Marathon

Business Studies

DISHA MA’AM
Chapter wise weightage
Chapter Weightage
1. Nature and Significance of Management 6 Marks
2. Principles of Management 7 Marks
3. Business Environment 4 Marks
4. Planning 6 Marks
5. Organising 8 Marks
6. Staffing 7 Marks
7. Directing 8 Marks
8. Controlling 4 Marks
9. Financial Management 8 Marks
10. Financial Markets 7 Marks
11. Marketing Management 11 Marks
12. Consumer Protection 4 Marks
Chp 1. NATURE AND SIGNIFICANCE
OF MANAGEMENT
 Basis of Difference Effectiveness Efficiency
1. Meaning It refers to completing the task on If refer to completing the
time, no matter whatever the cost task with minimum cost,
optimum utilisation of
resources and in cost
effective manner

2. Objective To achieve end result To conduct cost benefit

analysis
3. Main Doing the right task Doing the task in right way
consideration
Q.1 Mita has a successful ice cream business at Bikaner, namely 'Smartflavours'.
Her ice creams are utterly delicious. She makes ice creams from fresh milk
and the same are available in a wide range of flavours and packs. She sets
viable business objectives and works with the same in mind in order to
ensure that the customers will come back for purchasing. Having the first
mover advantage, her business was doing well. To earn higher profits, she
started cutting down costs. This would sometimes lead to delay in delivery
and the ice cream was not reaching the market in time. Over a period of time,
the demand for her ice cream declined and because of it the competitors
entered the market. She lost some of her market share to competitors. At the
beginning of summer season, she got back to back orders for supply of 4,000
ice cream packs of different flavours for special occasions. To ensure that the
task was completed and orders delivered in time she hired additional
workers. She was, thus able to produce and deliver the ice cream packs but at
a high production cost. While completing activities and finishing the given
task for achieving goals, Mita realised that she was ignoring one of the
important aspects of management. Identify the aspects of management that
has been ignored by Mita. Also explain the same with the help of an example.
Q.1 Identify the aspects of management that has been ignored by Mita. Also
explain the same with the help of an example.
Features of Management
(i) Goal Oriented: Management focus on the end result.
(ii) Multidimensional Management is multi facet, focus on three main
activities-Management of work, People and Operations.
(iii) Pervasive: Use of management in business as well non-business
organisation, everywhere, universal.
(iv) Continuous Never ending, not one time task, ongoing process.
(v) Group Activity: All levels of management perform, involvement of all
employees to manage and achieve the goal.
Use of we not I to represent management.
(vi) Dynamic: Any change in organisation, change in goal, change in
technology, change in menu, etc.
(vii) Intangible: Situation showing systematic working, no chaos, i.e.,
presence of management can be felt not seen.
Q.2 Josh Enterprises decides to have a meeting of all the key employees of
different departments in the organisation. The main motive is to tell the
employees to keep the target of 20% increase in sales as the main
objective when they work throughout the year. The meeting is full of ideas
regarding the employees and processes involved. Various plans are made
to harness the potential of the employees and streamline the processes.
However with the passage of a few days the external business
environment checks the capability of the organisation to adapt to the
situations. The company successfully comes out at the end of the year
with flying colours. What are the various characteristics of management
you can find highlighted here? Also identify the lines in which these
characteristics have been highlighted.
Objectives of Management
Q.3 Mega Ltd. manufactured water-heaters. In the first year of its operations,
the revenue earned by the company was just sufficient to meet its costs.
To increase the revenue, the company analysed the reasons behind the
less revenues. After analysis, the company decided: to reduce the labour
costs by shifting the manufacturing unit to a backward area where labour
was available at a very low rate. to start manufacturing solar water-
heaters and reduce the production of electric water- heaters slowly.
This will not only help in covering the risks but also help in meeting other
objectives. Identify and explain the objectives of management discussed
above. State any two values which the company wanted to communicate
to society.
Nature of Management

Management as Science Management as Art

1. Systematic body of knowledge 1. Systematic body of

knowledge/Theoretical Knowledge
2. Principles are based on repeated
experiments 2. Personalised Application

3. Universal validity 3. Based on practice and creativity

Nature of Management
Management as Profession
1. Well defined body of knowledge

2. Restricted Entry

3. Presence of professional association

4. Existence of ethical codes

5. Service Motive
Q.4 Ramarjuna joins an IT firm as a system analyst after completing his
masters in Computer Science. As the nature of his work demands he has
to work in very close coordination with all the departmental heads in the
firm, very soon Ramarjuna realizes that each departmental head has own
individual style of working. They differ greatly in their day-to-day
approach to work. They tend to deal with a given situation, an issue or a
problem through a combination of their own experience, creativity,
imagination, initiative and innovation. In the context of the above case:
Identify and explain the nature of management highlighted in the above
case
Levels of Management
Level of Management Designations Functions
• Deciding overall organisational
goals.
• Making policies and strategies
• Coordinating the activities of
Chairman, Chief Excecutive
different departments from a level
Officer (CEO), Chief
above.
Top Level Operating Officer (COO),
• Welfare and survival of the
President and Vice
organisation.
President, etc.
• Top management is ultimately
responsible for all the actitivities
of the organisation.
Levels of Management
Level of Management Designations Functions
• Interpreting the policies
framed by the top
management.
• Ensuring optimum number of
Operations manager, Plant personnel in the department.
superintendent, • Assigning duties and
Middle Level
Departmental managers, responsibilities to the
etc. subordinates in the
department.
• Coordinating with other
departmental heads at the
same level.
Levels of Management
Level of Management Designations Functions
• Giving instructions to
the workforce.
• Giving feedback to the
workforce.
Foreman, Supervisors,
Supervisory Level • Providing on-the-job
Section Officers, etc.
training to the workers.
• Acting as a link between
workers and
management.
Q.5 Deepak’s father has retired as a purchase manager of a company. At what
level of management was he working? What function do you think he was
performing at that level of management?
Functions of Management
Planning

Organising

Staffing

Directing

Controlling
Coordination – The essence of Management
1. Coordination is needed to perform all the
functions of management:

2. Coordination is required at all the levels:

3. Coordination is the most important function of

an organisation.
Features of Coordination
Importance of Coordination
Q.6 Kartik joins a garment factory as a plant supervisor in Lucknow. He observes that
the output of some workers is very low as compared to the standards set for their
performance. On analyzing the reasons for the same, he finds out that a lot of time
of the workers is wasted in getting the requisite materials issued from the store.
Whereas on asking, the store keeper complains that there is no harmony in the
working of the production department as a whole. Everyday the workers approach
him at the last minute to procure different kinds of threads, laces, mirrors, buttons
etc. If it is not available in the store then he has to place an order with the purchase
officer. As a result, a lot of time of the workers is wasted. So, in order to integrate the
various production activities, henceforth, Kartik ensures,that the store keeper is
informed well three days in advance about the requisite material. Consequently, the
store keeper is able to keep the materials ready for the workers every morning in
accordance with their requirements.
In context of the above case: Identify and explain the quality of management that
Kartik has introduced in the working of the production department as a corrective
measure to control the output of the workers. State briefly any two points
highlighting the importance of quality of management identified in part (a).
Chp 2. PRINCIPLES OF MANAGEMENT
14 Principles of Fayol
1. Division of work 8. Centralisation and Decentralisation

2. Authority and Responsibility 9. Scalar Chain

3. Unity of Direction 10. Order

4. Unity of Command 11. Equity

5. Discipline 12. Stability of Tenure of Personnel

6. Subordination of Individual interest 13. Initiative

to General interest
14. Espirit De Corps
7. Remuneration of persons
Q.7 Telco Ltd. manufactures files and folders from old clothes to discourage the
use of plastic files and folders. For this, they employ people from nearby
villages where very less job opportunities are available. An employee, Harish,
designed a plan for cost reduction but it was not welcomed by the
production manager. Another employee gave some suggestions for
improvements in design, but it also was not appreciated by the production
manager.
State the principle of management that is violated in the above paragraph.
Identify any two values that the company wants to communicate to the
society
Q.8 Neeraj is selected for the post of software developer in an IT Company. On
the first day of his joining Mehul, his project manager tells Neeraj that during
the course of his work he will come across many such opportunities which
may tempt him to misuse his powers for individual or family’s benefit at the
cost of larger general interest of the company. In such situations, he should
rather exhibit exemplary behaviour as it will raise his stature in the eyes of
the company. Also, for interacting with anyone in the company on official
matters, he should adopt the formal chain of authority and communication.
In context of the above case
Identify and explain the various principles of management that Mehul is
advising Neeraj to follow while doing his job.
Scientific Principles of Management
Q.9 Pawan is working as a Production Manager in CFL Ltd. which manufactures
CFL bulbs. There is no class-conflict between the management and workers.
The working conditions are very good. The company is earning huge profits.
As a policy, the management shares the profits earned with the workers
because they believe in the prosperity of the employees.
State the principle of management described in the above paragraph
Techniques of Scientific Management
Functional foremanship
1. Instruction Card Clerk: He assigns work to all the employees.
2. Route Clerk: He decides how work will progress regarding total
productions. So that production is on time.
3. Time and Cost Clerk: He determines what will be the total cost and
how much time each job take.
4. Disciplinarian: He sees that there is discipline at work place.

1. Speed boss: He ensures that the work is moving at a suitable pace.

2. Gang Boss: He ensures sufficient availability of raw material, tools etc.
3. Repair Boss: He sees that whenever some repair is involved in any
work, the work is done properly.
4. Inspector: He sees that whether the quality of output is good or not.
Time Study Fatigue study
Method study Motion study
Differential piece wage system
Q.10
'Scientific Management means knowing exactly what you want men to do
and seeing that they do it in the best and the cheapest way/ Taylor developed
various techniques for application of Scientific Management principles and
was able to achieve a three-fold increase in productivity in Bethlehem Steel
Company, where he worked. One of the techniques helps to determine the
number of workers to be employed; frame suitable incentive schemes and
labour costs. Another technique recognises those workers who are able to
accomplish/exceed the fair day's work and is based on the premise that
efficiency is the result of the joint efforts of the managers and the workers.
Quoting the lines from the above paragraph, identify and explain the two
techniques of Scientific Management.
Q.11 In a factory the toolbox was kept under the table of every worker, whenever
worker needs tools he had to bend tape out tool from tool box and keep it
back after use. The newly appointed supervisor observed it and suggested to
keep a stool near every worker's chain where toolbox can he placed so that
workers do not waste their energy in bending again and again.
1. Which technique of scientific management is used by New Supervisor.
2. State the objective of the above mentioned techniques.
Chp 3. BUSINESS ENVIRONMENT
Importance of Business Environment
• First Mover Advantage- Maximum benefits or profit by grabbing
the opportunity at the earliest.
• Warning Signal- Come to know in advance for the coming
constraints or threats of Business due to scan of environment.
• Help in Tapping Resources- Collecting right type of resources as
per present requirement of business by foreseeing the
requirement due scan of Business Environment.
• Help to Adapt Changes- Bringing changes in your organisation as
per changes in environment. Being innovative and adopt latest
technology latest method of production, etc.
• Help in making Planning and Policy- Making plans and policies
Keeping in mind conditions prevailing in environment.
• Improvement in Performance- With timely changes and
innovation performance improves.
Q.12
Naman and Govind after finishing their graduation under vocational stream
decided to start their own travel agency which will book Rail Tickets and Air
Tickets on commission basis. They also thought of providing tickets within
ten minutes through the use of internet. They discussed the idea with their
Professor Mr. Mehta who liked the idea and suggested them to first analyse
the business environment which consists of investors’, competitors and other
forces like social, political etc. that may affect their business directly or
indirectly. He further told them about the technological improvements and
shifts in consumer preferences that were taking place and hence they should
be aware of the environmental trends and changes which may hinder their
business performance. He emphasised on making plans keeping in mind the
threat posed by the competitors, so that they can deal with the situation
effectively. This alignment of business operations with the business
environment will result in better performance.
Q.12 Identify and state the component of business environment highlighted in the
above Para. State any two features of business environment as discussed by
Professor Mehta with Naman and Govind.
Also state two points of importance of business environment as stated by
Professor Mehta in the above situation.
Q.13 India's craft heritage continues because if its customs and traditions. Crafts
are used not only in the country by craftsmen in Rajasthan, Gujarat and
Assam but are also exported to USA, Germany, UK and France. The volume of
exports and imports give India an advantage in balance of payments and the
much needed foreign exchange reserves. The Prime Minister desires that the
handicraft industry should be expanded by linking it with technology. Focus
should be on changing the manufacturing process, ensuring durability and
adapting innovations. Quoting the lines from the above para, explain four
dimensions of the business environment.
Chp 4. PLANNING
Internal limitations of Planning

1. Planning leads to rigidity

2. Planning may not work in dynamic environment

3. It reduces creativity

4. Planning involves huge cost.

5. Planning Does not give guarantee success

Q.14
Suhasini, a home science graduate from a reputed college, has recently done
a cookery course. She wished to start her own venture with a goal to provide
‘health food’ at reasonable prices. She discussed her idea with her teacher
(mentor) who encouraged her. After analysing various options for starting
her business venture, they short listed the option to sell ready made and
‘ready to make’ vegetable shakes and sattu milk shakes. Then, they weighed
the pros and cons of both the short listed options.

Name the function of management being discussed above and give any one of
its characteristics. Also briefly discuss any three limitations of the function
discussed in the case
PLANNING PROCESS
1. Setting-up of the objectives.

2. Developing premises.

3. Listing the various alternatives for achieving the objectives.

4. Evaluation of different alternatives.

5. Selecting an alternative.
6. Implementing the plan.

7. Follow-up
Q.15 “Mobile Ltd.” is a well-known automobile manufacturing company in India.
The company plans to increase the sale of its Sedan Cars by 20% in the next
quarter. In order to achieve this target, the marketing department of the
company considered the impact of government policy on the diesel vehicles
and they also anticipated the level of competitions they might have to face.
The team explored the various available options for increase in sale like
offering more discounts, providing zero per cent finance, offering free
accessories, free service for three years, etc.
A thorough analysis of each option was done and finally company decided to
offer free service for next three years. In order to implement the plan, they
made various packages of service coupons and communicated the same to
their dealers. They also started giving the advertisements to make the
customers aware of their scheme through various print and electronic
medias.
A separate team was formed to keep a close watch on the revenue and
impact of new scheme on the sale.
Q.15 In the context of the above case.
(a) Name the function of management which is being described in above
paragraph.
(b) Identify and explain the any four steps involved in the process of the
function of management as identified in the above para, by quoting
the lines from it.
 Types of Plans

1. Objectives – written statement of desired results

2. Strategy – Complex and determines long term objectives

3. Policy – Solution to a common problem

4. Procedure – Step by step way of doing a work

5. Rules – Most rigid

6. Methods – Way of doing a job

 Types of Plans

7. Programmes – combination of objectives, policies, procedures and rules

8. Budget – Expected results in numerical terms

Q.16 Flipkart is an e-commerce company founded in the year 2007 by Sachin
Bansal and Binay Bansal. The company is registered in Singapore, but has its
head quarters in Bengaluru, India. The company seeks to increase traffic on
their site (more clicks on their product, and boost sale by next quarter).
Flipkart was the first company to offer ‘Cash on Delivery’ facility. Before
giving this offer, company scanned the environment and allocated huge fund
to implement this offer. The company offer in general Two Weeks’ Return
option, but it may vary from product to product.
After receiving the order, the company follows a chronological sequence of
steps till the delivery of product to customer. The company offers, various
options of payment such as cash on delivery, Debit/Credit card, net banking,
etc. This year company plans to spend 50 crore for advertisement to
increase the sale. Flipkart reserve the right to terminate your membership or
refuse to deliver product if it is discovered that you are under age of 18. This
is because as per Indian Contact Act the minors are not eligible to use
websites.
Q.16 In context of above case, identify and explain different types of plans being
used by Flipkart by quoting the lines from the para.
Chp 5. ORGANISING
ORGANISING PROCESS
1. Identification and Division of Work

2. Departmentalization

3. Assignment of Duties

4. Establishing Reporting Relationship

Q.17 Kiran Industries is a company dealing in office furniture. The company chose
to diversify its operations to improve its growth potential and increase
market share. As the project was important, many alternatives were
generated for the purpose and were thoroughly discussed amongst the
members of the organisation. After evaluating the various alternatives,
Sukhvinder, the Managing Director of the company, decided that they should
add ‘Home Interiors and Furnishings’ as a new line of business activity.

Name the framework, which the diversified organisation should adopt, to

enable it to cope with the emerging complexity? Give one reason in support
of your answer.
State any two limitations of this framework
Q.18
Samir Gupta started a telecommunication company, ‘Donira Ltd.’ to
manufacture economical mobile phones for the Indian rural market with 15
employees. The company did very well in its initial years. As the product was
good and marketed well, the demand of its products went up. To increase
production, the company decided to recruit additional employees. Samir
Gupta, who was earlier taking all decisions for the company had to
selectively disperse the authority. He believed that subordinates are
competent, capable and resourceful and can assume responsibility for
effective implementation of their decisions. This paid off and the company
was not only able to increase its production but also expanded its product
range.
(a) Identify the concept used by Samir Gupta through which he was able
to steer his company to greater heights.
(b) Also explain any three points of importance of this concept.
Q.19
Aman Chadha started ‘Bulls Eye’ a company for providing cyber security
solutions to businesses. Its objective is to prevent, detect and respond to
cyber attacks and protect critical data. He was a hardworking software
engineer and an expert in cyber security. His reputation grew by leaps and
bounds as he was not only a person of integrity but also did his work with
utmost honesty and sincerity. The business started growing day by day.
He was delighted when he was offered a big project by the Ministry of
Defence. While working on the project, he found that the volume of work
made it impractical for him to handle all the work by himself. He decided to
expand the team. The company maintained a close liaison with a local
engineering college. During a campus placement, Ishan and Vrinda were
appointed to work for the new project.
He found the new employees capable, enthusiastic and trustworthy. Aman
Chadha was thus, able to focus on objectives and with the help of Ishan and
Vrinda, the project was completed on time. Not only this Aman Chadha was
also able to extend his area of operations. On the other hand Ishan and
Vrinda also got opportunities to develop and exercise initiative.
Q.19 Identify and briefly explain the concept used by Aman Chadha in the above
case which helped him in focusing on objectives.
Also, state any four points of importance of the concept identified in (i)
above
Chp 6. STAFFING
STAFFING PROCESS

1. Estimating manpower requirement.

For estimating manpower requirement

company will take following three steps:

(i) Workload analysis

(ii) Workforce analysis
(iii) Comparing both to find out requirement.
STAFFING PROCESS

2. Recruitment

3. Selection

4.Placement and orientation

5.Training and Development.

Q.20 Alpha Enterprises is a company manufacturing water geysers. The company
has a functional structure with four main functions-Production, Marketing,
Finance and Human Resource. As the demand for the product grew, the
company decided to hire more employees.

Identify the concept which will help the Human Resource Manager in
deciding the actual number of persons required in each department.
External Sources of Recruitment

1. Direct recruitment

2. Casual callers

3. Advertising.

4. Employment exchanges.

5. Placement agency and management consultant

6. Campus recruitment
External Sources of Recruitment

7. Recommendations from present employees.

8. Labour contractors.

9. Advertising on television.

10. Web publishing

Q.21
Mohit Gupta is working with Yellow Security Services Ltd. He is also
recruiting security guards for the company. The company provides security
services in Delhi and Noida at short notice to various companies. The guards
are recruited on a temporary basis. The guards provided by this company are
known for their honesty and punctuality. Mohit Gupta is well-known in his
village for providing employment to unskilled people.

Name the source of recruitment used by Yellow Security Services Ltd.

Q. 22
Atul -The Assistant Manager, Vikas- The Marketing Head and Leena- The
Human Resource Manager of 'Montac Enterprises Ltd.' decided to leave the
company. The Chief Executive officer of the company called the Human
Resource Manager, Leena and requested her to fill up the vacancies before
leaving the organisation. Leena suggested that her subordinate Miss Rama
Wadhwa is very competent and trust worthy, if she could be moved up in the
hierarchy, she would do the needful. The Chief Executive Officer agreed for
the same. Miss Rama Wadhwa contacted 'Smith Recruiters' who advertised
for the post of marketing head for 'Montac Enterprises Ltd.' They were able
to recruit a suitable candidate for the company. Atul's vacancy was filled up
by screening the database of unsolicited applications lying in the office.

(a) Name the internal/external sources of recruitment used by 'Montac

Enterprises Ltd.' to fill up the above stated vacancies.
(b) Also state any one merit of each of the above identified source of
recruitment.
SELECTION

Selection can be defined as discovering most promising and

most suitable candidate to fill up the vacant job position in the
organisation.
Selection Process

1. Preliminary Screening

2. Selection Test

The common types of tests conducted by the organisations are:

1. Intelligence Test 4. Trade Test

2. Aptitude Test 5. Interest Test

3. Personality Test
Selection Process

3. Employment Interview

4. Checking reference and background

5. Selection decision

6. Medical Examination

7. Job Offer

8. Contract of Employment
Training and Development
The Common and Popular Techniques of
Training under On-the-job Method are:
The Common and Popular Techniques of
Training under Off-the-job Method are:
Q.23
Anushka is doing a course in fashion designing from an institute of repute. As
a part of the course, she has been asked to take on-the-job training in an
export house for a fortnight in order to gain an insight about various
practical aspects related to designing. Anushka, through the references from
her senior, joins an export house owned by an upcoming designer, Nandita.

In context of the above case:

Name and explain the type of training which Anushka has been asked to
undertake
Chp 7. DIRECTING
Elements of Directing
Maslow’s Need Hierarchy Theory

Maslow has given a sequence or hierarchy of needs in the following way:

Q.24 Rahim was working in an enterprise on a daily wages basis. It was difficult
for him to fulfill the basic needs of his family. His daughter fell ill. He had no
money for his daughter’s treatment. To meet the expenses of her treatment,
he participated in a cycle race and won the prize money. The cycle company
offered him a permanent pensionable job which he happily accepted.
By quoting lines from the above paragraph, identify the needs of Rahim that
are satisfied by the offer of the cycle company. Also, explain two other needs
of Rahim followed by above that are still to be satisfied.
Incentives
Monetary or Financial Incentives:

The reward or incentive which can be calculated in terms of money is known

as monetary incentive
Monetary/Financial Incentives

1. Pay and allowances. 6. Productivity linked with wage incentives.

2. Profit sharing 7. Retirement benefits

3. Co-partnership/stock option. 8. Perks/fringe benefits/perquisites

4. Bonus

5. Commission
Non – Monetary/ Non – Financial Incentives

The incentives which cannot be calculated in terms of money are known as non-
monetary incentives.
Non-Monetary/Non -Financial Incentives

1. Status 6. Job Security

2. Organisational climate 7. Employees’ participation.

3. Career advancement 8. Autonomy/employee empowerment.

4. Job enrichment/assignment of
challenging job.

5. Employees’ recognition.
Q.25 Ram Murthy, the CEO of 'Goodcare Hospitals', a leading chain of hospitals,
decided to reward the good work of the doctors of this organization. For this
he instituted two running trophies. A 'Healthcare Achievers Trophy' to
acknowledge and appreciate the tireless efforts of the doctors who rendered
selfless services to the patients and another 'Beti Bachao Trophy' to
recognize the outstanding work done by the doctors in saving the girl child.
The CEO also wanted to improve the health services in rural areas all over
the country. He decided that all doctors must work in rural areas for at least
six months. He also decided that the paramedical staff should be employed
locally.
(a) Identify the incentive provided by 'Goodcare Hospitals' to its doctors
through running trophies.
(b) Which need of the doctors will be satisfied through the incentive
identified in part (a)
Leadership
Communication
Barriers to Communication
SEMANTIC BARRIES

1. Badly expressed message

2. Symbol with different meaning

3.Faulty translation

4. Unclarified assumptions.

5. Technical jargon.

6. Body language and gesture decoding.

PSYCHOLOGICAL BARRIES

1. Premature evaluation.

2. Lack of attention.

3. Loss by transmission .and poor retention.

4. Distrust.
ORGANISATIONAL BARRIERS

1. Organisational policy.

2. Rules and regulations.

3. Status difference.

4. Complex organisation.

5. Organisational facilities.
PERSONAL BARRIERS

1. Lack of confidence of superior in his subordinates.

2. Lack of incentives.

3. Fear of authority.

4. Unwillingness to communicate.
Q.26
Mr. Shubhendu Bose is the owner of Bikmac Enterprises carrying on the
business of manufacturing various kinds of biscuits. There was a lot of
discontentment in the organisation and the targets were not being met. He
asked his son, Naval, who had recently completed his MBA, to find out the
reason.
Naval found that all the decision-making of the enterprise were in the hands
of his father. His father didn’t believe in his employees. As a result, both the
employer and the employees were not able to understand each others’
messages in the same sense. Thus, the employees were not happy and
targets were not met

Identify any two communication barriers because of which Bikmac

Enterprises was not able to achieve its target
Chp 8. CONTROLLING
CONTROLLING PROCESS

1. Setting up of (target) standards.

2. Measuring of performance.

3. Compare performance against standard.

4. Analyzing deviations
CONTROLLING PROCESS

These two categories must be controlled by following ways

(Two Techniques of Analyzing Deviations)

(i) Critical Point Control.

(ii) Management by exception

5. Taking corrective measures.

6. Feedback in controlling.
Q.27 Vinber Ltd. set up a manufacturing unit at Bhiwadi at Himachal Pradesh to
manufacture electric geysers and supply them to dealers all over the country.
Their production target was 500 geysers per week. It was decided by the
management that variation in production upto 10 units would be acceptable.
At the end of the first week, the production was 450 geysers. The next week,
production increased to 470 geysers. A week later, production was 460
geysers. On investigation, it was found out that fluctuation in production was
due to irregular supply of electricity.
The above para discusses some of the steps of one of the functions of
management. Explain the steps.
Also, state the step(s) not discussed in the above para.
Chp 9. FINANCIAL MANAGEMENT
Financial Management
Investment Decision (Capital Budgeting Decision)
(Where to invest Fixed Capital)

This decision relates to careful selection of assets in which funds will be

invested by the firms.

The firms invest its funds in acquiring fixed assets as well as current assets.
When decision regarding fixed assets is taken it is also called capital
budgeting decision.
Financing Decision

Deciding how much funds to raise from which source is the concern of
financing decisions.
Factors affecting Financing Decision

1. Cost. 5. Floating cost.

2. Risk. 6. Fixed operating cost.

3. Cash flow positions. 7. State of capital market

4. Control Considerations
Dividend Decision (Appropriate Distribution of Profit)

This decision is concerned with distribution of surplus funds. The profit of the
firm is distributed among various parties such as creditors, employees,
debenture holders, shareholders, etc. Under dividend decision the finance
manager decides how much to be distributed in the form of dividend and how
much to keep aside as retained earnings.
Factors Affecting Dividend Decision:

1. Earning

2. Stability of earnings.

3. Cash flow position.

4. Growth opportunities

5. Stability of dividend

6. Preference of shareholders
FINANCIAL PLANNING

Financial planning means deciding in advance how much to spend, on what to

spend according to the funds at your disposal. financial planning includes:

(i) Determination of amount of finance needed by an enterprise to carry out its

operations smoothly.

(ii) Determination of sources of funds, i.e., the pattern of securities to be issued.

(iii) Determination of suitable policies for proper utilisation and administration of

funds.
Capital Structure

Capital structure means the proportion of debt equity used for

financing the operations of business.
Debt
Capital Structure =
Equity
Financial Leverage/Trading on Equity Numerical:
Q.28 Kay Ltd. is a company manufacturing textiles. It has a share capital of 60
lakhs of shares with a face value of 10 each. In the previous year, its earning
per share was 0.50. For diversification, the company requires an additional
capital of 40 lakhs. The company raised funds by issuing 10% debentures for
the same. During the year, the company earned a profit of 8 lakhs on the
capital employed. It paid tax @ 40%.
State whether the shareholders gained or lost, in respect of earning per
share on diversification. Show your calculations clearly.
Q.29 Krish limited is in the business of manufacturing and exporting carpets and
other home décor products. It has a share capital of ₹ 70 lacs at the face value
of ₹ 100 each. Company is considering a major expansion of its production
facilities and wants to raise ₹ 50 lacs. The finance manager of the company
Mr. Prabhakar has recommended that the company can raise funds of the
same amount by issuing 7% debentures. Given that earning per share
of the company after expansion is ₹ 35 and tax rate is 30%, did Mr. Prabhakar
give a justified recommendation?
Show the working
Q.30 Healthcare Ltd. is a company engaged in production of organic food.
Presently it sells its products through indirect channels of distribution. The
company is planning to start its own show rooms and online portals. The
financial manager suggested to use debt to invest in own showrooms and
online portals. Company plans to raise debt capital of 40 lakhs through a loan
from ICICI bank at 10% Interest. The present capital base of the company is 9
lakhs equity shares of 10 each. The rate of tax is 30%
in the context of above case -Assuming expected rate of return same as
current year, i.e., 15%, do you think the decision to use debt is justified.
Show your working clearly
Fixed and Working Capital
Factors Affecting Requirement of Fixed Capital

1. Nature of business 6. Diversification

2. Scale of operation 7. availability of finance and leasing facility

3. Technique of production 8. Level of collaboration/ joint ventures.

4. Technology upgradation

5. Growth prospects
Factors Affecting Requirement of Working Capital

1. Nature of business 7. Credit avail

2. Scale of operation 8. Operating efficiency

3. Business cycle fluctuation 9. Level of competition

4. seasonal Factors 10. Inflation

5. Technology and production cycle 11. Growth Prospects

6. Credit allowed
Q.31
Radhika and Vani who are young fashion designers, left their job with a
famous fashion designer chain to set-up a company ‘Fashionate Pvt. Ltd.’
They decided to run a boutique during the day and coaching classes for the
entrance examination of National Institute of Fashion Designing in the
evening. For the coaching centre, they hired the first floor of a nearby
building. Their major expense was the money spent on photocopying of
notes for their students. They thought of buying a photocopier knowing fully
that their scale of operations was not sufficient to make full use of
photocopier.
In the basement of the building of Fashionate Pvt. Ltd, Praveen and Ramesh
were carrying on a printing and stationery business in the name of ‘Neo
Prints Pvt. Ltd.’ Radhika approached Praveen with the proposal to buy a
photocopier jointly which could be used by both of them without making
separate investment. Praveen agreed to this.
Q.31 Identify the factor affecting the fixed capital requirements of Fashionate Pvt.
Ltd.
Q.32 Amit is running an ‘advertising agency’ and earning a lot by providing this
service to big industries State whether the working capital requirement of
the firm will be ‘less’ or ‘more’. Give reason in support of your answer
.
Q.33 Arun is a successful businessman in the paper industry. During his recent
visit to his friend’s place in Mysore, he was fascinated by the exclusive variety
of incense sticks available there. His friend tells him that Mysore region is
known as a pioneer in the activity of Agarbathi manufacturing because it has
a natural reserve of forest products especially Sandalwood to provide for the
base material used in production. Moreover, the suppliers of other types of
raw material needed for production follow a liberal credit policy and the
time required to manufacture incense sticks is relatively less. Considering
the various factors, Arun decides to venture into this line of business by
setting up a manufacturing unit in Mysore.
Q.33 In context of the above case:
Identify and explain the type of financial decision taken by Arun.
Identify the three factors mentioned in the paragraph which are likely to
affect the working capital requirements of his business.
Chp 10. FINANCIAL MARKETS
STOCK EXCHANGE

The securities contract and regulation act defines a stock exchange as, “An
organisation or body of individuals, whether incorporated or not established
for the purpose of assisting, regulating and controlling of business in buying,
selling and dealing in securities”
Functions of Stock Exchange/Secondary Market

1. Economic barometer. 6. Providing scope for speculation

2. Pricing of securities. 7. Liquidity

3. Safety of transactions. 8. Better allocation of capital

4. Contributes to economic growth. 9. Promotes the habits of saving and

investment.
5. Spreading of equity cult.
SEBI

Securities and Exchange Board of India (SEBI) was set up in 1988 to in May
1992, SEBI was granted legal status. SEBI is a body corporate having a separate
legal existence and perpetual succession.
 Functions of SEBI

1. Protective Functions.

(i) Check a price rigging.

(ii) It prohibits insider trading.
(iii)SEBI prohibits fraudulent and unfair trade practices.
(iv) SEBI undertakes steps to educate investors
(v) SEBI promotes fair practise and code of conduct
 Functions of SEBI

2. Development Functions

(i) SEBI promotes training of intermediaries of the securities

market.
(ii) SEBI tries to promote activities of stock exchange by adopting
flexible and adoptable approach in following way:
 Functions of SEBI

3. Regulatory Functions

(i) SEBI has framed rules and regulations and a code of conduct to regulate the
intermediaries such as merchant bankers, brokers, underwriters, etc.
(ii) These intermediaries have been brought under the regulatory purview and
private placement has been made more restrictive.
(iii)SEBI registers and regulates the working of stock brokers, sub-brokers, share
transfer agents, trustees, merchant bankers and all those who are associated
with stock exchange in any manner.
(iv) SEBI registers and regulates the working of mutual funds, etc.
(v) SEBI regulates takeover of the companies.
(vi) SEBI conducts inquiries and audit of stock exchanges.
Q.33 Charu is a chartered accountant in Prakash Ltd. During the course of meeting
with directors she came to know that as against the previous years, this year
company is going to declare handsome dividend offer. It is observed that
when such news becomes public then the share-market jumps up.
Considering it, Charu purchased large number of company's shares before
this news reached the public.
1. Identify the type of malpractice used by Charu.
2. Name the authority which regulates such behaviour. Write any three
other functions of this authority.
Q.34 Mr Sanjay Nehra was the Chairman of 'Taran bank.' The bank was earning
good profits. Shareholders were happy as the bank was paying regular
dividends. The market price of their shares was also steadily rising. The bank
was about to announce taking over of 'Vena Bank.' Mr Sanjay Nehra knew
that the share price of 'Taran Bank' would rise on this announcement. Being
a part of the bank, he was not allowed to buy shares of the bank. He called
one of his rich friends Sudhir and asked him to invest ₹ 5 crores in shares of
his bank promising him the capital gains. As expected the share prices went
up by 40% and the market price of Sudhir's shares was now ₹ 7 crores. He
earned a profit of ₹ 2 crores. He gave ₹ 1 crore to Mr Sanjay Nehra and kept
₹1 crore with himself. On regular inspection and by conducting enquiries of
the brokers involved, Securities and Exchange Board of India (SEBI) was able
to detect this irregularity. The SEBI imposed a heavy penalty on Mr Sanjay
Nehra. By quoting the lines from the above para, identify and state any two
functions that were performed by SEBI in the above case.
Chp 11. MARKETING MANAGEMENT
Marketing Management Philosophies
Q.35 Ginika, Tanish and Rohit were friends from college days and now they are doing different
kinds of business. They regularly meet and discuss their business ideas and exchange notes
on customer satisfaction, marketing efforts, product designing, selling techniques, social
concerns etc.
In one of such meetings, Ginika drew the attention of Tanish and Rohit towards the
exploitation of consumers. She told that most of the sellers were exploiting the consumers in
various ways’ and were not paying attention towards the social, ethical and ecological
aspects of marketing, whereas she was not doing so.
Tanish told that they were under pressure to satisfy the consumers, but stated that the
consumers would not buy or not buy enough unless they were adequately convinced and
motivated for the same.
Rohit stressed that a company cannot achieve its objectives without understanding the
needs of the customers. It was the duty of the businessmen to keep consumer satisfaction in
mind because business is run by the resources made available to them by the society. He
further stated that he himself was taking into consideration the needs of the customers.
Identify the various types of thinking that guided Ginika, Tanish and Rohit in the marketing
efforts of their business. Also, state one more feature of the various types of thinking
identified that is not given in the above para.
Marketing Mix

1. Product
2. Price
3. Place
4. Promotion
Branding
Packaging
Functions of Packaging

1. Protection. 6. Self service outlets.

2. Identification. 7. Product differentiation.

3. Convenience. 8. Innovational opportunities

4. Promotion

5. Raising standard of health and

sanitation.
Q.36 As the number of people making online purchases has increased manifolds,
there is a growing concern about the disposal and management of packaging
waste. Every item bought is delivered with excess packaging and sometimes
even non-biodegradable materials are used.
In the context of above case:
Name the other two levels of packaging that the marketers may be using
besides the immediate package.
Describe briefly any two points highlighting the functions of packaging
Labelling
Functions of Labelling

1. Describe the product and specify its contents.

2. Identification of product

3. Helps in grading.

4. Promote sales

5. Provide information required by law

Q.37 Vasvi purchased a bottle of pickle from the local grocery shop. The
information provided on the bottle was not clear. She fell sick on consuming
it. She filed a case in the District Forum under Consumer Protection Act and
got the relief.
(a) Identify the important aspect neglected by the marketer in the above
case.
(b) Explain briefly the functions of the aspect identified in (a) above.
Q.38 As a project work in Business Studies, the Commerce students of Himachal
Public School, Himachal Pradesh thought of preparing apple jam from the
apples grown in their school premises and sell it in the school annual fete.
They approached the Principal who not only appreciated the students but
also gave her consent for the same. The school decided to donate 50% of the
revenue generated from the sale to a nearby orphanage. After the school fete,
the school also decided to extend this project by providing employment to
visually challenged and disadvantaged sections of society on regular basis.
Explain any two product-related decisions which the students had to take.
Suggest any two functions that the ‘label’ of the jam-bottle must perform.
Factors affecting pricing decision
Place/Physical Distribution
Q.39 Ajay was appointed as the marketing head of Alfa Enterprise, a manufacturer
of toothpastes and toothbrushes. His target sale was 2000 units a month.
Apart from thinking about various channels of distribution to achieve the
target, he himself started visiting schools in backward areas. He found that
even after taking various steps and counselling, some school children had not
started brushing their teeth. He investigated and found that they could not
afford to buy toothbrush and toothpaste. So with due permission, he started
donating 200 toothbrushes and toothpastes every month to the school.
Identify the channel of distribution Ajay would adopt for the distribution of
toothpaste and toothbrushes and justify it by giving one reason.
Promotion
Advertising – Features
Sales Promotion

• Sales promotion refers to short term use of incentives or

other promotional activities that stimulate the customer to
buy the product.

(a) Short and immediate effect on sale.

(b) Stock clearance is possible with sales promotion.
(c) Sales promotion techniques induce customers as well as
distribution channels.
(d) Sales promotion techniques help to win over the competitor.
Personal Selling – Features

Personal selling means selling personally. This involves face-to-face

interaction between seller and buyer for the purpose of sale.

Features of Personal Selling:

(i) Personal interaction.
(ii) Two way communication.
(iii)Better response.
(iv) Relationship
(v) Better convincing.
Public Relations

Public relations means maintaining public relations with public. By maintaining

public relations, companies create goodwill
Q.40 A company was marketing water purifiers which were very popular due to
their quality and after sales services provided to the customers. The
company was a leading company in the market and earning huge profits.
Because of huge profits, the company ignored the after sales services. As a
result, its relations with customers got spoiled and the image of the company
was damaged in the public. The top management became concerned when
the profits for the current quarter fell steeply. On analysis, it was revealed
that ignoring the after sales services was its reason. Therefore, the company
took all possible measures to protect and promote its favourable image in the
eyes of the public. As a result, the goodwill of the company improved in the
society.
Name and state the communication tool used by the marketer in the above
case to improve its image
Q.41 Choco Ltd. offers a wide variety of chocolate products. It has an action
program of not selling its products by their generic name but under different
names like Choco-silk bar, Choco-Munchy and Choco-crunchy etc. for
different customer segments. All these names have great popularity and
acceptability in the markets.As the company policy the products were
offered at reasonable and affordable prices for targeting a mass customer
base.During the festive season the company launched a massive promotional
campaign to increase its revenue and achieve its communication objectives.
The company introduced free gifts for the customers.Their on-ground sales
team delivers the product not only to the departmental stores but
also to small shops, so that all segments of customers can easily get the
products.
Q.41 They also provide information and support services to customers to ensure
repeat sales.
From the viewpoint of the management function, briefly explain any four
activities of marketing which the firm will be involved in, apart from the
above-mentioned ones it's already performing
Q.42 Radhika was a student of Business Studies of Class XII. Her father was a
farmer who grew different varieties of rice and was well-versed in the
various aspects of rice cultivation. He was also selected by the government
for a pilot-project on rice cultivation. As a project work in Business Studies,
she decided to study the feasibility of marketing good quality rice at a
reasonable price. Her father suggested her to use the Internet to gather
customers’ views and opinions. She found that there was a huge demand for
packaged organic rice. She knew that there were no predetermined
specifications in case of rice because of which it was difficult to achieve
uniformity in the output. To differentiate the product from its competitors,
she gave it the name of ‘Malabari Organic Rice’ and classified it into three
different varieties, namely — Popular, Classic and Supreme, based on the
quality. She felt that these names would help her in product differentiation.
Explain the three functions of marketing with reference to the above
paragraph
Chp 12. CONSUMER PROTECTION
Consumer Rights

1. Right to Safety.

2. Right to Information.

3. Right to make Choice.

4. Right to be Heard or Right to Representation.

5. Right to Seek Redressal.

6. Right to Consumer Education.

Q.43 Ronit Raj, a marketing manager is a patient of diabetes for which he takes
medicines regularly. One day, on his tour to Patna, he met with an accident
and was hospitalised. Due to doctor’s negligence a delicate nerve of his right
leg was cut rendering hum crippled throughout his life. Identify the
consumer right that has been violated by the doctors under the Consumer
Protection Act, 1986 in the above situation
CONSUMERS’ RESPONSIBILITIES

1. Consumer must Exercise his Right.

2. Cautious Consumer.

3. Filing Complaints for the Redressal of Genuine Grievances.

4. Consumer must be Quality-Conscious.

5. Do not be Carried Away be Advertisements.

6. Insist on Cash Memo.

Q.44 Mayank purchased a pack of chocolates of a renowned brand for his
daughter from a shop in the nearby market. After consuming the chocolates,
his daughter fell sick. He filed a case with the District forum against the
renowned brand. He lost the case because of a mistake that he could not
provide proof of purchase. What should be kept in mind by a consumer
while purchasing, using and consuming goods and services apart from
avoiding the mistake committed by Mayank, in order to enable him/her to
achieve the objective of consumer protection? Enumerate any four points.
Q.45 Suman bought a box of cheese of a reputed brand from a local shopkeeper.
On opening the box, she found a piece of stone in the cheese. She reported
the matter to the shopkeeper who forwarded her complaint to the concerned
company. Within a week, the representative of the company visited Suman’s
residence with an apology and as a replacement offered her a new cheese
pack with four other varieties of cheese as compensation for the
inconvenience to her. State the consumer right which Suman exercised
REDRESSAL AGENCIES UNDER THE CONSUMER PROTECTION
ACT, 1986 AND THEIR JURISDICTION – UPDATED 2019

1. District Forum.

2. State Commission.
3. National Commission.
ROLE OF CONSUMER ORGANISATIONS AND NGOs