Kerala Plus Two Business Studies Model Question Paper 4
General Instructions to Candidates :
- There is a ‘cool off time’ of 15 minutes in addition to the writing time of 2 hrs.
- Your are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
- Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
- Read questions carefully before you answering.
- All questions are compulsory and only internal choice is allowed.
- When you select a question, all the sub-questions must be answered from the same question itself.
- Calculations, figures and graphs should be shown in the answer sheet itself.
- Malayalam version of the questions is also provided.
- Give equations wherever necessary.
- Electronic devices except non programmable calculators are not allowed in the Examination Hall.
Answer the following questions from 1 to 7. Each carries 1 score.
Mr Rahul is working as a production manager in petro Ltd. Identify the level of management he belongs to.
a. Top level
b. Operate level
c. Middle level
d. Bottom level
Find the odd one
a. Unity of command
b. Division of work
d. Functional foremanship
It is the study to find out the best way of doing the job. Identify the technique.
a. Time study
b. Fatigue study
c. Method Study
d. Motion study
Complete the diagram.
The technique used by managers to study the relationship between cost, volume and profit is ______
a. Budgetary control
b. Ratio analysis
c. Break even analysis
d. Management audit
Which of the following is not a money market instrument?
a. Commercial bill
b. Commercial paper
d. Certificate of deposit
Complete the series.
Answer any 7 questions from 8 to 15. Each carries 2 score.
In a classroom debate Nvami argued that managent is multidimentional? Do you agree? why?
Brifly narrate motion study?
It is the basis of all other fuctions of management.
a. Identify the fuction.
b. State any two feathures of it.
Recruitment is regard as a positive process and selection is a negative process. Comment your views.
State the objective of financial management?
What are the elements in the communication process in between the receiver and the sender?
Some products have certain unique features because of which people make special efforts in their purchase.
a. Identify the product discussed above.
b. Write any two features of it.
State any two responsibilities of a customer while purchasing and using goods and services?
Answer Answer any 4 questions 16 to 20. Each Carries 3 score.
‘Efficiency and effectiveness are the two sides of the same coin’. Comment your views in the light of management
Describe informal organisation and its two merits?
“Directing function is regarded as the heart of the man agent process” Give reasons to support this statement.
Explain any three rights of consumer under the consumer protection Act 1986.
Describe the role and functions of entrepreneurs in their enterprise?
Answer any 4 questions from 21 to 25. Each carries 4 score.
Explain the importance of principles of management.
“Government of india withdrawn the old 500 and 1000 Rupee currency notes from 08.11.2016 on wards”
a. Identify the environment of the business it affected mostly.
b. State the features of this environment.
Explain briefly the various steps involved in the organizing process?
“Planning and controlling are insperable twins of management” Comment.
A devision in financial management is concerned with the quantum of finance to be raised from iongterm sourses.
a. Name the type of devision referred above.
b. Explain any three factors affecting this devision.
Answer any 3 questions from 26 to 29. Each carries 5 score.
It is an activity of thinking rather than doing.
a. Identify the activity
b. Narrate its steps.
Explain the important factors affecting the working capital requirement of a business?
it is the regulatory and developmental agency of Indian Securities market. Name the agency and narrate the different functions performed by them.
Describe the functions of labeling in the marketing of a product?
Answer any 2 questions from 30 to 32 . Each carries 8 score.
“Money is the only factor to motivate employees”
a. Do you agree this statement.
b. Give detailed justification.
Explain the different factors which affect the fixation of the price of a product?
Micro Ltd decided to fill 10 posts of Accountant from outside the organisation. Suggest the maximum possibilities of recruitments available to micro limited.
c. Middle level
d. Functional foremanship
c. Method study
c. Break even analysis
I agreed this statement because of In modern, concept, management has therefore, been defined as a process of getting things done with the aim of achieving goals effetively and effeciently.
The functions of management performs to getting things done through others by planning, organising, staffing, directing, and controlling.
Effectiveness in management is concerned with doing the right task, completing activities and achieving goals.
Efficiency means doing the task correctly and with minimum cost.
It involves the study of the movement of operations of a worker. It aims at eliminating unnecessary, ill directed and inefficient movement so as to perform the work in the best possible manner.
FEATURES OF PLANNING
1. Planning focuses on achieving objectives
Every organisation has a set of goals to be achieved. Planning involves setting goals and determining the most economical and viable course of action to achieve the predetermined goals.
2. Planning is a primary function of management
It lays down the base for all other functions of management. All other managerial functions are performed within the framework of the plans drawn.
Recruitment is the process of searching for prospective candidates and inducing them to apply for jobs. Its aim is to create a large pool of applicants for jobs, so it is a positive process.
Selection is concerned with choosing from those who have applied for jobs. Its aim is to ensures the most component people for jobs, so it is a negative process.
The primary aim of financial management is to maximise share holders wealth. The objective if financial management is to maximise the current price of equity shares of the company or to maximise the wealth of owners of the company, that is shareholders.
The process of communication begins when one person called the sender or communicator conveys a message or an idea to another person is called the receiver.
It is the subject matter of communication. It may consist of facts, information, ideas, opinion etc.
In order to make the receiver understand the message, the sender translates the message into words, symbols, or some other form. It is known as encoding the message.
It is the medium or path through which the encoded message is transmitted to the receiver. The channel may be a written form, face to face, phone call, internet etc.
The person who receives the message is called the receiver or communicate. The receiver may be a listener, a reader or observer.
It is the process of converting encoded symbols of the sender.
The receiver sends his response to the sender of the message. This response is known as feedback.
It means an obstruction or hindrance in the communication process.
a. Speciality products
b. Special efforts for during these are available for sale at few places only.
Demand for these products remains low.
a. Consumer must be quality consious/ Do Not compromise on quality.
b. Do Not forget get Receipt and Guarantee/Warranty card
c. Do Not buy in hurry
Effectiveness in management is concerned with doing the right task, completing activities and achieving goals.
Efficiency means doing the task correctly and with minimum cost.
Within the informal organisation, individuals carry out the assigned task in co-operation with each other. They interact or communicate on personal whims, likes, dislikes, prejudice, etc. among themselves in the course of their work. This gradually develops into friendly relations and forms small social groups. Such relations arise spontaneously and are not created by the top management.
Advantages of Informal organisation
1. Quick communication is possible
2. Give importance to social needs of employees
3. Better feedback from subordinates to superiors
Directing function is regarded as the heart of the management process, because of Directing is a complex function that includes all those activities which are designed to encourage subordinates to work effectively and efficiently.following are the importance of directing.
1. Initiate action
Planning, organizing and staffing are preparations for doing work. The work actually begins only when the manager performs the directing function. Thus directing initiates action.
2. Integrates employees efforts
It integrates the efforts of individual and group to achieve common objectives. This is possible by supervision, guidance and counselling.
3. Provides leadership
Effective directing provides motivation and leadership to the employees, which helps them to identify their potentials and realise their latent capabilities, leading to growth.
4. introduces changes
Most of the employees resist changes. They prefer to go on performing their routine work and remain indifferent to new ideas and techniques. Through effective direction, employees are induced to accept changes and challenges of the job.
5. Provides stability
Effective directing helps to develop co-operation and commitment on part of subordinates. This provide stability to the organisation.
THE CONSUMER PROTECTION ACT
The Consumers Protection Act (CPA) seeks to protect and promote the consumers interest through speedy and inexpensive redressal of their grievances.
1. Right to safety
The consumer has a right to be protected against goods and services which are hazardous to life and health.
2. Right to be informed
The consumers has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, 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.
Following are the functions of entrpreneurs
1. Contribution to GDP
Increase in the Gross Domestic Product or GDP is the most common definition of economic development. Entrepreneurs generate income via organisation of production be it agriculture, manufacturing or services.
2. Capital formation
To integrate the capital of others into entrepreneurial capital is known as capital formation. The entrepreneurial decision, in effect, is an investment decision that augments the productive capacity of the economy and hence, results in capital formation.
3. Generation of Employment
Every new business is a sources of employment to people with different abilities, skills and qualifications. Thus the entrepreneurship provides employment opportunities this will leads to economic development.
4. Generation of business opportunities for others
Every new business creates opportunities for the suppliers of inputs and the marketers of the output.
5. Improvement in economic efficiency
Efficiency means to have greater output from the same input. Entrepreneurs imp¬rove economic efficiency by providing, reducing wastes, increasing yield, and bringing about technical progress etc.
6. Increase the spectrum and scope of economic activities
Development does not merely mean ‘more’ and ‘better’ of the existing, it also and more crucially means diversification of economic activities across the geographic, sectrol, and technological scope. Entrepreneurs lead the process of economic development via bringing about sectoral change.
ROLE OF ENTREPRENEURS
1. Opportunity scouting
One may rely on personal observation, discovery or invention, personal experience may also help in identifying business opportunities.
2. Identification of specific product offering
While the environment scan leads to the discovery of more generalised business opportunities.
Clearly decision on specific product offering necessities decisions on who is buying, why, and what are the value expectations. You will be able to succeed when the value delivered not only meets but also exceeds customers expectations and create vow impact.
3. Feasibility analysis
The product offering idea must be technically feasible, that is it should be possible with the available technology to convert the idea into a reality.
PRINCIPLES OF MANAGEMENT
1. Providing managers with useful insights into reality
Principles help managers to improve their knowledge and understanding of managerial situations.
2. Optimum utilisation of resourcesand effective administration.
Optimum utilisation of resources emphasise that resources should give maximum benefit with minimum cost, it also increase the effeciency of managemtent.
3. Scientific decisions
Management principles helps in thoughtful decision making because they are based on logic rather than blind faith. Such decisions are free from bias and prejudice.
4. Meeting changing environment requirements
Modem business environment is complex and ever changing ln order to be successful, organisations have to adapt these changes. Principles are dynamic in nature.
5. Fulfilling social responsibility
Management principles are evolved or developed to serve the demands of society. These principles establish certain ethics in response to social responsibility towards society.
6. Management training, education and research
Management principles act as a base of doing research and development in management studies. These principles provide basic groundwork for the development of managers.
a. Economic Enviroment
b. The economic environment consist of the factors and forces concerning with means of production and distribution of wealth. It comprises of interest rate, rate of inflation, value of GDP, per capita income, tax rates, disposible income etc.
- Directly related with economic activities.
- Impact of Non-economic factors
- Impact of ideology of the people
- Impact of basic infrastructure
- Economic disparties, Economic planning
- Public morality
- Directives of the govt.
- Availability of capital
STEPS IN THE PROCESS OF ORGANISING
1. Division of work
This is the first step in organising. The need for setting up an organisation arises because the total work of an organisation cannot be performed by a single individual. The total work is, therefore, to be divided into various functions or activities so that each activity may be one person or a group of persons. This brings in specialisation of efforts and skills.
Once, work has been divided into small and manageable activities, then those activities which are similar in nature,are grouped together. This process is called departmentalisation.
3. Assigning duties
The next step involves the allotment of various activities of different individuals according to their ability and aptitude. Each one is given a specific job and he is responsible for its execution. However, he should be given appropriate authority also. ‘Right man at the right job is the motto’.
4. Establishing reporting relationships
It is at this stage that the various members of the organisation are linked by authority responsibility relations, in other words, an authority structure is created to facilitate the smooth functioning of the business.
Planning and controlling are closely related. After plan becomes opeational, control is necessary to measure the performance to locate deviations and to take remedial measures. Without planning, there is no basis for controlling activities and without effective system of control, planned activities cannot be properly implemented. It is true that planning depends upon controlling. Control system provides certain standards for measuring and appraising performance which are laid down by planning. Planning without control is meaningless and control without planning is blind.
Capital market is a market for medium and long term funds. This market facilitates the institutional arrangement through which long term funds, both debt and equity are raised and invested.
a. Performance of domestic companies: The performance of the companies or rather corporate earnings is one of the factors which has direct impact or effect on capital market in a country.weak corporate earnings indicate that the demand for goods and services in the economy is less due to slow growth in per capital income of people.
b. Political stability and government policies : For any economy to achieve and sustain growth it has to have political stability and pro growth government policies. This is because when there is political stability there is stability and consistancy in government’s attitude which is communicated through various government policies. The vice versa is the case when there is no political stability. So capital market also rea¬cts to be nature of government, attitude of government and various policies of the government.
c. Growth prospectus of an economy When the national income of the country increases and per capital income of people increases it is said that the economy is growing . Higher income also means higher expenditure and higher savings. Thus when an economy is growing at a good place capital market of the country attrats more money from investors, both from within and outside the country and vice versa. So we can say that growth prospectus of an economy does have an impact on capital market.
According to Koontz and O’Donnell “Planning is deciding in advance, what to do it, when to do it and who is to do it. Planning bridges the gap from where we are to where we want to go. It makes possible for things to occur which could not otherwise happen.”
b. As we all know, planning is to decide in advance what to do and how to do. It is an activity, which follows certain logical steps.
1. Setting Objectives
Every organisation operates to achieve certain objectives. Objectives specify what the organisation wants to achieve. Therefore, the first step in planning is to define and describe clearly the objectives of the organisation and each departments or unit within the organisation.
2. Developing premises
The manager is required to make certain assumptions about future. These assumptions are known as premises. Premises are the base, upon which plans are drawn. They may be forecasts, existing plans or past information.
3. Identifying Alternative course of action
Once the objectives and planning premises are established, it becomes necessary to discover the various course of action, which may be used to achieve the established objectives.
4. Evaluating Alternative course
The next step is to weigh the pros and cons of the alternative. It is necessary to evaluate the positive and negative aspect of each alternative in the light of the objectives to be achieved.
5. Selecting an alternative
This is the real point of decision making. The best plan has to adopted and implemented. An ideal plan would be one which most profitable feasible and has the least negative consequences.
6. Implementing the plan
This step is to concerned with putting the plan into action and doing what is required. The managers start communicating the plans to employees and initiate them to carry out the activities according to the specifications of plans.
7. Follow-up action
Planning is a continuous process, so the manager keep on following up the plans to see that activities are performed as per the shedule or not.
1. Nature of business
A trading organisation usually needs a smaller amount of working capital compared to manufacturing organisation.
2. Scale of operation
For increase the size of business,the requirement of working capital is also increases.
3. Business cycle
Different phases of business cycles affect the requirement of working capital by a firm.
4. Seasonal factors
Most business have some seasonality in their operations. In peak season, because of higher level of activity, larger amount of working capital is required. The seasonal factors also determining the requirement of working capital.
5. Production cycle
Some business have a longer production cycle while some have a shorter one. Duration and the length of production cycle, affects the amount of working capital requirement.
1. Registration of brokers and sub brokers and other players in the market.
2. Registration of collective investment schemes and mutual funds.
3. Calling of information by under taking inspection, conducting inquiries and audit of stock exchange and inter mediaries.
4. Levying fee or other charges for carrying out the purpose of the act.
5. Performing such other functions may be prescribed.
1. Training of intermediaries of the securities market.
2. Conducting research for the above purposes
3. To encourage online marketing
1. Prohibition of fradulent and unfair trade practices.
2. Controlling insider trading and imposing penalties for such practices.
3. Undertaking steps for investor protection.
Labelling means putting identification mark on the package. A label contains details regarding the product and then manufacturer. It also give information about brand and grade of the product.
Functions of labeling
1. Describe the product and specify its contents : it specifies the contents and other features of the product. It enables the manufacturer to give clear instructions to the consumer about the proper use of his product.
2. Identification of the product or brand: It gives a definite idendity to the product or brand and therefore, the identification of a product becomes easy.
3. Grading of products:
It enables the manufacturer to grade the products in to different categories.
4. Helps in promotion of products:
A good label can attract attention, describe the product and stimulate the buyer to buy the product. it helps in the promotion of the product.
5. Providing information Required by law : It provides information required under law.
lam not agree with this statement because of money is the only one factor to motivate the employees, that an individual have certain psychological,emotional and social needs which money cannot satisfy.in order to sataisfy these factors, non finanacial incentives are required. Following points contribute the same :
i. Status in business terms, 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
ii. Organisational climate Better conditions in an organisation like individual autonomy,reward orientation, consideration to employees, risk taking etc.provide an organisation to be different from the other organisations, positive measures taken in these aspects,helps to devolope better organisational climate.
iii. Career advanced opportunity When employees are provided opportunities to grow in status and resposibility, they are satisfiedand are commited to organisational goals. Appropriate skill developed programmes and sound promotion policy help employees to improve their skills and be promoted to higher levels and exhibit improved performance.
The term pricing denotes the money value of a product or service. It is the value which a buyer passes on the seller in return for a product or services provided.
There are number of factors which affect the fixation of the price of a product.
1. Production cost
One of the most important factor affecting price of a product or service is its cost. This includes the cost of producing, distributing and selling the product.
There are three types of costs; Fixed costs, variable cost and semi costs.
2. The utility and demand
If the demand is elastic, price should be set at a lower level and if the demand is less elastic or inelastic price can be set at a higher level.
3. Extent of competition in the market
Competitors prices and their anticipated reactions must be considered before fixing the price of a product.
4. Government and legal regulations
In order to protect the interest of public against unfair practices in the field of price fixing, Government can intervene and regulate the price of commodities. Government can declare a product as essential product and regulate its Price
5. Pricing objectives
If the firm decides to maximise profits in the short run, it would tend to charge maximum price for its products. But if it is to maximise its total profits in the long run. It would opt for a lower per unit price so that it can capture larger share of the market.
6. Marketing methods used
Price fixation process is also affected by other elements of marketing such as distribution system, sales promotion, publicity, advertising, etc.
External sources refers to recruitment from outside the organisation.
1. Direct recruitment
Under this, a notice is placed on the notice board of the enterprise specifying the details of the jobs available. On that basis the candidate give applications and attend the interview.
2. Casual cailers
Some business organisations keep a database of of unsolicited applicants in their offices. A list of such job seekers may be prepare and screened to fill the vacancies which may arise,
This is the best method of recruiting persons for higher and experienced jobs. Advertisement may be given in local or national press, trade or professional journals. The requirements of jobs are given in the advertisement.
4. Employment Exchanges
Employment exchanges are a good source of recruitment. The job seekers and job givers are brought into contact by the employment exchanges.
5. Campus Recruitment
Colleges and institutes of management and technology also offer opportunities to employers to recruit students freshly passing out of their portals. This has become a popular source of recruitment.