horizontal diversification.
• This is because it requires more outlay in terms of product development and advertising.
• Synergy may result through the application of management expertise or financial resources, but the primary purpose of conglomerate diversification is to improve the profitability of the acquiring firm.
• Little, if any, the concern is given to achieving marketing or production synergy with conglomerate diversification.
• One of the most common reasons for pursuing a conglomerate growth strategy is that opportunities in a firm's current line of business are limited.

A strike involves temporary but indefinite suspension of work on the part of employees or workers as a form of protest to have their demands met.
A wildcat strike is a work stoppage that occurs during the term of a collective bargaining agreement without approval of union leadership and in violation of a no-strike clause. Such strikes generally occur because labour has specific problems or concerns that have not been satisfactorily addressed by employers or workers feel that union leaders are not acting in the best interest of the union members. It is also referred to as an "outlaw strike".

American Marketing Association (AMA) defines advertising as "any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor".
The AMA is the only organisation that provides direct benefits to marketing professionals in both business and education and assists in personal and professional career development among marketing professionals, and to advance the science and ethical practice of marketing disciplines.

• 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?

The waterfall model is a linear sequential (non-iterative) design approach for software development, in which progress flows in one direction downwards (like a waterfall) through the phases of conception, initiation, analysis, design, construction, testing, deployment and maintenance.

• System and software requirements: captured in a product requirements document
• Analysis: resulting in models, schema, and business rules
• Design: resulting in the software architecture
• Coding: the development, proving, and integration of software
• Testing: the systematic discovery and debugging of defects
• Operations: the installation, migration, support, and maintenance of complete systems

• Negative Case Sampling, where you choose samples that appear to wholly disprove or refute the theory being developed.
• Discrepant case and negative case sampling are so closely related they both do not fit the prevailing theory that the two terms are used interchangeably.
• It involves selecting cases that disconfirm the researcher’s expectations and generalizations.
• So the answer is Negative case sampling.

Vestibule Training is a term for near-the-job training, as it offers access to something new (learning).
In this training factory schools were created, due to the industrial revolution, in which workers were trained in classrooms within the factory walls
That is theoretical training is given in the classroom while the practical work is conducted on the production line.
OJT means on the job training.
BARS mean bartending school training.

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.

Directing motivates members of the organization to work in the best interests of the organization.
Directing is said to be a process in which the managers instruct, guide, and oversee the performance of the workers to achieve predetermined goals. Directing is said to be the heart of the management process. 

Elasticity of demand:

• The price elasticity of demand is the percentage change in the quantity demanded of a good or service by the percentage change in the price.
• In other words, the price elasticity of demand is the rate at which the demand increases or decreases with the corresponding change in price.
• When the change in demand is seen to be proportionately larger in comparison to the change in price, then it is said to be elastic.(% change in quantity > % change in price)
• When the change in demand is smaller than the change in price, then it is said to be inelastic. (% change in quantity < % change in price)

The formula for price elasticity of demand 

Price elasticity of demand (PED) = %∆ in Qd/%∆ in P

• %∆ in Qd = Percentage change in the quantity demanded
• %∆ in P = Percentage change in price

Important Points In the given scenario, 

• Qd1= 10, P1= Rs. 1
• Qd2= 6, P2= 2
• %∆ in Qd= Change in Demand/ Intital Quantity demanded = 4/10*100 = 40%
• %∆ in P= Change in Price/ Initial price= 0.5/1*100= 50%

Price elasticity of demand (PED) = %∆ in Qd/%∆ in P
= 40%/50% = 0.8

Hence, X’s price elasticity of demand is 0.8. 

The defenders of the sustainability approach toward Corporate Social Responsibility (CSR) point out that all economic activity exists within a biosphere that supports all life.

• Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. 
• By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.
• To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to them.

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.

Deep discount bonds are very similar to zero coupon bonds. Only, these bonds are issued at deep discounts against the face value. For example - A bond having a face value of Rs. 1000 is sold at a price of Rs. 600. Notice that the amount of discount given to the buyer is of Rs. 400 (Certainly a deep discount, as the name suggests). These bonds are sold at a discounted value and on maturity, face value of the bond is paid to the investors.

Centroid Method is used for factor analysis. It extracts the largest sum of absolute loadings for each factor in turn. It is defined by linear combinations in which all weights are either +1.0 or -1.0.
Hierarchical Method is used for Cluster Analysis. Hierarchical cluster analysis is an algorithm that groups similar objects into groups called clusters.
Multiple Regression is the relationship between a single metric dependent and two or more independent variables. It is used when we want to predict the value of a variable based on the value of two or more other variables. The variable we want to predict is called the dependent variable (or sometimes, the outcome, target or criterion variable).
Multivariate analysis of variance (MANOVA) is a procedure for comparing multivariate sample means. As a multivariate procedure, it is used when there are two or more dependent variables, and is often followed by significance tests involving individual dependent variables separately.

According to the Tannenbaum and Schmidt Leadership model, the statement that would be most accurate regarding someone exhibiting behavior toward right of the continuum of leader behaviours is option (b), i.e., He would be more likely to ask the group to make a decision.

Creativity is an individual phenomenon and cannot be discovered through groups is not a limitation of group discussion techniques to enhance creativity.

Weakened International Balance of Payments is an argument against Social Responsibility of Business.

Hence from above discussion, we can infer that option (c) is correct.Options (a), (b), (d) are all arguments for Social Responsibility of Business.

When managers have substantial but not complete confidence and trust in subordinates and solicit advice from subordinates while retaining the right to make final decision, Likert’s four systems of management describes it as consultative leadership style. (a) In Participative leadership style, the manager has complete trust and confidence in the subordinates in all the matters. (b) In Benevolent-authoritative leadership style, the managers have a patronizing confidence and trust in subordinates, solicit some ideas and opinions from subordinates, motivate with rewards and some fear and punishment, permit some upward communication and allow some delegation of decision-making but with close policy control. (d) In Exploitative-authoritative leadership style, the managers represent dictatorial leadership behavior with all decisions made by the manager. (e) Trait theory of leadership style assumes that leaders share certain inborn personality traits.

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.

Budgetary Control:

• Setting up a specific budget by management to track the variance between the company's actual performance and budgeted performance is referred to as budgetary control.
• It aids managers in using these budgets to track and manage different costs throughout the course of a specific accounting cycle.
• It compels management to think about the future, which is probably the most important feature of a budgetary planning and control system. Forces management to look ahead, to set out detailed plans for achieving the targets for each department, operation and (ideally) each manager, to anticipate and give the organisation purpose and direction.

Standard Costing:

• Standard Costing is a cost accounting technique that aids in assessing how well materials, labour, and overhead are doing and reporting variations so that remedial action can be taken.
• By contrasting the real costs with the standard cost for the actual production, the deviations are thoroughly examined, documented, and their causes are ascertained.
• This method enables the company to utilise its resources to the fullest.
• Furthermore, the management can monitor organisational operations by evaluating deviations, or the discrepancy between actual performance and expected performance.

Important Points

• The methods of standard costing and budgetary control both offer a benchmark to assess performance and examine discrepancies between actual and estimated numbers.
• Periodic budget adjustments are necessary due to the side-by-side comparisons done by budgetary control, which also eliminates the necessity for reporting deviations that are present in standard costing.
• The common objective is of controlling business operations by establishing pre-determined targets.

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