CLASS–XII Business Studies (2024-25) PDF

.  े संदश विद्यालयी विक्षा में िैवक्षक उत्कृष्टता प्राप्त करना केन्द्रीय विद्यालय संगठन की सिोच्च िरीयता है। हमारे विद्यार्थी, विक्षक एिं िैवक्षक नेतत्ृ ि कताा वनरं तर उन्द्नवत हेतु प्रयासरत...

.  े संदश विद्यालयी विक्षा में िैवक्षक उत्कृष्टता प्राप्त करना केन्द्रीय विद्यालय संगठन की सिोच्च िरीयता है। हमारे विद्यार्थी, विक्षक एिं िैवक्षक नेतत्ृ ि कताा वनरं तर उन्द्नवत हेतु प्रयासरत रहते हैं। राष्ट्रीय विक्षा नीवत 2020 के संदर्ा में योग्यता आधाररत अवधगम एिं मलू यांकन संबवन्द्धत उद्दे श्यों को प्राप्त करना तर्था सीबीएसई के वदिा वनदेिों का पालन, िता मान में इस प्रयास को और र्ी चन ू ा बनाता है। ु ौतीपर् केन्द्रीय विद्यालय संगठन के पांचों आंचलिक लशक्षा एवं प्रलशक्षण संस्थान द्वारा संकवलत यह ‘विद्यार्थी सहायक सामग्री’ इसी वदिा में एक आिश्यक कदम है । यह सहायक सामग्री कक्षा 9 से 12 के विद्यावर्था यों के वलए सर्ी महत्िपर् ू ा विषयों पर तैयार की गयी है । केन्द्रीय विद्यालय संगठन की ‘विद्यार्थी सहायक सामग्री’ अपनी गुर्ित्ता एिं परीक्षा संबंधी सामग्री-संकलन की वििेषज्ञता के वलए जानी जाती है और अन्द्य विक्षर् संस्र्थान र्ी इसका उपयोग परीक्षा संबध ं ी पठन सामग्री की तरह करते रहे हैं । िर् ु -आिा एिं विश्वास है वक यह सहायक सामग्री विद्यावर्था यों की सहयोगी बनकर सतत मागा दिा न करते हु ए उन्द्हें सफलता के लक्ष्य तक पहु ंचाएगी । िुर्ाकांक्षा सवहत । वनवध पांडे ु , केन्द्रीय विद्यालय संगठन आयक्त 1 ZIET,MYSORE  LIST OF TEACHERS AND OTHER OFFICIALS INVOLVED IN THE PREPARATION OF STUDENT SUPPORT MATERIAL PRINCIPAL ACADEMIC - SHRI.RAJAPPAN M N PMSHRI KV NO.1 PALAKKAD COORDINATOR ERNAKULAM REGION ZIET TRAINING ASSOCIATE (GEOG) COORDINATOR Mr. P SELVAMANI ZIET, MYSORE PRINCIPAL REVIEWED Mrs. VARSHA JAIN KV ONGC RAJAHMUNDRY BY KVS HYDERABAD REGION SMT. SWAPNA V P PGT COMMERCE, PMSHRI KV NO.2 CALICUT EDITED AND SHRI SACHIN E PGT COMMERCE, PMSHRI KV MALAPPURAM COMPILED BY SMT. DHANYA M PGT COMMERCE, PMSHRI KV NO.1 PALAKKAD CONTENT CREATERS S.NO NAME OF THE TEACHER NAME OF THE KV REGION 1 MRS.RACHNA B CHHILWAR HEBBAL BENGALURU 2 NARENDRA VERMA DONIMALAI BENGALURU 3 MR. JAGADEESH MYSURU BENGALURU 4 MRS. NISHA AFS AVADI CHENNAI 5 MRS. R. LALINI NO.2 TAMBARAM CHENNAI 6 MRS. CINI AUGUSTINE KARAIKUDI CHENNAI 7 MRS. RAJI KRISHNAN PORT TRUST, COCHIN ERNAKULAM 8 MS. SHYMOL T VARGHESE PORT BLAIR NO.1 CHENNAI 9 MRS. KALA V NO.1 TRICHY CHENNAI 10 SMT. SOJA C P K V PAYYANUR ERNAKULAM 11 SHRI. MUHAMMED NIZAR K A K V THRISSUR ERNAKULAM 12 SMT. SUDHA K R, KV, NO I CALICUT ERNAKULAM 13 MR SHAHZAD ARABI NO.1 TIRUPATI (S.1) HYDERABAD 14 MR G GURAVA REDDY BOLARUM HYDERABAD 15 MR PARAS ANAND NFC NAGAR HYDERABAD 2 ZIET,MYSORE  INDEX NAME OF THE TOPIC PAGE NO 2024-25 CBSE CURRICULAM AND DESIGN OF 1 4-14 QUESTION PAPER TOPIC WISE SUPPORT MATERIAL PART -A PRINCIPLES AND FUNCTIONS OF MANAGEMENT 1 NATURE AND SIGNIFICANCE OF MANAGEMENT 15-29 2 PRINCIPLES OF MANAGEMENT 30-54 3 BUSINESS ENVIRONMENT 55-68 4 PLANNING 69-86 5 ORGANISING 87-107 6 STAFFING 88-121 7 DIRECTING 122-140 8 CONTROLLING 141-153 PART B-BUSINESS FINANCE AND MARKETING 9 FINANCIAL MANAGEMENT 154-172 10 FINANCIAL MARKETS 173-182 11 MARKETING MANAGEMENT 183-207 12 CONSUMER PROTECTION 208-217 2024 MARCH CBSE BOARD QUESTION PAERS WITH MARKING SCHEMES 15 PAPER 1 PAPER 2 PAPER 3 218-268 16 2024-25 SAMPLE PAPER 1 & ANSWER KEY 17 2024-25 SAMPLE PAPER 2 &ANSWER KEY 18 2024-25 SAMPLE PAPER 3 &ANSWER KEY 3 ZIET,MYSORE  Business Studies CLASS–XII (2024-25) Theory: 80 Marks 3 Hours Project: 20 Marks Units Periods Marks Part A Principles and Functions of Management 1. Nature and Significance of Management 12 16 2 Principles of Management 14 3 Business Environment 12 4 Planning 14 14 5 Organising 15 6 Staffing 16 20 7 Directing 15 8 Controlling 12 Total 110 50 Part B Business Finance and Marketing 9 Financial Management 20 15 10 Financial Markets 18 11 Marketing Management 30 15 12 Consumer Protection 12 Total 80 30 Part C Project Work (One) 30 20 4 ZIET,MYSORE  Part A: Principles and Functions of Management Unit 1: Nature and Significance of Management Concept After going through this unit, the student/ learner would be able to: Management - concept, objectives, and Understand the concept of importance management. Explain the meaning of ‘Effectiveness and Efficiency. Discuss the objectives of management. Describe the importance of management. Management as Science, Art and Examine the nature of Profession management as a science, art and profession. Levels of Management Understand the role of top, middle and lower levels of management Management functions-planning, Explain the functions of organizing, staffing, directing and management controlling Coordination- concept and importance Discuss the concept and characteristics of coordination. Explain the importance of coordination. 5 ZIET,MYSORE Unit 2: Principles of Management Principles of Management - concept Understand the concept of and significance principles of management. Explain the significance of management principles. Fayol’s principles of management Discuss the principles of management developed by Fayol. Taylor’s Scientific management - Explain the principles and principles and techniques techniques of ‘Scientific Management’. Compare the contributions of Fayol and Taylor. Unit 3: Business Environment Business Environment- concept Understand the concept of and importance ‘Business Environment’. Describe the importance of business environment Dimensions of Business Describe the various dimensions of Environment - Economic, Social, ‘Business Environment’. Technological, Political and Legal Understand the concept of demonetization Demonetization - concept and features Unit 4: Planning Planning: Concept, importance Understand the concept of and limitation planning. Describe the importance of planning. Understand the limitations of planning. Planning process Describe the steps in the process of planning. Single use and Standing Plans. Develop an understanding of single Objectives, Strategy, Policy, use and standing plans Procedure, Method, Rule, Budget and Describe objectives, policies, Programme strategy, procedure, method, rule, budget and Programme as types of plans. 6 ZIET,MYSORE Unit 5: Organising Organising: Concept and Understand the concept of organizing as a structure and importance as a process. Explain the importance of organising. Organising Process Describe the steps in the process of organizing Structure of organisation- Describe functional and divisional structures functional and divisional of organisation. concept. Explain the advantages, disadvantages and Formal and informal organization suitability of functional and divisional - concept structure. Understand the concept of formal and informal organisation. Discuss the advantages, disadvantages of formal and informal organisation. Delegation: concept, Understand the concept of delegation. elements and importance Describe the elements of delegation. Appreciate the importance of Delegation. Decentralization: concept and Understand the concept of importance decentralisation. Explain the importance of decentralisation. Differentiate between delegation and decentralisation. Unit 6: Staffing Staffing: Concept and Understand the concept of staffing. Explain the importance of staffing importance of staffing Staffing as a part of Human Understand the specialized duties and activities Resource Management performed by Human concept Resource Management Staffing process Describe the steps in the process of staffing 7 ZIET,MYSORE Recruitment process Understand the meaning of recruitment. Discuss the sources of recruitment. Explain the merits and demerits of internal and external sources of recruitment. Selection – process Understand the meaning of selection. Describe the steps involved in the process of selection. job and off the job - vestibule Appreciate the importance of training to the training, apprenticeship training organisation and to theemployees. and internship training Discuss the meaning of induction training, vestibule training, apprenticeship training and internship training. Differentiate between training and development. Discuss on the job and off the job methods of training. 8 ZIET,MYSORE  Unit 7: Directing Directing: Concept and importance Describe the concept of directing. Discuss the importance of directing Elements of Directing Describe the various elements of directing Motivation - concept, Maslow’s Understand the concept of hierarchy of needs, Financial and non- motivation. financial incentives Develop an understanding of Maslow’s Hierarchy of needs. Discuss the various financial and non- financial incentives. Leadership - concept, styles - Understand the concept of authoritative, democratic and laissez leadership. faire Understand the various styles of leadership. Communication - concept, formal Understand the concept of and informal communication; communication barriers to effective communication, Understand the elements of the how to overcome the barriers? communication process. Discuss the concept of formal and informal communication. Discuss the various barriers to effective communication. Suggest measures to overcome barriers to communication. Unit 8: Controlling Controlling - Concept and importance Understand the concept of controlling. Explain the importance of controlling. Relationship between planning Describe the relationship between planning and controlling and controlling Steps in process of control Discuss the steps in the process of controlling. 9 ZIET,MYSORE  Part B: Business Finance and Marketing Unit Unit 9: Financial Management Financial Management: Concept, Understand the concept of financial role and objectives management. Explain the role of financial management in an organisation. Discuss the objectives of financial management Financial decisions: investment, Discuss the three financial decisions and the financing factors affecting them. and dividend - Meaning and factors affecting Financial Planning - Describe the concept of financial planning concept and importance and its objectives. Explain the importance of financial planning. Capital Structure – concept and Understand the concept of capital structure. factors affecting capital Describe the factors determining the choice structure of an appropriate capital structure of a company. Fixed and Working Capital - Understand the concept of fixed and Concept and factors affecting their working capital. requirements Describe the factors determining the requirements of fixed and working capital. Unit 10: Financial Markets Financial Markets: Concept Understand the concept of financial market. Money Market: Concept Understand the concept of money market. Capital market and its types (primary Discuss the concept of capital and secondary) market. Explain primary and secondary markets as types of capital market. Differentiate between capital market and money market. Distinguish between primary and secondary markets. 10 ZIET,MYSORE Stock Exchange - Functions and trading Give the meaning of a stock procedure exchange. Explain the functions of a stock exchange. Discuss the trading procedure in a stock exchange. Give the meaning of depository services and demat account as used in the trading procedure of securities. Securities and Exchange Board of India State the objectives of SEBI. (SEBI) - objectives and functions Explain the functions of SEBI. 11 ZIET,MYSORE Unit 11: Marketing Marketing – Concept, Understand the concept of marketing. functions and philosophies Explain the features of marketing. Discuss the functions of marketing. Explain the marketing philosophies. Marketing Mix – Concept and Understand the concept of marketing elements mix. Describe the elements of marketing mix. Product – branding, Understand the concept of product as an labelling and packaging element of marketing mix. – Concept Understand the concept of branding, labelling and packaging. Price - Concept, Factors Understand the concept of price as an element determining price of marketing mix. Describe the factors determining price of a product. Physical Distribution – Understand the concept of physical concept, components and distribution. channels of distribution Explain the components of physical distribution. Describe the various channels of distribution. Promotion – Concept and Understand the concept of promotion elements; Advertising, as an element of marketing mix. Personal Selling, Sales Describe the elements of promotion mix. Promotion and Public Understand the concept of advertising. Relations Understand the concept of sales promotion. Discuss the concept of public relations. Unit 12: Consumer Protection Consumer Protection: Concept Understand the concept of and importance consumer protection. Describe the importance of 12 ZIET,MYSORE  consumer protection. Discuss the scope of Consumer Protection Act, 2019 The Consumer Protection Act, 2019: Understand the concept of a Source: consumer according to the http://egazette.nic.in/WriteReadData/2 Consumer Protection Act, 2019. 019/210422.pdf Explain the consumer rights Understand the responsibilities of Meaning of consumer consumers Rights and responsibilities of Understand who can file a consumers Who can file a complaint and against whom? complaint? Discuss the legal redressal Redressal machinery under Consumer machinery Protection Act, 2019. Remedies available Examine the remedies available to the consumer under Consumer Protection Act, 2019. Consumer awareness - Role of Describe the role of consumer consumer organizations and Non- organizations and NGOs in Governmental Organizations protecting consumers’ interests. (NGOs) 13 ZIET,MYSORE  Suggested Question Paper DesignBusiness Studies (Code No. 054) Class XII (2024-25) March 2025 Examination Marks: 80 Duration: 3 hrs. SN Typology of Mar Percenta Questions ks ge Remembering and Understanding: Exhibit memory of previously learned material by recalling facts, terms, basic concepts, and answers. 1 Demonstrate understanding of facts and ideas by 44 55% organizing, comparing, translating, interpreting, giving descriptions, and stating main ideas Applying: Solve problems to new situations by 2 applying acquired knowledge, facts, techniques and 19 23.75% rules in a different way Analysing, Evaluating and Creating: Examine and break information into parts by identifying motives or causes. Make inferences and find evidence to support generalizations. 3 Present and defend opinions by making judgments 17 21.25% about information, validity of ideas, or quality of work based on a set of criteria. Compile information together in a different way by combining elements in a new pattern or proposing alternative solutions. Total 80 100% 14 ZIET,MYSORE  CHAPTER -1 NATURE AND SIGNIFICANCE OF MANAGEMENT Meaning/Concept of Management: Management is the process of getting things done with the aim of achieving goals effectively and efficiently. (Process means the activities that management performs to get things done.) Management consists of a series of interrelated functions that are performed by all managers. Management guides the efforts of people working towards the achievement of common goal of the organisation. Effectiveness: means completing the right task to achieve the goal within time. Efficiency: means completion of task using minimum resources. Characteristics/Features of Management Management is a goal-oriented process: -The basic goal of the organisation for its existence must be clearly stated. Management is all pervasive:- The activities involved in managing an enterprise are common to all organisations whether economic, social or political. Management is multidimensional:-Management of Work, Management of people, Management of Operation. Management is a continuous process:- Management is a series of continuous, composite but separate functions. Management is a group activity:- Every member of the group has a different purpose for joining the organisation but as members of the organisation they work towards fulfilling the common organisational goal. Management is a dynamic function:– To be successful, an organisation must change itself and its goals according to the needs of the environment. Management is an intangible force:- Management is an intangible force that cannot be seen but its presence can be felt in the way the organisation functions. Importance of Management 15 ZIET,MYSORE Management helps in achieving group goals:- The task of manager is to give a common direction to the individual efforts. Management increases efficiency:– The aim of a manager is to reduce costs and increase productivity. Management creates a dynamic organisation:- Management helps people to adapt to the changes to maintain its competitive edge. Management helps in achieving personal objectives:- Through motivation and leadership the management helps individuals to achieve their personal goals. Management helps in the development of society:– It helps to provide good quality products and services, creates employment opportunities, adopts new technology. Objectives of Management 1. Organisational objectives: - Survival: - In order to survive, an organisation must earn enough revenues to cover costs. Profit: - Profit is essential for covering costs and risks of the business. Growth: - Growth indicates how well it exploits the potential opportunities. 2. Social Objectives: Supply of quality products at reasonable rates, generating employment opportunities, using environmentally friendly methods of production. 3. Personal Objectives: Meeting the Financial needs like competitive salaries & perks, Peer recognition like self- respect etc. Good & healthy working conditions for ensuring the safety of employees, Promotion, training personal growth of employees. Levels of Management The levels of management denote a demarcation between various positions in an organization on the basis of the responsibility, authority and status. These are– Top Level Management - CEO, Board of directors, MD, President& Chairman. Functions of Top-Level Management: - Decide overall objectives of the organization. Responsible for the welfare and survival of the organization. Analyse the business environment and its implications for the survival of the firm. 16 ZIET,MYSORE  Formulate overall organisational goals and strategies. Middle Level Management – Departmental heads such as purchase manager, Operations manager, Production manager, Marketing manager, Divisional heads & Plant superintendent etc. Functions of Middle Level Management: - Interpret the policies framed by top management. Ensure that their department has the necessary personnel. Assign necessary duties and responsibilities to them. Motivate them to achieve desired objectives. Co-operate with other departments for smooth functioning of the organisation. Supervisory or Operational Management– Foremen, Inspectors, Supervisors etc. Functions of Operational Management: - Oversee the efforts of the workforce. Interact with the actual work force and pass on instructions of the middle management to the workers. Maintain quality of output. Minimise wastage of materials. Maintain safety standards. Nature of Management Management as an Art Features of an art are :- (i)Existence of theoretical knowledge: Art presupposes the existence of certain theoretical knowledge. (ii) Personalised application: The use of this basic knowledge varies from individual to individual. (iii) Based on practice and creativity: Art involves the creative practice of existing theoretical knowledge. Management can be said to be an art since it satisfies the following criteria: (i) A successful manager practices the art of management based on study, observation and experience. (ii) A manager applies the scientific methods and body of knowledge to a given situation, in his own unique manner. (iii) A manager applies this acquired knowledge in a personalised and skillful manner. 17 ZIET,MYSORE  Management as a Science Science is a systematised body of knowledge that explains certain general truths or the operation of general laws. The basic features of science are: (i) Systematised body of knowledge: Its principles are based on a cause and effect relationship. (ii) Principles based on experimentation: Scientific principles are developed through observation and repeated experimentation. (iii) Universal validity: Scientific principles have universal validity and application. Management has some characteristics of science. (i) Management is also a systematised body of knowledge. (ii) Management deals with human beings, hence the outcomes of the experiments cannot be predicted. (iii) The principles of management are not as exact as the principles of science, their application and use is not universal. Management as a Profession (i) Well-defined body of knowledge: All professions are based on a well-defined body of knowledge that can be acquired through instruction. (ii) Restricted entry: The entry to a profession is restricted through an examination or through acquiring an educational (iii) Professional association: All professions are affiliated to a professional association. (iv) Ethical code of conduct: All professions are bound by a code of conduct which guides the behaviour of its members. (v) Service motive: The basic motive of a profession is to serve their client’s interests by rendering dedicated and committed service. Management does not meet the exact criteria of a profession. (i) Management based on a systematic body of knowledge comprising well-defined principles. (ii) There is no restriction on anyone being designated or appointed as manager in any business enterprise. (iii)There is no compulsion for managers to be members of any professional Association. (iv)The basic purpose of management may be profit maximisation for a business enterprise and service for a hospital. Functions of Management Planning - Setting objectives and targets and formulating an action plan of what is to be done, how to be done and when to do it. 18 ZIET,MYSORE Organising - Assignment of duties, task, establishment of authority and responsibility Relationship, allocating the resource required to perform the planned task. Staffing -Finding and placing the right person at the right job at the right time. Directing - Leading, influencing, and motivating the staff chosen to perform the assigned task efficiently and effectively. Controlling - Ensuring/Monitoring the activities in an organisation are performed as per the plan. Coordination The process by which a manager synchronises the activities of different departments is known as coordination. Coordination is the force that binds all the other functions of management. Characteristics of Coordination (i) Coordination integrates group efforts: Coordination gives a common focus to group effort to ensure that performance is as it was planned and scheduled. (ii) Coordination ensures unity of action: It acts as the binding force between departments and ensures that all action is aimed at achieving the goals of the organisation. (iii) Coordination is a continuous process: Coordination begins at the planning stage and continues till controlling. (iv) Coordination is an all pervasive function: Coordination is required at all levels of management. (v)Coordination is the responsibility of all managers: Coordination is the function of every manager in the organisation. (vi) Coordination is a deliberate function: A manager has to coordinate the efforts of different people in a conscious and deliberate manner. Importance of Coordination (i)Growth in size: As organisations grow in size, the number of people in the organisation also increases. They may work for cross purposes. So, coordination is needed to integrate their efforts and activities. (ii)Functional differentiation: Coordination brings unity of action among inter- dependent departments of an organisation and helps to avoid conflicts between them. (iii)Specialisation: In modern organisations, there is high degree of specialisation. So, many specialists are appointed. Coordination is required to avoid conflict between the specialists and other members of the organisation. MULTIPLE CHOICE QUESTIONS (MCQs) 1. Efficiency: (a) Focuses on optimum use of resources (b) Involves cost-benefit analysis 19 ZIET,MYSORE (c) Means doing the task correctly and with minimum cost (d) All of the above 2. Which of the following is not an organisational objective of the management? (a) Survival (b) Women Empowerment (c) Profit (d) Growth 3.__________________ is concerned with monitoring organisational performance towards the attainment of organisational goals. (a) Staffing (b) Controlling (c) Organising (d) Directing 4. General Manager belongs to ________________ level, while Production Manager belongs to ______________ level. (a) Middle, Top (b) Top, Middle (c) Top, Lower (d) Middle, Lower 5. Manager is able to achieve the target production within the time, but after high wastage of resources. In this case, the manager is: (a) Effective (b) Efficient (c) Both (a) and (b) (d) Neither (a) nor (b) 6. ‘A business needs to add to its prospects in long run’. Which organisational objective of management is highlighted in the given statement? (a) Growth (b) Profit (c) Survival (d) None of these 7. Star Ltd. arranged motivational lecture for personal growth and development to fits employees. Which objective of management the company is trying to achieve? (a) Organisational Objective (b) Personal Objective (c) Social Objective (d) Both (a) and (b) 8. Earth Ltd. has a target of producing 10,000 units in a year, at a cost of ₹70 per unit. The target was achieved by the production manager but at a cost of ₹90 per unit. Is production manager effective or efficient or both? (a) Effective only (b) Efficient only (c) Both (a) and (b) (d) None of these 9. ‘The activities involved in managing an enterprise are common to all organisations whether economic, social or political’. Which characteristic of management is highlighted in the given statement? (a) Intangible Force (b) Group Activity (c) Dynamic Function (d) Pervasive 10. Top Level Management spend more time on: (a) Directing (b) Organising (c) Controlling (d) Planning 20 ZIET,MYSORE 11. ‘A manager applies the acquired knowledge in a personalised and skilful manner in the light of the realities of a given situation’. The given statement indicates that management is: (a) A Science (b) An Art (c) A Profession (d) None of these 12. A good manager synchronises all the activities of different departments through: (a) Staffing (b) Directing (c) Coordination (d) Planning 13. The target production of Mars Ltd. was 10,000 units in a year. Production manager was able to cut down the cost but could not achieve the target. In this case, manager is _______________________ but not _______________________. (a) Efficient, Effective (b) Efficient, Honest (c) Effective, Efficient (d) None of these 14. The functions performed by top management are the most important because they take care of: (a) Overall organisation (b) Specific problems (c) Routine problems (d) extraordinary problems 15. Foremen belongs to: (a) Top level of management (b) Middle level of management (c) Supervisory management (d) None of the above 16. Name the process, which integrates activities of different departments. (a) Coordination (b) Cooperation (c) Organising (d) Management 17. Which function determines the future course of action? (a) Organising (b) Controlling (c) Planning (d) Directing 18. __________ is the process of motivating, leading and communicating with the subordinates to achieve the organisational objectives. (a) Staffing (b) Planning (c) Controlling (d) Directing 19. To become a Chartered Accountant in India, a candidate has to clear a specified examination conducted by the Institute of Chartered Accountants of India. Which feature of profession is being revealed? (a) Ethical code of conduct (b) Restricted Entry (c) Well defined body of knowledge (d) Professional association 21 ZIET,MYSORE 20. “Management has to adapt itself according to the changing environment”. Which feature of management is highlighted in the given statement? (a) Continuous Process (b) Goal Oriented (c) Group Activity (d) Dynamic Function 21.An organisation is providing basic amenities like schools and healthcare to employees. Which management objective is highlighted? (a) Organisational objective (b) Individual Objective (c) Social Objective (d) None of these 22.An organisation consists of diverse individuals with different needs, who join the organisation for different purpose, but as members of the organisation, they work together to achieve organisational goal. Which feature of management is being highlighted? (a) Goal Oriented (b) Pervasive Function (c) Group Activity (d) Continuous Process 23.Which management level is responsible to ensure that their department has necessary personnel? (a) Supervisory Level (b) Top Level (c) Middle Level (d) None of these 24.Coordination is associated with which management function? (a) Planning (b) Organising (c) Staffing (d) All of these 25.Policy formulation is the function of: (a) Top level managers (b) Middle level managers (c) Operational management (d) All of the above 26.Survival is possible only when organisation is able to earn enough revenue to cover its costs. Which management objective is highlighted? (a) Organisational objective (b) Individual Objective (c) Social Objective (d) None of these 27.‘To cooperate with other departments for smooth functioning of the organisation’ highlights the function of ____________________ level of management. (a) Top (b) Supervisory (c) Middle (d) None of these 28.Ms. Sonia is a section officer of Epson Ltd. She is working at……. level. (a) Middle (b) Lower (c) Top (d) None 29.The force that binds all other functions of management is called: 22 ZIET,MYSORE (a) Controlling (b) Planning (c) Organising (d) Coordination 30. ‘Management cannot be seen but its presence can be felt’. Which characteristic of management is highlighted in the given statement? (a) Group Activity (b) Dynamic Function (c) Intangible Force (d) Continuous Process 31.Max Ltd. needed funds to fulfil a big order. The management of the company borrowed money from a financial institution @ 15% interest, while the prevailing rate of interest was 11%. As a result of this the company was able to achieve the target. According to you, management was_________ (a) Effective (b) Efficient (c) Both (a) and (b) (d) Inefficient 32.Chief Executive Officer is working at _________________ level of management. (a) Middle (b) Lower (c) Top (d) Supervisory 33.Which management function puts the right people at right place? (a) Planning (b) Organising (c) Staffing (d) Directing 34.Every manager has his own unique way of managing things and people. This is related to: (a) Management as a Profession (b) Management as Science (c) Management as an Art (d) None of these 35. ___________________ is the creation of an internal environment where individuals working in a group can perform effectively and efficiently for the achievement of organisational goal. (a) Planning (b) Organising (c) coordination (d) Management 36.Which function of management aims to ensure that everything is done according to predetermined goals? (a) Planning (b) Staffing (c) Directing (d) Controlling Q.No. Ans: Q.No. Ans: Q.No. Ans: 1 D 13 A 25 A 2 B 14 A 26 A 3 B 15 C 27 C 4 B 16 A 28 A 5 A 17 C 29 D 23 ZIET,MYSORE  6 A 18 D 30 C 7 B 19 B 31 A 8 A 20 D 32 C 9 D 21 C 33 C 10 D 22 C 34 C 11 B 23 C 35 D 12 C 24 D 36 D MATCHING TYPE QUESTION Q.1. From the set of statements given in Column I and Column II, choose the correct pair of statements: Column I Column II (a) Effectiveness (i) It refers to doing the task correctly and with minimum cost (b) Middle Level (ii) It consists of divisional or departmental heads Management (c) Coordination (iii) It is one of the main function of management (d) Efficiency (iv) It refers to achieving the goals on time Ans. (b) Middle Level Management - (ii) It consists of divisional or departmental heads. Short Answer Type Questions 1. Yash Ltd. is facing a lot of problems these days. It manufactures electronic goods like washing machines, microwave ovens, refrigerators and air-conditioners. The company's margins are under pressure and the profits and market share are declining. The production department blames marketing department for not meeting sales targets and marketing department blames production department for producing goods, which are not of good quality to meet customers’ expectations. The finance department blames both production and marketing departments for declining return on investment and bad marketing. (a) What quality of management do you think the company is lacking? Justify your answer. (b) State the importance of the concept identified in (a). Ans. (a) Coordination; because production, marketing and finance departmental efforts are not coordinated for achieving organisational objectives harmoniously. As a result, the company's profits and market share are declining. (b) Importance of Coordination (i) Growth in size: As organisations grow in size, the number of people in the organisation also increases. They may work for cross purposes. So, coordination is needed to integrate their efforts and activities. 24 ZIET,MYSORE  (ii) Functional differentiation: Coordination brings unity of action among inter- dependent departments of an organisation and helps to avoid conflicts between them. (iii) Specialisation: In modern organisations, there is high degree of specialisation. So,many specialists are appointed. Coordination is required to avoid conflict between the specialists and other members of the organisation. 2. The management of Vee Ltd. strongly believes that the members of an organisation should work towards fulfilling the common organisational goals. This requires team work and integration of efforts of all individuals, departments and specialists. This is because all the individuals and departments depend on each other for information and resources to perform their respective activities. Managers need to reconcile differences in approach, timing, effort or interest. At the same time it should enable all its members to grow and develop. Thus, there is a need to harmonise individual goals and organisational goals. (a) Identify the concept of management discussed above. (b) State any three features of the concept identified in (a). (c) Identify and explain the characteristic of management which is reflected from the above para. Ans. (a) Coordination (b) Features of coordination: (i) Coordination integrates group efforts by unifying diverse interests. (ii) Coordination ensures unity of action by acting as a binding force between departments. (iii) Coordination is a continuous process as it begins at planning stage and continues till controlling. (c) Management is a group activity. An organisation is a group of different individuals who work together with team spirit and coordination to achieve the goals of the organisation. 3. Nisha is the marketing manager of a company selling laptops. She plans the target sale of 2000 laptops per month. She allocated necessary resources to carry out the plan. She has six salesmen working under her. She works with them, guiding and motivating them to achieve the target sales. At the end of the month, after comparison of actual sales with the target sales she found that actual sales exceeded the target sales. She rewards the efficient employees to motivate them. (a) How does Nisha prove the importance of management? Explain. (b) Also state the functions performed by Nisha. Ans. (a) The marketing manager, Nisha helps in: 25 ZIET,MYSORE  (i) achieving the group goals by giving a common direction to the individual effort of her subordinates in achieving the target sale of 2000 laptops in a month. (ii) increasing efficiency of employees by rewarding them. She performs all the functions of management. She plans the target sale of 2000 laptops per month’ – Planning She allocates necessary resources to carry out the plan’ – Organising. She works with them, guiding and motivating them to achieve the target sales’ – Directing At the end of the month, after comparison of actual sales with the target sales she found that actual sales exceeded the target sales’ – Controlling 4. Megha Ltd. was manufacturing 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 of less revenues. After analysis the company decided (i) to reduce the labour cost by shifting the manufacturing unit to a backward area where labour was available at a very low rate. (ii) 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 too. Identify and explain the objectives of management discussed above. Ans: (i) Organisational Objective- Profit (ii) Social Objective. HOTS & APPLICATION BASED QUESTIONS WITH ANSWERS Q.1. Mr. Aditya is responsible for framing plans and policies of M/s Evershine Industries. At which managerial level, he is working. Also discuss his main functions. Ans. Top Level. Discuss ‘Main Functions of Top level management’. Q.2.“A business needs to add to its prospects in the long run. “Which organisational objective is highlighted in the statement? Mention two other objectives under this category. Ans. The organisational objective highlighted is ‘Growth’. Two other organisational objectives are: (i) Survival (ii) Profit. 26 ZIET,MYSORE Q.3. ‘Success of a manager depends on the manner in which he practices the conceptual knowledge of management in combination with his own skills.’ What nature of management is indicated in the statement? OR “Every manager has his own unique way of managing things and people.” What nature of management is highlighted in the statement? OR “Management is skilful and personal application of existing knowledge to achieve desired results:” Explain. Ans. Discuss ‘Management as an Art’. Q.4. “Management helps to implement new changes in the organisation. “Which importance of management is referred in the statement? Ans. Management creates a dynamic organisation. Q. 5. “A manager is continuously engaged in maintaining an orderly arrangement of his group efforts so that their actions move in the same direction and common purpose of the company can be achieved.” Which process is referred here? Discuss the importance of this process in management. OR ‘Through this process, a manager synchronises the activities of different departments’. Identify and explain the importance of the process highlighted in the given statement. Ans. Coordination is referred in the given case. Discuss ‘Importance of Coordination’. Q.6. Mr.Tanvir is responsible for assigning work to employees and representing their grievances to Mr. Deepak (Tanvir’s Boss). Identify the managerial levels at which Tanvir and Deepak are working. Ans. Mr.Tanvir works at the Operational Level and Deepak at the Middle Level. Q.7. Match the 'Functions of Management' given under 'A' with the suitable statements under 'B': (A) (B) (i) Organising a. Determining in advance what is to be done. (ii) Directing b. Aims to ensure that right people with right qualifications are available at the right places. (iii) Planning c. Monitoring organisational performance for achieving organisational goals. (iv) Controlling d. Involves leading, influencing and motivating employees. 27 ZIET,MYSORE  (v) Staffing e. Grouping of the required tasks into manageable departments. Ans. (i) e; (ii) d; (iii) a; (iv) c; (v) b. Q. 8.Identify the ‘Nature of Management’ highlighted in each of the following individual cases: (i) Management Principles have been evolved over a period of time based on repeated experimentation and observation. (ii) Every manager has his own unique way of managing things and people. (iii) Certain management associations, like AIMA, have formulated ethical codes for managers, but there is no legal support for it. (iv) Mangers improve their managerial skills with regular application of management principles. (v) There is no restriction on any person being appointed as manager. (vi) A lot of literature is available in various areas of management which the manager has to specialize in. Ans. Management as a Science: (i) Management as an Art: (ii), (iv), (vi) Management as a Profession: (iii), (v) CASE STUDIES Q.1. Alpha Automobiles aims to produce and sell 2,00,000 cars in 2019. To achieve this objective, the production department strives for timely production and sales department takes all possible steps to sell them. Due to combined efforts of all the departments, the company is able to achieve its target. (i) Which significance of management is highlighted in the given statement? (ii) Mention two other points of importance of management. Ans. (i) Management helps in achieving group goals; (iii) (a)Management increases efficiency (b) Management creates a dynamic organization. 28 ZIET,MYSORE Q.2. From the following pictorial presentation, identify the objective violated by the management. Ans. Social Objective. Q.3. Aman, Ahmad and Ally partners in a firm engaged in the distribution of dairy products in Maharashtra state. Aman is a holder of Senior Secondary School Certificate from Central Board of Secondary Education with Business Studies as one of his elective subjects. Ahmed had done his post-graduation in History and Ally in dairy farming. One day, there was a serious discussion between Ahmed and Ally regarding the nature of management, Ahmed argues that management was a profession. Whereas, Ally argued against it saying that the legal and medical profession are the only professions because they fulfill all the conditions of profession. Aman on the basis of his knowledge of business studies explained the nature of management as a profession to Ahmed and Ally. Explain, how Aman would have satisfied both Ahmad and Ally? Ans. Aman would have satisfied both Ahmed and Ally by explaining the following features of management as a profession: (i) Well-defined body of knowledge: (ii) Restricted entry: (iii) Professional association: (iv) Ethical code of conduct (v) Service motive 29 ZIET,MYSORE  CHAPTER 2 PRINCIPLES OF MANAGEMENT Concept of Principles of Management ‘Principles of Management are broad and general guidelines for decision making and behaviour of managers.’ These principles help managers to take decisions while performing functions of management viz. planning, organising, staffing, directing and controlling. Not rules but only a guide to action. Applicable to different kinds of organisations. Derived from Observation and Experimentation. Derivation of these principles may be said to be a matter of science and their creative application may be regarded as an art. Nature/Characteristics/Features of Principles of Management Code :- Under Ground Cat is Pining For Bitter Cucumber 1. Universal Applicability Can be applied to all kinds of organisations irrespective of size & nature. Extent of application varies depending on nature & size of organisation. E.g. Principle of ‘Discipline’ can be applied to all kinds of organisations for smooth functioning of management. 2. General Guidelines Are general guidelines and cannot be used as tailor-made tools. As real business situations are very complex and dynamic, these can just provide guidelines not the specific solutions. E.g. Strict compliance of principle of ‘Centralisation & Decentralisation’ is not required in all sorts of situations and in all organisations. 3. Cause and Effect Relationship Are intended to establish relationship between cause and effect so that they can be applied in similar situations. However, accurate cause and effect relationship cannot be established by these as these are applied on human behaviour and in real life situations which are not identical. E.g. According to principle of ‘Stability of Personnel’, making efforts to keep employees satisfied is cause and employees remain stable is effect. 4. Formed by Practice and Experimentation Are evolutionary in nature i.e. developed through observations, experimentation and experience of the management thinkers. E.g. Principle of ‘Scalar Chain’ has been developed after observing positive results of the hierarchy. 30 ZIET,MYSORE 5. Flexible Are not rigid as in case of pure science principles. Can be modified as per changes in the business environment. Even in identical situations, same principles cannot be applied blindly. Manager has to decide which principle to use under each situation. E.g. Principle of ‘Unity of Direction’ is applied as per the requirement. 6. Mainly Behavioural Aim at influencing human behaviour. Human behaviour is very complex and unpredictable in nature. Also enable a better understanding of relationship between human and material resources to achieve the organisational goals. E.g. Principle of ‘Initiative’ is effective only if employees are interested. 7. Contingent Their application is dependent or contingent (uncertain) upon the prevailing conditions at a particular point of time. Have to be suitably amended as per situations. E.g. Principle of ‘Division of Work’ cannot be applied in organisations, where personal skills are needed. Significance/Importance of Principles of Management Code:- Insights of Training Optimise Science, Society & Environment 1. Providing Managers with Useful Insights into Reality These principles improve knowledge, ability and understanding of managerial situations and circumstances. Enable managers to learn from past mistakes and to save time by solving recurring problems quickly. E.g. Like Accounting Principles become the basis for taking decisions related to real life accounting problems. 2. Management Training, Education and Research Are used as a basis for management training, education and research. That is why these have been included in various courses like MBA, BBA, B.Com., etc. These also enable refinement of management practices and facilitate development of new techniques. E.g. As for teaching and learning law, one has to undergo law discipline where one learns norms of law. 3. Optimum Utilisation of Resources and Effective Administration These help managers to foresee the cause and effect relationship of their decisions and as a result, wastage and inefficiency associated with trial-and- error approach can be reduced. Resources are used in a manner that give maximum benefit with minimum cost. 31 ZIET,MYSORE  E.g. Having knowledge of the accurate proportions of the all ingredients to prepare a dish reduces wastage of ingredients hence dish tastes up to the mark. 4. Scientific Decisions Decisions based on these principles include objective assessment of the situation and emphasis on logic rather than blind faith. Hence, decisions are timely, realistic and subject to measurement and evaluation. E.g. Science emphasizes on first analysis then solution and all principles of management have been given after analysis. 5. Fulfilling Social Responsibility Help in fulfilling social responsibility by responding to the demands of the public. These not only help in achieving organisational goals but also guide managers in performing social responsibilities. E.g. Principle of ‘Equity’ states that there should be no discrimination with any employee on the basis of caste, religion, gender, etc. By following this principle, social responsibility is automatically being fulfilled. 6. Meeting Changing Environment Requirements These provide an effective and dynamic leadership and help the organisation to implement the changes. Although these principles are general guidelines yet they are flexible and can be modified to meet the dynamic business environment. E.g. One can adapt to new changes successfully only when one is well aware of old system. 14 Principles of Management by Henri Fayol 32 ZIET,MYSORE  Code:- CURIOUS AS DEEDS 1. Division of Work Work of all kinds must be divided and allocated as per competence, qualification and experience. Due to this reason, big companies have separate departments for finance, marketing, production and human resources. According to this principle, whole work must be divided into small tasks or jobs and each job must be assigned to a trained specialist who is competent to perform it. 2. Authority and Responsibility Authority is the right to give orders to subordinates and responsibility is the duty. Authority and Responsibility go hand in hand. Parity between Authority and Responsibility helps in meeting responsibilities on time and prevents misuse of authority. According to this principle, there should be proper balance between Authority and Responsibility. 3. Discipline Discipline requires good supervisor at all levels, clear and fair agreement regarding rules and judicious application of penalties. An employer/manager must also be disciplined to stick to his commitments/promises/words. According to this principle, there must be obedience to rules and regulations of the organisation, which is necessary for systematic working of the organisation. 4. Unity of Command If an employee gets orders from two or more superiors at the same time, it creates confusion, conflicts, disharmony and many other unpleasant situations. According to this principle, each subordinate should receive orders and be accountable to one and only one superior. 5. Unity of Direction All the units of an organisation should be moving towards the same objectives through coordinated and focused efforts. It ensures unity of action and avoids unnecessary duplication of efforts. According to this principle, there should be one head and one plan for group of activities having same objectives. 6. Subordination of Individual Interest to General Interest Every individual has its own interests and company has got its own objectives. This principle demands that each individual should sacrifice his personal interest for achieving company’s objectives. 33 ZIET,MYSORE  According to this principle, interest of the organisation as a whole must prevail over the interest of the individuals or employees. 7. Remuneration of Employees Employees should be paid fair wages which should give them at least a reasonable standard of living. At the same time it should be within the paying capacity of company. According to this principle, overall pay and compensation should be fair to both employees and organisation. 8. Centralisation and Decentralisation Centralisation refers to concentration of decision-making authority. Decentralisation refers to evenly distribution of authority at all levels of management. According to this principle, there should be proper balance between centralisation and decentralisation in the organisation. 9. Scalar Chain The formal lines of authority from highest to lowest ranks are known as scalar chain. This chain should not be violated in normal course of formal communication but in case of urgency, a short cut in the chain is permitted i.e. Gang Plank. Gang Plank allows direct communication between two employees of the same level, without following the scalar chain. According to this principle, organisation should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates. 10.Order If there is fixed place for everything and it is present there, there will be no obstruction in work. Same is with the employees. According to this principle, there should be a place for everything and everyone and they should be present there. 11.Equity If management is partial or biased in dealing with employees, the employees will get dissatisfied and will not contribute to their maximum potential. This principle emphasises kindliness and justice in the behaviour of managers towards employees. It ensures loyalty, devotion and cordial relations between superiors and subordinates. According to this principle, there should not be any discrimination among the employees on the basis of religion, language, caste, sex, belief or nationality 12.Stability of Personnel 34 ZIET,MYSORE  It is always in the interest of the enterprise that its trusted, experienced and trained employees do not leave the organisation. Continuous changes will create instability and insecurity among employees and they would tend to leave the organisation. It will also raise the cost of recruitment, selection and training. Employees should be selected and appointed after due and rigorous procedure and they should be given reasonable time to show results. According to this principle, there should be proper efforts to achieve stability and continuity of tenure of personnel. 13.Initiative Initiative means taking the first step with self-motivation and a source of strength by suggesting or forming plans for the betterment of the organisation. Initiative should be encouraged by the employer. According to this principle, employees should be encouraged and given an opportunity to take some initiative in making and executing the plans. 14.Esprit De Corps: A manager should replace ‘I’ with ‘We’ in his conversations to give rise to a spirit of teamwork. It develops an atmosphere of mutual trust and belongingness among team members and minimises the need for using penalties. Management must promote the feeling of team spirit among employees specially in large organisation. Espirit/Esprit De Corps is a French phrase which means ‘spirit of group’ According to this principle, management should promote a team spirit of unity and harmony among employees. Concept of Scientific Management ‘It stresses that there is always ‘one best way’ of doing a work.’ Scientific Management refers to use of scientific, systematic, objective and logical principles and techniques to various managerial functions It can also be defined as ‘application of science for each and every element of management’. It means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way. Code:- She & He Can Dance 1. Science, not Rule of Thumb Taylor believed that there was only one best method to maximise efficiency. This method can be developed through study and analysis. This study and analysis involves investigation of traditional methods also through work-study, unifying the best practice and developing a standard method of work. 35 ZIET,MYSORE  The method so developed should substitute Rule of Thumb throughout the organisation. According to this principle, there should be scientific study and analysis of each element of a job, in order to replace the old rule of thumb approach or hit and trial method. 2. Harmony, not Discord As under a factory system, there always exists a possibility of class-conflict between the managers (owners) and workers, Taylor recognised that this conflict helps neither the manager nor the worker but organization surely suffers. Taylor emphasised complete harmony between managers and workers away from any discord. Both need to realise each other’s importance and should be part of family. Taylor called for complete ‘mental revolution’ on the part of both. Mental Revolution: A complete change in the mindsets of manager as well as worker. Management should share the gains of the company, if any, with the workers and workers should work hard and be willing to accept the changes made by management for the betterment of the company. According to this principle, there should be complete harmony and proper understanding between management and workers 3. Cooperation, not Individualism This principle is an extension to ‘Harmony, not discord’. Competition should be replaced by cooperation. Taylor stated that there should be an almost equal distribution of work and responsibility between workers and management. Management should encourage constructive suggestions by employees and take them into confidence before making any important decision. 4. Development of Workers to their greatest efficiency and prosperity Taylor was of the view that the concern for efficiency could be built in right from the process of employee selection. Each employee should be scientifically selected and should be assigned job as per their physical, mental and intellectual capabilities. To increase the efficiency and to achieve the maximum potential of workers, they should be provided scientific training so that they may learn the ‘best method’ developed due to application of scientific management. According to this principle, management should aim to develop workers to their greatest efficiency and prosperity. 36 ZIET,MYSORE Techniques of Scientific Management Code:- Foreman Stands & Simplifies Work (of method, motion, time & fatigue) Differently 1. Functional Foremanship Functional Foremanship is an extension of ‘Division of Work’ principle of Fayol. This technique is opposite to ‘Unity of Command’ principle of Fayol. He suggested the division of factory into two departments; ‘Planning Department’ and ‘Production Department’. Therefore, in a factory, there should be a planning in-charge and a production in-charge. He also stated that the both in-charges will be assisted by a group of 4 foremen each. i.e., total of 8 specialists will guide and direct a worker, and each worker will have to take orders from these 8 foremen.. According to this technique, the task of supervision is divided into several specialised functions and each function is entrusted to a specialist foreman. Foremen Under Planning In-charge: 1. Instruction Card Clerk: One who drafts instructions for the workers. 2. Route Clerk: One who specifies the route of production. 3. Time and Cost Clerk: One who prepares time and cost sheet. 4. Disciplinarian: One who ensures discipline. Foremen Under Production In-charge 1. Speed Boss: One who ensures timely and accurately completion of job. 2. Gang Boss: One who keeps machines and tools, etc. ready for operation by workers. 3. Repair Boss: One who ensures proper working condition of machines and tools. 4. Inspector: One who checks the quality of work. 37 ZIET,MYSORE 2. Standardisation and Simplification of Work: (i) Standardisation of Work: Standardisation of Work refers to the process of setting standards for every phase of business operation.. Objectives of Standardisation To establish standards of excellence and quality in materials. To establish performance standards of men and machines. To establish interchange ability of manufactured parts and products. To reduce product to fixed types, sizes and characteristics. (iii) Simplification of Work: Simplification of work refers to eliminating Superfluous or unnecessary varieties, sizes and grades of the product manufactured by the organisation It aims to eliminate unnecessary diversity of products, sizes & types. It results in savings cost of labour, machines and tools and facilitates better control of activities. Work Study -- It is a group of four techniques; Method Study, Motion Study, Time Study & Fatigue Study 3. Method Study Method study is concerned with finding ‘one best way’ of doing a job. Objectives of Method Study: To minimise the cost of production. For finding one best method of performing the job, critical analysis is made for plant layout, product design, material handling and work processes. 4. Motion Study Motion study involves study of movements like lifting, putting objects, sitting and changing positions, etc., which are undertaken while doing a typical job. Objectives of Motion Study: To determine the movements of workers while doing a typical job. To differentiate between productive, incidental and unproductive movements. To cut down unproductive movements. 5. Time Study Time study refers to a technique, which is used to determine the standard time taken by a workman of reasonable skills and ability to perform a well- defined job Objectives of Time Study To determine number of workers to be employed. To frame suitable incentive schemes. To determine labour costs. 38 ZIET,MYSORE 6. Fatigue Study Fatigue means tiredness from physical or mental work. Taylor suggested that as a person gets tired when he works continuously without a break, he must be provided a brief rest interval in between so as to enable him to regain lost stamina. This will result in increased productivity. Objectives of Fatigue Study To determine the amount and frequency of rest intervals in completing a task. Fatigue study refers to determining the amount and frequency of rest intervals required in completing a task. 7. Differential Piece Wage System In this technique, incentive is directly linked with productivity. First of all, a standard task is established with the help of time and motion study. Then, two rates are fixed: Higher wage rate for the workers who produce equal to or more than standard output and low wage rate for the workers who do not reach the standard. Objectives of Differential Piece Wage System To differentiate efficient and inefficient workers and to suitably reward the efficient workers. Multiple Choice Questions (MCQs) Q.1 Study Buddy Pvt. is company dealing in stationery items. In order to establish standards of excellence and quality in materials and in the performance of men and machines, the company adheres to benchmarks during production. Moreover, its products are available in limited varieties, sizes and dimensions thereby eliminating superfluous diversity of products. Identify the technique of scientific management which has been adopted by Study Buddy Pvt. Ltd. (a) Functional Foremanship (b) Fatigue Study (c) Standardisation & Simplification of Work (d) Method Study Q.2 In a factory the toolbox was kept under the table of every worker, whenever worker needs tools he had to bend to take 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. Which technique of scientific management is used by new supervisor? (a) Motion Study (b) Fatigue Study (c) Time Study (d) Method Study Q.3 She/he keeps machines, materials, tools etc., ready for operations by concerned workers. Which specialist’s work is described by this sentence under functional foremanship? (a) Gang Boss (b) Repair Boss (c) Route Clerk (d) Instructions Card Clerk 39 ZIET,MYSORE Q.4 ‘Resources should be put to use in such a manner that they should give maximum benefit with minimum cost’. Identify the importance of principles of management highlighted in the statement. (a) Providing managers with useful insights into reality (b) Meeting changing environment requirements (c) Fulfilling social responsibility (d) Optimum utilisation of resources and effective administration Q.5 It refers to the use of scientific methods in decision making to resolve management problems rather than depending on conventional or trial and error methods. Name it. (a) Science, not rule of thumb (b) Harmony, not discord (c) Cooperation, not individualism (d) Method Study Q.6 Every individual working in an organization has different goals, but they all work towards fulfilling the common organizational goals. Which principle of management is being referred to here? (a) Scalar Chain (b) Harmony, not Discord (c) Subordination of Individual Interest to General Interest (d) Unity of Action Q.7 Ram is a marketing executive and he is being given instructions from the purchase manager as well as production manager simultaneously. Which principle of Fayol is being violated here? (a) Discipline (b) Unity of Command (c) Scalar Chain (d) Unity of Action Q.8 What is the situation if all the decisions are taken by the top managers? Explain the principle given by Fayol in relation to the same. (a) Equity (b) Centralisation and Decentralisation (c) Scalar Chain (d) Authority and Responsibility Q.9 The manager of ABC Ltd. asked his workers to work overtime to increase the production and earn more but he did not pay extra wages to workers for extra time worked. The workers started feeling dissatisfied and stop contributing maximum. Which principle of Fayol is violated in the above case. (a) Discipline (b) Equity (c) Esprit De Corps (d) Order 40 ZIET,MYSORE Q.10 Telco Ltd. is manufacturing files and folders from old clothes to discourage 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 suggestion for improvement in design, but it was also not appreciated by the production manager. Identify the principle of management being violated in the above para. (a) Authority and Responsibility (b) Stability of Personnel (c) Espirit De Corps (d) Initiative Q.11 Mr. Rajiv, the senior manager of Unique Enterprise, considered himself very wise and used to take all the decisions himself without consulting the employees, he never used to help anyone nor he used to take help of anyone. The employees of Unique Enterprise were not working efficiently and company’s profit margin started declining. To tackle the problem, the company appointed a new manager from IIM Bangalore. The new manager after joining made a policy that all the decisions will be taken after consulting employees in the meeting. All employees must give some suggestions and best suggestions will be rewarded with financial and nonfinancial incentives. This policy had a very positive effect on the company. State the principle of Henry Fayol used by new manager. (a) Authority and Responsibility (b) Initiative (c) Equity (d) Division of Work Q.12 In a school, principal makes sure that every instruction, order or information given by him must be passed to vice-principal then Head of the department and then to teachers and students must be informed by respective teachers only. He never allows teachers to directly communicate with him. State the principle of Henry Fayol followed by the school principal. (a) Discipline (b) Scalar Chain (c) Centralisation and Decentralisation (d) Unity of Command Q.13 Keerti is working in a local bank. She has been assigned the duty of safety of cash but she is not allowed to keep the keys with her. Which principle of management is being violated here? (a) Authority and Responsibility (b) Initiative (c) Equity (d) Division of Work Q.14 ‘AapkaVidyalaya’ believes in holistic development of students and encourages team building through a mix of curricular, co-curricular and sports activities. On its foundation day, a stage performance had to be put up. A committee of ten prefects was constituted to plan different aspects of the function. They all decided to use recycled paper for decoration. There was a spirit of unity and harmony and all members supported each other. With mutual trust and belongingness, the programme was systematically planned and executed. Kartik, one of the prefects realized that unknowingly the group had applied one of the principles of management while planning and executing the 41 ZIET,MYSORE programme. He was so inspired by the success of the function that he asked his father to apply to same principle in his business. His father replied that he was already using this principle. Identify the principle of management applied for the success of the programme. (a) Authority and Responsibility (b) Stability of Personnel (c) Esprit De Corps (d) Initiative Q.15 Karan Nath took over ‘D’ North Motor Company from his ailing father three months ago. In the past, the company was not performing well. Karan was determined to improve the company’s performance. He observed that the methods of production as well as selection of employees in the company were not scientific. He believed that there was only one best method to maximize efficiency. He also felt that once the method is developed, the workers of the company should be trained to learn that ‘best method’. He asked the production manager to develop the best method and carry out the necessary training. The production manager developed this method using several parameters right from deciding the sequence of operations, place for men, machines and raw materials till the delivery of the product to the customers. This method was implemented throughout the organisation. It helped in increasing the output, improving the quality and reducing the cost and wastage. Identify the principle of scientific management followed by the production manager in the above case. (a) Science, not rule of thumb (b) Harmony, not discord (c) Cooperation, not individualism (d) Method Study Instructions: Q.16 to Q.19 are based on Assertion and Reason. In each question, on the basis of (A) and (R) given in the question, choose the correct choice from the options given below: (a) Both (A) and (R) are wrong (b) Only (A) is right and (R) is wrong (c) Both (A) and (R) are right and (R) is the correct explanation of (A) (d) Both (A) and (R) are right but (R) is not the correct explanation of (A) Q.16 Assertion (A): Management principles have to be modified as per the changes in the business environment. Reason (R): Principles of management are rigid like pure science principles. Q.17 Assertion (A): The application of principles of management is contingent. Reason (R): The principles of management are not rigid prescriptions, which have to be followed absolutely. Q.18 Assertion (A): In an organisation, there should be a chain of superiors ranging from the ultimate authority to the lowest. Reason (R): Managers require authority commensurate with their responsibility. Q.19 Assertion (A): When authority is transferred, responsibility is automatically transferred. Reason (R): When responsibility is transferred, authority is not automatically transferred. Q.20 Statement I: “The application and result of management principles remain same in all organisations.” Statement II: “The application of principles of management is dependent upon the 42 ZIET,MYSORE  prevailing situation at a particular point of time.” Choose the correct option: (a) Both Statements are wrong (b) Statement I is right and Statement II is wrong (c) Statement I is wrong and Statement II is right (d) Both Statements are right Answer Key 1 (c) 2 (a) 3 (a) 4 (d) 5 (a) 6 (c) 7 (b) 8 (b) 9 (a) 10 (d) 11 (b) 12 (b) 13 (a) 14 (c) 15 (d) 16 (b) 17 (d) 18 (d) 19 (c) 20 (b) Very Short Answer Type Questions/ Three Marks Questions Q.1 Explain the technique of differential piece wage system with a numerical example. What will be the effect on the performance of a firm if it follows this technique? Q.2 The production department of Alpha Ltd. was not performing well on detailed analysis, it was observed that the workers of that department were overburdened. They were forced to work for longer hours without any break. So the management planned to replace the production manager. They appointed Mr.Hari as the new Production Manager. He observed the average worker and note down their times. He noted down the time they worked and the time they required to be fresh to join back the work. Based on this observation, he set the break intervals for workers. He gave small breaks to workers to recharge their energy. Name and explain the technique of scientific management used by Mr.Hari. Also mention its objective. Q.3 In the staff meeting, the principal of the school raised objection that teachers start the teaching after 5 to 10 minutes in third floor classes. He warned them as students are complaining about this. The teachers explained the principal that when we climb steps from ground to third floor, we get some tiredness and need 5 to 10 minutes rest before starting the lecture. The principal planned to install a lift in school so that teachers do not waste their energy on wasteful activity of climbing steps. (i)State the technique of scientific management used by principal. (ii)State the objectives of the technique of scientific management identified in (i). Q.4 A company believes in natural growth of an enterprise as per needs and circumstances. It has no policies to regulate the working of its staff. Therefore, the staff has become unproductive and unpunctual. Advice. Q.5 Anshul owns a small scale factory where utility items are prepared from waste material like paper machine items, paper and cloth bags, decorative material etc. over the past few weeks, he was observing that the productivity of one of his very efficient workers, Ramdas, is going down. So he decides to probe into the matter and confronts Ramdas one day. On being asked, Ramdas shares with Anshul that he has deliberately slowed down in his work as many of the less efficient workers often pull his leg saying that there is no need for him to be more efficient when everybody is being paid at the same rate. Taking a lesson from this insight, Anshul decides to implement an incentive 43 ZIET,MYSORE bonus plan so as to differentiate between efficient and inefficient workers. In context of the above case, name and explain the incentive bonus plan that Anshul may implement so as to differentiate between efficient and inefficient workers. Q.6 Mr.Mukesh used to manufacture shoes by employing labourers who were easily available. When his son after completing his MBA, joined the business, he analysed that if we use capital intensive method by using a machine, it will reduce the cost and the quality of shoes will also improve. (i)Which technique of scientific management is used by his son? (ii)What is the objective of that technique? Q.7 After finishing her BBA degree course, Tanya gets a job of Assistant Manager in a retail company through the reference of her cousin. Taruna who works in the same company as a Senior Manager, decides to guide Tanya through her experience by making her aware of the important facts about management in practice. She tells her that neither the principles of management provide any readymade, straitjacket solutions to all managerial problems nor they are rigid prescriptions, which have to be followed absolutely. In context of the above case: (i) Identify the feature of principles of management mentioned in the above paragraph by quoting lines from the paragraph. (ii)Why do the principles of management not provide readymade, straitjacket solutions to all managerial problems? Q.8 Knowledge of management principles is quiet relevant for managers in performing their jobs efficiently, but they cannot use these principles without having analytical skills. Discuss the relevance of management principles in the light of above statement Q.9 “Contributions of Taylor and Fayol are complementary to each other.” Do you agree? Give reasons. Q.10 Ammy and Sammy are friends and graduated from a Law School together. Ammy sets up her law practice and establishes her Law Firm while Sammy joins a job with a reputed Law Firm. One day, Sammy visited Ammy’s office and finds it in a real mess. Files and documents were all lying in a haphazard manner. There was no assigned place for the stationery being used by Ammy. The employees in her office do not have a fixed place to work. They sit anywhere they feel like. When someone has to be contacted, he/she has to be searched all over the office. On the basis of the given information about Ammy and Sammy, answer the following questions: (i) Which principle of management is not being applied in Ammy’s office? (ii) What are the drawbacks of that? Q.11 Ramesh and Ravi are office assistant in a company having the same educational qualifications. Ramesh gets Rs.13,000 per month and Ravi gets Rs.17,000 per month as salaries for the same working hours. (i) Which principle of management is being violated in this case? (ii) Explain the principle and also discuss the effects of its violation. 44 ZIET,MYSORE Q.12 Fast Track Motors, an automobile company, is producing 3 different types of vehicles: cars, two-wheelers and three-wheelers. All the activities of the company (purchase, production, marketing, etc.) with respect to each type of vehicle are under one common department. Due to this, the company is unable to achieve its overall objectives. (i) Which management principle is not observed by Fast Track Motors? (ii) What should be done so that Fast Track Motors can achieve its overall objectives? Q.13 Gangadhar is a worker in Liberty Industries, a shoe making company. He is regularly provided instructions by one of his superior. Another superior lays down the sequence of operations. His speed, efficiency and quality of work are also supervised by different superiors, who specialise in their respective fields. (i) Identify the technique of scientific management followed by Liberty Industries. (ii) What is the significance of having so many superiors on Gangadhar? (iii) Which principle of Fayol is not applicable in this kind of organisation? Q.14 Identify the principles/techniques of scientific management in the followin