Practicing the CBSE Sample Papers for Class 12 Business Studies with Solutions Set 3 allows you to get rid of exam fear and be confident to appear for the exam.
CBSE Sample Papers for Class 12 Business Studies Set 3 with Solutions
Time: 3 Hours.
Max. Marks: 80
General Instructions:
- This question paper contains 34 questions.
- Marks are indicated against each question.
- Answers should be brief and to the point.
- Answers to the questions carrying 3 marks may be from 50 to 75 words.
- Answers to the questions carrying 4 marks may be about 150 words.
- Answers to the questions carrying 6 marks may be about 200 words.
Question 1.
Even though the political conditions vary from country to country, they impact the sentiment of an investor in the business, if the instability of the political conditions cause uncertainty and make it difficult for him to predict the future. Which feature of the business environment is being highlighted in the above statement?
(a) Specific and general forces
(b) Dynamic nature
(c) Relativity
(d) All of these
Answer:
(d) All of these
Explanation: All the three features of business environment are included in the statement given. Investors are a part of specific forces, whereas political conditions are dynamic in nature and these in turn affect the decisions about future prospects.
Question 2.
Aman runs a rubber factory. He wants to expand his business and for this reason he needs ? 100 crores. His CFO told that the fixed operating cost of the business was low and the cash flow position was strong. He also informed Aman that stock market is going through a bearish phase. Suggest Aman which source of finance he should choose for financing?
(a) Debt
(b) Equity
(c) Retained earnings
(d) Loan from bank
Answer:
(a) Debt
Explanation: He should choose debt as a source of finance because debt is considered as the cheapest of all sources; tax deductibility makes it still cheaper. A stronger cash flow position may make debt financing more viable than funding through equity. Therefore, in order to take advantage of cheap finance, companies prefer debt to equity.
Question 3.
“Adarsh wants to start a business of opening a fast food chain Arti his friend, told him to perform planning as a function of management, as it precedes all functions of management, i.e., organising, staffing, directing, and controlling.” Identify the feature of planning referred to here.
(a) Planning is a primary function
(b) Planning is pervasive
(c) Planning is continuous
(d) Planning is futuristic
Answer:
(a) Planning is a primary function
Explanation:
Planning is the primary function of management that is performed by every manager. The manager cannot execute any other function without performing a planning function. Planning therefore involves setting objectives and developing an appropriate course of action to achieve these objectives. Adarsh has to make a proper plan before starting a fast food chain to become successful.
Question 4.
Which of the following internal dimension is being described in the given picture below?
(a) Dividend
(b) Financial resources
(c) Working capital
(d) None of these
Answer:
(b) Financial resources
Explanation: A financial resource is component of internal environment. Financial capability relates to the usage, management, and availability of funds that directly affect an organization’s capacity.
Question 5.
“Any one can be called a manager irrespective of the educational qualification possessed.” Identify the characteristic of the profession that management does not fulfill in the statement being discussed above,
(a) Ethical code of conduct
(b) Professional association
(c) Restricted entry
(d) Service motive
Answer:
(c) Restricted entry
Explanation: Management does not have the feature of restricted entry similar to profession. One can become a manager even with inheritance, like son can become a manager in the firm of his father without any particular degree or qualification but son of a CA cannot run his office until he gets the membership from the Institute of Chartered Accountants of India (ICAI).
Question 6.
Controlling is known as a backward-looking function because:
(a) it is like a post-mortem of the past activities
(b) to find out deviation, it aims at improving future performance.
(c) all of the above
(d) none of the above
Answer:
(c) all of the above
Explanation: Controlling is called a process of looking back as under it actual results are compared with the standards decided in the past. After that, a corrective action in initiated. In other words, if the standards are not decided in the past, controlling is not at all possible.
Hence, it is true that ‘controlling is backward looking’. Controlling also involves assessment of past performance, it also aims at improving the future
performance by taking the required corrective actions.
Question 7.
“There is concentration of decision-making authority at higher or top levels of management. It refers to a situation where all decisions on all matters are taken by one or a few managers at levels.” Identify the concept of organising.
(a) Delegation
(b) Centralisation
(c) Authority
(d) Responsibility
Answer:
(b) Centralisation
Explanation: Centralisation means the decision making authority is concentrated at top level and all the decisions are taken at that level only. The lower level management has just to follow their instructions.
Question 8.
What is the last step in organising process?
(a) Identification and division of work
(b) Departmentalisation
(c) Assignment of duties
(d) Establishing reporting relationship
Answer:
(d) Establishing reporting relationship
Explanation: After identification, departmentalisation and assigning of duties, the last step that remains is establishing reporting Relationship by which each individual get to know from whom he has to take orders and to whom he is accountable.
Question 9.
Nisha Limited is a company dealing in lights and illumination. Whenever the company is in need of daily wage workers, a notice is placed on the factory gate for the same. Identify the source of recruitment being used by the company.
(a) Placement agencies and management consultants
(b) Direct recruitment
(c) Labour contractors
(d) Advertising
Answer:
(b) Direct recruitment
Explanation: Under the direct recruitment, a notice is placed on the notice board of the enterprise specifying the details of the jobs available and it is one of the best methods for filling casual vacancies.
In the above case, the company is using direct recruitment because when the company is in need for daily wage workers, a notice is placed on the factory gate for the recruitment.
Question 10.
ABC Ltd., is an organisation manufacturing generators. The marketing manager delegates the task to five sales representatives working under him. Among them the three representatives were able to achieve their respective targets.
As a result the marketing manager talks to the CEO of the company to recognise the performance of the three sales representatives. The company decides to upgrade their cadre and their salary package also. Name the element of directing function which the company assures the three representatives to achieve their targets.
(a) supervision
(b) leadership
(c) motivation
(d) communication
Answer:
(c) motivation
Explanation: The element of directing mentioned in the above case is motivation. The company decided to upgrade the cadre of three representatives who achieved their targets. This element motivates other employees also to achieve their targets on time.
Question 11.
Kamini runs a designer boutique in Gurgaon. She’s doing well in terms of profits. She wants to open 10 branches in different parts of India. Identify the type of decision indicated in the given lines.
(a) Financing decision
(b) Investment decision
(c) Dividend decision
(d) None of these
Answer:
(b) Investment decision
Explanation: The type of decision which Kamini has taken is investment decision. Investment decisions are the financial decisions taken by management to invest funds in different assets with an aim to earn the highest possible returns for the investors.
Question 12.
Statement I: Used and discarded packaging contributes significantly to the consumer protection problem.
Statement II: Appropriate packaging contributes to the convenience in handling the product.
Choose the correct option from the options given below:
(a) Statement I is true and II is false.
(b) Statement II is true and I is false.
(c) Both the statements are true.
(d) Both the statements are false.
Answer:
(b) Statement II is true and I is false
Explanation: Appropriate packaging contributes to the convenience in handling the product whereas used and discarded packaging does not contributes to the consumer protection problem.
Question 13.
Match the Column-I with their respective Statements in Column-II.
| Column-I | Column-II |
| (A) Production concept | (i) Relationship between benefits and the cost |
| (B) Customer value | (ii) Marketing management philosophy |
| (C) Customer satisfaction | (iii) Fundamental objective of most businesses |
| (D) Survival, profits, and growth | (iv) Grading |
| (E) Product sorting | (v) Value-based on price are met or exceeded |
(a) (ii), (i), (v), (iii), (iv)
(b) (iv), (ii), (iii), (i), (v)
(c) (i), (ii), (iii), (iv), (v)
(d) (v), (i), (ii), (iv), (iii)
Answer:
(a) (ii), (i), (v), (iii), (iv)
Question 14.
__________is stamped on the jewelleries to certify their standard of purity.
(a) ISI
(b) Hallmark
(c) AGMARK
(d) FPO
Answer:
(b) Hallmark
Explanation: “Hallmark” – A standardised mark printed on jewellery. The BIS hallmark is a hallmarking system for gold as well as silver jewellery sold in India certifying the purity of the metal.
Question 15.
“Planning is required in all types of organisations and at all levels of management.” Identify the statement and choose the correct answer.
(a) Planning is futuristic.
(b) Planning is pervasive.
(c) Planning is a mental process.
(d) Planning focuses on achieving objectives.
Ans.
(b) Planning is pervasive.
Explanation: Pervasiveness of planning means that it is required in all types of organisations and at all levels of management too.
Question 16.
Which of the following is not a component of specific forces of business environment?
(a) Technological conditions
(b) Customers
(c) Employees
(d) Investors
Answer:
(a) Technological conditions.
Explanation: Technological conditions are a part of general forces of business environment. Specific forces include investors, customers, etc,
Question 17.
Controlling is __________aspect of management.
(a) mental
(b) practical
(c) theoretical
(d) physical
Answer:
(b) practical
Explanation: Controlling is a function of management which helps to check errors in day to day working of an organisation in order to take corrective actions. This is the reason that controlling is a practical aspect of management.
Question 18.
If an employee of the bank has been given a target to open 100 accounts in his branch during the year, then his performance will be evaluated on the basis of which step of the staffing process?
(a) Promotion and career planning
(b) Performance appraisal
(c) Training and development
(d) None of these
Answer:
(b) Performance appraisal
Explanation: The term performance appraisal refers to the regular review of an employee’s job performance and overall contribution to company’s goals.
Question 19.
Which of the following statement is incorrect?
(a) Directing is a continuous process.
(b) Directing ensuring order and discipline.
(c) Directing initiate action.
(d) Directing flows from top to bottom
Answer:
(b) Directing ensuring order and discipline
Explanation: Direction process initiates action, it takes place at every level and is a continuous process. Hence, ensuring order and discipline is not a feature of directing.
Question 20.
Arrange the steps involved in Organizing process in correct sequence:
(i) Departmentalisation
(ii) Assignment of Duties
(iii) Identification and division of work
(iv) Establishing authority and reporting relationships
(a) (iii), (i), (ii), (iv)
(b) (i), (ii), (iii),(iv)
(c) (iv),(iii),(ii),(i)
(d) (iii), (ii), (i), (iv)
Answer:
(a) (iii), (i), (ii), (iv)
Explanation:
The steps in Organizing Process:
1. Identification and Division of Work.
2. Departmentalisation.
3. Assignment of Duties.
4. Establishing authority and reporting relationships.
Question 21.
What is the purpose and role of SEBI?
Answer:
SEBI has to be responsive to the requirements of three groups, which constitute the market, namely:
1. The issuers of securities: To provide them with a platform for raising capital in an easy, effective and efficient manner.
2. The investors: To protect their interests in security market by keeping them updated about the developments through true and appropriate information.
3. The market intermediaries: To provide them with a framework to enable them to perform their functions effectively and efficiently
Question 22.
Why it is important for business enterprises to understand their environment? Explain.
Answer:
It is very essential to understand business environment as it helps in determining success or failure of an organisation. The functioning and performance of an organisation is dependent on various factors which can be external.
When we understand business environment it becomes easier to drive factors that help in growth. Following points highlight the importance of understanding the business environment for business enterprises:
1. Business enterprises can identify the positive opportunities for a business. It will help in making the first move and stay ahead of competitors.
2. Businesses can identify the potential threats by studying the business environment which can impact the growth of the organisation. Therefore, a study of business environment proves beneficial for identifying threats and determining the best solution to neutralise it.
3. Various resources are required for a business to run and the appropriate resources are determined by studying the local business environment. These inputs are used to create various products.
4. Business environment is of dynamic nature, the factors such as technology, consumer preferences and government policies are subjected to change based on demand. Knowing the business environment will make things easier to adapt easily.
5. Study of business environment helps in formulating new plans and policies as per the market trends which makes it more relevant for the current scenario.
6. Analysing of business environment will result in a better performance of the organisation.
Question 23.
In order to promote the habit of health and hygiene among weaker sections of the society, Abhyas Limited has launched low-cost packs of hand wash. Identify the type of marketing philosophy being adopted by the company.
OR
Explain any three elements of marketing mix.
Answer:
Production concept: In the earlier days of the industrial revolution, the number of producers were limited. Thus, limited supply of industrial products were not able to meet the demands of the society. So, anyone who was able to produce goods could easily find buyers for the same.
In other words, as the number of producers were limited in the early days of the industrial revolution, industrialists assumed that consumers were only interested in easily and widely available goods at an affordable price.
OR
Elements of marketing mix are:
1. Price: Price is associated with its acceptability among customers for purchasing a product that reflects its utility, quality or value among them.
2. Place: Place refers to a channel or a route through which products or services move or are distributed from businesses to end-customers thus ensuring that the products are easily available or accessible to their respective customers.
3. Product: The product in a product mix can include a product, service or idea consisting of tangible elements that can be touched, felt, tasted or smelled and intangible elements like image, satisfaction, utility, etc., about the product or its price.
4. Promotion: Promotion mix is a combination of promotional methods like personal selling, advertising, trade fairs, etc., used for promoting that specific product, idea or a brand.
Question 24.
Define ‘Consumer’ as per Consumer Protection Act, 2019.
OR
State any three functions performed by consumer organisations for protection and promotion of interests of consumers.
Answer:
Under the Consumer Protection Act, 2019, the term ‘consumer’ has been defined as any person who buys goods or hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment.
It also includes any user of such goods with the buyer’s approval or any beneficiary of services when such goods or services are availed of with the approval of the person concerned but does not include a person who avails such services for any commercial purpose.
OR
The following are some of the functions performed by consumer organisations for the protection and promotion of interest of the consumers.
1. Consumer education: The consumer organisations arrange various training programs and seminars to educate the consumers about their rights and duties.
2. Publishing journals: In addition to the training programs and workshop, they also extend awareness through journals and periodicals. These journals and other periodicals provide information about various consumer problems and available legal remedies and other such matters.
3. Legal assistance: They also provide legal assistance and aid to the consumers and help them in seeking suitable redressal.
Question 25.
Explain ‘Harmony Not Discord’ as a principle of Scientific Management.
OR
Explain ‘Science-not Rule of Thumb’ as a principle of Scientific Management.
Answer:
The principle of ‘Harmony, not discord’ means that the managers and workers of an organisation should maintain a harmonious work environment. They should realise that they are dependent on each other.
Only if they work in unity they will be able to perform better. Frederick Taylor, emphasized a complete mental revolution i.e., the workers should change their attitude and each should realise others’ importance in the business.
The management should take care of the needs of the workers on the one hand, and on the other hand, the workers should work to the best of their efficiency. Both the managers and the workers should work in harmony to achieve the common goals and objectives of the organisation.
OR
Science not Rule of Thumb: According to this principle decisions should be based on facts rather than rule of thumb. Rule of thumb is based on intuition, experiences, personal opinion and/ or prejudice.
This principle requires development and application of scientific method. Taylor advocated that the traditional ‘Rule of Thumb’ method should be replaced by scientific methods. Scientific methods should be used for the following purposes:
1. to determine standard time required to do a job.
2. to determine a fair day’s work for the workers.
3. to determine the best way of doing the work.
4. to select standard tools and equipments etc.
Question 26.
What are the functions of stock exchange?
OR
“Money market is essentially a market for short term funds”. Discuss.
Answer:
Ensures marketability and liquidity of existing securities by providing a ready and continuous market for the sale and purchase of securities.
1. It supports in defining the prices of the securities through the forces of demand and supply.
2. It promotes the habit of investment and saving among the general public.
3. It offers a legal framework for fair and safe dealings.
4. It assists the companies in raising finance, thus facilitating capital formation and economic growth.
5. It offers scope for healthy speculation in a controlled and restricted way.
OR
The money market refers to the market for the trading of short term securities and funds. Securities traded in the money market have a very short maturity period ranging from one day to one year.
Such assets act as a close substitute for cash or money. Due to their short maturity period, they are also known as ‘near money instruments’. Money market instruments act as an important source of finance for working capital requirements.
In addition, they enjoy a high degree of liquidity. DFHI discounts money market securities and offers a ready market for them. In addition, securities traded in the money market are safe and secure as the transactions are made in instruments issued by the financial institutions and those who are financially strong companies.
Common instruments traded in the money market are treasury bills, commercial paper, call money, certificate of deposit, etc.
Question 27.
“Samir Gupta started a telecommunication company,” Donira Ltd. to manufacture economical mobile phones for the Indian rural market with 15 employees. The company did very well in its initial years. As the product was good and marketed well, the demand of its products went up.
To increase production the company decided to recruit additional employees. Samir Gupta, who was earlier taking all decisions for the company had to selectively disperse the authority.
He believed that subordinates are competent, capable and resourceful and can assume responsibility for effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range.”
1. Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.
2. Also explain any three points of importance of this concept.
Answer:
1. The concept of decentralisation of authority is used by Samir Gupta.
2. Importance of decentralisation of authority is as follows:
(a) Reduction in workload of top executives: In a decentralised organisation, the top executives are not burdened by the problems and complexities of administrative details. Therefore, they have enough time to plan ahead, develop new strategies and concentrate on coordination and control.
(b) Motivation of employees: A decentralised organisation improves motivation of employees because it encourages lower levels to take decisions without seeking approval from higher levels. It gives employees a sense of importance, recognition and responsibility.
(c) Improved teamwork: In a decentralised organisation, managers make special efforts to seek the participation of subordinates in decision-making, have constant open communication and take personal interest in their welfare. These factors lead to superior teamwork.
Question 28.
How is training of employees beneficial for the organisation? State by giving any four reasons.
Answer:
Training is important in every organisation, as it aims at building the skills and abilities of the employees to perform their tasks. The following points highlight the importance of training in an organisation:
1. Less wastage: Training is a concept that involves a systematic learning of a particular job. It is a more efficient way of learning than any trial-and-error method. It helps in reducing wastage of time and money of the organisation, thus ensuring optimum utilisation of resources.
2. Higher profits: Training enhances the productivity of employees by making them more efficient. This increases both qualitative and quantitative productivity and hence boosts the profits of the company.
3. Managerial efficiency: Training prepares employees to face new challenges, thus helping them to make effective responses to various business problems.
4. Boost employees morale: Training not only improves the performance, but it also improves the overall attitude of the employees towards job, working conditions and organisation. It helps in reducing absenteeism, labour turnover and grievances among the employees.
Question 29.
Discuss the importance of coordination.
Answer:
Coordination is the force which synchronises all the functions of management and activities of different departments. Lack of coordination results in overlapping, duplication, delays and chaos in organisation. Coordination is implicit and inherent in all functions of an organisation.
Importance of Coordination:
Importance of the coordination are as follows:
1. Growth in size: An organisations growth results in the increase in the number of people employed with varied individual aspirations and culture. So it is important to harmonise individual goal with the organisational goals through coordination.
2. Functional differentiation: All the departments and divisions may have their own set of objectives, policies and their own style of working. However all departments and individuals are interdependent and cannot work in isolation. Thus, coordination is necessary for linking the activities of various departments.
3. Specialisation: Mostly specialists have a feeling of superiority and prioritise their zone of activities. Coordination seeks to sequence and integrate all the specialists’ activities to achieve organisational objectives.
Question 30.
Rahim was working in an enterprise on daily wage basis. It was difficult for him to fulfill the basic needs of his family. His daughter fell ill. He had no money for his daughter’s treatment. To meet the expenses of her treatment, he participated in a cycle race and won the prize money. The cycle company offered him a permanent pensionable job which he happily accepted.
1. By quoting the lines from the above para identify the needs of Rahim that are satisfied by the offer of cycle company.
2. Also, explain two other needs of Rahim followed by above that are still to be satisfied.
Answer:
1. The offer of the company satisfied Rahim’s physiological and security needs. Physiological needs refer to essential requirements for the sustenance of life. These needs are at the bottom of the hierarchy. These needs are necessary for survival. This can be judged from the statement given below.
‘It was hard for him to fulfil the basic requirements of the family. Security needs relate to physical, security, economic security and well being. For example, an employee may desire job security, income stability and well being of his health etc. In Rahim’s case, this need is fulfilled because the company offered him a permanent pensionable job with economic security.
2. Two more needs that still remain to be satisfied are given below:
(a) Belongingness needs: Such needs refer to the social needs of an individual such as love, acceptance, friendship, etc. as every individual keen for social acceptance and belongingness.
(b) Self-esteem needs: These needs include elements like respect, dignity, credit, etc. as every individual wants to command respect and acknowledgement in the group.
Question 31.
What do you understand by depository?
OR
What is the organisation structure of SEBI and its committee?
Answer:
Depository is just like a bank, who keeps money in safe custody for customers. It keeps securities in electronic form on behalf of the investor. In the depository, a securities account can be opened, all shares can be deposited, they can be withdrawn/sold at any time and instruction to deliver or receive shares on behalf of the investor can be given.
It is a technology-driven electronic storage system. It has no paperwork relating to share certificates, transfer, forms, etc. All investors’ transactions are settled with greater speed, efficiency and use as all securities are entered in a book-entry mode.
In India, there are two depositories. National Securities Depositories Limited (NSDL) is the first and largest depository presently operational in India. It was promoted as a joint venture of the IDBI, UTI, and the National Stock Exchange.
The Central Depository Services Limited (CDSL) is the second depository to commence operations and was promoted by the Bombay Stock Exchange and the Bank of India. These national level depositories operate through intermediaries who are electronically connected to the depository and serve as contact points with the investors and are called depository participants.
The depository participant (DP) is an intermediary between the investor and the Depository (NSDL or CSDL) authorized to maintain the accounts of dematerialised shares.
Financial institutions, banks, clearing corporations, stock-brokers and non-banking finance corporations are permitted to become depository participants. Thus, if the investor is buying and selling the securities through the broker or the bank, or a non banking finance corporation, it acts as a DP for the investor and completes the formalities.
OR
The organisation structure of SEBI are:
As SEBI is a statutory body, there has been a considerable expansion in the range and scope of its activities. Each of the activities of the SEBI now demands more careful, closer, coordinated and intensive attention to enable it to attain its objectives.
Accordingly, SEBI has been restructured and rationalized in tune with its expanded scope. It has decided divide its activities into five operational departments. An executive director heads each department.
Apart from its head office in Mumbai, SEBI has opened regional offices in Kolkata, Chennai, and Delhi to attend to investor complaints and liaise with the issuers, intermediaries and stock exchanges in the concerned region.
The SEBI also formed two advisory committees. They are the Primary Market Advisory Committee and the Secondary Market Advisory Committee. These committees consist of the market players, the investors’ associations recognized by the SEBI and the eminent persons in the capital market. They provide important inputs to the SEBI’s policies.
The objectives of the two committees are as follows:
1. To advise SEBI on matters relating to the regulation of intermediaries for ensuring investors protection in the primary market.
2. To advise SEBI on issues related to the development of the primary market in India.
3. To advise SEBI on disclosure requirements for companies.
4. To advise for changes in the legal framework to introduce simplification and transparency in the primary market.
5. To advise the board in matters relating to the development and regulation of the secondary market in the country.
The committees are, non-statutory and the SEBI is not bound by the advice of the committee. These committees are a part of SEBI’s constant endeavour to obtain feedback from the market players on various issues relating to the regulations and development of the market.
Question 32.
“Is planning actually worth the huge costs involved.” Explain.
OR
“Rajesh is at the real point of decision making in the course of his planning. He has arrived at this point after identifying various alternative courses of action. After identification he was thoroughly involved in the evaluation of each of these alternatives.
He later got involved into making several permutations and combinations of these alternatives to arrive at this point.” Through which stage of the planning process is Rajesh going? Also give the next two steps of planning process.
Answer:
Planning comes at a high price in terms of both time and money. It involves analysis, research and scientific calculations that involve huge costs. However, despite being an expensive function, it is a very basic and essential function of an organisation. Despite the astronomical expenditures, we may assert that planning is a critical action due to the emphasised factors.
1. Renders Direction: The aims and objectives that must be met are clearly stated in the planning. As a result, it serves as a guide for future activities. It directs the activities of several departments inside the organisation.
It advise managers on what has to be done, what path to take, and how to attain the goals. It ensures that the path taken to achieve objectives is the proper one. Planning also ensures that the all departments in an organisation work together to attain the desired goals.
2. Risk Prevention: By steering an organisation on the proper path, it empowers its leaders to analyse and predict changes. As a result, the probability of the anticipated events is reduced.
Planning shows how to deal with situations, which may arise in the due course of management, though it does not fully eliminate the problems.
3. Minimise Overlapping: As the managers are well comprehended with the policies and plans of the organisation, they coordinate the activities together to reach the objectives.
As a result, work overlapping is reduced. Planning ahead of time ensures that there will be no misunderstandings and that the activity will be completed successfully.
4. Promotes Creativity: Planning is an important part of any organisation’s success. It entails establishing strategies and plans, which necessitates creativity.
It is a key activity that necessitates the highest thinking talents and inventiveness from managers. It encourages management to come up with fresh ideas in order to achieve the objectives.
5. Assists in Decision Making: Planning is the foundation for making decisions. Planning entails analysing the future, evaluating potential courses of action, and selecting the best option based on the goal.
As a result, managers can make more sensible judgements by following a proper planning procedure.
6. Planning is necessary for Controlling: Planning lays out the goals that must be met. As a result, it establishes the benchmarks against which the performance is measured.
It also aids in detecting whether there is any divergence from the stated objectives, making remedial action easier. As a result, we may conclude that, notwithstanding the expenditures, planning is a critical role in management that is well worth the investment.
OR
Rajesh is at the real point of decision making in the course of his planning. He has arrived at this point after, identifying various alternative courses of action.
After identification he was thoroughly involved in the evaluation of each of these alternatives. He later got involved into making several permutations and combinations of these alternatives to arrive at this point.
The stage through which Rajesh is going is ‘Selecting an alternative’. The real point of decision making is selecting an alternative. The best plan has to be adopted and implemented. The ideal plan, of course, would be the most feasible, profitable and with least negative consequences.
Most plans may not always be subjected to a mathematical analysis. In such cases, subjectivity and the manager’s experience, judgement and at times, intuition play an important part in selecting the most viable alternative.
The next two steps in the process of planning are ‘Implementing the plan’ and ‘Follow through’. The step is concerned with putting the plan into action, i.e., doing what is required. For example, if there is a plan to increase production than more labour, more machinery will be required.
This step would also involve organising for labour and purchase of machinery. To see whether plans are being implemented and activities are performed according to schedule is also part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved.
Question 33.
Explain any five points which highlight the importance of ‘controlling’ function in management.
Answer:
The following points highlight the significance of effective controlling.
1. Achieving organisational goals: Controlling aims at the accomplishment of organisational goals by indicating the deficiencies and the corrective actions which are to be taken.
It provides checks on deviations, thereby ensuring that the organisation is moving in the right direction for achieving the set objectives.
2. Evaluating standards: Controlling helps in judging the accuracy of the standards adopted by the management. A good controlling technique enables the manager to check whether the set standards are accurate and feasible.
It also helps the organisation to review and revise the standards according to the changing business environment and the need of the hour.
3. Optimally utilising resources: A continuous control and monitoring system ensures efficient and optimum utilisation of the resources available.
By aiming at full utilisation of funds, financial planning ensures that situations of excess and shortage of funds are avoided. Thus, it ensures that the funds are properly and optimally utilised.
4. Motivating employees: By exercising effective control, employees get to know well in advance, what is expected from them and the standards against which their performances will be assessed. This motivates them to achieve the assigned targets in a better and orderly manner.
5. Maintaining order and discipline: An efficient controlling system helps in creating an atmosphere of order and discipline in an organisation.
As the employees are aware that their performances are being continuously observed, the probability of dishonesty and inefficiency is minimised thus revenue can increase.
Question 34.
Reena purchased one litre of pure desi ghee from a shopkeeper. After using it, she doubted that it was adulterated. She sent it for a laboratory test which confirmed that the ghee was adulterated.
State any six reliefs available to Reena if she complains, and the consumer court is satisfied with the genuineness of the complaint.
Answer:
In case of the genuineness of the complaint, the court can issue one or more directions to the opposite party. Six reliefs available to Reena, if court is satisfied with her complain, are:
1. To remove defect from goods or services: If there is a defect in the goods or services, the court can pass the order to remove defect from goods or services. For example, if the desi ghee is adulterated the court can give order to remove this adulteration.
2. To refund the price: If the seller fails to remove the product’s defect, the order can be passed to refund the customer. In the above example, if the seller fails to remove the adulteration from the desi ghee, the court can pass an order to refund the price paid by the customer.
3. To replace the defective good with a new one: If the seller is failed to remove the defect from the product, the order can be passed to replace the product immediately.
4. To pay punitive damages: Punitive damages may be recovered from the seller in some cases.
5. To discontinue the unfair/restrictive trade practices: Unfair or restrictive trade practices should be stopped immediately to save consumers.
6. To pay a reasonable amount of compensation for any loss or injury suffered: The Seller is liable to pay appropriate compensation if the loss or injury is suffered from the defective product.