2024-25

Second

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Prepared by: JOY K.V, M.Com, B.ed, K.Set

 CHAPTER -1

NATURE AND SIGNIFICANCE OF MANAGEMENT

I Choose and write the correct answer:

1. Which is not a function of Management?

a. Planning b. Staffing
c. Co-operating d. Controlling
2. The following is not an objective of Management
a. Earning Profits b. Growth of the Organisation
c. Providing employment d. Policy
3. Policy formulation is the function of
a. Top level management b. Middle level management
c. Operational Management d. All of the above
4. Successful Management ensures that
a. Goals are achieved with least cost b. Timely achievement of goals
c. Both of the above d. None of the above
5. Management as a profession is
a. Well defined body of knowledge b. Restricted entry
c. Ethical code of conduct d. All of the above
6. Hemangi enterprises limited is planning to increase its sales by 30% in the next quarter. Identify the
feature of management being high lightened in the given statement.
a. Management is all pervasive b. Management is goal-oriented process
c. Management is a continuous process d. All the above
7. Coordination is
a. Function of Management b. The essence of Management
c. An objective of Management d. None of the above
8. _____ refers to doing the task correctly and with minimum cost
a. Effectiveness b. Co-ordination
c. Process d. Efficiency
9. Management is considered as
a. Art b. Science
c. Both Art and Science d. None of the above
10. Providing facilities of Schools, creches and Hospitals is the ______ objective of Management.
a. Social Objective b. Organizational Objective
c. Personal Objective d. None of the objective

II Fill in the blanks by choosing appropriate answers from those given in the brackets.
(Planning, Link, Unity of action, Achieving goals, Top level)

1. Management is the process of getting things done with the aim of Achieving goals,
2. Planning is considered as the base for all the other managerial functions.
3. Top level Management consists of seniormost executives of the organisation.
4. Middle level Management act as a Link between top level management and lower-level management.
5. Co-ordination ensures Unity of action

III Match the following:

A B
a. Effectiveness i. Doing the right task
b. Organisation Objective ii. Survival of Business
c. Co-ordination iii. Integrates group efforts
d. Social Objective iv. Environment friendly methods
e. Supervisory level v. Foremen

IV Answer the following questions in one word or one sentence each:

1. What is efficiency?
Ans: Efficiency means doing the task correctly with minimum cost and minimum resources.
2. What is effectiveness concerned with?
Ans: Effectiveness in management is concerned with doing the right task, completing with activities and
achieving goals. OR in other words, it concerned with the end result.
3. State any one dimension of management.
Ans: Management of work, Management of people, Management of operations.
4. Give an example of Top-level Management.
Ans: Chairman, President, Chief executive officer, Managing Director, Chief Finance Officer,Etc
5. Give an example of Middle level Management.
Ans: Purchase manager, Production manager, Sales manager, Marketing manager etc.
6. State any one social objective of management.
Ans: Protecting the environment by using environmental friendly method of Production.
7. State any one personal objective of management.
Ans: Satisfying the financial needs of the employees by giving them fair salaries, incentives, and other financial
benefits.
8. Mention any one function of management.
Ans: Planning

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.

1. Define Management.
“Management is the process of working with and through others to effectively achieve the organizational
objectives by efficiently using limited resources in the changing environment.” by Kreitner.
OR
According to Harold Koontz and Heinz Weihrich “Management is the process of designing and maintaining an
environment in which individuals working together in groups, to efficiently accomplish selected aims”
2. Mention any two levels of Management.
a. Top level management b. Middle level management
3. State any two objectives of Management.
Ans: organisational objectives, social objectives
4. Give any two organizational objectives of Management.
Ans: 1. Survival 2. Profit 3. Growth
5. State any two importance of management.
Ans: 1. Management helps in achieving group goals 2. Management increases efficiency
6. Define Co- ordination.
Coordination is the process whereby an executive develops an orderly pattern of group efforts among his
subordinates and secures unity of action in pursuit of common purpose. By McFarland
OR
E.F.L Brech “Coordination is balancing and keeping together the team by ensuring suitable allocation of tasks
to the various members and seeing that the tasks are performed with harmony among the members themselves.
VI Answer the following questions in 20 to 25 sentences each. Each question carries 8 marks

1. Management is a three - tier activity. Show the levels of Management with a Neat diagram. Explain
them with examples.

Meaning of Management: Management is the process of getting things done with aim achieving goals
effectively and efficiently. Levels of Management are:

1. Top level management:

Top level management They are superiors to another member of the organization. They determine overall
organisational goals and strategies for their achievements. They also formulate policies and coordinate the
activities of different departments.

2. Middle level Management:

Middle Management generally consists of the heads of the functional departments. E,g. Production manager,
purchase manager and so on. Middle management is the link between top level and lower-level managers. They
are subordinate to top managers and superiors to the lower-level managers, they responsible for implementing
and controlling plans and strategies developed by top management.

3.Operational level management;

It consists of supervisor, foreman, etc. Their main work is to get the work done by workers and employees.
Lower-level managers act as a link between the middle level managers and the workers.

2. Explain the characteristics of management.

1.Management is a goal-oriented process
Every organization is established to achieve certain goals. For example, the goal of a retail store may be to
increase sales. These goals should be simple and clear. Management combines the efforts of various individuals
for the achievement of these goals.
2. Management is all pervasive:
Management is common to all organizations whether economic, social, or political. For e.g. management is
applicable for a government company, school, private company or an NGO.
3.Management is multi-dimensional.
(i) Management of work: It is concerned with completing the work efficiently.
(ii) Management of people: It involved leading and developing employees.
(iii) Management of operations: It involves coordinating work and people.
4.Management is a continuous process.
Management is a continuous or never-ending function. All the functions of management like planning,
organizing, staffing, directing, and controlling are performed continuously by all the managers in the
organization.
5.Management is a group activity.
Management is a group effort. All the managers and their subordinates work as a group or a team to achieve the
organizational goals.
6.Management is dynamic function.
Management is a dynamic function and adjusts itself to the changing environment. It changes its objectives,
plans, policy, strategies, etc., according to the changing needs of the environment.
7. Management is Intangible force. Management is an intangible force, which cannot be seen, its impact is
seen in better results, like more sales, happy employees, and increased productivity

3. What objectives a management aims to achieve? Explain.

(OR)
Management seeks to achieve certain objectives. Explain.

Objectives of Management

1. Organisational objectives
(a) Survival: the basic objective of any business is to survive in the competition market.
(b) Profit: Profit is essential for covering cost and risks of the business.
(c) Growth: Every business organisation must grow and expand their activities. The growth will be measured in
terms of increase in sales, number of branches, number of products, number of employees working in the
organisation.

2. Social objectives
(a) Protecting the environment by using environmentally friendly methods of production.
(b) Providing employment opportunities to the weaker sections in the society.
(c) Providing basic amenities like schools, hospitals and creches to employees and other members of the
society.

3. Personal objectives
(a) Satisfying the financial needs of the employees by giving them attractive salaries, incentives etc.
(b) Satisfying the social needs like peer recognition.
(c) satisfying the higher-level needs of employees by creating opportunities for their personal growth and
development.

4. Management is considered to be both Art and Science. Explain

(OR)
‘Management as an art and science are not mutually exclusive, but complement
to each other’. Elucidate.
A.Management as an Art: ( Short cut: Eraser Pencil Geometry Box)
a. Existence of theoretical knowledge:
In every art there is a systematic and organized study materials available to gain the theoretical knowledge of
the art. In management also there is a systematic and organized study materials, these materials help you to learn
management principles and theories.
b. Personalized applications: Like an artist every manager has his own way of managing the things depending
upon this knowledge and experience.
c. Goal oriented: Like any other art management is also directed towards the achievement of predetermined
goals.
d. Based on Practice and creativity: The artist requires regular practice of art to become finer and more
perfect, same way a manager applies his learned skills, and knowledge in a unique manner. More practice
makes him a better manager.
Management as a science: (Short cut: CUPS)
a. Cause and effect relationship: Like principles of science, management principles also establishes cause and
effect relationship in dealing with various situations in the organization.
b. Universal validity: Scientific principles may be applied in all situations, at all places. Similarly, some basic
management principles applicable for all type of organizations. Example: unity of command.
c. Principles based on experimentation. Scientific principles are developed through scientific investigation
and research. Management principles are also developed through experiments and practical experiences of a
large number of managers.
d. Systematized body of knowledge. Like science, management has a systematized body of knowledge, it has
its own theory and principles. Example: Motivation theory.
Conclusion: Both management has an art science, makes managers to use this personalized knowledge in
different situations effectively.

5. What is Co-ordination? Explain its characteristics.

(Shortcut: IP CURD)
Meaning of Coordination: Co-ordination is the process by which the management synchronises the activities
of different departments to achieve the common goal.

1. Coordination Integrates group efforts.

coordination combines the group efforts by bringing together different interests of employees and giving them a
common direction. This ensures that everyone working towards the same goals and objectives.
2. Coordination is an All-pervasive function
Coordination is required at all levels of management. It combines the efforts of different departments such as
purchase, production and sales departments and different levels.
3. Coordination is a Continuous process:
Coordination is a non-ending function. It begins at the planning stage and continue till controlling.
4. Coordination ensures Unity of action. Coordination acts as the binding force between departments and
ensures unity of action to achieve the goals of the organization.
5. Coordination is the Responsibility of all managers:
Coordination is the function of every manager in the organisation. Example: Middle level management
coordinate with both the top level and first line managers.
6. Coordination is a Deliberate function: Coordination means making sure different people work together
effectively. A manager needs to do this intentionally and carefully.

6. Explain the functions of Management.

(OR)
‘Management is a series of continuous interrelated functions’ Explain.
1.Planning:
Planning is the first function of management, but it is a continuous and never-ending process. It is required at
every stage. It is performed at each level of management in an organization. It is the function of deciding in
advance what to do, how to do, when to do and who is going to do.
2.Organising:
It is the Management function of grouping tasks, assigning duties, arranging and allocating resources and
establishing authority responsibility relationships.
3.Staffing:
Staffing is finding the right people for the right job. The main purpose of staffing function is to put the right
people with right qualifications at the right place and time to achieve the goals of the organization effectively
and efficiently.
4.Directing:
Directing refers to the process of instructing- guiding, counselling, motivating and leading people in the
organization to achieve its objectives. Elements of directing: Supervision, Motivation, Leadership,
Communication.
5.Controlling:
Controlling is the management function concerned with the activities in an organization are performed as per the
plans. Controlling involves comparison of actual performance with the standard performance. If there is any
difference, then finding the reasons for such difference and taking corrective measures.
Conclusion: In order to achieve the objectives of the organisation, starting from planning till controlling,
management has to perform a series of continuous interrelated functions.

CHAPTER -2
PRINCIPLES OF MANAGEMENT
I Choose and write the correct answer:

1. Principles of management are not

a. Universal b. Flexible
c. Absolute d. Behavioural
2. How are principles of management formed?
a. In a Laboratory b. By experience of Managers
c. Experiences of Customers d. By propagation of social scientists
3. The principles of management are significant because of
a. Increase in efficiency b. Initiative
c. Optimum utilisation of resources d. Adaptation to changing technology
4. Henri Fayol was a
a. Social scientist b. Mining Engineer
c. Accountant d. Production engineer
5. Which of the following statement best describes the principle of ‘Division of Work’.
a. Work should be divided into small task b. Labour should be divided.
c. Resources should be divided among jobs. d. It leads to specialisation.
6. ‘She/he keeps machines, materials, tools etc., ready for operations by concerned workers’. Whose work
is described by this sentence under functional foremanship?
a. Instruction card clerk b. Repair boss
c. Gang boss d. Speed boss
7. Which of the following is NOT a Principle of Management given by Taylor?
a. Science, not rule of Thumb b. Functional foremanship
c. Maximum not restricted output d. Harmony not discord
8. Management should find ’One best way’ to perform a task. Which technique of Scientific management
is defined in the sentence?
a. Time study b. Motion study
c. Fatigue study d. Method study
9. Which of the following statements best describes ‘Mental Revolution’?
a. It implies change of attitude
b. The management and workers should not play the game of Upmanship
c. Both management and workers require each other
d. Workers should be paid more.
10. Basic aim of Functional foremanship is
a. Not to provide free time to workers
b. Not to divide the work
c. To separate planning functions from execution functions
d. To separate Top level management from Chief Executive Officer
II Fill in the blanks by choosing appropriate answers from those given in the brackets.
(Henri Fayol, Order, Fatigue Study, F W Taylor, Mental Revolution, Just in Time.)
1. F W Taylor, is known as Father of Scientific Management.
2. Just in Time is the new technique of management developed on the basis of Principles of management.
3. The amount and frequency of rest intervals in completing a task is determined by Fatigue Study,
4. Complete change in the attitude of workers and management towards each other is called Mental
Revolution
5. Henri Fayol is called Father of General Management
6. Order Principle states that there is a place for everything and everything in its place.

III Match the following:

A B
a. F W Taylor i. Piece wage System
b. Time Study ii Standard time for a well-defined job
c. Repair Boss iii. Functional foremanship
d. Kiran Mazumdar Shaw iv. Biocon
e. Unity of Direction v. One Head One Plan
f. Espirit De Corps vi. Team spirit

IV Answer the following questions in one word or one sentence each:

1. What is Standardization according to Taylor?
Ans: Standardizations refer to the process of setting standards for every business activity such as standard raw
material, standard time standard product, etc.
2. What is the aim of simplification according to Taylor?
Ans: Simplification aims at eliminating unnecessary diversity of products which results in saving
of cost.
3. Who advocated the separation of planning and execution of functions in any organization?
Ans: F.W. Taylor
4. Identify the technique of scientific management which is an extension of principle of division of work
and specialisation to the shop floor.
Ans: Functional foremanship.
5. State the role of ‘Inspector’ in functional foremanship.
Ans: Check the quality of work.
6. State the objective of Method Study.
The objective of method study is to find out one best way of doing the job
7. How many principles are given by Henri Fayol?
Ans: 14
8. Which management principle of Fayol advocates that there should be only one boss for each individual
employee?
Ans: Unity of command.
9. When is gang plank used?
Ans: Gang plank can be used in case of emergency.
10. ‘Workers should be encouraged to develop and carry out their plans for improvement’. Identify the
particular principle of management by Henri Fayol.
Ans: Initiative.
11. Which principle of management suggest the concept of replacing ‘I’ with ‘WE’?
Ans: Esprit De corps.

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks

1. What do you mean by Principles of Management?

Principles of management are the statements of basic truths that provide general guidelines
to the managers for decision making and actions.
2. What is Scientific Management?
Scientific Management refers to the use of scientific and standardised tools, methods and trained workers in all
organisational activities in order to increase the production with minimum cost and minimum wastage.
OR
According to Fredrick Winslow Taylor, “Scientific Management means knowing exactly what you
want men to do and seeing that they do it in the best and the cheapest way.
”3. What is Motion Study?
Motion study refers to the study of movements like lifting and putting objects, sitting and changing positions,
etc., which are undertaken while doing a job.
4. State two differences between unity of command and unity of direction.
Basis Unity of Command Unity of Direction

1.Aim Prevent dual subordination Preventing overlapping of activities

2.Affect It affects an individual employee It affects the entire organizations.
5. What is scalar chain?
The formal lines of authority and communication between superiors and subordinates from the highest to the
lowest ranks are known as scalar chain.
6. What is gang plank?
Gang Plank is a shorter route of communication in the scalar chain between the same level employees in case of
emergencies.

VI Answer the following questions in 10 to 12 sentences each. Each question carries Four Marks :

1. Explain any four features of Principles of Management.

1. Universal applicability:
Management principles of universal applicability can be applied to all types of organizations, business as well
as non-business organizations.
2.General guidelines:
The principles of management act as general guidelines to the manager but do not provide any ready-made
solutions to managerial problems.
3.Formed by practice and experimentation:
Management principles are developed through scientific investigation and research, as well as experiments and
practical experiences of a large number of managers.
4. Flexible:
The principles of management are flexible and can be modified by the managers according to the situation.
2. Discuss the significance of Principles of Management by explaining any four points.

1.Fullfilling social responsibility.

Management principles help the managers to fulfill the social responsibility of business. For example, the
principle of equity ensures fair wages to employees.
2.Meeting changing requirements:
The principles of management are flexible; it helps the managers to modify according to the changing
requirements in the organization.
3. Optimum utilization of resources and effective administration.
Principles of management help the managers to reduce the wastages like wastage of materials, wastage of labor
time, and also increase the productivity and reduce the cost.
4. Management training, education and research.
Management principles are the basis for training, learning, and research in management. Many institutes use
them for competitive exams and in courses like MBA and BBA.

3. Explain the Principles of Management contributed by F.W. Taylor.

1. Science, not Rule of Thumb.

Taylor believed that there was only one best method to maximise efficiency, this method can be adopted through
scientific study and analysis of each element of job, in order to replace the old rule thumb approach.
2.Harmony not discord.
According to Taylor, there should be no conflict between managers and employees. He highlighted that there
should be total harmony between the manager and the employees, and that both should understand the importance
of the other.
3. Cooperation not individualism. There is complete cooperation between employees and management
instead of individualism. Competition should be replaced by cooperation; both the management and workers
realize the need for and importance of each other.
4.Development of each and every person to his or her greatest efficiency and prosperity.
Management should scientifically select workers based on their skills and abilities, and provide training
matched to job requirements to maximize productivity and job satisfaction.

4. Briefly explain any four techniques of scientific management.

1.Time study: Time study is conducted to determine the standard time required to perform a well-defined task.
2.Motion study: Motion study involves the study of movements like lifting, putting objects, sitting and changing
positions.
3.Fatigue study: Fatigue study is conducted to determine the amount and frequency of rest intervals in
completing a task.
4.Method study: the objective of method study is to find out one best way of doing the job which
minimises the cost and maximise the quality.
5. Write short notes on (a) Simplification b) Method study:
(a) Simplification: Simplification aims at eliminating unnecessary varieties, sizes and diversity of
products. It results in saving of cost of labour, machines and tools
(b) Method study: The objective of method study is to find out one best way of doing the job which
minimises the cost and maximise the quality.

6. As a general manager, explain any four principles advocated by Henri Fayol which you would like to
adopt in your business organisation.

1.Division of work:
The work should be divided into small jobs and each task should be performed by trained specialists.
2. Discipline:
Discipline is the obedience to organizational rules and employment agreements which are necessary for the
working of the organization.
3.Unity of command:
There should be one boss for every individual employee and he as to receive orders and report to one superior.
4.Unity of direction: Each group activity having the same objective must have one head and one plan.

7. Principles of Taylor and Fayol are mutually complementary. But there are many points of difference
between their contribution. Identify any four points of differences between Taylor and Fayol.
Basis Henri Fayol F.w Taylor

1. Applicability Applicable Universally Applicable to specialized situations.

2. Focus Improving overall administration Increasing productivity
3. Basis of information Personal experience Observations and experimentation
4. Personality Practitioner Scientist

8. Identify the Principles of Management contributed by Henry Fayol from the following statements.
a. “Specialisation is the most efficient way to use human effort”._ Division of work
b. “Organisation should have a chain of authority and communication that runs from top to bottom and should
be followed by managers and subordinates. Scalar Chain.
c. “Interests of an organisation should take priority over the interests of individual employee”. Subordination
of individual interest to general interest.
d. “Employee turnover should be minimised to maintain organisational efficiency”. Stability of Personnel.
CHAPTER -3
BUSINESS ENVIRONMENT

I Choose and write the correct answer

1. Which of the following does not characterize the business environment?
a. Uncertainty b. Relativity
c. Employees d. Complexity
2. Which of the following best indicates the importance of business environment?
a. Identification b. Improvement in performance
c. Coping with rapid changes d. All of them
3. Which of the following is an example of social environment?
a. Money supply in the economy b. Consumer Protection Act
c. The Constitution of the country d. Composition of family
4. Liberalisation means
a. Integration among economies b. Reduced govt. controls and restrictions
c. Policy of planned disinvestments d. None of the above
5. Which of the following is feature of demonetization?
a. Tax Administration measure b. Channelizing savings into the formal financial system
c. Development of less cash economy d. All of the above
6. Between June 2023 and June 2024, a report say the exports of India have increased by 2.47% while
imports have increased by 5.04%. Identify the related dimensions of the business environment.
a. social dimension b. Technological dimension
c. Legal dimension d. Economic dimension
7. Identify the related dimensions of the business environment which led to the mandatory usage of
masks and PPE kits during COVID - 19
a. social dimension b. Legal dimension
c. Technological dimension d. Political dimension
8. The Government of India has allowed foreign direct investment in insurance sector. What economic
reform is the reason of this change in government’s policy?
a. Globalisation b. Liberalisation
c. Privatisation d. Demonetisation
9. In today’s world, Internet has connected people for doing business without any limitations in
boundaries. It has allowed for the free flow of goods and services which are reliable and at a reasonable
price with speed. Identify the concept of being described in the above lines:
a. Globalisation b. Liberalisation
c. Privatisation d. Demonetisation
10. Which one of the following is a part of economic environment?
a. Public debt b. Lifestyle of people
c. Technological changes d. Level of education.
11. The aim of demonetisation was to
a. Curb corruption
b. Curb accumulation of black money
c. Counterfeiting the use of high denomination notes for illegal activities
d. All of the above

II Fill in the blanks by choosing appropriate answers from those given in the brackets.
(Scientific, Privatisation, Tax, dynamic, Political environment, uncertain.)
1. Business Environment is dynamic in nature.
2. Government rules and regulations relevant to business are included in political environment of business.
3. Technological environment includes forces relating to Scientific improvements and innovations.
4. It is very difficult to predict the future happenings because business environment is largely uncertain.
5. Demonetisation is viewed as a tax administration measure.
6. Privatisation refers to giving more resources in the hands of private sector.

III Match the following:

A B
a. Totality of external forces i. Characteristics of Business Environment
b. Disinvestments ii. Sale of shares in public sector to private individuals
c. Dimensions of Business Environment iii. Economic, technological, social, legal and political
d. Demonetisation iv. November 8, 2016
e. Globalisation v. Integrating the economy with economies of other countries

IV Answer the following questions in one word or one sentence each:

1. What is Liberalisation?
Ans: Liberalising the Indian business and industry from all unnecessary controls and restrictions is called
liberalization.
2. What is Globalisation?
Ans: Integrating the economy of a country with the world economy.
3. What is Privatisation?
Ans: Privatization is the process of transfer of ownership and management of public sector enterprises to
private sector through disinvestment.
4. Expand BIFR.
Board of Industrial and Financial Reconstruction
5. Expand FIPB
Ans: Foreign Investment Promotion Board
6. Expand LPG.
Ans: Liberalization, Privatization and Globalization.
7. Mention any one denominations of Notes which was demonetized by Govt. of India in the year 2016.
Ans: Rs. 500 and Rs. 1000.

V Answer the following questions in 10 to 12 sentences each. Each question carries 4 marks

1. Explain any four features of the business environment.

1. Dynamic in nature:
Business environment is dynamic in nature, it keeps on changing whether in terms of technological
improvement, shifts in consumer preferences or entry of new competition in the market.
2. Uncertainty
Business environment is largely uncertain as it is very difficult to predict the future happenings, especially
when environment change is taking place too frequently as in the case of information, technology of or fashion
industries.
3. Specific and general forces:
Business environment includes both specific and general forces, specific forces such as customers, suppliers,
competitors and investors affect individual enterprises directly and immediately, General forces such as social,
political, legal and technological conditions affect an individual firm indirectly.
4. Totality of external forces:
Business is the sum totals of all those factors which are available outside the business and which the business
has no control.

2. Explain any four points to show how important the understanding of business environment for a
manager is.

1. It helps in tapping useful resources:

After analysing various environmental factors affecting the business, it helps the manager to arrange various
resources such as finance. Machines, raw materials etc.
2.It helps in coping with rapid changes:
Changes are taking place rapidly in today’s business environment. In order to adjust with the changes, managers
should be up to date and adopt new changes whenever is required.
3. It helps in planning and policy formulation:
Understanding and analysis of business environment can be the basis for planning and policy formulation in an
organization.
4.It helps in improving performance:
Continuous monitoring and understanding of the business environment helps the managers to adopt suitable
business practices which helps to improve their present as well as future performance.
3. Explain any four dimensions of the business environment.

1.Economic environment Economic environment refers to all the forces and factors which have a bearing on the
functioning of a business enterprise. It has an immediate and direct impact on a business. Rate of interest,
inflation rate, change in the disposable income of people, monetary policy, stock market indices, etc. are some
economic factors which could affect business firms.
2.Social Environment: The business environment includes various social forces such as customs, beliefs,
literacy rate, educational levels, lifestyle, values, etc. Social trends present various opportunities and threats to
business enterprises.
3. Political Environment: It includes political conditions such as general stability and peace in the country and
the attitude of the elected government representatives towards business. Political stability builds confidence in
the business community. Political unrest and violence can create uncertainty and disrupt business operations.
4. Legal environment: It includes various laws and legislative acts, administrative orders issued by
government authorities, Court judgements, as well as decisions of various commissions and agencies at every
level of the government central, state or local.
5. Technological environment: It includes forces related to scientific improvements and innovations that
provide new ways of producing goods and services. New methods and techniques of operating business. A
businessperson must closely monitor the technological changes taking place in industry as it helps in facing
competition and improving the quality of the product.

(HOTS)
4. Show the different elements of the business environment that influence the success of business
enterprises with a neat diagram.

5. The project of Nano car re-established in Gujarat is indicated by which factor of Environment. Write a
note on it.

Ans: Political Environment:

It includes political conditions such as general stability and peace in the country and the attitude of the elected
government representatives towards business. Political stability builds confidence in the business community.
Political unrest and violence can create uncertainty and disrupt business operations.

6. Parents are focusing on girl education as the number of working women has increased in all fields.
State the dimension of the business environment with which it is related. Write a note on it.

Ans: Social Environment:

The business environment includes various social forces such as customs, beliefs, literacy rate, educational
levels, lifestyle, values, etc. Social trends present various opportunities and threats to business enterprises.

7. Banking sector reforms have led to easier credit terms and better services. This is an example of a key
component of “Business Environment”. Name the dimension and write a note on it.
Answer: Economic environment
Economic environment refers to all the forces and factors which have a bearing on the functioning of a business
enterprise. It has an immediate and direct impact on a business. Rate of interest, inflation rate, change in
disposable income of people, monetary policy, stock market indices, etc. are some economic factors, which
could affect business firms.

8. Identify the type of dimension of environment to the following are related

i. Banks reduces the interest rate on house loans: Economic environment
ii. Number of working women is increasing: Social environment.
iii. Reservation of Tickets by internet. Technological environment.
iv. Prohibition of alcohol beverages to be advertised. Legal environment.

CHAPTER -4
PLANNING
I Choose and write the correct answer:
1. Name the function of management which involves setting objectives
a. Directing b. Planning
c. Staffing d. Organising
2. Which of the following is a type of standing plan?
a. Budget b. Project
c. Programmes d. Rule
3. Which of the following is not a type of plan?
a. Objectives b. Co-ordination
c. Budget d. Rule
4. First step in the planning process is ________
a. Implementing the plan b. Evaluate alternative courses
c. Setting an objectives d. None of the above
5. Which of the following is an example of a single ______ use plan?
a. Policy b. Procedure
c. Budget d. Method
6. Name the type of budget which determines the net cash position
a. Purchase budget b. Sales budget
c. Cash budget d. Production budget

II Fill in the blanks by choosing appropriate answers from those given in the brackets
(Planning, Single use, Dynamic, Standing plan, Budget, Rule, Primary)
1. Budget is a statement of expected results expressed in numerical terms.
2. Planning is deciding in advance what to do and how to do.
3. Planning is a Primary function of management.
4. Single use plan is developed for a one time event.
5. Standing plan is likely to be repeated in future.
6. Rule are specific statement that inform what is to be done.
7. Planning may not work in a Dynamic environment.
III Match the following:
A B
a. Planning i. Primary function of management
b. Implementing the plan ii. Putting plan into action
c. Strategy iii. Comprehensive plan
d. Policies iv. General statement
e. Planning premises v. Assumption about the future

IV Answer the following questions in one word or one sentence each:

1. Which function of management involves decision making?
Ans: Planning.
2. What is Planning?
Ans: Planning is deciding in advance what to do, and how to do.
3. Give an example for a standing plan.
Ans: Methods, Rules
4. Give an example for a single use plan.
Ans: Budgets, Programmes.
5. Give an example for policy in planning.
Ans: Recruitment policy, pricing policy, purchase policy, sales policy etc.
6. “No smoking in office” is an example of which type of plan?
Ans: Rule
7. Name the plan which specifies a detailed step by step presentation of a job.
Ans: Procedure
8. Name the type of plan in which expected results are expressed in numerical terms.
Ans: Budget
V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.
1. Define Planning.
Planning is the process of setting objectives for a given time period, formulating various courses of action to
achieve them, and then selecting the best possible alternative from among the various courses of action
available.
2. State the first two steps in planning.
a. Setting objectives b. Developing planning premises.
3. Give the meaning of planning premises.
Planning premises are the assumptions about the future conditions and events like trends in population, changes
in political and economic environment, variations in production cost and prices, government and legal
regulations etc.
4. Mention any two standing plans.
Ans: Methods, Rules
5. Give any two examples for policy in planning.
Ans: Recruitment policy, pricing policy, purchase policy, sales policy etc.
6. What are the Rules? Give an example
Rules are specific statements that inform what is to be done. Example: Wearing I D card in the organization,
No smoking in office
7. What is “Budget”? Give an example.
Budget is a statement of expected results expressed in numerical terms for a definite period of time.
Example: Cash budget, Sales budget, Production budget

VI Answer the following questions in 10 to 12 sentences each. Each question carries 4 marks.
1. Explain any four features of planning.
1.Planning is a primary function of management.
Planning is the primary function to be performed by every manager. No other function can be performed by the
manager without performing planning function.
2.Planning is pervasive.
Planning is required at all levels of management as all departments of the organization.
3.planning is continuous. Planning is an ongoing process.
Plans are prepared for a specific period of time and at the end of the that period there is a need for new plan based
on the new situation.
4.Planning involves decision making.
Planning is needed only when different alternatives are available, and we have to select the most suitable
alternative after proper analysis.

2. Is planning actually worth the huge cost involved? Give four reasons.
(OR)
Explain the importance of Planning with any four points.
1.Planning Provides Directions
Planning provides clear instructions and guidelines in advance on how to complete work in the organization.
This helps reduce confusion and ensures tasks are completed efficiently.
2. Planning Facilitates decision making.
Planning is needed only when different alternatives are available, and we have to select the most suitable
alternative after proper analysis.
3. Planning reduces the risk of uncertainty:
Planning helps predict future uncertainties and prepares the organizations to handle challenges.
Example: Competition, technological changes etc.
4. Planning establishes standards for controlling:
Planning sets goals and standards, allowing managers to compare actual results with expected outcomes.

3. Explain any four limitations of planning.

1. Planning leads to rigidity:
Plans are made with clear goals to be achieved within a set time frame. Managers may not be able to change
them based on the situation.
2.Planning is a time-consuming process:
Because it takes a long time to evaluate the alternatives and select the best one. Lot of time is needed to develop
planning premises.
3.Planning Involves Huge cost:
A lot of money is needed in the collection, analysis and interpretation of data, on board room meetings,
discussions with experts. Sometimes the cost spent in formulating plans is higher than the benefits received.
4.Planning Does not guarantee success:
Managers depend on previously tried and tested successful plans, these may not be effective in changing
conditions and could lead to failure instead of success.

4. Briefly explain any two types of plans.

(OR)
Write a short note on (a) Policy (b) Strategy
(a) Policy: Policies are general statements that guide thinking or channelise energies towards a particular
direction. Example: Recruitment policy, pricing policy, purchase policy, sales policy etc.
(b) Strategy: strategy is a comprehensive plan for accomplishing an organisation objective.
This comprehensive plan will include three dimensions, (i) determining long term objectives, (ii) adopting a
particular course of action, and (iii) allocating resources necessary to achieve the objective.

5. As a manager of an enterprise what steps you will follow in the planning process.
Ans: Planning steps.
1) Setting objectives:
2) Developing premises
3) Identification of alternative courses of action
4) Evaluating alternative courses
5) Selecting an alternative
6) Implementing the plan
7) Follow up action
CHAPTER -5
ORGANISING
I Choose and write the correct answer:

1. The form of organization known for giving rise to rumors is called ____
a. Centralized organization b. Decentralized organization
c. Formal organization d. Informal organization
2. Mohan was given a task by his superior to prepare a plan in one week. He asked two of his
subordinates to work on two aspects of his task. One of the subordinate was sick and could not complete
his work. Who is accountable for his task?
a. Mohan is accountable b. Mohan’s subordinate is accountable
c. Mohan’s superior is accountable d. None of them
3. Grouping of activities on the basis of functions is a part of
a. Centralized organization b. Decentralized organization
c. Divisional organization d. Functional organization
4. Which of the following is not an element of delegation?
a. Accountability b. Authority
c. Responsibility d. Informal organization
5. Under this type of organizational structure manpower is grouped on the basis of different products
manufactured
a. Divisional structure b. Functional structure
c. Network structure d. Matrix structure

II Fill in the blanks by choosing appropriate answers from those given in the brackets

(Formal, Responsibilities, Organizing, Delegation)

1. Organizing is the process of identifying and grouping the activities of the enterprise and establishing
authority relationships among them
2. Formal organization specifies the relationships among various job positions and the nature of their inter-
relationship.
3. Organization in which decision making authorities lie with the top management are termed as Centralization
4. Delegation refers to the downward transfer of authority from a superior to a subordinate.
5. Responsibilities is the obligation of a subordinate to properly perform the assigned duty.

III Match the following:

A B
a. Decentralization i. Delegation of authority throughout all the levels of organization
b. Authority ii. Right to command
c. Informal Organization iii. Arises as a result of social interaction
 d. Accountability iv. Answerable for the final outcome
e. Scalar Chain v. Formal Organization

IV Answer the following questions in one word or one sentence each:

1. Which management function translates the plans into action?

Ans: Organizing
2. State any one type of organization structure
Ans: Functional structure
3. What is span of management?
Span of management refers to the number of subordinates that can be effectively managed by a
superior.
4. Give the meaning of authority.
Authority is the power to command employees and instruct them to perform a job. OR Authority is the right to
give orders and obtain obedience.
5. Can accountability be delegated?
No. Accountability cannot be delegated
6. Name the activity which increases the importance of the role of subordinates.
Ans: Delegation

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.

1. Define Organising.
Organizing is the process of defining and grouping the activities of the enterprise and establishing authority
relationships among them. “By Theo Haimman
2. State any two steps in the process of organising.
1. Identification and Division of Work: 2. Departmentalization:
3. What is organizational structure?
It is the framework within which managerial and operating tasks are performed in an enterprise.
4. State any two differences between Functional and Divisional organization.
Functional Structure Divisional Structure
Formation is based on functions Formation is based on product lines and is supported by functions.
It is difficult to fix responsibility for a department. Easy to fix responsibility for performance.
5. Why does informal organization exist within the framework of formal organization? Give two reasons
for the emergence of informal organization.
Informal organisation emerges from within the formal organisation when people interact beyond their officially
defined roles. Two reasons for the emergence of informal organization.
1.Social Interaction and Emotional Needs
2. Communication and Information Sharing
6. State any two elements of Delegation.
Ans: Authority and Responsibility
7. What is Responsibility?
Responsibility is the obligation of a subordinate to perform the assigned duty.
8. What is Accountability?
Accountability means being answerable for the final results.
9. State any two difference between delegation and decentralization.
Basis Delegation Decentralization.
1.Status It is a process that followed to share It is the result of the policy decision of the top
tasks. management.
2. Scope It is a narrow scope It is wide scope.

10. State any two difference between Centralization and Decentralization.

SL.No Centralization Decentralization
1 There is no delegation of authority There is a delegation of authority
2. Found in small organizations. Found in case of large organizations.
11. A manager is of the view that he is not responsible for the quality of work that he has delegated to his
subordinate. Do you agree with this viewpoint? Explain.
I do not agree with the viewpoint of the manager, as authority can be delegated, but responsibility cannot be
delegated by a manager. The manager remains responsible to his own superior for the tasks, which he may have
assigned to his subordinate.

Reference purpose (The manager cannot escape his responsibility for any mistake on the part of his
subordinates. The process of delegation does not relieve the manager of his own responsibility.)

VI Answer the following questions in 20 to 25 sentences each. Each question carries 8 marks.

1. What is Organizing? Explain the importance of organizing.

(OR)
“The role of organization is important for a business organization to successfully achieve its goals”
Explain the importance of organization to justify this statement.

Meaning of organizing: Organizing is the process of defining and grouping the activities of the enterprise and
establishing authority relationships among them
Importance of Organizing (Short cut: OUR ABCDE2)

1. Optimum utilization of resources: Organizing ensures proper allocation of jobs. It leads to optimum use of
material, financial, and human resources. This also avoids duplication work and helps in minimizing the
wastage of resources.
2. Adaption to change:
Organizing helps business organizations to adapt to the changing environment and make changes in organization
structure and levels of management according to the changing environment.
3. Benefits of specialization:
In an organization, tasks are allocated to employees based on their abilities, skills, and experience, and
continuously performing the same task by the same employee increases productivity and leads to specialization.
4.Clarity in working relationships:
Organizing clearly defines the authority and responsibility relationships within the organization, specifying who
is reports to whom, which helps to eliminate confusion in information transfer and ensures effective
communication.
5.Development of Personnel:
Organizing encourages creativity among managers and helps them to delegate (transfer) routine tasks to
subordinates; this helps subordinates to develop their skills, handle challenges effectively, and reach their full
potential/ability.
6.Effective Administration:
Organizing provides a clear description of jobs and related duties. This helps to avoid confusion and
duplication. Clarity in working relationships enables proper execution of work. All these lead to effective
administration.
7. Expansion and growth:
Decentralization gives the subordinates a chance to prove their skills and abilities while also preparing them for
future managerial roles through promotions.

2. What is functional structure? Discuss its three advantages and three disadvantages.

Meaning of Functional Structure: In this kind of organisational structure, the activities or jobs of similar
nature are grouped together based on the functions which are to be performed by the individuals.
Example: In a manufacturing concern, there may be Purchase department, production department, marketing
department and finance department.

Advantages of Functional Structure:

1.It promotes control and coordination within a department because of similarity in the tasks being performed.
2. It helps in increasing managerial and operational efficiency and this results in increased profit
3. It avoids duplication of efforts and thus reduces cost.
4. It makes training of employees easier.
Disadvantages of Functional Structure:
1. functional structure places less emphasis on overall enterprise objectives than the objectives of a functional
head.
2. It may lead to problems in coordination as information has to be exchanged across different departments.
3. It may lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective.

3. Draw a diagram depicting a functional structure. List out any four advantages of it.

Advantages of Functional Structure:

1.It promotes control and coordination within a department because of similarity in the tasks being performed.
2. It helps in increasing managerial and operational efficiency and this results in increased profit
3. It avoids duplication of efforts and thus reduces cost.
4. It makes training of employees easier.

4. What is a divisional structure? State its three advantages and three disadvantages.

Meaning of Divisional Structure: Grouping of activities on the basis of product is known as divisional
structure organisation. A separate division is created for each major product in a business enterprise.
For example, a company may have division like cosmetics, garments, footwear etc.

Advantages of Divisional Structure

1. Product specialisation helps in the development of varied skills in a divisional head, and this prepares him for
higher positions.
2. It promotes flexibility and initiative because each division functions as an autonomous unit which leads to
faster decision making.
3. It facilitates expansion and growth as new divisions can be added without interrupting the existing
operations.

Disadvantages of Divisional Structure:

1. conflicts may arise among different divisions with reference to allocation of funds.
2. It may lead to increase in costs since there may be a duplication of activities across products.
3. Divisional manager may ignore organisational interests.

5. Draw the organization structure which is suitable for organizations producing a variety of products for
performing diversified activities. List out any four advantages of it.

Advantages of Divisional Structure

1. Product specialisation helps in the development of varied skills in a divisional head and this prepares him for
higher positions.
2. It promotes flexibility and initiative because each division functions as an autonomous unit which leads to
faster decision making.
3. It facilitates expansion and growth as new divisions can be added without interrupting the existing
operations.
4. It makes divisional heads accountable for profits, It also helps in fixation of responsibility in cases of poor
performance of division and appropriate remedial action can be taken.
Disadvantages of Divisional Structure:
1. conflicts may arise among different divisions with reference to allocation of funds.
2. It may lead to increase in costs since there may be a duplication of activities across products.
3. Divisional manager may ignore organisational interests.

6. State the advantages and disadvantages of formal and informal organization.

Advantages of Formal Organization

1. It is easier to fix responsibility since mutual relationships are clearly defined.
2. There is no ambiguity in the role that each member has to play as duties are specified.
3. Unity of command is maintained.
4. It leads to effective accomplishment of goals.
5. It provides stability to the organization.
Disadvantages of Formal Organization
1. Formal communication may lead to procedural delays.
2. It may not provide adequate recognition for creative talent
3. It is difficult to understand all human relationships in an enterprise.
Advantages of Informal Organization
(a)Prescribed lines of communication are not followed. Thus, the informal organisation leads to faster spread of
information as well as quick feedback.
(b) It helps to fulfil the social needs of the members and allows them to find likeminded people. This enhances
their job satisfaction and creates a sense of belongingness in the organisation.
(c) It contributes towards fulfilment of organisational objectives by compensating for inadequacies in the
formal organisation.
Dis advantages of informal organisation
1. It acts as a disruptive force against the interest of the formal organisation.
2. The management may not be successful in implementing changes if the informal organisation opposes them.
Such resistance to change may delay or restrict growth.
3. It pressurizes members to conform to group expectations. This can be harmful to organisations if the norms
set by the group are against organisational interests.

7. Distinguish between formal and informal organization.

Sl. Basis Formal Organisation Informal Organisation
1. Meaning It is structure of authority relationships It is network of social relationship arising out of
created by the management interactions among employees.

2. Origin It arises as a result of company rules and It arises as a result of social interaction.
policies
3. Authority It arises by virtue of position in It arises out of personal qualities.
management.
4. Behaviour It is directed by rules There is no set behaviour pattern in it.
5. Flow of Communication takes place through the Flow of communication is not through a planned
communication scalar chain route. It can take place in any direction.
6. Nature It is rigid It is flexible
7. Leadership Managers are leaders in it Leaders may or may not be
managers. They are chosen by the group.
8. Flow of Authority flows from top to bottom Authority flows vertically as well as horizontally.
authority
8. What is delegation? Explain the importance of delegation.
(OR)
Why delegation is considered essential for effective organizing?
Meaning of Delegation:
Delegation refers to the downward transfer of authority from a superior to a subordinate.
1.Effective management:
Delegation of authority enables managers to assign routine work to subordinates, relieving them from heavy
workloads and allowing them to function more efficiently.
2.Employee development:
As a result of delegation employees get more opportunities to utilise their talents. It makes them better leaders
and decision makers. It motivates them to develop themselves for higher positions.
3.Motivation of employees:
Delegation provides a feeling of status and recognition to subordinates. It motivates them for higher
performance.
4.Facilitates Growth:
Delegation facilitates growth and expansion by providing trained and experienced employees for talking up
leading positions in new project.
5.Quick decision making.
The subordinates are given authority to take decisions. They need not go to their superiors from time to time to
take decision on routine/daily matters. This increases the speed of decision making.
6.Basis of management hierarchy:
Delegation establishes superior subordinate relationships which is the base for hierarchy of managers. Thus,
delegation decides who will report to whom and the power at each job position.
7.Better co-ordination. Delegation brings coordination to an organization by clearly defining the authority,
responsibility, and accountability associated with various positions.

9. What is decentralization? Explain its importance.

(OR)
Decentralization is an optional policy. Explain why an organization would choose to be decentralized?
Meaning of Decentralisation: decentralization refers to delegation of authority throughout all the levels of an
organization.
1.Develops initiative among subordinates:
Decentralization helps subordinates become more independent and confident, it gives subordinates freedom to
face challenges and develop solutions to problems.
2.Develops managerial talent for the future:
Decentralization gives the subordinates a chance to prove their skills and abilities while also preparing them for
future managerial roles through promotions.
3.Quick decision making:
Managers are free to make their own decision within the specific area of task assigned to them. The enterprise
enjoys the benefit of quick decision making.
4.Relief to top management:
The authority is delegated to the lower levels. The top management is relieved of taking operational decisions.
They can concentrate on corporate planning, control, and coordination of the activities of different departments.
5.Facilitates growth:
It gives more freedom to lower-level employees to perform work. This creates a sense of competition between
them. It reduces managers' workloads and adds to the growth of the firm.
6.Better control: In decentralization, employees working at various levels, make their own decisions and they
are personally responsible for their decisions, they cannot pass the blame to their superiors.

CHAPTER -6
STAFFING
I Choose and write the correct answer:

1. Promotion of employees results in

a. Increase in pay b. Increase in responsibility
c. Increase in job satisfaction d. All the above
2. Which of the following is off-the-job training method
a. Coaching b. Vestibule training
c. Internship d. Job rotation
3. Which of the following is on the job training method
a. Job rotation b. Films
c. Computer modelling d. Vestibule training
4. Which of the following is an Internal source of recruitment
a. Advertisement b. Campus recruitment
c. Transfer d. Employment exchange
5. Horizontal movement of employees within the organisation is called
a. Promotion b. Transfer
c. Campus recruitment d. Demotion
6. The test which is helpful in assessing the Individual capacity for learning new skills
a. Aptitude test b. Personality test
c. Interest test d. Intelligence test

II Fill in the blanks by choosing appropriate answers from those given in the brackets.
(Orientation, Job Rotation, External, Development, Selection)
1. Selection is the process of choosing from among the prospective job candidates.
2. Development refers to the learning opportunities designed to help employees grow.
3. Orientation is the process of introducing the selected employee to other employees.
4. Shifting of trainees from one department to another is known as Job Rotation
5. External Source of recruitment helps to bring in new blood in the organization
III Match the following:
A B
st
a. Estimating Manpower requirement i. 1 step in staffing process
b. Preliminary scrutiny ii. Selection process
c. Campus recruitment iii. External sources
d. Transfer iv. Internal sources
e. Coaching v. On the job training
f. Vestibule training vi. Off the job training

IV Answer the following questions in one word or one sentence each:

1. What do you mean by recruitment?
Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply
for jobs in the organization.
2. Give the meaning of Transfer.
Transfer means shifting of an employee from one job to another, one branch to another or one shift to another.
3. What is promotion?
Promotion leads to shifting an employee to a higher position, carrying higher responsibilities, facilities, status
and pay.
4. State any one type of selection test.
Ans: Interest test
5. Name On-the-job training method used to train plumbers, electricians and iron workers.
Ans: Apprenticeship programmes.
6. Name Off-the-job training method used to train employees before handling sophisticated machinery
and equipment.
Ans: Vestibule training.

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.

1. What is staffing?
Staffing has been described as the managerial function of filling and keeping filled the positions in the
organisation structure. Staffing is a process of recruiting right people for the right job.
2. Write any two importance of staffing.
1. Staffing function contributes for higher performance by putting right person on the right job.
2. It ensures continuous survival and growth of the enterprise.
 3. Give the meaning of placement.
Placement refers to the employee occupying the position or post for which the person has been selected.
4. What is orientation in the staffing process?
Introducing the selected employee to other employees and familiarizing him with the rules, regulations and
policies of the organization.
5. Name any two methods of recruitment suitable to recruit technical, professional and managerial
personnel.
Ans: 1. Placement Agencies and Management Consultants 2. Campus Recruitment:
6. Name the internal sources of recruitment.
1. Transfer 2. Promotion
7. Give the meaning of selection.
It is the process of choosing and appointing the right candidates for right job in an organization by conducting
various exams, tests and interviews.
8. What is Training?
Training is an act of increasing the knowledge and technical skills of an employee for doing a particular job
efficiently.
9. Bring out any two differences between training and development.
Training Development
It is a process of increasing knowledge and skills It is a process of learning and growth.
It is a job-oriented process. It is a career oriented process.
10. What do you mean by Job rotation?
Shifting the trainee from one department to another or from one job to another so that he may learn the working
of various departments or jobs.
11. The manager of the company designed learning opportunities to improve skills and abilities of
employees and help in the growth of individuals in all respects. Identify the two concepts involved in it.
Ans: Training and Development

VI Answer the following questions in 10 to 12 sentences each. Each question carries 4 marks.

1. Explain the importance of staffing with any four points.

1. Staffing function of management helps in discovering and obtaining competent personnel for various jobs.
2. Staffing function contributes for higher performance by putting right person on the right job.
3. It ensures continuous survival and growth of the enterprise.
4. It helps to ensure optimum utilization of human resources by avoiding the situations of both the excess and
shortage of personnel.

2. List out the steps involved in staffing process.

a) Estimating manpower requirement
b) Recruitment
c) Selection
d) Placement and orientation
e) Training and development
f) Performance appraisal
g) Promotion and Career planning
h) Compensation

3. Write a short note on Internal sources of recruitment.

Recruitment from within the organization is called internal sources of recruitment. They are:
(a) Transfers
(b) Promotions
1.Transfer
Transfer is the shifting of an employee from one job to another, one department to another or from one shift to
another without substantiate change in the responsibilities and status of the employee. It is a horizontal
movement of employees
2.Promotion
It means placing an employee to a higher position carrying higher responsibilities, prestige, facilities and pay.
Promotion is a vertical shifting of employees.

4. State any two merits and two demerits of external sources of recruitment.

Memerits of external sources of recruitment.

1) Wider Choice: The management has a wider choice while selecting the people for employment.
2) Fresh Talent: It provides wider choice and brings new blood in the organization.

Demerits of external sources of recruitment.

1. Lengthy process: Recruitment from external sources takes a long time.
2. Costly process: It is very costly to recruit staff from external sources.

5. Explain any four selection tests in staffing.

(a) Intelligence Tests: This is one of the important psychological tests used to measure the level of intelligence
quotient of an individual.
(b) Aptitude Test: Aptitude means the potential which an individual has for learning new skills.
(c) Personality Test: Personality tests measure the overall qualities of a person. They provide information of
the candidate’s personal characteristics such as temperament, emotional reactions, confidence, courage, likes,
dislikes etc.
(d) Trade Test These tests measure the existing skills of an individual. It helps to measure the level of
knowledge and proficiency in the area of professions or technical training.
(e) Interest Tests Every individual has fascination for some job than the other. Interest tests are used to know
the pattern of interests or involvement of a person.

6. Explain how training and development benefits the organization?

1. Training is a systematic learning always better than hit and trial methods.
2. Training increases employee Satisfaction and morale and reduces absenteeism and turnover.
3. It enhances employee productivity both in terms of quantity and quality, leading to higher profits.
4. A well-trained employee needs less supervision.

7. Explain how training and development benefits the employees?

1.Improved skills and knowledge due to training lead to better career of the individual.
2.Increased performance by an individual helps him to earn more.
3.Training makes the employee more efficient to handle machines and helps to reduce the industrial accidents.
4.Training increases the satisfaction and morale of employees.

8. The post of Assistant Manager and Marketing Manager was vacant in a company. The Chief Executive
Officer of the company called the HR manager and requested her to fill up the vacancies. She suggested that
Marketing manager’s subordinate Miss Swathi is very competent and trustworthy. If she could moved up in the
hierarchy, she would do the needful. The Chief Executive Officer agreed for the same. The Assistant Manager
post was filled up by screening the database of unsolicited applications lying in the office.
(a)Name the internal/external sources of recruitment used by the company to fill up the above stated
vacancies.
(b) State any one merit of each of the above identified sources of Recruitment
Ans: 1. Promotion.
Merits of internal sources of recruitment:
1. Simplifies the process of selection and placement.
Ans: 2. Casual callers.
Merits of external sources of recruitment:
1.Fresh Talent: It provides wider choice and brings new blood in the organization.
VII Answer the following questions in 20 to 25 sentences each. Each question carries 8 marks.

1.Explain the various steps followed in the staffing process.

1.Estimating Manpower Requirement:

It involves forecasting and determining the number and kind of employees required by the organization. This is
done on the basis of workload and work force analysis.
2.Recruitment:
Recruitment is the process of searching for prospective/future employees and stimulating/encouraging them to
apply for jobs in the organization. Both internal and external sources may be used for searching for employees.
3.Selection: It is the process of choosing and appointing the right candidates for right job in an organization by
conducting various exams, tests and interviews
4.Placement and Orientation:
Orientation: introducing the selected employee to other employees and familiarizing him with the rules,
regulations and policies of the organization.
Placement: refers to the employee occupying the position or post for which the person has been selected.
5.Training and Development: Training is an act of increasing the knowledge and technical skills of an
employee for doing a particular job efficiently. Development is the process of overall growth of employees.
Example: Coaching, Case study etc.
6. Performance Appraisal:
It means evaluating an employee’s current or past performance as against certain predetermined standards and
providing feedback to improve their performance.
7. Promotion and Career Planning
Promotion: It means placing an employee to a higher position carrying higher responsibilities, prestige, facilities
and pay. Career planning helps people plan and advance their careers inside an organization.
8. Compensation: Compensation refers to all forms of pay or rewards given to the employees.
It includes. I. Direct financial payment (Salary, wage, incentives, bonus etc.)
II. Indirect payment. Insurance, PF etc)
2. List out any eight external sources of recruitment and state the advantages of them.
1. Advertisement
2. Advertising on Television
3. Campus Recruitment
4. Casual Callers
5. Web Publishing
6. Employment Exchange
7. Labor Contractors
8. Direct Recruitment
Advantages of external sources of recruitment:
1.Qualified Personnel: The management can attract qualified and trained people to apply for vacant jobs in the
organisation.
(2) Wider Choice: The management has a wider choice while selecting the people for employment.
(3) Fresh Talent: It provides wider choice and brings new blood in the organization.
(4) Competitive Spirit: If a company taps external sources, the existing staff will have to compete with the
outsiders.

3. Explain the different steps in the selection process. (OR)“Selection is the process of Elimination”.
Justify this statement. OR Assume yourself as HR manager of a company and explain the various steps
you would like to adopt in selection of employees.

Selection: It is the process of choosing and appointing the right candidates for the right job in an organization
by conducting various exams, tests and interviews.
(1) Preliminary Screening: Preliminary screening helps the manager to eliminate unqualified or unfit
candidates based on the information provided in the application forms.
(2) Selection Tests: Tests are conducted to know the level of ability, knowledge, interest, aptitude etc. of a
particular candidate. Types of selection tests are:
(a) Intelligence Tests: This is one of the important psychological tests used to measure the level of
intelligence quotient of an individual.
(b) Aptitude Test: Aptitude means the potential which an individual has for learning new skills.
(c) Trade Test: These tests measure the existing skills of an individual.
(d) Interest Tests: Interest tests are used to know the pattern of interests or involvement of a person.
(3) Employment Interview Is a formal, in-depth face to face conversation and observation conducted to
evaluate the applicant’s suitability for the job. Types of Interviews are: Direct Interview, Panel Interview etc.
(4) Reference and Background Checks: Background checks help to know the additional information of the
candidates such as honesty, loyalty, character etc. This is verified from the heads of the educational institutions
or from their previous employers.
(5) Selection Decision: After clearing all the selection tests, interviews etc., the right candidate will be
selected for the job. This decision is taken after getting the opinion of concerned manager of the department
where the selected candidates have to work.
(6) Medical Examination: Candidates finally selected for the job are asked to undergo a medical examination
to check whether they are physically fit for the job. This aims at reducing employee turnover, absenteeism,
accidents etc., in the organization.
(7) Job Offer: Candidates finally selected are issued a formal appointment order by the organization to confirm
his acceptance. It contains the nature of job, the remuneration, date of reporting and other terms and conditions
relating to employment.
(8) Contract of Employment: Once the selected candidate accepts the job offer, he becomes the employee of
the organization. He must formally join the organization by giving his acceptance in writing or by signing the
contract of employment. It contains job title, the pay scale, leave rules, work rules, etc.

4. Briefly explain the four methods of On-the-Job training and four methods of Off-the-job training.
(A) On the Job Training Methods:
1. Apprenticeship Programme: Apprenticeship programmes put the trainee under the guidance of a master
worker. These are designed to gain a higher level of skill. People want to enter skilled jobs like plumbers,
electricians, etc., are required to go through apprenticeship training.
2. Coaching: Coaching is a training method where an experienced supervisor guides and instructs
employees. The coach teaches employees how to use equipment, sets goals, and provides feedback to improve
performance. This personalized training helps employees gain skills, confidence, and better job performance.
3. Internship Training: This joint program between educational institutions and businesses provides practical
skills and industry knowledge. Selected candidates carry on regular studies for the prescribed period. They also
work in some factory or office to acquire practical knowledge and skills.
4. Job Rotation: This kind of training involves shifting the trainee from one department to another or from
one job to another. This method of training helps an employee to learn each and every job within the
organization.

(B) Off the job training methods: (any four)

1. Classroom Lectures: In this method, trainees receive training in the form of lectures in a classroom setting.
Experts deliver lectures on relevant topics, using presentations, videos and visual aids to make the training
engaging and effective. This type of training is typically conducted for
managerial executives in an organization.
2. Case Study: In this method the employees of the organization are given a case of an incident that happened
in the past of the organization, they have to discuss it as a group and find the best solution for it.
3. Computer modelling: This method increases employee skills through computer simulations. The real
working environment is artificially created through computer programs or software, providing trainees with a
realistic training experience.
4. Films: Certain skills that cannot be demonstrated through other methods are presented through films or
short videos. Example: A customer service team watches a film on handling difficult customers.
5. Vestibule Training: This method simulates actual working conditions in a training centre. Trainees learn to
handle machinery, equipment, and other tasks in a controlled environment. Once training is completed, they
work in the real workplace.
 CHAPTER -7
DIRECTING
I Choose and write the correct answer:

1. Which one of the following is not an element of direction?

a. Motivation b. Communication
c. Delegation d. Supervision
2. The motivation theory which classifies needs in hierarchical order is developed by
a. Fred Luthans b. Scott
c. Abraham Maslow d. Peter.F.Druker
3. Which of the following is a financial Incentive?
a. Promotion b. Stock Incentive
c. Job Security d. Employee Participation
4. Which of the following is not an Element of Communication process?
a. Decoding b. Communication
c. Channel d. Receiver
5. Grapevine is
a. Formal Communication b. Barrier to Communication
c. Lateral Communication d. Informal Communication
6. Status comes under the following type of barriers
a. Semantic barrier b. Organisational barrier
c. Non-Semantic barrier d. Psychological barrier
7. The software company promoted by Narayana Murthy is
a. Wipro b. Infosys
c. Satyam d. HCL
8. The highest-level need in the need Hierarchy of Abraham Maslow.
a. Safety need b. Belongingness need
c. Self-actualization need d. Prestige need
9. The process of converting the message into communication symbols is known as
a. Media b. Encoding
c. Feedback d. Decoding
10. The communication network in which all subordinates under a supervisor communicate through
supervisor only is
a. Single Chain b. Inverted V
c. Wheel d. Free Flow
11. On the successful completion of two years in a company, Kailash received a letter confirming his job
as a permanent employee. Identify the need of Kailash being fulfilled as per Maslow’s need Hierarchy
Theory.
a. Esteem Needs b. Self Actualisation Needs
c. Basic Physiological Needs d. Security Needs.
12. If there is no reward or appreciation for a good suggestion, the subordinates may not be willing to
offer useful suggestion Identify the above type of barrier to communication.
a. Unwillingness to communicate b. Lack of proper incentive
c. Distrust d. Lack of confidence of superior on subordinate

II Fill in the blanks by choosing appropriate answers from those given in the brackets.
[Motivation, Wheel Network, Instructions, Motivators/Incentives, Motivation, Bonus, Motive,]

1. Directing means giving Instructions to do the work

2. Motive is an inner state that activates and directs behaviour towards goal.
3. Motivation is the process of stimulating people to action to accomplish desired goals.
4. Motivators/Incentives is a technique used to motivate people in an organisation.
5.The communication network in which all subordinates under a supervisor communicate through supervisor
only is called Wheel Network
6. Bonus is an incentive offered over and above the wages /salary to the employees.
7. Supervision + Motivation +Leadership+ Communication = Directing.

III Match the following:

A B
a. Unity of command i. Principle of directing
b. Pay and allowance ii. Financial incentives
c. Non-financial incentives iii. Job enrichment
d. Issue of orders and Instructions iv. Supervision
e. Need Hierarchy Theory v. Abraham Maslow
f. Basic physiological needs vi. Food, shelter, clothing
g. Hindrance to communication vii. Lack of attention
h. Faulty translations viii. Semantic barriers

IV Answer the following questions in one word or one sentence each:

1. What is Directing?
Directing refers to the process of instructing, guiding, counselling, motivating and leading people in the
organisation to achieve its objectives.
2. State any one element of Directing.
Ans: Motivation, Communication.
3. State any one assumption of Maslow’s Hierarchical Theory of Needs.
Ans: People’s behaviour is based on their needs.
4. State any one Leadership style.
Ans: Autocratic style of leadership.
5. State any one type of Grapevine Network.
Ans: Gossip network, Cluster network.
6. Is it possible to motivate the employees, if their needs are fulfilled completely?
Ans: No
7. Name the kind of monetary incentive in which employees are offered company’s share at a set price
which is lower than market price.
Ans: Co-partnership/ Stock option:
8. A company displays on the notice board or in the company’s newsletter about the achievement of
employees. Name the kind of non-monetary incentive given by the company.
Ans: Employee Recognition programmes:
9. Communication originally directed in English has been poorly translated in Kannada. Name the type
of barrier to effective communication.
Ans: Faulty translations:
10. State the highest level of need in the Maslow’s need Hierarchy Theory?
Ans: Self-Actualization Needs

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.

1. Give the meaning of Supervision.

Supervision means overseeing what is being done by subordinates and giving instructions to ensure optimum
utilisation of resources and achievement of work targets.
2. What do you understand by motivation?
Motivation is the process of stimulating people to action to accomplish desired goals.
3. What is Leadership?
Leadership is the process of influencing the behaviour of people by making them strive voluntarily towards
achievement of organisational goals.
4. What is Communication?
Exchange of information between two or more persons to reach common understanding.
5. What is Formal Communication?
The communication which flows through official channels designed in the organisation chart is called as formal
organisation. This communication may take place between superior and subordinate.
6. What is Grapevine Communication?
Communication that takes place without following the formal lines of communication is said to be informal
communication. Social interactions, friendly talks, and non-official matters are discussed in the informal
communication.
7.State any two semantic barriers to communication.
Ans: (i) Badly expressed message ii) Symbols with different meanings
8.Mention any two psychological barriers to communication.
Ans: (ii) Lack of attention (ii) Distrust:
9.State any two organizational barriers to communication.
Ans: (i) Organisational policy (ii) Status
10.State any two personal barriers to communication.
Ans: i) Unwillingness to communicate (ii) Lack of proper incentives
11. Classify the following motivations into positive and negative motivation.
(a) Threatening. Ans: Negative Motivation
(b) Promotion. Ans. Positive Motivation
12. The following are the Barriers to Communication. Classify them into Personal barrier and
Organisational barriers.
(a) Rules and Regulations: Ans: Organisational barriers.
(b) Challenge to authority Ans: Personal barrier

VI Answer the following questions in 20 to 25 sentences each. Each question carries 8 marks

1. Explain the Principles of Directing.

1) Maximum individual contribution:

This principle emphasizes that directing techniques must help every individual in the organisation to contribute
to his maximum potential for achievement of organizational objectives. It should bring out untapped energies of
employees for the efficiency of organisation.
2) Harmony of objectives:
Sometimes there is a conflict between the organizational objectives and individual objective. Through effective
directing, managers must provide harmony between employee's individual objectives and organizational
objectives. Example : Employees expects more salary while organization expects more efficiency, the gap
between these two may be reduced with the help of directing.
3) Unity of Command:
This principle states that one person should receive orders from only one superior, only. If instructions are
received from more than one, it creates confusion, conflict and disorder in the organisation.
4) Appropriateness of direction technique:
According to this principle, appropriate motivational and leadership technique should be used while directing
the people based on subordinate needs, capabilities, attitudes and other situational variables.
5) Managerial communication:
Effective managerial communication across all the levels in the organisation makes direction effective.
Directing should convey clear instructions to create total understanding to subordinates.
6) Use of informal organisation:
A manager should realize that informal organisations exist within every formal organisation. He should spot
and make use of such organisations for effective directing.
7) Leadership:
While directing the subordinates, managers should exercise good leadership as it can influence the subordinates
positively without causing dissatisfaction among them.
8) Follow through:
A manager not only issue orders and instructions, but he should also follow it up by reviewing continuously
whether orders are being implemented accordingly or any problems are being encountered.

2. What is Supervision? Explain the role played by a supervisor.

Supervision:
It means overseeing what is being done by subordinates and giving instructions to ensure optimum utilisation of
resources and achievement of work targets
Importance of Supervision / Role played by a supervisor.
The importance of supervision can be understood from multiple roles performed by a supervisor:
(i) Supervisor maintains day-to-day contact and maintains friendly relations with workers. A good supervisor
acts as a guide, friend and philosopher to the workers.
(ii) Supervisor acts as a link between workers and management. He conveys management ideas to the
workers, on one hand and workers problems to the management on the other. This role played by supervisor
helps to avoid misunderstandings and conflicts between management and workers/employees.
(iii) Supervisor plays a key role in maintaining group unity among workers placed under his control. He sorts
out internal differences and maintains harmony among workers.
(iv) Supervisor ensures performance of work according to the targets set. He takes responsibility for task
achievement and motivates his workers effectively.
(v) Supervisor provides good on- the-job training to the workers and employees. A skilled and knowledgeable
supervisor can build efficient team of workers.
(vi) Supervisory leadership plays a key role in influencing the workers in the organisation. A supervisor with
good leadership qualities can build up high morale among workers.
(vii) A good supervisor analyses the work performed and gives feedback to the workers. He suggests ways
and means of developing work skills

3. Explain any four financial incentives and four non-financial incentives.

Financial Incentives Financial incentives are expressed in terms of money. They are:
1) Pay and allowances:
For every employee, salary is the basic monetary incentive. It includes basic pay, dearness allowance and other
allowances.
2.Bonus: Bonus is an incentive offered over and above the wages/ salary to the employees.
3.Profit Sharing: When a company shares a certain percentage of profit to employees.
4. Retirement Benefits: Several retirement benefits such as provident fund, pension, and gratuity, provide
financial security to employees after their retirement.
Non-financial Incentives
1 Status:
In the organizational context, status means ranking of positions in the organisation. The authority,
responsibility, rewards, recognition, perquisites and prestige of job indicate the status given to a person holding
a managerial position.
2.Job enrichment
Job enrichment is a strategy used to motivate employees by giving them increased responsibility and variety in
their jobs.
3.Job security
A permanent job with a stable income provides employees with a sense of security, allowing them to work
without worry and focus on delivering their best performance, thereby increasing efficiency.
4. Employee participation:
It means involving employees in decision making of the issues related to them. In many companies, these
programmes are in practice in the form of joint management committees, work committees, canteen committees
etc.,

4. “Communication serves as the lubricant fostering for the smooth operations of the management
process.” In the light of this statement, explain the importance of communication in management.

Meaning of Communication:
Exchange of information between two or more persons to reach common understanding.
Importance of Communication
(1) Acts as basis of coordination: It provides coordination among departments, activities and persons in the
organisation. Such coordination is provided by explaining about organisational goals, the mode of their
achievement and inter relationships between different individuals etc.
2) Helps in Smooth working of an enterprise:
Good communication ensures smooth and uninterrupted working of an organization. Smooth functioning
depends on proper information supply. Communication is the essence of it.
(3) Acts as basis of decision making: Communication provides needed information for decision making. In its
absence, it may not be possible for the managers to take any meaningful decision. Only on the basis of
communication of relevant information one can take right decision.
(4)Increases managerial efficiency: Communication is essential for quick and effective performance of
managerial functions. The management conveys the goals and targets, issues instructions, allocates jobs and
responsibilities and looks after the performance of subordinates.
5) Promotes Co-operation and industrial peace:
The two-way communication promotes corporation and mutual understanding between the management and
workers. This leads to industrial piece and efficient operations.
6) Establishes effective leadership:
Communication is the basis of leadership. Effective communication helps to influence subordinates. While
influencing people, leader should possess good communication skills.
7) Boosts morale and provides motivation:
An efficient system of communication enables management to motivate, influence and satisfy the subordinates.
It also helps to boost morale of employees and managers. it improves good human relations in industry.
Conclusion
From the above it is clear that effective Communications system increases managerial efficiency and the plays
an important role in the success of any organisation.

5. Suggest the suitable measures to improve communication effectiveness.

Improving Communication Effectiveness

1. Clarify the ideas before communication:
The problem to be communicated to subordinates should be clear in all aspects. The entire problem should be
studied in-depth, analysed and stated in such a manner that is clearly conveyed to subordinates.
2. Communicate according to the needs of receiver:
The level of understanding of receiver should be crystal clear to the communicator. Manager should adjust his
communication according to the education and understanding levels of subordinates.
3. Consult others before communicating:
Before actually communicating the message, it is better to involve others in developing a plan for
communication. Participation and involvement of subordinates may help to gain ready acceptance and willing
cooperation of subordinates.
4. Be aware of languages, tone, and content of message:
The contents of the message, tone, and language used, manner in which the message is to be communicated are
the important aspects of effective communication. The language used should be understandable to the receiver
and should not hurt the feelings of the receiver.
5. Convey things of help and value to listeners:
While conveying message to others, it is better to know the interests and needs of the people with whom you
are communicating.
6. Ensure proper feedback:
communicator may ensure the success of communication by asking questions regarding the message conveyed.
The receiver of communication may also be encouraged to respond to communication. The communication
process may be improved by the feedback received to make it more responsive.
7. Communicate for present and future:
Generally, communication is needed to meet the existing commitments to maintain consistency; the
communication should aim at future goals of the enterprise also.
8. Follow up communications:
There should be regular follow up and review on the instructions given to subordinates. Such follow up
measures help in removing hurdles if any in implementing the instructions.
9. Be a good listener:
The essence of communication is that both the sender and the receiver should be good listeners. Both should
listen the viewpoints with attention, patience and positive attitude.
Conclusion: We cannot expect barrier free communication in all organisations. Its degree may vary from
organization to organization. We should adopt certain measures to overcome the barriers and to improve the
communication process.

6. Draw a neat diagram of Maslow Hierarchy Needs. Classify the following needs as per Maslow need
Hierarchy Theory

(a) Need for love and affection, championship: Ans: Affiliation / Belongingness Needs
(b) Safety from illness, accident, fire etc: Ans: Safety needs
(c) Need for food, shelter and clothing: Ans: Basic physiological needs.
(d) Job security. Ans: Security needs

CHAPTER -8
CONTROLLING
I Choose and write the correct answer:

1. An efficient Control System helps to

a. Accomplish Organisational objectives b. Boosts employee Moral objectives
c. Judge accuracy of standards d. All the above
2. Controlling function of an organisation is
a. Forward looking b. Backward looking
c. Both forward- and Backward-looking d. None of the above
3. Controlling function is performed by Manager at
a. Top level b. Middle level
c. Lower-level d. All the levels
4. Standards can be set in _____terms
a. Quantitative b. Qualitative
c. Both Quantitative and Qualitative d. None of the above.
5. What should the ‘Critical Point’ for a manager while controlling as controlling at each and every step
is not possible.
a. Special area b. Key result area
c. Normal area d. None of these

II Fill in the blanks by choosing appropriate answers from those given in the brackets.
(Inseparable twins, Controlling, Costly, Corrective, Quantitative)

1. Controlling is the process of ensuring that activities in an organisation are performed as per plan.
2. Planning and Controlling are Inseparable twins of Management.
3. Comparison becomes easier when standards are set in Quantitative terms.
4. Controlling is a Costly affair.
5. Taking Corrective action is the last step in Controlling.

III Match the following:

A B
a. Controlling function i. Indispensable function of every Management
b. Setting performance standards ii. First step of controlling
c. Controlling limitation iii. Resistance from employee
d. Defective Machine iv. Repair/Replacement of machinery
e. Critical point control v. Key Result Area

IV Answer the following questions in one word or one sentence each:

1. What is meant by controlling?
Controlling means ensuring that activities in an organisation are performed as per the plans.
2. Mention any one method used to measure actual performance.
personal observation, sample checking, performance reports, etc
3. What is standard in controlling process?
Standards are the criteria against which actual performance would be measured.
4. Which are considered as inseparable twins of Management?
Planning and Controlling
5. Expand KRA.
Ans: Key Results Areas

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.
1. Define Managerial Control.
According to Koontz and O’ Donnel, “Managerial control implies the measurement of accomplishment against
the standard and the correction of deviations to assure attainment of objectives according to plans”.
2. Give any two advantages of controlling.
(a) It helps in accomplishing organisational goals
(b) It helps in improving employee motivation:
3. State any two limitations of controlling.
(a) Little control on external factors:
(b) Costly affair
4. State the methods used by managers to analyse deviations.
a. Critical point control. B. Management by exception.

VI Answer the following questions in 10 to 12 sentences each. Each question carries 4 marks.

1. “A good control system helps an organization in many ways” – Justify this statement with any four
points. OR explain the importance of controlling with any four points.

Importance of Controlling:
(i) It helps in accomplishing organisational goals:
Controlling function ensures that all the activities in the organisation take place according to plan and if there is
any deviation, timely action is taken to bring back the activities on the path of planning.
(ii) It helps in judging accuracy of standards:
A good control system enables management to verify whether the standards set are accurate and objective.
Thus, it helps to review and revise the standards, if necessary.
(iii) It helps in making efficient use of resources:
Controlling helps to reduce wastage and spoilage of resources. Thus, it ensures that resources are used in the
most effective and efficient manner.
(iv) It helps in improving employee motivation:
A good control system ensures that employees know well in advance what they are expected to do and what are
the standards of performance, on the basis of which they will be evaluated. It thus, motivates them and helps
them to give better performance.
2. Discuss the relationship of planning and controlling
(OR)
‘Planning is looking ahead, and controlling is looking back’ Comment.

Rrelationship of planning and controlling

1) Planning and controlling are inseparable twins:
Planning and controlling are inseparable twins of management. The standards of performance which serve as
the basis of controlling are provided by planning.
2) Planning without controlling is meaningless:
Controlling is necessary to ensure that events conform to plans. Thus, planning without controlling is
meaningless. Similarly, controlling is blind without planning.
3) Planning is looking ahead while controlling is looking back:
Plans are prepared for future and are based on forecasts. Therefore, planning involves looking ahead and is
called a forward-looking function. Controlling is like a post-mortem of past activities to find out deviations
from the standards. In that sense, controlling is a backward-looking function.
4) Planning and controlling are both backward-looking as well as forward-looking functions:
Planning is guided by past experiences and the corrective action initiated by control function. Control function
aims to improve future performance. Thus, planning and controlling are both backward-looking as well as
forward-looking functions.

3. ‘Controlling everything results in Controlling nothing’. Explain

(OR)
Explain the limitations of controlling.
(i) Difficulty in setting quantitative standards:
Controlling will be effective only when standards are fixed in quantitative terms Employee morale, job
satisfaction, customer response etc. cannot be expressed quantitatively, so that controlling becomes less
effective.
(ii) Little control on external factors:
Generally, an enterprise cannot control external factors such as government policies, technological changes,
competition etc.
(iii) Resistance from employees:
Control is often resisted by employees. They see it as a restriction on their freedom. For instance, employees
might object the setting up of CCTV.
iv) Costly affair:
Control is a costly affair as it involves a lot of expenditure, time and effort. A small enterprise cannot afford to
install an expensive control system.

4. Briefly explain the first four steps in controlling.

1. Setting performance standards.

The first step in the controlling process is setting up of performance standards. Standards are the criteria against
which actual performance would be measured. Standards can be set in both quantitative as well as qualitative
terms. Examples of quantitative standards are, to increase sales by 20%., cost to be incurred, units to be
produced etc., Example of qualitative standard is improving goodwill, customer satisfaction etc.
2.Measurement of Actual Performance:
Once performance standards are set, the next step is measurement of actual performance. Performance should
be measured in an objective and reliable manner. There are several techniques for measurement of performance.
These include personal observation, sample checking, performance reports, etc
3.Comparing Actual Performance with Standards:
This step involves comparison of actual performance with the standard. Such comparison will reveal the
deviation or variation (difference)between actual and expected results.
4.Analysing deviations:
At this stage, acceptable and non-acceptable deviations are analysed.
Two methods are generally used:
(a) Critical point control: It means keeping the focus on key result areas where deviations are not acceptable
and they should be attended on a priority basis.
(b) Management by exception: It means that if a manager tries to control everything, he may end up in
controlling nothing.
5) Taking Corrective Action:
The final step in the control process involves taking corrective action so that deviations may not occur again
and the organisational objectives are achieved. After finding what has gone wrong, where and why,
management can initiate remedial action.

CHAPTER -9
FINANCIAL MANAGEMENT

I Choose and write the correct answer:

1. Business Finance is needed to

a. Establish a business b. Run a business
c. Expand a business d. All of the above
2. Primary aim of Financial Management is to
a. Maximise shareholder’s wealth b. Wealth maximisation concept
c. Maximisation of the market value of equity shares d. All of the above
3. Current Assets are those Assets which get converted into Cash
a. within 6 month b. within 1 year
c. between 1 & 3 years d. between 3 & 5 years.
4. Name the financial decision which relates to disposal of profits.
a. Investment decision b. Financing decision
c. Dividend decision d. Capital budgeting decision
5. A decision to acquire a new & modern plant to upgrade an old one is a:
a. Financing decision b. Working Capital decision
c. Investment decision d. None of the above

II Fill in the blanks by choosing appropriate answers from those given in the brackets.
[Blueprint, Capital Structure, Current assets, Fixed, Business Finance]
1. The money required for carrying out business activities is called Business Finance
2. Financial planning is essentially preparation of a financial Blueprint of an organization’s future operations.
3. Fixed capital refers to investment in Fixed assets.
4. Investment in Current assets facilitates smooth day-to-day operations of the business.
5. Capital Structure refers to the mix between owners and borrowed funds.
III Match the following:
A B
a. Financial Management i. Wealth Maximisation
b. Capital Budgeting ii. Long term Investment decision
c. Current Assets-Current Liabilities iii. Net working capital
d. Cash & Cash Equivalents iv. Current Assets
e. Return on Investment v. Trading on Equity
IV Answer the following questions in one word or one sentence each:
1. What is Business Finance?
Money required for carrying out the business activities is called as business finance.
2. State the primary objective of Financial Management.
The primary aim of financial management is to maximise shareholders’ wealth.
3. What is fixed capital?
Fixed capital refers to investment in long term assets or fixed assets such as investment in plant and machinery,
investment in buildings etc.
4. Give an example of a fixed asset.
Land and Buildings, Furniture, Machinery
5. What is working capital?
Working capital refers to the funds invested to meet the day-to-day activities of an organization.
6. Give an example for current assets.
Cash in hand, stock, debtors, bills receivables Etc.
7. Give the meaning of Current assets.
Current Assets are those Assets which get converted into Cash with in one year.
8. Give the meaning of Current Liabilities.
Current liabilities are those payment obligations which are due for payment within one year.
9. How do you calculate net working capital?
Net working capital = Current assets – Current Liabilities.
10. Write the meaning of financial risk.
Financial risk refers to a position when a company is unable to meet its fixed financial charges namely interest
payment, preference dividend and repayment obligations.
11. What is floatation cost?
It is the cost incurred for floating (issue) securities such as brokerage, underwriting commission etc.
12. A Company wants to establish a new unit in which a machinery worth Rs.5 Lakhs is involved.
Identify the type of decision involved in Financial Management.
Capital budgeting decision OR Long-term investment decision,
13. A decision is taken to distribute certain parts of the profit to shareholders after paying tax. What is
this decision called?
Ans: Dividend decision

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.
1. What do you mean by Financial Management?
Financial management means procurement of required funds at minimum cost and utilisation of such funds in
an effective manner.
OR
Financial management refers to efficient acquisition of finance, efficient utilisation of finance and efficient
distribution and disposal of surplus for smooth working of company.
2. What is meant by Capital Structure?
Capital structure refers to the mix between owner’s funds and borrowed funds.
Capital Structure = Debt/ Equity
3. State the two objectives of Financial Planning.
a. To ensure availability of funds, whenever these are required.
b. To see that the firm does not raise resources unnecessarily
4. Give the meaning of Investment decision with an example.
The investment decision is a financial decision which relates to how the firm’s funds are invested in different
assets. For example: a decision to make investment of Rs. 5 crores to purchase a new machine.
5. Give the meaning of Financing decision with an example.
This decision is about the quantum of finance to be raised from various long-term sources. They are
shareholders’ fund and borrowed funds such as shares, debentures, loans etc.
OR
A company can raise finance from various sources, such as by issue of shares, debentures or by taking loan and
advances. Deciding how much to rise from which sources concern of financing decision
6. Give the meaning of Dividend decision.
The decision involved here is how much of the profit earned by company (after paying tax) is to be
distributed to the shareholders and how much of it should be retained in the business.
7. Give the meaning of Financial Planning
The preparation of a financial blueprint of an organization’s future operations is called as financial planning.
8. What is Financial leverage?
The proportion of debt in the overall capital is also called financial leverage.
Financial leverage is computed as D÷E or D÷D+E. Where D is Debt and E is the Equity.
9. Give the meaning of Trading on Equity.
It refers to the increase in profit earned by the equity shareholders due to the presence of fixed financial charges
like interest.
10. A Businessman who wants to start a manufacturing concern, approaches you to suggest him whether
the following manufacturing concern would require large or small working capital.
a. Bread : Small working capital
b. Motor Car. Large working capital

11. State why the working capital needs for a service industry are different from that of a manufacturing
Industry.
Ans: Service industries require no inventory and manufacturing process, hence, require less working capital

VI Answer the following questions in 10 to 12 sentences each. Each question carries 4 marks.
1. Financial Management is based on three broad Financial Decisions. What are these and briefly explain
them.
1. Investment decision :
The investment decision is a financial decision which relates to how the firm’s funds are invested in different
assets. For example: a decision to make investment of Rs. 5 crores to purchase a new machine.
2.Financing decision
This decision is about the quantum of finance to be raised from various long-term sources. They are
shareholders’ fund and borrowed funds such as shares, debentures, loans etc.
3. Dividend decision.
The decision involved here is how much of the profit earned by company (after paying tax) is to be
distributed to the shareholders and how much of it should be retained in the business.

2. What do you mean by Current Assets? Give four examples of such assets.

Current Assets are those Assets which get converted into Cash within one year. Example: Cash in hand, stock,
debtors, bills receivables. Etc.

3. What is capital Budgeting decision? Explain briefly the factors affecting capital budgeting decisions.
Long term investment decision is called capital budgeting decision. OR It is a decision to invest in fixed assets.
for example: a decision to take investment in new machine, decision to open a new branch etc.
Factors affecting capital budgeting decision
1. Cash flows of the project:
The inflow and outflow of cash in the business should be considered before making capital budgeting decisions.
Some projects will take a long period of time to start inflow of cash.
2. The rate of return
usually, the project which gives highest rate of return should be selected. If two projects having 10% return and
15% return with almost equal risk, normally, the second one may be selected.
3. The investment criteria involved
Investment decisions must be based on certain capital budgeting techniques or calculations regarding the
amount of investment, rate of return, interest rate, cash flow etc.
4. Explain any four factors affecting financing decisions.
1.Cost:
The cost of raising finance from various sources is different and finance manager always prefer the source with
minimum cost or cheapest.
2.Risk:
Risk associated with each of the sources is to be evaluated and the source with the least (less) risk should be
preferred or selected.
3.Floatation Cost:
The floatation or fund-raising costs are to be considered. The source with lower floatation cost is to be
preferred.
4. Fixed operating cost:
If a business has high fixed operating costs such as building rent, insurance premium and salaries, it must
reduce its debt financing. If fixed operating cost is less, more of debt financing may be preferred.

5. Explain any four factors affecting Dividend decision

Factors affecting dividend decision:
1.Amount of earnings:
It is the main determining factor of dividend policy, because dividend can be paid out of current and past
earnings.
2.Stability of earnings:
A company having stable earnings is in a position to declare higher dividend, otherwise strict dividend policy
followed.
3. Stability of Dividends:
Dividend per share is not altered if the change in earnings is small or seen to be temporary in nature.
4.Taxation Policy:
If tax on dividend is higher, it is better to pay less by way of dividends. As compared to this, higher dividends
may be declared if tax rates are relatively lower.

6. Explain any four factors affecting the choice of capital structure.

1. Cost of debt:
If the firm is able to borrow at a lower rate, it may prefer more debt than equity in capital structure.
2.Tax rate:
Income tax liability can be reduced by employing borrowed funds in capital structure, as the interest on debt is
a deductible expense.
3. Cost of EquityWhen a company increases debt in their capital structure, the financial risk faced by the
equity shareholders may increase, so that the company cannot use debt beyond a point.
4. Floatation cost:
It is the cost incurred for floating (issue) securities such as brokerage, underwriting commission etc. It is
generally less in case of debts.

7. Explain any four factors affecting Fixed capital requirements of an organisation.

1.Nature of business:
The nature and character of business determine how much fixed capital is required. E.g. A trading concern
needs lower investments in fixed assets compared with a manufacturing organization.
2.Scale of operations:
A large sized business will generally require huge investment in fixed assets as compared to a small sized
business.
3.Technology upgradation:
The Organizations using assets which become obsolete faster require more fixed capital to purchase new
assets.
4. Growth Prospects:
Companies having higher growth prospects require more fixed capital investments, in order to expand their
production capacity.

8. Explain any four factors affecting working capital requirements of an organisation.

(OR)
What do you call the capital needed for day-to-day operations? Explain any 3 factors affecting such
capital needs.
1.Nature of business:
The nature of business influences the amount of working capital required. For instance a trading business and
service industries require less working capital. While manufacturing business requires more working capital
since raw materials needs to be converted into finished goods.
2.Scale of operation:
A business with large scale operations needs large amount of working capital to hold more inventory or stock.
On the other hand, a business concern with small scale operations needs less working capital
3.Business cycle:
In case of a boom, demand for goods increases, requiring large amount of working capital. In case of recession
and depression, demand for goods declines, requiring lesser amount working capital.
4.Production cycle:
Working capital requirement is higher in concerns with longer production cycle and lower in concerns with
shorter production cycle.

9. A Capital budgeting decision is capable of changing the Financial Fortune of a business. Do you agree?
Why or why not?
Yes, I agree that a capital budgeting decision is capable of changing the financial fortune of a business, and the
reason is capital budgeting decision relates to long term investment decisions that affect the profitability of the
company on a longer period it involves huge investment in fixed assets of company.

10. Read the following text and answer the following questions on the basis of the same:
Bimal Ltd. Dealing in readymade garments is planning to expand its business operations in order to cater to the
international market. For this purpose, the company needs an additional Rs.50 Lakhs for replacing machines
with modern machinery of higher production capacity. It involves committing the finances on a long-term basis.
These decisions are very crucial for any business since they affect its earning capacity in the long run. The
company can either raise the required funds by issuing debentures with an estimated cost of 10% or can issue
Equity shares. The Financial Manager of the company would normally opt for a source which is the cheapest.

1. What is the other name of long-term decision?

a. Capital budgeting b. Fixed Capital
c. Financial Management d. Working Capital
2. A decision for replacing machines with modern machinery of higher production capacity is a
a. Financing decision b. Working Capital decision
c. Investment decision d. None of the above.
3. A decision for raising fund of Rs.50 Lakhs either from 10% Debentures or Equity shares is a-
a. Financing decision b. Dividend decision
c. Investment decision d. None of the above.
4. The financing decisions are affected by various factors. Which one of the following factor is discussed in the
above case? Choose the correct option.
a. Cash flow position of the company b. Cost
c. Amount of Earnings d. Taxation Policy

CHAPTER -10
MARKETING
I Choose and write the correct answer:
1. ‘Focus on satisfaction of customer’s needs is the key to the success of any organisation in the market’.
The underlying marketing philosophy is
a. Production concept b. Selling concept
c. Marketing concept d. Product concept
2. Marketing mix is the set of _______ tools.
a. Selling tools b. Production tools
c. Publicity tools d. Marketing tool
3. Which of the following is a durable product?
a. Toothpaste b. Chocolate
c. Television d. Stationery item
4. Amazon is an example for
a. Brand Name b. Brand mark
c. Trademark d. Label
5. Which of the following factors affects the price determination?
a. Product cost b. Demand
c. Government regulations d. All of these
6.Which of the following is not a component of Physical Distribution?
a. Transportation b. Warehousing
c. Inventory control d. Packaging
7. Providing information to the customers about the product, its features and quality etc., are part of
a. Production b. Promotion
c. Pricing d. None of the above
8. Which of the following is not a part of the promotion mix?
a. Sales promotion b. Personal selling
c. Advertising d. Physical distribution
9. Discount, contests, free samples and lucky draw etc., are the examples of
a. Personal selling b. Sales promotion
c. Channels of distribution d. Advertising

II Fill in the blanks by choosing appropriate answers from those given in the brackets.

(Trademark, Primary package, Sales Promotion, Personal selling, Selling, Packaging, Generic name,
Unpaid, Market, Physical Distribution.)
1. Market refers to set of actual and potential buyers of a product or service.
2. Selling activities start after the product has been developed.
3. Generic name refers to the name of the whole class of the product.
4. A brand or part of a brand that is given legal protection is called Trademark
5. Packaging refers to the act of designing and producing the container or wrapper of a product.
6. Primary package refers to the product’s immediate container.
7. The physical handling and movement of goods from place of production to the place of distribution is called
as Physical Distribution.
8. Personal selling provides direct and immediate feedback of consumers.
9. Sales Promotion refers to short-term incentives, which are designed to encourage the buyers to make
immediate purchase of a product/service.
10. Publicity is a unpaid form of communication.

III Match the following:

A B
a. Marketing Philosophy i. The Product concept
b. Shopping product ii. Jewellery
c. Services iii. Intangible
d. Brand iv. Identification of a product
e. Personal selling v. Promotion mix
f. Sales Promotion vi. Discount
IV Answer the following questions in one word or one sentence each:

1. State anyone Marketing Philosophy.

Product concept
2. State any one feature of Marketing.
Needs and Wants: marketing process is on satisfaction of the needs and wants of individuals and organizations.
3. Give an example of the marketing of services.
Insurance, Health Care services etc.
4. Give the meaning of Product.
Product means goods or services or 'anything of value' which is offered to the market for sale.
5. Name any one level of packaging.
Primary level of packaging
6. What is labelling?
Labelling refers to designing and developing the label to be put on the package.
7. State any one function of labelling.
Grading of Products:
8. Give the meaning of Price.
Price is the amount of money paid by a buyer in consideration of the purchase of a product or service.
 9. State any one feature of personal selling.
Ans: Personal form
10. What is Publicity?
Publicity is a non-paid form of communication. It generally takes place when favourable news is presented in
the mass media about a product or service.

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.

1. What is Marketing?
Marketing is a process whereby people exchange goods and services for money or for something of value to
them.
2. Define Marketing.
Phillip Kotler has defined marketing as, “a social process by which individual groups obtain what they need and
want through creating offerings and freely exchanging products and services of value with others”.
3. Define marketing Management.
Philip Kotler has defined Marketing management as the art and science of choosing target markets and getting,
keeping and growing customers through creating, delivering and communicating superior customer values of
management.
4. What is Standardization?
Standardisation refers to determining of standard regarding size, quality, design, weight, colour, raw material to
be used etc in respect of a particular product. This ensures uniformity and consistency in the output.
5. Give the meaning of Grading of products.
Grading is the process of classification of products into different groups, on the basis of some of its important
characteristics such as quality, size, etc. E.g. food grains, cotton, tobacco, apples, mangoes etc.
6. What are Consumer goods?
Products, which are purchased by the ultimate consumers or users for satisfying their personal needs and
desires are referred to as consumer products. For example, soap, edible oil, eatables, textiles, toothpaste, fans,
etc.
7. Give two examples for Convenience goods.
Examples of convenience goods are, ice creams, medicines, newspaper, stationery items toothpaste etc.
8. Give two examples for Industrial goods.
The examples Industrial products are raw materials, engines, lubricants, machines, tools, etc.
9. How do you describe shopping goods?
Shopping products are those consumer goods where buyers devote considerable time, to compare the quality,
price, style, suitability, etc., at several stores, before making final purchase.
Examples: clothes, shoes, jewellery, furniture, radio, television, etc.
10. Mention any two functions of packaging.
(i) Product Identification (ii) Product protection.

11. Mention any two objectives of pricing.

1) Obtaining Market Share Leadership 2) Surviving in a Competitive Market
12. State any two features of advertising.
(i) Paid Form: (ii) Impersonality:
13. What is personal selling?
Personal selling involves oral presentation of message in the form of conversation with one or more prospective
customers for the purpose. It is a personal form of communication.
14. State any two-marketing objective of public relations.
a. Building awareness b. Building credibility.

VI Answer the following questions in 10 to 12 sentences each. Each question carries 4 marks.

1. Explain the elements of Marketing Mix.

(1)Product Mix:
- Product means goods or service or anything of value, which is offered to the market for exchange.
- In marketing terms, the product refers to anything that satisfies the needs of the consumers.
- Product mix is the combination of product features, quality, packaging, labeling and branding.
 2. Price Mix:
Price is the amount of money that the customers have to pay to obtain the product. Marketers have to analyse
the factors determining the price such as, cost of the product, profit expected, elasticity of demand, competitors
price etc. and fix a price for the firm’s products.
(3) Place:
Place or physical distribution include activities that make firm's products available to the target customers.
Important decision areas in this respect include selection of dealers (e.g., wholesaler, retailers etc) to reach the
customers and providing support to the intermediaries.
(4.)Promotion Mix:
- ‘Promotion’ of goods and services involves informing the customers about the firm’s product, features, quality,
and persuading them to purchase the same.
- Promotion Mix includes four ingredients: Personal selling, Publicity, Advertising, Sales promotion

2. State any four considerations to be kept in mind while choosing a brand name.
Characteristics of Good Brand Name:
(1) The brand name should be short, easy to pronounce, spell, recognise and remember e.g., Ponds, VIP, Rin,
Vim, etc.
(2) A brand should suggest the product’s benefits and qualities. It should be appropriate to the product’s
function.
(3) A brand name should be distinctive.
(4) It should be capable of being registered and protected legally.

3. How does Packaging acquire significance in marketing of goods?

(OR)
Packaging has acquired great significance in the marketing of goods. In the light of this statement, list
any four functions of packaging.

(i) Rising Standards of Health and Sanitation:

Because of the increasing standards of living in the country, more and more people have started purchasing
packed goods as the chances of adulteration in such goods are minimised.
(ii) Self Service Outlets:
Packaging plays the role of personal selling in respect of promotion in self service retail outlets, particularly in
major cities and towns.
(iii) Innovational Opportunity:
Some of the recent developments in the area of packaging have completely changed the marketing scene in the
country. For example, milk can now be stored for 4-5 days without refrigeration in the recently developed
packing materials.
(iv) Product Differentiation:
Packaging is one of the very important means of creating product differentiation. The colour, size, material,
etc., of package makes real difference in the perception of customers about the quality of the product.

4. Explain briefly any four functions performed by Label.

1.Identification of the Product or Brand
The other important function performed by labels is to help in identifying the product or brand. Other common
identification information provided by the labels include name and address of the manufacturer, net weight
when packed, manufacturing date, maximum retail price and Batch number.
2. Grading of Products
Another important function performed by labels is to help grading the products into different categories.
Sometimes marketers assign different grades to indicate different features or quality of the product.
3. Helps in Promotion of Products:
An important function of label is to aid in promotion of the products. A carefully designed label can attract
attention and give reason to purchase.
4. Providing Information Required by Law
Another important function of labelling is to provide information required by law. For example, the statutory
warning on the package of Cigarette or Pan Masala, ‘Smoking is Injurious to Health’
5. Explain in brief any four objections against advertising
(OR)
‘Though advertising is one of the most frequently used medium of Promotion of goods and services, yet it
attracts a lot of objections’. Explain any four such objections.

Objections to advertising
1. Adds to Cost:
The opponents of advertising argue that advertising unnecessarily adds to the cost of product, which is
ultimately passed on to the buyers in the form of high prices.
2. Confuses the Buyers: Another criticism against advertisement is that so many products are being advertised
which makes similar claims that the buyer gets confused as to which one is true and which one should be relied
upon.
3. Encourages Sale of Inferior Products:
Advertising does not distinguish between superior and inferior products and persuade people to purchase even
the inferior products. In fact, superiority and inferiority depends on the quality, which is a relative concept.
4. Some Advertisements are in Bad Taste:
Another criticism against advertising is that some advertisements are in bad taste. These show something which
in not approved by some people.

6. 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 sales.
(1) Discount:
Offering products at less than list price. Example, a shoe company’s offer of ‘Discount Up to 50%’ or a shirt
marketer’s offer of ‘50+40% Discount’.
(2) Refunds:
Refunding a part of price paid by customer on some proof of purchase, say on return of empty foils or wrapper.
This is commonly used by food product companies, to boost their sales.
(3) Instant Draws and Assigned Gift:
For example, ‘Scratch a Card’ or ‘Burst a Cracker’ and instantly win a Refrigerator, Car, T-shirt, Computer,
with the purchase of a TV.
(4) Lucky Draw:
For example, the offer of a bathing soap to win a gold coin on lucky draw coupon for free petrol on purchase of
certain quantity of petrol from given petrol pump or lucky draw coupon on purchase of easy undergarment and
win a car offer.

7. List out promotional message given on the package of any three consumer products of your choice and
comment how these promotional messages helps in the sale of these products.
1. Boost : Boost is the secret of my energy Buy 1 kg get free tennis Ball.
2. Dove India: "Real Beauty, Real Care" get 10% extra.
3. Horlicks: Stronger, taller and sharper. Get 25 rupees Cash back

Advantages of sales promotions:

1. Attract attention of people
2. Effective tool while launching new products
3. A tool designed to supplement the personal selling and advertising efforts used by a firm.

8. Identify the type of sales promotion activities involved in the following statements.
a. ‘Scratch a card and win exciting prizes’. Ans: Instant Draws and Assigned Gift:
b. ‘Buy 2 Get 1 Free. Ans: Quantity Gift:
c. ‘A refund of Rs 5 and return of empty wrapper/foil. Ans: Refund
d. ‘Buy 2 kgs of detergent powder and get one bucket free. Ans: Quantity Gift:

9. Explain any four functions performed by public relations department of an organisation.

(1) Press relations:
The public relations department is in contact with the media to present true facts and a correct picture about the
company. Otherwise, news can get distorted if taken from other sources.
(2) Product publicity:
New products require special effort to publicise them, and the company has to sponsor such programmes. The
public relations department manages the sponsoring of such events.
(3) Corporate Communication:
The image of the organisation needs to be promoted through communicating with the public and the employees
within the organisation. This is usually done with the help of newsletter, annual reports, brochures, articles and
audio-visual materials.
(4) Counselling:
The public relations department advises the management on general issues which affect the public and the
position the company would like to the take on a particular issue.

VII. Answer the following questions in 20 to 25 sentences each. Each question carries 8 marks.

1. Explain any eight functions of Marketing.

1. Standardisation and grading. Standardization is determining the quality and setting of standards for
manufactured products. Grading is the process of classification of products into different groups, based do their
important characteristics such as quality, size, etc.
2.Packaging and labelling: Packaging refers to designing and developing the package for the products.
Labelling refers to designing and developing the label to be put on the package.
3.Branding: Giving a brand name to products such as 'Reynolds' pen, "Samsung" Cell phone, 'Colgate'
toothpaste, "Godrej Almira is another important function of marketing.
4. Customer support services: A very important function of the marketing management relates to developing
customer support services such as after sales services, handling customer complaints, credit facilities,
maintenance services, technical services etc.
5.Pricing of product; Pricing is the process of determining and fixing the price of a product or service.
Pricing decision to be taken after considering certain factors like product cost, expected profit, competitors
price and so on.
6. Promotion; Promotion means informing the consumers about the products of the company and encouraging
them to buy these products. The four important methods of promotion include
advertising, personal selling, sales promotion, and public relations.
7. Physical distribution: Under this function of marketing the decision about carrying things from the place of
production to the place of consumption is taken into account.
8. Transportation: It involves the physical movement of goods from one place to the other. For example: Coffee
produced in Kodagu has to be transported not only within the district but also to other far-off places, where it is
consumed.
9. Storage and warehousing: It refers to preserving the goods between the time of production and the time of
sale. Storing of goods is facilitated by ware housing.

2. “An important task in the marketing of goods relates to designing the label as it provides useful and
detailed information about the product’. In the light of the above statement, draw a label for a packet of
juice and highlight the important information to be provided on it.

Brand Name: Sunshine Juice

Product Name: Orange Delight
Net Weight: 1Litre.

Ingredients:
- Orange Juice (100%)
- No added preservatives
- No artificial flavors
Nutritional Information (per serving):
- Energy: 50 kcal
- Carbohydrates: 12g
- Sugars: 10g
- Protein: 1g
- Fat: 0g
Storage Instructions:
- Store in a cool, dry place
- Refrigerate after opening
Manufacturing Details:
- Manufactured by: Sunshine Beverages Pvt. Ltd.
- Date of Manufacture: 12/02/2024
- Best Before: 12/02/2025
Maximum Retail Price:
Rs. 90 (inclusive of all taxes)

3. What is Pricing? Explain in brief the factors affecting Price determination.

(OR)
As a publisher, you have published a new book on marketing management. How will you determine the
price of this book? Explain the factors affecting pricing decisions.

Meaning of Pricing: Pricing is the process of determining and fixing the price of a product or service. Pricing
decision to be taken after considering certain factors like product cost, expected profit, competitors price and so
on.

Factors affecting price determination.

(1) Pricing Objectives: The most key factor which helps in deciding the price is the objective of the firm.
Apart from profit maximization, the pricing objectives of a firm may include”.
a. Obtaining Market Share Leadership: If a firm wants to capture a big share of the market then it has to
keep its price low so that more people can be approached.
b. Surviving in a Competitive Market: To survive in a competitive market firms, have to reduce their price by
offering discounts.
c. Attaining Product Quality Leadership: In this case, generally, high prices are charged to cover the cost of
research and development.
(2) Product Cost: Cost and price of a product are closely related. The price must cover all
production cost and fair return of product. No business can survive for long without covering its
costs. Cost is of two types. Viz Fixed and variable. The impact of these two costs should be
considered while taking pricing decisions.
(3) The Utility and demand: When determining a product's price, marketers consider the demand and utility it
offers. Inelastic demand allows for higher prices, while elastic demand requires lower prices. The utility of a
product also affects pricing, with high utility products commanding higher prices and low utility products
requiring lower prices.
(4) Extent of Competition in the Market: If there is no competition in the market, a firm can fix the price for
its product by its own, and they are the price makers. If the competition is very high in the market, the price
should be fixed by considering the price of competitors, and they became the price takers.
(5) Government and Legal Regulations. Prices of certain products are regulated by the
government.eg: Edible oils, sugar, cement etc. In such cases, prices should be fixed accordingly.
Government can declare a product as essential product and regulate its price.
(6) Marketing methods used: Pricing is also affected by other elements of marketing such as distribution
system, sales promotion techniques, quality and amount of advertising, quality of salesmen, the distributor’s
attitude towards the price, customer services provide etc.

4. Explain in brief the merits and any four objections of Advertising.

Merits of Advertising

(i) Mass Reach: Advertising is a medium through which a large number of people can be reached over a vast
geographical area. For example, an advertisement message placed in a national daily reaches lakh of its
subscribers.
(ii) Enhancing Customer Satisfaction and Confidence: Advertising creates confidence amongst prospective
buyers as they feel more comfortable and assured about the product quality and hence feel more satisfied.
(iii) Expressiveness: With the developments in art, computer designs, and graphics, advertising has developed
into one of the most forceful medium of communication. With the special effects that can be created, even
simple products and messages can look very attractive.
(iv) Economy: Advertising is a very economical mode of communication if large number of people are to be
reached. Because of its wide reach, the overall cost of advertising gets spread over numerous communication
links established. As a result, the per-unit cost of reach comes low.

Objections of Advertising.
1. Adds to Cost:
The opponents of advertising argue that advertising unnecessarily adds to the cost of product, which is
ultimately passed on to the buyers in the form of high prices.
2. Confuses the Buyers:
Another criticism against advertisement is that so many products are being advertised which makes
similar claims that the buyer gets confused as to which one is true and which one should be relied upon.
3. Encourages Sale of Inferior Products:
Advertising does not distinguish between superior and inferior products and persuade people to purchase even
the inferior products. In fact superiority and inferiority depends on the quality, which is a relative concept.
4. Some Advertisements are in Bad Taste:
Another criticism against advertising is that some advertisements are in bad taste. These show something
which in not approved by some people.

5. List out any eight differences between Advertising and Personal Selling.
Advertising Personal selling
1. Advertising is impersonal form of communication. 1. Personal selling is a personal form of
communication.
2.Advertising involves transmission of standardised 2.In personal selling, the 'sales talk' is
messages, i.e., same message is sent to all the adjusted keeping in view of customer's
customers in a market segment. background and needs.
3.Advertising is inflexible as the message can't be 3.Personal selling is highly flexible as the
adjusted to the needs of the buyer. message can be adjusted.
4.It reaches masses, i.e., a large number of people can 4. Only a limited number of people can be
be approached; contacted because of time and cost
considerations.
5.In advertising the cost per person reached is very 5. The cost per person is quite high in the case
low. of personal selling.
6. Advertising can cover the market in a short time. 6. Personal selling efforts take a lot of time to
cover the entire market.
7.Advertising makes use of mass media television, 7.Personal selling makes use of sales staff,
radio, newspaper, and magazines. which has limited reach.
8.Advertising lacks direct feedback. Marketing 8.Personal selling provides direct and
research efforts are needed to judge customers' immediate feed back. Salespersons come to
reactions to advertising. know about the customers reactions
immediately.
9.Advertising is more useful in creating and building 9. Personal selling plays important role at the
interest of the consumers in the firm's products. awareness stage of decision making.
 CHAPTER -11
CONSUMER PROTECTION

I Choose and write the correct answer:

1. Consumer protection Act was formed in the year _____

a. 2019 b. 1984
c. 1987 d. 2007
2. Consumer protection is important for business because of
a. Long term interest b. Social responsibility
c. Uses Society’s resources d. All of the above
3. Consumers are exploited when
a. The shopkeeper under weights b. The shopkeeper overcharges
c. The shopkeeper sells goods of inferior quality d. All of the above
4. Which of the following right is not provided by the Consumer Protection Act to the consumers?
a. Right to safety b. Right to choose
c. Right to scold d. Right to seek redressal
5. Those complaints that can be filed in the State Commission where the value of goods or services and
the amount of compensation claimed is :
a. More than Rs.20 Lakhs but less than Rs.1 Crore. b. More than Rs.1 Crore but less than Rs.10 Crores.
c. More than Rs.10 Crores. d. More than Rs.10 Lakhs but less than Rs.20 Lakhs.
6. Which of the following functions are not carried out by the consumer organisation?
a. Accelerating consumer awareness
b. Filing suits, complaints on behalf of consumers
c. Solving personal and marital problems of consumers
d. Collecting information of different products and testing them.
7. Where can the aggrieved party appeal further, in case, he is not satisfied with the order of District
Commission?
a. State Commission b. National Commission
c. Supreme Court of India d. All of the above.

II Fill in the blanks by choosing appropriate answers from those given in the brackets.
[Supreme Court of India, Interest, Businesses, State Government]

1. The concept of consumer protection is to safeguard the of Interest the consumers.

2. State commission is established by the respective State Government
3. An order passed by the National Commission in a matter of its original Jurisdiction is appealable before the
Supreme Court of India
4. The Consumer Protection Act,2019 is applicable to all types of Businesses in India

III Match the following:

A B
a. Beware of various goods i. Consumer responsibility
b. District Commission ii. Redressal Agencies
c. Providing legal assistance to consumer iii. Role of consumer Organization.
d. Consumer iv. Who uses/consumes goods
e. Right to choose v. Consumer Right

IV Answer the following questions in one word or one sentence each:

1. What does the approach of “caveat emptor” mean?
Ans: caveat emptor which means Let the buyer beware,
2. State any one unfair trade practice of manufacturers and service providers by which consumers are
exploited.
Ans: Black marketing
3. State any one regulation which provides legal protection to the consumers.
Ans: Consumer protection act 2019
4. Name any one redressal agency set up under consumer protection Act to redress consumer grievances.
Ans: District Consumer Disputes Redressal Commission or District Commission.
5. Who establishes the National Commission?
Ans: Central Government.
6. Name the apex institution to seek redressal under consumer protection Act, 2019
Ans: The National Consumer Disputes Redressal Commission (NCDRC).
7. What is the monetary limit of claim in National Consumer Disputes Redressal Commission?
Ans: Exceeds ten crores of rupees.
8. Santhosh bought a laptop for Rs.80,000 from a laptop seller on his verbal commitment that the laptop
will be replaced in case of any defect. Within a span of six months, the system started creating technical
issues in spite of proper maintenance. The seller denied taking any action on the complaint made by
Santhosh. Name the redressal agency under the Consumer Act where Santhosh can file his complaint.

Ans: No Santhosh cannot file a complaint against the seller in the consumer court as he does not have cash-
memo. He had purchased mobile phone on the verbal commitment only.

V Answer the following questions in 2 or 3 sentences each. Each question carries 2 marks.
1. Give two examples of Unfair Trade Practices.
Black marketing, Hoarding, Adulteration, Supply of defective and unsafe products, False and misleading
advertising.
2. What is Consumer Protection?
Consumer Protection means protecting the consumers against anti-consumer trade practices by the producers or
sellers.
3. State any two causes of consumer exploitation.
1. Lack of Awareness 2. Unfair Trade Practices
4. State any two reasons to emphasize the importance of consumer protection from consumers point of
view.
1) Consumer Ignorance 2) Unorganised Consumers:

5. Nikhitha who works in a school, purchased two shirts for Rs.300 each for her son. When she went back
home, she realised that the shirts was small in size for her son. She decided to ask for exchange in the size of
the shirt or for return of money. But the store owner refused to return the money or exchange the shirt. Nikhitha
was disheartened. Her friend advised her to go to a consumer organisation working for the protection of
consumer welfare. The organisation helped her by explaining to her the legal procedure, as well as educated her
about her rights as a consumer. They helped her in filling a complaint against the store owner and getting relief.
With the help of the organisation Nikhitha was able to get her money back from the store.
State any two rights of a consumer which Nikhitha was able to exercise with the help of the organisation.
Ans: a. Right to be heard
b. Right to seek redressal
c. Right to consumer education
VI Answer the following questions in 10 to 12 sentences each. Each question carries 4 marks.

1. Explain any four rights of consumers.

1. Right to Safety:
According to this right, the health and life of the consumer is to be protected against manufacturing and other
defects in the food products, medicine, electrical appliances, gas cylinders, pressure cookers and other similar
products and services.
2. Right to be Informed:
consumers have the right to know everything about a product before they buy it, including its ingredients, date
of manufacture, expiry date, price, quantity, directions for use, etc.
3. Right to Choose:
The consumer has the freedom to choose from a variety of products at competitive prices. This implies that the
marketers should offer a wide variety of products in terms of quality, brand, prices, size, etc. and allow the
consumer to make a choice from amongst these.
4. Right to Consumer Education:
According to this right, every consumer has the right to be educated about the consumer rights and the reliefs
available to him in case of a product or service not satisfied or any defect is found in the product or service.

2. State any four responsibilities of consumers while purchasing, using and consuming goods and
services.
1) Be aware about various goods and services available in the market so that an intelligent and wise choice can
be made.
2) Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods,
FPO mark on food products, Hallmark on jewellery etc.
3) Learn about the risks associated with products and services, follow manufacturer ‘s instructions and use the
products safely.
4) Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.

3. Explain any four ways in which the objective of consumers’ protection can be achieved.
1. Self-Regulation by Business:
Enlightened business firms realise that it is in their long-term interest to serve the customers well. Socially
responsible firms follow ethical standards and practices in dealing with their customers. Many firms have set up
their customer service and grievance cells to redress the problems and grievances of their consumers.
2. Business Associations:
The associations of trade, commerce and business-like Federation of Indian Chambers of Commerce of India
(FICCI) and Confederation of Indian Industries (CII) have laid down their code of conduct which lay down for
their members the guidelines in their dealings with the customers.
3. Consumer Awareness:
A consumer, who is well informed about his rights and the reliefs available to him, would be in a position to
raise his voice against any unfair trade practices or unscrupulous exploitation. In addition to this, an
understanding of his responsibilities would also enable a consumer to safeguard his interests.
4. Consumer Organisations:
Consumer organisations play an important role in educating consumers about their rights and providing
protection to them. These organisations can force business firms to avoid malpractices and exploitation of
consumers.

4. State any four directions which can be issued by the consumer court to the opposite party.
1) To remove the defect in goods or deficiency in service.
2) To replace the defective product with a new one, free from any defect.
3) To refund the price paid for the product, or the charges paid for the service.
4) To pay punitive damages in appropriate circumstances.

5. State any four functions of consumer organisations and NGOs for the protection and promotion of
consumer interests.
(1) Educating the general public about consumer rights by organising training programmes, seminars and
workshops.
(2) Publishing periodicals and other publications to impart knowledge about consumer problems, legal
reporting, reliefs available and other matters of interest.
(3) Providing legal assistance to consumers by way of providing aid, legal advice etc. in seeking legal remedy.
(4) Filing complaints in appropriate consumer courts on behalf of the consumers.

6. Bindu purchased a book from Sudheendra Book House. While reading the book she found that some pages
were missing. She approached the seller of the book and complained about the missing pages. The seller
promised that if the publisher was ready to change the book, he would change the same. After a week, he
informed her that the publisher refused to change the book. Can Bindu file a complaint against the seller? If so,
where can she file a complaint? State the right which Bindu can execute while filling a complaint. Give reason
in support of your answer.

Ans: Yes, Bindu can file a complaint against the seller.

Bindu can file a complaint with the District Consumer Disputes Redressal Forum (DCDRF).
The right that Bindu can execute while filing a complaint is the "Right to be Protected against Unfair Trade
Practices". Reason:

The seller promised to replace the book if the publisher agreed, but later informed Bindu that the publisher
refused to replace it. This is a case of unfair trade practice, as the seller made a false promise to Bindu.

7. Harika purchased one litre of Pure Desi Ghee from a shopkeeper. After using it, she had a doubt that it is
adulterated. She sent it for a laboratory test which confirmed that the Ghee was adulterated. State any four
reliefs available to Harsika, if she complains and the consumer court is satisfied about the genuineness of the
complaint.

Ans: Reliefs available to Harika are:

(i) To replace the adulterated ghee.
(ii) To refund the price paid for the product.
(iii) To pay a reasonable amount of compensation for any loss or injury/sickness suffered by her due to the
negligence of the manufacturer.
(iv) To pay punitive damages in appropriate circumstances.
(v)To withdraw the adulterated ghee from sale.
(vi)To cease manufacture of adulterated ghee.

8. Arohi buys a pocket of Biscuits from a Bakery without asking for the bill. The packet does not bear any
information other than the name of the Bakery. After reaching home she finds the Biscuits to be stale.
a) Identify the consumer right that has been violated.
b) State any three responsibilities that a consumer must keep in mind while purchasing any goods.

Ans: a) Right to Information

b. Three responsibilities that a consumer must keep in mind while purchasing any goods.
1. Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made.
2. Learn about the risks associated with products and services, follow manufacturer's instructions and use the
products safely.
3. Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates,
etc.