Differences

1) Difference between management and administration
Points of Difference Administration Management
Level of Authorities At the top-level administrative function dominate over managerial function. More authority at top level. Managerial function are more than administration at the bottom level. More authority at bottom level.
Nature of organisation It forms the organisational structures and exercises control over the enterprise. It uses organisation for the achievement of the targets fixed by the administration.
Decision making Prompt decision because no need of advises. Delay in decision because these needs advise of specialists.
Usage The word administration is used in non-business activities like government departments, Military organization, social cultural and religious organization. The term management is applicable in business enterprises.
Type of work Administration is thinking function. Management is doing function.
2) Difference between levels of Management on the basis of functions
S.NO Points of Difference Top Level Management Middle Level Management Supervisory Level Management
1 Time Range It covers long span of period It covers intermediate range It is concerned with short period
2 Skills It requires creative skills It needs persuasive skills It is concerned with operative skills
3 Evaluation It is difficult to evaluate its achievement It is less difficult to evaluate its performance It is easy to evaluate its performance
4 Persons It involves few persons It concerns moderate number of persons It is concerned with large number of persons
5 Policy formulation It is concerned with the formulation of policies to a greater extent It is moderately concerned with formation of policy It is Least concerned with policy formulation

3) Difference between co-operation and co-ordination
S.No Points of difference Co-operation Co-ordination
1 Freedom It depends upon the sweet will of the individuals. They may or may not co-operate Co-ordination is planned and entrusted by the central authority. It is obligatory upon the employees and departments to honour it.
2 Supremacy Co-operation may be termed as a part of the co-ordination. Co-ordination is wide enough to channelise the efforts the individuals, departments and groups to the desired direction.
3 Relationship co-operation establishes informal relationship. Both formal and informal relations are established.

4) Difference between Management and Organisation
S. No Points of difference Management Organisation
1 Objective Management aims to achieve the general objective of the business i.e., maximum output at minimum cost. Organisation aims at achieving effective co-ordination and co-operation. between physical and human resources.
2 Scope Management has a wide scope Organisation is one of the functions of management
3 Level There are three levels in management – Top, Middle and Lower Organisation work is in the middle level and extends to lower levels of the organisation
4. Activities Management helps administration to achieve the objectives set by it. Organisation helps management in deciding who has to do a particular work in the business.

5) Difference between Unity of Direction and Unity of Command
S. No Points of difference Unity of Command Unity of Direction
1 Guiding Principle One subordinate and one boss One head and one plan
2 Aim Aims at avoiding duplication overlapping and confusion and fixes responsibility. Aims at coordinating group efforts and brings uniformity in the work.
3 Emphasis It stresses the need for the subordinate to be accountable to the boss. It emphasis the attainment of common goal under one head.

6) Difference between Line Organization, Line and Staff Organization and Functional Organization.
S. No Points of difference Line Organization Line and Staff Organisation Functional Organisation
1 Simplicity Very Simple Simple Not Simple
2 Work Load on Managers High work load Moderate work load Uneven work load
3 Suitability It is suitable for all types of enterprises It is suitable for large and medium sized enterprises Suitable for large enterprises
4 Economy It is highly economical It is moderately economical It is not economical
5 Degree of specialization Specialization is low Specialization is medium. Specialisation is high.

7) Difference between Line Organisation and Staff Organisation.
S. NO. Points of Difference Line organization Function Organisation
1 Nature of authority Authority is centralized at the top Authority is decentralized among different bosses
2 Unity of Command Unity of command is strictly followed Unity of command is not followed
3. Classification Line organization has two types pure and departmental Functional organization has no types.
4. Nature of responsibility Clearly established Responsibility is distributed.
5 Discipline Rigid discipline Liberal discipline
6 Nature of Management Simple method of management Complex method of management
8) Differences between Formal and Informal Organisation.
S.No Basis Formal Organisation Informal Organisation
1 Formation It is the result of company’s rules, policies and regulation It is the result of working together
2 Purpose It achieves pre-determined purpose It has no pre-determined purpose
3 Authority and Responsibility It is well thought, predetermined and made known to individuals It is spontaneously and automatically developed. It is unpredictable
4 Degree of rigidity It is more rigid. It is more flexible
5 Leadership Managers are leaders Leaders are voluntarily chosen
6 Flow of authority Authority flows vertically Flow of authority is horizontal
7 Goal It intends to achieve organisational goals It provides social satisfaction to people.

9) Distinguish between delegation of authority and decentralization of authority.
S. No. Basis Delegation of Authority Decentralisation of Authority
1) Concept It is a process of granting authority to a subordinate to get a particular work done. It is the end result of delegation of authority and the creation of and disposal of authority responsibility as between a manager and his subordinate.
2) No. of Persons involved It is confined to a manager and his immediate subordinate in a work unit. It involves all managers at all levels. It indicates relationship between top management and various other department and sub departments in the organization
3) Objective To reduce the burden of the manager To prepare the organizational head of the unit for handling major expansion of its activities.
4) Purpose The purpose of delegation is the multiplication of the manager. Purpose of Decentralisation is to increase subordinates’ role in the Organisation and achieve the objective of the business.
5) Stability The authority delegated can be easily withdrawn The decentralisation cannot be easily withdrawn

10) Distinguish between ‘recruitment’ and ‘selection’
S. No. Basis Recruitment Selection
1. Meaning Recruitment is an activity of establishing contact between employer and applicants. Selection of employees is the process of picking up more competent and suitable candidates for the job.
2. Objectives. Encourage large number of candidates to apply for the job. Selection aims to rejecting unsuitable candidates, so far the most competent candidate is available at every stage.
3. Stages Identifying the suitable candidate and motivate them to apply for the various jobs in the organisation. In selection more stages involved such as, Application blank, Selection test, Interview, Medical tests ,References etc
4. Time It is less time consuming It is more time consuming
5. Process It is a positive process It is a negative process
6. Economy Recruitment enjoys economy of time. Selection is expensive.
11) Difference between Internal and External Sources of Recruitment
S. No. Basis Internal Sources External Sources
1. Meaning It is the process of recruiting employees from within enterprise It is the process of recruiting employees from outside the enterprise.
2. Basis Generally based upon seniority of employees Normally based upon the merit of the employees.
3. Time Involved It is less time consuming It is more time consuming
4. Economy Internal sources of recruitment enjoy economy of time. External sources of recruitment are expensive.
5. Quality of Recruitment Quality of recruitment is not superior Quality of recruitment is superior
12) Difference between Training and Development
S. No. Basis Training Development
1. Meaning Training is an activity to increase understanding, skill and attitude to perform specific jobs in better ways. Development means the growth of employees at every level of management by a planned and organized process.
2. Aim The aim of training is to improve the skill of the employee in performing the job. The best possible utilization of employees’ capability is its main aim.
3. Scope Training is the part of development and also limited in its scope. Development is a wider term it includes education learning and training.
4. Duration Training is imparted for a fixed period Development is a continuing process and a never-ending process.
13) Difference between Time Rate and Piece Rate Wage System
S. No. Basis Time Rate Piece Rate
1. Basis Wages are determined on the basis of time Wages are determined on the basis of number of units produced.
2. Efficiency Wages are not linked with the efficiency of the workers Wages are directly linked with the efficiency of the workers.
3. Quality Quality of work tends to be high. Quality of work tends to be low
4. Wastage There is less chance of wastage of materials There is more chances of wastage of materials
5. Supervision Close supervision is required. Close supervision is not required.
6. Cost Cost of maintenance is low. Cost of maintenance is high.
7. Attitudes of Trade Union Trade Unions prefer it. Trade Unions Oppose it.
8. Security Provides sense of security to employees as the wages are assured. There is a feeling of economic insecurity since wages depend on the output.
14) Difference between Management and Leadership
S. No. Basis Management Leadership
1. Scope Management has wider scope. It plans, organises, directs and leads the business activities Leadership is a part of management
2. Authority Management directs the employees through the formal authority Leader exercises his leadership through informal activities.
3. Relationship There is authority responsibility relationship between the manager and the subordinates. There is relationship between the leader and the follower
4. Stability Management is generally stable Leadership is never stable.
5. Importance Management is necessary in every enterprise. Leadership is not essential
6. Structure Management has formal structure Leadership may be both formal and informal.

15) Difference between Direction and Supervision
S. No. Basis Direction Supervision
1. Scope The Scope of direction is wide, It includes supervision, motivation, communication &leadership Supervision is a part of direction hence its scope is limited
2. Level of Management Direction is generally at top level Supervision is the job of the lower level management
3. Framing policies Direction being at the top level formulates policies and takes important decisions. Supervision being a lower level management function it is involved in the execution of the policy
4. Incentives Direction makes the provision of financial and non-financial incentives. Supervision cannot provide incentives but can recommend the employees for reward.




16) Difference between Formal and Informal Communication.
S. No. Points of difference Formal Communication Informal Communications
1. Verbal and written It is written communication. It is verbal communication.
2. Direct/Indirect It is based upon indirect written documents It is based upon direct gestures.
3. Scalar Chain It follows the chain of command It does not follow the chain of command.
4. Proof A proof of sending formal communication is kept. There is no proof for sending it.
5. Authenticity Messages are authentic. Message may not be authentic.
6. Speed It is not as fast as informal communication. It is faster in speed

17) Difference between Oral and written Communication.
S. No. Points of difference Oral Communication Written communication
1. Form Messages are verbally transmitted Messages are transmitted in writing
2. Time Taken Messages can be exchanged very quickly Exchange of messages takes lot of time.
3. Expenses It is economical It is expensive
4. Responsibility Responsibility cannot be fixed. Responsibility can be fixed.
5. Language Language problem is not very serious Language problem is very serious





18) Difference between under-capitalisation and Overcapitalisation

S. No. Points of difference Capitalisation Capital structure
1. Meaning Capitalisation in a narrow sense is the sum total of capital raised through shares, debentures & earnings. Capital structure is the make up of capitalisation. i.e., shares, debentures, bonds & loans etc.
2. Classification. Capitalisation is classified as over capitalisation and under capitalisation Capital structure may be high geared and low geared.
3. Influence Capitalisation is mainly influenced by the internal requirements of the enterprise Capital structure is mainly influenced by the external forces, such as market conditions, investors., etc.
4. Type of funds Capitalisation represents quantity of funds. Capital structure represents quality of funds.

19) Difference between Fixed Capital and Working Capital
S. No. Points of difference Fixed Capital Working Capital
1. Period Fixed Capital is required for longer period Working Capital is required for Short period
2. Uses Fixed capital is required for acquiring fixed assets It is required for buying current assets.
3. Utilization Capital is blocked and sunk in the business. It is not available for routine business activity. Capital is working and revolving so always available for routine business activities.
4. Source Raised through shares, debentures and loans. Raised through cash sales, collection from debtors, overdraft etc.
20) Difference between Capital Market and Money Market
S. No. Points of difference Capital market Money Market
1. Meaning The market dealing in the long and medium term is known as capital market. The market dealing in short term funds is known as money market.
2. Amount of fund The capital market arranges large amount of funds. The money market arranges small amounts of funds.
3. Use of Funds The capital market makes fund available for investment in fixed assets. The money market makes fund available for routine expenses or working capital.
4. Periods Funds may be used for 7 to 25 years on long-term basis. And 1 to 6 years on medium term basis. The use of funds is restricted to 1 year.

5. Scope It has limited scope. It has widely distributed market.
6. Rate of interest Rate of interest in this market is generally low. Rate of interest in this market is generally high.
7. Instruments examples Shares, debentures, bonds etc. Commercial bills discounting, treasury bills, commercial papers etc.

21) Distinction between Investor and Speculator
S. No. Points of difference Investor Speculator
1. Meaning An investor is a person who buys the securities A speculator is person who enters into contract for buying and selling the securities, however does not actually buy or sell the securities.
2. Objective An investor is interested in regularity of income and safety of funds and appreciation in the value of investments A speculator is interested in making quick profit by changing price.
3. Delivery of securities The securities are delivered by the sellers to the purchasers Delivery of securities does not take place.
4. Payment Immediate payment is made for the securities Payment is not made immediately and the difference is made on the settlement date.
22) Difference between Under Capitalisation and Over Capitalisation
S. No. Points of difference Under capitalisation Over capitalisation
1. Meaning Under capitalisation is a situation, wherein the company has insufficient capital but large amount of secret reserve Over capitalisation is that phenomenon of a business enterprise, wherein long-term funds, (share capital, debenture and loans) exceed the amount of optimum capitalisation
2. Earnings Higher rate of earnings Lower rate of earnings
3. Credit worthiness Higher rate of earning increases credit worthiness Lower rate of earnings due to lower rate of earnings
4. Competition Facilitates competition owing to high rate of dividend/ earnings. Discourages competition owing to lower earnings.
5. Goodwill Goodwill increases Goodwill or reputation is lost.
6. Income Regular Income is assured. Return is uncertain and irregular.


23) Difference between Primary and Secondary Market
S. No. Points of difference Primary market Secondary Market
1. Meaning It is a market wherein funds are raised through shares, debentures and bonds buy industrial enterprises. It is a market which creates liquidity. It facilitates transfer of ownership of securities. It makes purchases and sale of securities easy.
2. Issue Deals with the fresh issue of shares Deals with the shares already issued by the different companies
3. Objective Helps in raising funds for the company Helps in liquidity of shares for the investors
4. Origination Primary Market originates first Secondary market supports the primary market.
24) Distinction between Speculation and Gambling.
S. No. Points of difference Speculation Gambling
1. Study Speculative activities are based upon the careful study of the stock market. Gambling is based upon chance event. No intelligence is involved in gambling.
2. Legality Speculation is legal Gambling is an unlawful, void and not enforceable in the court of law.
3. Benefits Speculation is beneficial to the economy. Gambling has no benefits to the economy. It is anti-social.
25) Distinction between Broker and Jobber
S. No. Points of difference Broker Jobber
1. Dealings The broker does not deal in securities in his name. Jobber deals in his own name.
2. Remuneration The broker gets commission from both buyer and seller Jobber earns profit from his dealings
3. Medium The broker works through the medium of jobber. The jobber does not need the broker to deal.
4. Channel Broker is the channel between the investor and the jobber The jobber is a channel between the broker, Investor and Stock Exchange.

26) Distinction between marketing and selling:
S.No Basis Marketing Selling
1 Meaning Marketing means all customers’ wants satisfying efforts concerning with planning, pricing, promoting product and services Selling is the transfer of ownership and possession of the goods to the purchasers
2 Objective It refers to integrated approach towards achieving long-term goals. It refers to piece meal approach to achieve short-term goal.
3 Emphasis Emphasis is on the customers’ satisfaction Emphasis is on the selling of the product
4 Beginning Marketing begins with consumers determines the needs of the consumer first than producer accordingly. Commodities are produced and after wards efforts are made for their profitable selling.
5 Stage Marketing is in its initial stage, what customers wants, and produces such goods that would satisfy the consumers’ wants. Or in other words marketing starts with the consumer and ends with the consumer Selling starts after the production of the goods and efforts are made for their profitable sale.


27) Distinction between Advertising and Sales Promotion
S.No Basis Advertising Sales Promotion
1 Meaning Advertising is an effort to create & sustain the demand of the product. Sales promotion is an effort to stimulate consumer to purchase more and more of a commodity.
2 Influence Advertising influences consumer. Sales promotion is an attempt to influence channel of distribution.
3 Mailing Advertising literature is directly mailed to the consumer Sales Promotion literature is generally mailed through middlemen, dealers, retailers, etc.
4 Orientation Advertising is consumer oriented activity Sales promotion is product-oriented activity.
28) Distinction between Advertisement and Personal selling:
S.No Basis Advertisement Personal Selling
1 Coverage Advertisement covers vast area Personal Selling is restricted to specific customer.
2 Cost Advertisement is less costly Personal Selling is more costly.
3 Media Advertisement establishes impersonal contact. Salesmanship is the media of personal contact.
4 Variation Advertising media can vary from time to time. There are not much variations in case of Personal Selling.
5 Contact Advertising is the method of mass influencing Personal Selling is the media of individual contacts.
6 Sale Advertising does not result in immediate sale Personal Selling results in immediate sale

Expected answer of business studies

Expected answer of business studies
March 2004 set-3
1) Differentiate between ‘marketing’ and ‘selling’ on the basis of (a) meaning and (b) emphasis.

Differences between marketing and selling
POINT OF DIFFERENCE MARKETING SELLING

1.MEANING Marketing mean all customers want satisfactory efforts concerning with planning pricing promoting product and selling. Selling is the transfer of the ownership and possession of the goods to the purchasers.

2.EMPHASIS
Marketing - Emphasis is on the satisfaction of customers wants effectively
Selling - Emphasis is on the product.

2) Explain in brief, the term ‘directing’ as a function of management.

Directing as a function of management is concerned with instructing, guiding, and inspiring people in the organisation to achieve its objectives
It involves overseeing people at work, making provision for necessary facilities and creating a work environment whereby employees may perform to the best of their abilities

3) What is meant by the product concept of ‘marketing’?

It is true that customers want to buy high quality product but only when they need them. This product concept says that goods produced by business unit shall have high quality and improve them overtime.

4) Explain, in brief, ‘management’ as an activity.

The word activity implies doing something like reading, writing, etc. While doing so the material resources and human efforts are integrated in such a way that there is minimum wastage of material time and energy.

5) Give two examples of the impact on business organizations of changes in social environment.

The following are two examples of the impact on business organizations of changes in social environment: -
(1) Some years ago the manufactures of vanaspati ghee used to import animal fat for manufacturing vanaspati ghee. On the basis of the strong public protests the government cancelled the import license of these manufactures.

(2) Raise in middle class influence the investing public in corporate sector and continuing demand potential for variety of consumer items.

6) Explain briefly any three important features of advertising.

a) Reach: - Advertising can reach a large market. One commercial aired through All India Radio or Doordarshan has a potential to reach a very large customer.
b) Choice: - Advertising can be possible through a wide variety of media like video, audio or audio-visual.
c) Legitimacy: - When the products or service are promoted through advertising, the message is presented publicly to the audience, it makes legitimacy in the eyes of the prospects.

7) Explain any three sales promotion activities commonly used by marketers.
Three sales promotion activities are: -
a) Rebates: - Some times, the product is made available at special prices less than original price for limited period of time by business unit.
b) Discount: - This is like price promotion, in which certain percentage of price reduced as discount from the list price .The purpose is to induce them to buy or buy more.
c) Refund: - In these days the sellers’ offers to refund a part of price paid by the customer on the production of some proof of purchase.

8) Explain any three reasons as to why proper understanding of management principles is necessary.
Understanding of management principles is necessary because: -
a) Achieve results economically: - Management principles help in setting realistic objectives for the business, therefore effort could be made to get result economically.
b) Optimum utilization of resources: - Managers are capable of making proper use of the available resources of the business. This is possible if activities are planned in advance and organized systematically.
c) Social responsibility: - Business has responsibility towards different interest groups (society, workers, customers, and insurance). The management principles fair to all suggest that organization must take care of the interest of all including social commitments.

9) “Leadership is required only for less efficient subordinates.” Do you agree? Give any three reasons in support of your answer.
No, I do not agree with this statement because: -
Leadership is must be ahead of the group if plans are to be performed well. There are reasons: -
a) Helps in guiding and inspiring employees: - A leader by exercising his leadership creates an urge in the employees for higher Performance and helps in the attainment of organizational goal.
b) Secures co-operation of members of organisation: - Managers are successful only when they secure willing corporation of their subordinates. As leader, managers persuade employees to work enthusiastically and with confidence.
c) Creates confidence: - sometimes individuals fail to recognize their qualities and capabilities. The leader creates confidence among them because of his insight, understanding and ability to handle situations.

10) Enumerate any three advantages and three disadvantages of “formal communication”.
Advantages of formal communication: -
a) Systematic: Formal communication is systematic and ensures orderly flow of information and ideas.
b) Authentic: The source of communication can be easily located.
c) Fixing of Responsibility: Responsibilities of action taken on the basis of any formal communication can be easily fixed.
Disadvantages: -
i) Slow moving process: Formal communication following the scalar chain of authority is slow moving process.
ii) Lack of Personal Touch: Personal warmth and touch is lacking in formal communication.
iii) Lack of Freedom: Free and frank opinion cannot be expressed just to avoid criticism and confrontation.

11) The directors of a newly established company having paid up equity share capital of Rs. 2.5 crores, desire to get its shares traded at an All India level stock exchange. As finance manager of the company, suggest the name of the stock exchange for the purpose. Give any three reasons in support of your answer.

As finance manager of the company having Rs. 2 crores paid up equity share capital, I suggest that NSEI (National Stock Exchange of India) is the best stock exchange where a company share can be traded, if the company already listed. Means the inclusion of securities permitted to be traded as per the official list of the stock exchange.

My suggestions are based on the following reasons: -
a) Nation-wide coverage: - The NSE has a nation-wide coverage. Prior to the setting of this, all stock exchanges in India were regional. They operated in a limited jurisdiction, situated in large cities. Investors could not avail the facilities easily. But with the NSEI we have to merely visit to only NSEI dealer.
b) Ring-less: - The NSEI is ring-less and there is no trading floor. Trading of securities is to be done through a network of computers of NSEI dealers, located in differential cities.
c) Transparency: - All transaction on NSEI are electronically conducted and fully computerized; since the NSEI is screened based Investors can check the exact price at which the transaction occurred.

12) Which method of wage payment – time -rate or piece -rate -would you adopt in each of the following situations? Give reasons in support of your answer.
a. Where rate of output is determined solely by machine and not by operation.
b. Where production process requires high degree of skill.
c. Where work flow is regular,
d. Where quantity of output is more important than its quality

a) Time rate system is more suitable because workers have no control over the rate of output.
b) Time - rate is more suitable as the job requires a high degree of skill. The worker would not be in a hurry to complete his job and would maintain the degree of skill and quality desired.
c) Piece - rate is suitable because any increase or decrease in the speed may upset the whole production process
d) Piece rate is suitable because, when quantity of output is more important than its quality.

13) State any two developmental functions and any two regulatory functions of the securities and Exchange Board of India (SEBI).

Developmental functions of SEBI: -

I. SEBI promotes training of intermediaries of the securities market.
II. SEBI permitted internal trading in a limited way through registered stockbrokers.


Regulatory functions of SEBI: -
I. SEBI registers and regulates the working of mutual funds etc.
II. SEBI regulates takeover of companies.

14) Which principles of management envisage that each group of activities having the same objectives must have one head and one plan? Explain the principles with a suitable example.

“Unity of direction” is the principle. According to Henri Fayol the efforts of all the members of the organization should be directed towards common goal. For example: - suppose an automobile company has three divisions: - cars, scooters, and three wheelers. Now, each division must have its own targets. Since, each product has its own market and problems. Each division must plan its targets as per its environmental conditions to achieve better results. Thus the principle of unity of directions emphasises the importance of common goal being persuade by all in a group activity under the direction of one head.

15) “Authority can be delegated but responsibilities cannot”. Explain this statement, in brief.
According to the principle of absolute responsibility, authority can be delegated but responsibility cannot be delegated by a manager. The managers remain responsible to his own superior for the tasks, which he may assign to his subordinate. In other words, the managers cannot escape from responsibility for any default on the part of his subordinates. The process of delegations does not relieve the managers of his own responsibility. Every superior is responsible for the act of his subordinates to whom he delegates authority for any work. For example: - If the foreman fails to get 200 units produced by the workers on any day, he is responsible to his superior He cannot escape by saying that the workers were at fault.

16) Explain, in brief, any five economic changes that have been initiated by the Government of India since 1991.
The Government of India has been going through a process of economic reform and liberalization from 1991.
The five economic changes are the following: -
1. New Industrial Policy: - A number of industries have been liberalized from the clutches of licensing and comfort. Substantive changes have been introduced in matters like foreign investment and technology import.
2. New Trade Policy: - The Govt. of India changes trade policy like –removal of Import Licensing, liberalization of all import except small non-permitted list of items, abolition of export duty; simplifying export procedures, introducing of partial convertibility of rupee.
3. Fiscal Reforms: - The fiscal reforms centered on reduction of fiscal deficits and reforms of the taxation system, corporate and personal. Income tax was scaled down, substantial reduction in the excise and import duty.
4. Monetary Reforms: - The Govt. carried out a phased reduction of structure liquidity ratio (SLR) and permitted degree flexibility to the bank in the matter of deposits interest rate equity was permitted. Allowed setting of new private sector bank.
5. Capital market reforms: - The Govt also carried out channel of reforms in respect of the capital market like; Removal of restriction on interest rate on debentures, public sector bonds, allowing free prices of shares, liberalization of bonus issue allowing private sector to set up mutual funds.

17) “Administration is a part of management”. Explain the view.
“Administration is a part of management”
According to this view, management means the entire planning, policy making and co-ordination of efforts, controlling the operation and maintaining the discipline for the efficient and smooth functioning of a business enterprise. It means management involves effective planning, policy making, fixations of targets and operational functions of providing men, money and material to carry out the policy and run the day-to-day activities of the enterprise smoothly and systematically for producing tangible result in the process of work. According to this opinion management involves: -
1. Responsibility for policy formation
2. Responsibility for planning organizing, directing and controlling
3. Responsibility for supervision.
So, finally we can say that an administration is more important in top level. As one moves down the layers of the organization Managerial functions become more and more important.

18) Explain, in brief, any five factors that should be taken into consideration while determining capital structure of business enterprises.
Factors determining capital structure: -
a) Financial Leverage: - The most important factor in deciding capital structure is the impact of financial leverage/ capital gearing on the owner of the company. This is possible only if the rate of interest on the debt is less than the rate on the investment.
b) Cash Flow Ability: - Capital structure also depends upon ability of the business to generate enough cash flow to meet its fixed commitments. The fixed charges are interest on debt, dividend on preference capital and principal amount of loan which have to be paid .So company must earn sufficient profit.
c) Comfort: - The equity shareholders have a say in the management of a company. Debenture holders, preference shareholders have no right, a limited right to interfere in business affairs. If the company thinks to change in managerial control better to raise fund through issue of debenture or loan from financial institution.
d) Flexibility: -A company should be able to adopt its capital structure to changing conditions, when required the capital structure should be flexible enough to raise additional fund without undue delay and cost. Additional fund may be raised in the form of debt or share capital.
e) Market condition: - The capital structure depends upon the condition in the capital market, the mood of the investors and the internal condition of the company. The company should decide on the alternative method of financing and choose an appropriate mix. Whenever the company requires additional fund.

19) Explain briefly the various steps involved the process of controlling.
The steps involved in the processes of control are: -
1. Establishing standards: - The first step in the control process is the setting of standards of performance; standards are the criteria for judging results. They are the yardsticks of performance and specify what should be accomplished.
2. Measuring Performance: -The second major step in the process is the measurement of performance. It means evaluation of the work actually done and result achieved. Measurement is most useful if actual performance is expressed in the same units as the planned targets or standards.
3. Compare Performance Against standards: - comparisons of actual performance with the planned targets or standards involve two steps.
(a) Finding the external of deviations.
(b) Identifying the causes of such deviations.
4. Taking corrective action: - The purpose of control is not only to defect errors and defects in the performance of work but also to adopt remedial measure. Corrective actions are, therefore initiated on the basis of factor causing deviations between standards and actual results.

20) Though one of the effect of under-capitalization is that the market value of shares goes up, yet under-capitalization is not considered good for the company.” Do you agree with the statement? Give reasons.

Yes, I agree with this statement because other effect of under –capitalization of a company are: -

1. Increase in number of competitors: - Rate of profit is high in an under-capitalized company. Impressed by it several new competitors enter the market. On account of increase in number of competitors, the profits of these companies are adversely affected.
2. More govt. interference: - the consumers treat large profits of undercapitalised companies as their exploitation. They feel that, high price are charged from them for the product of the company. They complain to the Govt. against this exploitation. Consequently, Govt. is compelled to interfere in the affairs of the company.
3. Payment of more taxes: - Since these companies earn high profits, they are made to pay large sums by way of co-operate tax.
4. Demand of more remuneration by the employees: - Because of high profits earned by these companies their workers and employees make demand for raise in wage and salary structure. If this demand is not met, they get disappointed and frustrated which affect their efficiency adversely.

21) Explain the following rights of consumers:
1. The right to safety
2. The right to consumer education, and
3. The right to be heard.

OR
Explain any four ways and means of consumer protection followed in India

1) The right to safety: - This is protection against risk to life or any danger of damage to life. Manufacturing defect etc. if any, detected by the consumer causing damage should be reimbursed. For example: - electrical goods, pressure cookers etc.
2) The right to consumer education: - Consumer education refers to educate the consumer constantly with regards to their right. In other words, consumers must be aware of the right they enjoy against the loss they suffer on account of goods and services purchased by them. Govt. has taken several measures to educate the consumers.
3) The right to be heard: - The consumers should be assured that complaints or grievances regarding a product or services would be considered. Newspapers, consumer associations encourage dissatisfied consumers to write about product. Thus, the right to be heard should be available to every consumer.

OR
Ways and means of consumer protection
1) Lok Adalats: - The concept of lok adalats, in India is catching up fast. Here, aggrieved parties can directly approach these adalats with their grievances. Issues are discussed on the spot and decisions are taken thereafter, DTC. Indian railway, D.D.A. hold lok adalats from time to time to sort out the problems faced by users.
2) Public Interest Litigation: - The concept of PIL is any person can move to the court in the interest of the weaker individual or a group who or which nay not be in a position to seek legal remedy on his / their own. So PIL provides legal representation to unrepresented groups and interests
3) Environmentally friendly product: - The ministry of environment and forests has introduced the “Eco –mark” scheme. The scheme authorizes Producers to use the eco –mark label with the symbol of an earthen pitcher if the products satisfy the condition laid down regarding the production processes and use of environmentally friendly material.
4) Redressal forums and consumer protection councils: - Under the consumer protection act, 1986, a judicial machinery has been set up to deal with consumer grievances and dispute. The district forums state commissions and national commission are constituted to provide for a simple, speedy and inexpensive redressal of consumers grievances.

22) Explain briefly any six points, which highlight the importance of planning.
OR

Explain in brief the meaning of policy and rule as types of plans and give any four point of distinction between them.

Importance of planning are: -
1. Offsetting uncertainty and change: - Planning is necessary because of future uncertainty and change. Manager must look ahead, anticipate change, consider the impact of change, and develop appropriate responses, Planning reduces uncertainty. It also clarifies the consequences of action, manager might take in response to change.
2. Focusing attention on objectives: - planning is directed towards the objectives of the business undertaking. Therefore, the attention of every manager is focused on these objectives in the very course of performing their respective planning functions.
3. Gaining Economical Operation: - Planning works for efficiency and economy in operation planning is concerned with the predetermined and well thought out course of action. Therefore it helps in avoiding chaos, confusion, and disorder and therefore waste of resource.
4. Established co-ordinated efforts: - Planning gives direction to manager and non-managers. When the employees know where the organization is going and what they must contribute to reach the objectives, they can co-ordinate their activities, co-operate with each other, and works in teams.
5. Encourages innovation and creativity: - Planning is thinking in advance and therefore, there is a scope of finding better and different method and procedures to achieve the desired objectives. This forces managers to think differently from the present.
6. Facilitating control: - Plans provide standards for controlling employees’ performance. Executives cannot have a check on the accomplishment of their subordinates without planned goals.
OR

Policy: - A policy specifies the organization’s general response to a designated problem or a situation. Example -- a school admission office might establish a policy that admission will be granted to those applicants who have a minimum score of 60% marks.

Rules: - Rules spell out specific required action or non-action allowing no discretion making. They do not allow any deviations. Example: - No smoking, No admission without permission etc.

Differences between policies and rules
S.No. POLICY RULES
1) Policies are a general statement. Rules are the most specific statements.
2) Policies guide to decision making Rules guide to behaviour
3) Lay down management attitude. Indicates what should or should not be done.
4) Flexible may have some exception. Rigid no exception or deviations

23) What is an Informal organization? Distinguish between formal organization and informal organization on the basis of;
a. purpose, b . Behaviour of members, c. adherence to rules, and d. stability
OR

Explain in brief any six points, which highlight the importance of decentralization in an organization.

Informal organization originates from within the formal organization to meet the cultural and social need of members of the operation when several organizations individually work together for achieving certain organizational good, they come to know each other’s cultural interest and needs. They associate informally to fulfil such interest to need. The network of those social groups based on friendship is called informal organization.

Differences between Formal and informal organisation
S.NO. BASIS FORMAL ORGANISATION INFORMAL ORGANISATION
1) Purpose To achieve planned organizational goals To satisfy social and cultural needs and fulfil common interest.
2) Behaviours of members Standards of behaviour and performance are prescribed and enforced by management.
Standards of behaviour and performance are evolved by mutual consent among members called groups-norms.
3) Adherence to rules Violation of rules may need to penalties. No such punishment at the violation of rules.
4) Stability It is stable and predictable Neither stable nor predictable

“ OR”

IMPORTANCE OF DECENTRALISATION

1. Reduction in workload of top executives: - In a decentralized organization top executives are not engaged in common, day- to-day problems. Therefore, they have enough time to plan ahead, develop new strategies and concentrate in co-ordination and control.
2. Improving motivation: - A decentralized organization improves motivation of employees because it encourages lower levels to take decisions without seeking approval from higher levels.
3. Improved teamwork: - In decentralized organizations managers at different levels are given autonomy. They make special effort to seek the participation of subordinates in decision making have constant, open communication and take personal interest in their welfare.
4. Executive development: - Lower-level managers learn the art of exercising decision-making authority; prepare them for promotion to higher levels. This leads to development of future executives.
5. Quick decision making: - Since decision making authority is entrusted nearest to the point of action quick decision making is facilitated; it provides competitive edge to the company
6. Promotes initiative and creativity: - Managers with greater degree of autonomy take initiative; develop better ingenious ways of doing the work; thereby creativity and experimentation are encouraged.

24) Explain in brief any six steps involved in the process of Selection of employees.
OR
Explain in brief any six external sources of recruitment of workers?

Selection process involves the following steps: -
1) Scrutiny of Application Received: - As per requirements received from various departments applications are invited and applications received are closely screened; those applicants who do not possess the requisite qualification are kept out of the list of candidates.
2) Preliminary interview: - After scrutiny of application personal department conduct first interview. This interviews questions cover points such as educational qualification, experience, age, place of residence, marital status (whether married or unmarried)
3) Specialised Application Form: - After clearing preliminary interview specialized application form are given to candidates. The form of application varies according to the requirement of the job. Specialized applications are –
a. They should be as brief as possible in keeping with the need of adequacy
b. They should cover only those point in definite forms
4) Testing: - There are different “tailor made tests”, i.e. standardized tests are available for this purpose. It helps in improving the accuracy and effectiveness of proper selection of such candidates. There are some important tests – (a) Trade test (b) performance test (c). Psychological test
5) Interview: - It is a selection tool of major importance for nearly all jobs. This is to use to select skilled and technical jobs, which is already mentioned in specialized application form.
6) Checking references: - Generally a reference is demanded by companies’ means. If a candidate has submitted a work experience certificate the company sends a person to enquire about his character and reputation. Company may use telephone, postal service or personal visit by a person.
7) Medical examination: - Almost in every organization it is the practice that to select a candidate, it is ensured that have he must be a clear physical fitness. Candidates are checked up by a medical officer examination. Final selection is then made.
“ OR”

External sources of recruitment of workers: -
1. Recommendation of the present employee: - Many firms encourage their employees to recommend the names of their relatives, friends and acquaintance for employment.
2. Factory gate: - sometimes, a large number of jobs seekers assemble every day at the gate of the factory. Those are the unskilled workers, selected on immediate requirement by foreman.
3. Jobbers and contractors: - Many industries in India secure their manpower requirement through jobbers and conductors. Jobbers are ready to supply required number of workers to the company on payment of commission.
4. Collages, universities, technological institution and school: - All these institutions are very useful source of employees for full range of jobs. They pick up young and talented persons. Mostly those institutions have their own employment and guidance bureau with the sole objective of providing employment to their students.

5. Employment exchange: - Public employment exchanges are an important source of recruitment from outside. Job seekers get their names registered in those exchanges. Employment exchanges keep in touch with the employers. On request of employer, Employment exchange sends the name of registered candidates, who are having the desired qualification and experience.
6. Media advertising: - Advertising is an extremely popular method of recruiting staff. The advertiser can choose the most appropriate newspaper or a journal for the post being advertised. For example: -If an accountant is needed, the post may be advertised in an accountancy journal, or employment news / ‘Rojgar Samachar’.

25) ”Advertising costs are passed on to the consumers in the form of high prices” and some “advertisements are in bad taste”. Do you agree? Give reason in support of your answer.
OR
Explain, in brief the factors that are taken into consideration while taking decision on pricing the product.

A. Advertising costs are passed on to the consumers in the form of high price”.
No, I don’t agree with this agreement. The most serious objection to advertising is that all these costs, production and marketing are summed up and covered in the selling price. This is true no manufacturer pays for the advertising costs out of his own pocket. On the other hand, advertising increases market efficiency by increasing demand. Since demand is increasing, sales go up and manufacturer can go in for large-scale production and thus, take advantages of economies of scale, economics of scale further lead to reduction of costs and therefore, lower prices. Ultimately consumers not pay from their pocket.
B. Some advertisement in bed taste”
Yes I agree with this statement, there are certainly some advertisement which are not prepared with care and concern for other people test sometimes the manner in which somebody is speaking in an advertisement may not appeal to everyone. Advertisement showing women dancing when not required or women running after a man because he is wearing a particular suiting or using a particular perfume are certainly not in good taste. But individual differ in their perception of good taste and bed taste.
OR


Determination of price of the product is a very important but difficult function of marketing manager.
Following factors are to be kept in mind while pricing the product: -
A. Cost: - Cost of production is the main component of price. No company can sell its product or services at less than the cost of production. There are two types of cost fixed and the variable cost. Fixed cost are rent of the premises, salaries of the permanent staff, variable cost vary with production like material cost, labour cost. Thus before price fixation, it is necessary to compile data relating to cost of production and keep that in mind.
B. Competition: - Competition is another important consideration while pricing. When a firm does not face any competition it can enjoy complete freedom in fixing its price. But when there are competitors selling the same or similar product, the pricing freedom of the firm is considerably reduced. Example: - Marutizen now faces a lot of competitors from brand like Santro and Indica. Therefore, its pricing cannot be approached in isolation without considering the prices of other products.
C. Customers’ demand: -Customer’s demand must be taken into consideration. Price elasticity in this regard is an important measure. When demand of the product is inelastic, the marketer can charge higher price without much loss of the market or demand. However, when the demand is elastic a slight change in price alters the demand by a big magnitude. Elasticity tends to be higher when there are substitute of the product. Buyers are sensitive to price and buyers are quick to change their buying habits.
D. Purchasing power of customers: - what is the purchasing power of the customer and at what price and how much they can purchase? It should also be taken into consideration.
E. Government regulation: - The price of the commodity and services is fixed as per the regulation of the government, it should also be borne in mind.

March 2004 Set II &III – Questions other than common questions in Set I

March 2004 Set II – Questions other than common questions in Set I

1 What is meant by ‘marketing management’? 2
2 Explain in brief, the term motivation as an element of directing. 2
4 Give two examples of the impact on business organisations of changes in social environment. 2
5 Explain in brief ‘Management as a process’. 2
8 Explain any three features of Personal Selling. 3
10 Explain the meaning of management principles and state how they are derived. 3
14 The concept of decentralisation is related to the concept of delegation. Explain the statement in brief. 4
16 Explain in brief any five factors that should be taken into consideration while determining the requirements of working capital of the business enterprise. 5
19 “Administration comes first, management follows it”. Explain the view. 5

Set III – Questions other than common questions in Set I or II

2 Explain in brief the term ‘directing’ as a function of management. 2
3 What is meant by the product concept of ‘marketing’? 2
4 Explain in brief management as an activity. 2
6 Explain briefly any three important features of advertising. 3
8 Explain any three reasons as to why proper understanding of management principles is necessary. 3
13 State any two developmental functions and any regulatory functions of the Securities and Exchange Board of India (SEBI). 4


15 “Authority can be delegated but responsibility cannot” Explain this statement in brief. 4
17 “Administration is a part of Management” Explain the view. 5
18 Explain in brief any five factors that should be taken into consideration while determining capital structure of the business enterprise. 5

CBSE Examination Paper March 2004

CBSE Examination Paper March 2004
Set I
1 Explain in brief, ‘ management’ as a group of people having managerial responsibility for the enterprise 2
2 Give two examples of the impact on business organisation of changes in social environment. 2
3 Explain, in brief, the term ‘supervision’ as an element of directing. 2
4 What is the societal concept of marketing? 2
5 Differentiate between ‘marketing’ and ‘ selling’ on the basis of (a) meaning and (b) emphasis 2
6 Explain any three points which highlight the nature of principles of management. 3
7 Enumerate any three advantages and three disadvantages of formal communication. 3
8 “Leadership is required only for less efficient subordinates” Do you agree? Give any three reasons in support of your answer. 3
9 Explain briefly any three factors that are considered while fixing the price of a product. 3
10 Explain any three sales promotion activities commonly used by marketers. 3
11 Which principle of Management envisages that each group of activities having the same objectives must have one head and one plan? Explain the principle with a suitable example. 4
12 “Delegation of authority is a process involving authority, responsibility and accountability”. Explain this statement in brief. 4
13 Which method of wage payment – time rate or piece rate – would you adopt in each of the following situations? Give reasons in support of your answer.
i) Where rate of output is determined solely by machine and not by operation.
ii) Where production process requires high degree of skill.
iii) Where work flow is regular, and
iv) Where quantity of output is more important than its quality. 4
14 The directors of a newly established company having paid-up equity share capital of Rs.2.5 crores, desire to get its shares traded at an all India level stock exchange. As Finance Manager of the Company, suggest, the name of the stock exchange for the purpose. Give any three reasons of your answer. 4
15 State any four regularity functions of the Securities and Exchange Board of India (SEBI). 4
16 “Management and Administration mean the same thing”. Explain the view. 5
17 Explain, in brief, any five economic changes that have been initiated by the Government of India since 1991. 5
18 Explain briefly the various steps involved in the process of controlling. 5
19 “Though one of the effects of under capitalisation is that the market value of shares goes up, yet under-capitalisation is not considered good for the company” Do you agree with the statement? 5
20 Explain, in brief, any five factors that should be taken into consideration while determining the long-term dividend policy. 5
21 Explain briefly any six points, which highlight the importance of planning.
or
Explain in brief the meaning of policy and rule as types of plans and give any four points of distinction between them. 6
22 What is an ‘informal organisation’? Distinguish between ‘Formal Organisation’ and ‘Informal Organisation’ on the basis of
i) Purpose ii) Behaviour of members iii) Adherence to rules and stability.
or
Explain in brief any six points which highlight the importance of decentralisation in an organisation.. 6
23 Explain in brief any six steps involved in the process of selection of employees.
or
Explain briefly any six external sources of recruitment of workers. 6
24 “Advertising costs are passed on to the consumers in the form of high prices” and “ Some advertisements are in bad taste”. Do you agree? Give reasons in support of your answer.
or
Explain in brief the factors taken into consideration while taking decision on pricing the product. 6
25 Explain the following rights of consumers:
i) The Right to Safety
ii) Right to consumer Education, and
iii) The right to be heard
or
Explain any four ways and means of consumer protection followed in India. 6

CBSE SAMPLE QUESTION PAPER – SET II

CBSE SAMPLE QUESTION PAPER – SET II
BUSINESS STUDIES
CLASS XII
MAX. MARKS: 100 TIME: 3 Hours
General instructions:
1. Answers to questions carrying 2-3 marks should not exceed 30-40 words.
2. Answers to questions carrying 4-5 marks should not exceed 60-80 words.
3. Answers to questions carrying 6 marks should not exceed 120 words.
4. Attempt all parts of a question together.

1. ‘Management as a group have the responsibility of managing an enterprise’ Explain. 2
2. How does the change in social environment affect a business? 2
3. Explain the concept of ‘Noise’ in the communication process in about thirty words. 2
4. What is the meaning of ‘Insider Trading’? 2
5. Define ‘consumer’ under Consumer Protection Act, 1986. 2
6. If an organization does not provide the right place for physical and human resources in the organization, which principle is violated? What are the consequences of it? 3
7. XYZ Limited is manufacturing chemicals and textiles. What type of organizational structure would suit the requirement of such an organization? And why? 3
8. State the steps in the process of organizing as a function of management. 3
9. State the objectives of marketing management. 3
10. Explain any three factors to be kept in mind before selecting a particular media of advertising. 3
11. State any four points highlighting the significance of principles of management. 4
12. How does delegation of authority help in reducing the workload of managers and in motivating the subordinates? Explain briefly. 4
13. Explain ‘supervisory relationship’ and ‘Assignment of Challenging Jobs’ as non-monetary incentives. 4
14. The manager of Impact Enterprises dealing in cosmetics is facing the problem of poor sales. Suggest and explain any four promotional measures that he can undertake to improve the sales. 4
15. Mr. Soni a consumer purchased medicines without noticing the date of expiry. He also did not obtain the cash memo. Do you think he will be able to protect himself from the loss caused due to expired medicine? Give reasons in support of your answer. 4
16. Is management becoming a profession? Discuss in the light of the emerging trend. 5
17. Explain the meaning of ‘Business Environment’. Briefly discuss any two dimensions of general environment of business. 5
18. Define ‘controlling’. State the steps in the process of controlling as a function of management. 5
19. Explain the five features of an appropriate capital structure. 5
20. State any five effects of under capitalization on the company. 5
21. State any six features of planning function of management.
OR
State any six points of importance of planning function of management. 6
22. Which system of wage payment will be suitable in the following situations and why? 6
a. When quality is of supreme importance.
b. When there is no standard unit of output.
c. When there is clear relationship between employees’ efforts and output.
d. When rate of output is determined solely by process and not by the
operator.
e. When the work force comprises learners and trainees.
f. When the job is standardized.
OR
Name the function of management which concentrates on employing and retaining the right person at the right place. Explain why this function is important in any organization? 6
23. Explain how supervision ‘facilitates control’, ‘Improves communication’ and ‘Helps in optimum utilization of resources’. 6
OR
Explain any four needs that motivate an employee to work.
24. Distinguish between ‘Capital Market’ and ‘Money Market’ on any six bases.
OR
Distinguish on any six bases between ‘Primary Market’ and ‘Secondary Market’ as components of ‘Capital market’. 6
25. Explain the term ‘Product Mix’ and its four components.
OR
Explain the term ‘Marketing’. and any four functions performed by a marketing manager 6

CBSE SAMPLE QUESTION PAPER I

CBSE SAMPLE QUESTION PAPER I
BUSINESS STUDIES
CLASS XII
MAX MARKS: 100 TIME: 3 hours
General Instructions: -
1. Answers to questions carrying 2-3 marks should not exceed 30-40 words.
2. Answers to questions carrying 4-5 marks should not exceed 60-80 words.
3. Answers to questions carrying 6 marks should not exceed 100 words.
4. Attempt all parts of a question together.
1. Briefly explain ‘Management as a Process’ 2
2. Classify business environment into two major categories and give one example of each. 2
3. Ramesh, a supervisor in a factory always expects that his subordinates should obey him. He is not prepared to listen to any suggestion made by workers. Do you think this quality of Ramesh will help him to become a good leader? Why? 2
4. What is meant by ‘Marketing Research’? 2
5. Differentiate between radio and TV as media of advertising on any two basis. 2
6. Your grandfather has retired as the Director of manufacturing Co. At what level of management was he working? What functions do you think he was performing at that level? State any two. 3
7. What is meant by ‘Directing as a function of management? 3
8. Explain ‘Esteem needs’ of an employee. 3
9. Explain ‘Personal interaction’ and ‘two way communication’ as characteristics of Personal selling. 3
10. Bajaj Auto wants to promote its sales in the market. Suggest any three sales promotion techniques for the purpose. 3
11. How are principles of ‘Scalar Chain’ and ‘unity of command’ useful to management? Explain briefly. 4
12. In an electrical goods manufacturing company, there are four main activities Marketing, Production, Finance and Personnel. The General Manager is planning to structure the organization. Which type of organization structure should he adopt and why? Give two reasons. 4
13. Name the basic methods of wage payment. State any three advantages of each. 4
14. What is meant by ‘Capital market’? Describe its nature. 4
15. Distinguish between the features of NSEI and OTCEI on the basis of size, securities traded, settlement and objectives. 4
16. What is the meaning of Management as an Art? Briefly describe any three of its features. 5
17. Explain briefly five ways in which Indian-managers are responding to changes in the business environment. 5
18. How are the planning and controlling functions of management interrelated? Explain briefly. 5
19. Explain briefly any five factors, which may influence the amount of working capital needed in a business enterprise. 5
20. The Directors of a manufacturing company are thinking of issuing Rs. 20 lacs additional debentures for expansion of their production capacity. This will lead to an increase in debt equity ratio from 2:1 to 3:1. What are the risks involved in it? What factors other than risk do you think the directors should keep in view before taking the decision? 5
21. ‘Defining organisational objectives’ is the first step in the process of planning. Explain the other steps of this process. 6
OR
Explain in brief any six limitations of the planning function of management. 6
22. Define the terms ‘Responsibility’, ‘Authority’ and ‘Accountability’. 6
OR
What is the meaning of formal organization? State any four features of formal organization. 6
23. Explain briefly ‘Job-rotation’, Vestibule training’ and ‘Apprenticeship programme’ as methods of employee training.
OR
Explain ‘Profit-sharing, ‘Co-partnership’ and ‘Bonus’ as monetary incentives for employees in an organization. 6
24. Explain any three factors to be considered in connection with pricing decision of a product? 6
OR
Explain briefly the factors to be kept in view while taking a decision on the channels of distribution of any product. 6
25. State any six-consumer rights, which are recognized in the interest of consumers.
OR
State the responsibilities of consumers to safeguard their interest. 6

Weightage to contents Business Studies 12

DESIGN OF QUESTION PAPER
SUBJECT: BUSINESS STUDIES
CLASS XII
MAX MARKS: 100 TIME : 3 hours
1. Weightage to objectives
Objectives % of marks
Knowledge (K) 30%
Understanding (U) 50%
Application (A) 20%
2. Weightage to form of questions
Form of questions Marks for each question No. of questions Total marks Estimated time (in minutes)
Long answer (LA.) 6 5 30 45 minutes
Short answer I (S.A.I) 5 5 45 40 minutes
V.S.A 3 5 25 40 minutes
Total 25 100 150 minutes
½ hour for reading and revision
1. Weightage of content
As per CBSE syllabus
2. Weightage of Difficulty Level
Estimated Difficulty Level Percentage
A EASY 30%
B AVERAGE 50%
C DIFFICULT 20%

5. Scheme of options – Internal choice to be provided in – all 6 mark questions

Syllabus in Business Studies XII

Detailed Syllabus
1. Nature and significance of management
a. Management concept, objectives, importance
b. Management as on activity, process, discipline and as a group.
c. Nature of management as a science, as art and as a profession.
d. Management and administration – different views on the usage of the terms.
e. Levels of Management – top, middle, supervisory.
f. Management functions –planning, organising, staffing, directing and controlling.
g. Co-ordination – nature and importance.
2. Principles of management
a. Principles of management- meaning, nature and significance.
b. Fayol’s principles of management.
c. Scientific Management – Principles and techniques.

3. Business Environment
a. Business Environment-meaning and importance.
b. Dimensions of business environment-Political, Economic, Social, Legal-regulatory.
c. Economic Environment in India, Impact of government policy change on business and industry with special references to liberalisation and globalisation ( since 1991).
d. Managerial response to change in business environment.
4. Planning
a. Meaning, features, importance.
b. Goals, objectives, policy, Procedures, Methods, Rules Budget and Programmes-meaning and definition.
c. Planning process.
d. Limitations of Planning.
5. Organising.
a. Meaning and Importance.
b. Steps in the process of organising
c. Structure of organisation- functional and divisional.
d. Formal and informal organisation
e. Delegation: meaning and importance.
f. Elements of Delegation.
g. Meaning and Importance of Decentralisation.
h. Difference between delegation and decentralisation.
6. Staffing
a. Meaning and importance of staffing.
b. Staffing as a part of Human Resource Management.
c. Steps in staffing process.
d. Recruitment – meaning and sources.
e. Selection meaning process
f. Training and Development- meaning, need and distinction, methods, job rotation apprenticeship. Vestibule, internship.
g. Types of compensation and incentives- monetary and non-monetary.
h. Methods of wage payment- time rate and piece rate.
7. Directing:
a. Meaning and importance
b. Elements of Direction:
i. Supervision- Meaning and importance.
ii. Motivation- meaning hierarchy of needs and importance of motivation.
iii. Leadership – meaning, importance, qualities of a good leader.
iv. Communication- meaning and importance, formal and information communication and barriers to effective communication.
8. Controlling
a. Meaning and importance.
b. Relationship between planning and controlling.
c. Steps in the process of control.
Part – B Business Finance and Marketing

9. Financial Management
a. Meaning, Objectives and finance functions
b. Financial planning meaning and importance.
c. Capital Structure- meaning and factors.
d. Capitalisation- over and causes and effects under.
e. Fixed and working capital – meaning and factors affecting both.
f. Determinants of divided decision.
10. Capital Market
a. Concept and nature of capital market – primary and secondary market.
b. Money market.
c. Distinction between capital market and money market.
d. Stock Exchange- meaning, functions, NSEI, OCTEI nature and purpose.
e. Securities Exchange Board of India (SEBI)- objectives.
f. Distinction between marketing and selling.
g. Marketing Functions.
i. Product- Product Mix, breeding labelling and packaging.
ii. Price – Pricing strategies.
iii. Place – Physical distribution and factors determining chain of channels.
iv. Promotion
– Sales promotion – concept and methods.
- Advertising- features media, choice of media objections to advertising.
- Personal selling – features.
v. Public relations – concept.
12 Consumer Protection
a. Importance of consumer protection.
b. Consumers rights
c Consumer responsibilities.
d. Ways and means of consumer protection- consumer awareness and legal redresses with special reference to consumer protections ACT
e. Role of consumer organisation and NGO’s