Nios Class 12th Business Studies (319) Very Very Important Questions with Solutions. in English Medium

Question – 1 Management Principles are statement of principles truth, which provide guidelines for managerial decision’. in the lights of this statement, state any three characteristics of principles of management.

Answer – Certainly, principles of management are fundamental guidelines that provide direction and help in making managerial decisions. Here are three characteristics of management principles:

1. Universality: Management principles are universal in nature, which means they can be applied to various organizations and industries regardless of their size, nature, or location. These principles are not limited to a specific type of organization but are applicable across different contexts.
2. Flexibility: Management principles are flexible and adaptable. They can be modified or customized to suit specific situations and organizational needs. Managers can apply these principles in a way that aligns with the unique goals and circumstances of their organization.
3. Timelessness: Management principles have a timeless quality. While management practices and techniques may evolve over time due to changing technologies and business environments, the underlying principles remain relevant. Principles such as delegation, unity of command, and division of labor continue to guide effective management practices.

Question – 2 ‘There are certain non – financial incentives that motivates the employees’ state any three such incentives.

Answer – Recognition and Appreciation: Employees often seek recognition and appreciation for their efforts and contributions. A simple “thank you” from a supervisor or public acknowledgment of their achievements can boost morale and motivation. Employee of the month awards, certificates of appreciation, or praise during team meetings are some ways to provide recognition.

Career Development Opportunities: Many employees are motivated by the prospect of advancing in their careers. Providing opportunities for skill development, training, and career growth can be a powerful non-financial incentive. Employees appreciate learning new skills, taking on challenging assignments, and having a clear path for career progression within the organization.

Work-Life Balance: A healthy work-life balance is highly valued by employees. Offering flexible work hours, remote work options, or additional paid time off can be motivating. Employees who can better balance their work and personal lives tend to be more satisfied and engaged in their roles.

Question -3 State any three limitations of debentures.

Answer – Debentures are a common form of long-term borrowing for companies, but they also come with limitations and drawbacks. Here are three limitations of debentures:

1. Fixed Obligation: Debentures represent a fixed obligation for the issuing company. This means that the company must make interest payments and repay the principal amount as specified in the debenture agreement, regardless of its financial performance. If the company faces financial difficulties, meeting these obligations can become challenging and may lead to financial distress or even bankruptcy.
2. Cost of Interest: The interest paid on debentures is a cost to the company, and it is typically higher than the cost of equity financing. This can increase the company’s overall financial burden and reduce profitability, especially if it has issued a significant amount of debentures at a high-interest rate.
3. Lack of Voting Rights: Debenture holders usually do not have voting rights in the company’s decision-making processes, unlike shareholders who have voting rights in matters such as board elections and major corporate decisions. This means that debenture holders have limited control over the company’s management and policies, even though they have a financial stake in the company.

Question – 4 Debentures are a common form of long-term borrowing for companies, but they also come with limitations and drawbacks. Here are three limitations of debentures:

Answer –

1. Fixed Obligation: Debentures represent a fixed obligation for the issuing company. This means that the company must make interest payments and repay the principal amount as specified in the debenture agreement, regardless of its financial performance. If the company faces financial difficulties, meeting these obligations can become challenging and may lead to financial distress or even bankruptcy.
2. Cost of Interest: The interest paid on debentures is a cost to the company, and it is typically higher than the cost of equity financing. This can increase the company’s overall financial burden and reduce profitability, especially if it has issued a significant amount of debentures at a high-interest rate.
3. Lack of Voting Rights: Debenture holders usually do not have voting rights in the company’s decision-making processes, unlike shareholders who have voting rights in matters such as board elections and major corporate decisions. This means that debenture holders have limited control over the company’s management and policies, even though they have a financial stake in the company.

 Question – 5 Distinguish between ‘Advertising’ and ‘Sales promotion’ on any three bases.

Answer –

1. Nature:

Purpose and Goals:

Advertising: Advertising is a long-term, brand-building strategy aimed at creating awareness, generating interest, and establishing a positive image for a product or brand. It focuses on creating a strong brand identity and maintaining a consistent message over time. The primary goal of advertising is to build and maintain customer loyalty and trust.

Sales Promotion: Sales promotion, on the other hand, is a short-term tactic designed to boost sales quickly. It aims to stimulate immediate action from customers by offering incentives or discounts. The primary goal of sales promotion is to increase sales volume within a specific period, often by encouraging customers to make a purchase or take a specific action immediately.

2. Duration and Timing:

Advertising: Advertising campaigns typically run over an extended period, ranging from weeks to months or even years. It is a continuous effort to create and maintain brand presence in the minds of consumers. The timing of advertising is less about urgency and more about building a brand’s reputation and equity over time.

Sales Promotion: Sales promotions have a shorter duration and are often tied to specific events or seasons, such as holiday sales, clearance sales, or product launches. They are designed to create a sense of urgency and prompt immediate action from customers. Sales promotions are time-sensitive and are meant to drive sales within a limited timeframe.

3. Communication Channels and Content:

Advertising: Advertising uses a variety of communication channels, including television, radio, print media, digital platforms, and outdoor advertising. It often includes creative and emotionally appealing content to engage consumers and build brand identity. Advertising messages are usually informative and focus on the brand’s unique selling propositions (USPs).

Sales Promotion: Sales promotion primarily relies on direct marketing channels, such as in-store displays, email marketing, social media, coupons, discounts, and contests. The content of sales promotions is focused on the immediate benefit or incentive offered to customers, such as price discounts, buy-one-get-one-free offers, or limited-time offers.

Question – 6 Give the meaning of different type of external trade.

Answer –

1. Import Trade: Import trade involves the purchase of goods and services from foreign countries by a domestic country or entity.
2. Export Trade: Export trade involves the sale and shipment of domestically produced goods and services to foreign markets or countries.
3. Re-Export Trade: Re-export trade occurs when goods are imported into one country and then subsequently exported to another country without significant alteration or processing.
4. Bilateral Trade: Bilateral trade refers to the exchange of goods and services between two countries, involving a direct trade relationship between those two nations.
5. Multilateral Trade: Multilateral trade involves the exchange of goods and services among three or more countries, typically within the framework of international trade agreements or organizations.
6. Intra-Industry Trade: Intra-industry trade occurs when a country both exports and imports similar or related products within the same industry.
7. Countertrade: Countertrade is a form of international trade where payment for goods and services is made through non-monetary exchange, such as barter or offset agreements.

Question – 7 Explain the following principles of management (a) Division of work and (b) Equity

Answer – Certainly, here’s a concise explanation of the principles of management, division of work, and equity in 2 marks each:

(a) Division of Work:

Definition: Division of work, also known as specialization, is a management principle where complex tasks are broken down into smaller, specialized tasks and assigned to individuals or teams based on their skills and expertise.

Significance: It enhances efficiency and productivity as employees become more skilled in their specialized roles, reduces time wastage, and leads to cost-effective operations.

(b) Equity:

Definition: Equity in management principles refers to the fair and impartial treatment of all employees, ensuring that they are treated with fairness, respect, and justice, regardless of their personal characteristics.

Significance: Equity fosters a positive work environment, motivates employees, promotes diversity and inclusion, and leads to better conflict resolution, ultimately contributing to higher morale and performance.

Question – 8 What is meant by delegation? describe its element.

Answer – Delegation is the process of assigning authority, responsibility, and tasks from a higher-level manager or supervisor to a subordinate or team member. In this process, the manager transfers certain duties to others while retaining overall accountability. Delegation has two key elements:

Assignment of Responsibility: Delegation begins with entrusting a specific task or responsibility to someone else. This includes clearly defining the scope of the task, its objectives, and any relevant deadlines or expectations.

Transfer of Authority: Along with responsibility, delegation involves granting the necessary authority to make decisions, allocate resources, and take actions related to the assigned task. Authority should align with the level of responsibility given.

Question – 9 Explain (a) shopping good and (b) speciality good.

Answer –Certainly, here’s a concise explanation of shopping goods and specialty goods in 2 marks each:

(a) Shopping Goods:

Shopping goods are products that consumers actively research and compare before purchasing. These items are not bought frequently and require some degree of consideration regarding factors like quality, price, and features.

(b) Specialty Goods:

Specialty goods are unique products with distinct characteristics or qualities that make them highly sought after by consumers. Consumers often display strong brand loyalty and are willing to pay a premium for these goods due to their uniqueness.=

Question -10 Is consumer protection important for business? give any four points support your answer

Answer –Yes, consumer protection is important for businesses for several reasons. Here are four key points that support this statement:

• Enhances Reputation and Trust: Ensuring consumer protection builds a positive reputation for a business. When consumers trust that a company provides safe and reliable products or services, they are more likely to make repeat purchases and recommend the business to others. A good reputation can lead to increased customer loyalty and a larger customer base.
• Reduces Legal Risks and Costs: Compliance with consumer protection laws and regulations helps businesses avoid costly legal battles, fines, and penalties. Non-compliance can result in lawsuits, investigations, and damage to a company’s financial standing. Adhering to these laws reduces the risk of legal disputes and associated expenses
• Drives Innovation and Quality: Consumer protection encourages businesses to focus on product and service quality. To meet safety and quality standards, companies often invest in research and development, leading to innovative and improved offerings. This commitment to quality can lead to a competitive advantage in the market.
• Boosts Customer Satisfaction: When consumers feel protected and valued by a business, their overall satisfaction increases. Businesses that prioritize consumer protection tend to provide better customer service, handle complaints and issues more effectively, and offer clear and transparent information. Satisfied customers are more likely to become loyal customers and brand advocates.

Question -11 Is management a ‘profession’? Explain

Answer –Management lacks key characteristics of traditional professions, such as standardized licensing requirements and a universal code of conduct. Instead, it is often considered a field or discipline that encompasses a wide range of roles and responsibilities in various industries and organizations.

Question – 12 Explain any five external sources of recruitment.

Answer – Advertisements: Organizations use advertisements in newspapers, online job boards, and social media to attract external candidates. These ads provide information about job openings and application details, reaching a wide audience.

• Recruitment Agencies: Companies partner with recruitment agencies to find suitable candidates. These agencies specialize in identifying potential employees who meet specific criteria, making them valuable for filling specialized or high-level positions.
• Job Fairs: Job fairs and career events provide opportunities for organizations to meet potential candidates in person. These events are organized by universities, industry associations, or job fair companies and attract a diverse pool of talent.
• Employee Referrals: Employee referral programs encourage current employees to refer candidates for job openings. Employees refer individuals they believeare agood fit for the company, making referrals valuable for cultural alignment.
• Internship Programs: Internship programs allow organizations to identify and evaluate potential full-time employees. Interns gain experience within the company, and successful internships can lead to permanent employment offers.

Question – 13 Describe ‘External Borrowings’ and ‘foreign investment’ as foreign sources of long-term finance.

Answer – External Borrowings: External borrowings refer to obtaining funds from foreign sources, such as international financial institutions, foreign banks, or bond markets. These funds are typically acquired through loans, bonds, or other debt instruments. Organizations can use external borrowings to finance projects, expansion, or operations. The terms and conditions, including interest rates and repayment schedules, are usually negotiated between the borrowing organization and the foreign lender.

Foreign Investment: Foreign investment involves attracting capital from overseas investors, either through foreign direct investment (FDI) or foreign portfolio investment (FPI). FDI occurs when foreign entities make significant investments in a company, often acquiring ownership stakes and participating in management. FPI, on the other hand, involves foreign investors buying financial assets like stocks and bonds in a domestic company without gaining significant control. Foreign investment can provide long-term financing to support business growth and development.

Question – 14 Explain any five factors affecting the price decision of a product.

Answer – The five factors affecting the price decision of a product are:

1. Cost of Production: The cost of producing the product is a fundamental factor. Prices need to cover production costs, including materials, labor, and overhead, while ensuring a reasonable profit margin.
2. Market Demand: The level of demand for the product influences pricing. High demand often allows for higher prices, while low demand may require competitive pricing to attract buyers.
3. Competitor Pricing: The pricing strategies of competitors impact pricing decisions. Firms analyse competitor prices to determine whether to undercut, match, or differentiate their pricing.
4. Perceived Value: Customer perception of the product’s value affects pricing. If consumers see added value, such as superior quality or unique features, they may accept higher prices.
5. Elasticity of Demand: Price elasticity of demand measures consumer responsiveness to price changes. Elastic demand means small price changes can significantly impact demand, affecting pricing decisions to maximize revenue.

Question – 15 Explain any four function of stock exchange.

Answer – The Four function of stock exchange are:

1. Facilitating Trading: Stock exchanges serve as marketplaces where investors can buy and sell financial securities like stocks, bonds, and derivatives. They provide a platform for transactions, enabling investors to trade assets efficiently and with transparency.
2. Price Discovery: Stock exchanges play a crucial role in determining the prices of financial instruments through the forces of supply and demand. Prices are continuously updated as trades occur, allowing investors to access real-time market values.
3. Capital Raising: Stock exchanges provide companies with the opportunity to raise capital by issuing shares to the public through initial public offerings (IPOs) or secondary offerings. This capital helps businesses expand, invest in new projects, and fuel economic growth.
4. Risk Management: Stock exchanges offer derivative markets, such as futures and options contracts, that enable investors and businesses to hedge against price fluctuations in underlying assets. These derivatives serve as risk management tools, allowing market participants to protect their investments and reduce exposure to volatility.

Question – 16 State any six responsibilities of consumers.

Answer – The six responsibilities of consumers are:

1. Informed Decision-Making: Consumers have a responsibility to make informed choices by researching products and services, reading reviews, comparing prices, and evaluating quality. Informed decision-making helps them make purchases that align with their needs and preferences.
2. Financial Responsibility: Consumers should manage their finances responsibly by budgeting for purchases, avoiding excessive debt, and spending within their means. Financial responsibility ensures financial stability and long-term well-being.
3. Demanding Quality and Safety: Consumers have the right to expect products and services to meet certain quality and safety standards. They should report unsafe or defective products and hold companies accountable for subpar offerings, contributing to product safety.
4. Environmental Awareness: Consumers can contribute to environmental sustainability by making eco-conscious choices. This includes reducing waste, conserving resources, recycling, and supporting products and practices that are environmentally friendly.
5. Exercising Legal Rights: Consumers have legal rights and protections, such as the right to return faulty goods or seek refunds for misrepresented products. They should be aware of these rights and take action when necessary to seek redress for unfair or unethical practices.
6. Ethical Consumption: Consumers should consider the ethical implications of their purchases. This involves supporting businesses that adhere to fair labor practices, ethical sourcing, and responsible production methods. Ethical consumption promotes socially responsible business practices and ethical behaviour in the marketplace.

Question – 17 Name the function of management that harmonises group efforts so as to achieve common objectives. Also list any five characteristics of this function.

Answer –

1. Integration of Activities: Coordination involves aligning and integrating the activities of various individuals and departments within an organization.
2. Harmonizing Efforts: It ensures that the efforts of different individuals or groups are synchronized and work together in a cohesive manner.
3. Achievement of Common Goals: The primary purpose of coordination is to facilitate the achievement of the organization’s common objectives and goals.
4. Continuous Process: Coordination is an ongoing and continuous managerial process that requires regular attention to maintain organizational harmony.
5. Optimizing Resources: It helps in optimizing the use of resources by minimizing duplication of efforts and avoiding conflicts.

These characteristics highlight the role of coordination in fostering cooperation, reducing inefficiencies, and enhancing overall organizational effectiveness.

Question – 18 Name and explain the concept in organising that refers to the systematic effort to delegate authority at all levels of management and in all departments.

Answer – The concept in organizing that refers to the systematic effort to delegate authority at all levels of management and in all departments is called “Decentralization.”

Decentralization involves the delegation of decision-making authority and responsibilities to lower levels of management and various departments or units within an organization. It allows for a more distributed approach to decision-making, empowering managers and teams at different levels to make choices that are aligned with their areas of expertise and responsibility.

In essence, decentralization is about sharing decision-making power and responsibilities throughout the organization, promoting agility, autonomy, and responsiveness in various functional areas while maintaining an overall framework of control and accountability.

 Question – 19 Explain the importance of business finance by giving any three points.

Answer – Business finance is crucial for the success and sustainability of any organization. Here are three points highlighting its importance:

1. Capital Investment: Business finance provides the necessary funds for capital investment, allowing companies to purchase assets, expand operations, and undertake new projects. It enables businesses to invest in equipment, technology, infrastructure, and other resources that drive growth and competitiveness.
2. Risk Management: Finance helps businesses manage financial risks by providing tools and strategies to hedge against market volatility, interest rate fluctuations, and currency exchange risks. This risk management capability ensures the stability and resilience of the organization in an ever-changing business environment.
3. Operational Efficiency: Adequate finance ensures that a business can meet its day-to-day operational expenses, pay salaries, purchase inventory, and fulfill customer orders. It promotes efficiency by providing the necessary working capital to keep operations running smoothly, reducing the risk of disruptions and financial instability.

These points underscore how business finance supports growth, minimizes risks, and enhances the operational effectiveness of an organization.

Question – 20 State any four benefits of training to employees.

Answer – Certainly! Here are four benefits of training to employees:

1. Skill Enhancement: Training programs provide employees with the opportunity to develop and enhance their skills and knowledge. This can include technical skills, soft skills, and industry-specific expertise, making employees more proficient in their roles.
2. Career Advancement: Training can open doors for career advancement within the organization. When employees acquire new skills and knowledge through training, they become better qualified for promotions and opportunities for higher responsibilities.
3. Increased Job Satisfaction: Employees who receive training often report higher job satisfaction. They feel more confident in their abilities, which can lead to increased job engagement and a sense of accomplishment.
4. Adaptation to Change: In today’s rapidly evolving business environment, training helps employees adapt to new technologies, processes, and industry trends. This adaptability is essential for staying competitive and relevant in the workplace.

These benefits of training contribute not only to the personal and professional growth of employees but also to the overall success of the organization.

Question – 21 State any five points of importance of communication.

Answer – Five points of importance of communication are:

1. Effective Decision-Making: Communication provides the necessary information and data for individuals and teams to make informed and timely decisions.
2. Conflict Resolution: Clear and open communication helps resolve conflicts by allowing parties to express their concerns and find mutually acceptable solutions.
3. Efficient Operations: Good communication ensures that tasks are understood and executed correctly, leading to greater efficiency in daily operations.
4. Building Relationships: Communication is essential for building trust, rapport, and positive relationships both personally and professionally.
5. Innovation and Creativity: Effective communication encourages the sharing of ideas and collaboration, fostering innovation and creative problem-solving.

Question – 22 With the help of any five points explain the role of small business in India.

Answer – Role of small business in India are:

1. Employment Generation: Small businesses are major contributors to employment in India. They provide job opportunities to a substantial portion of the workforce, including skilled and unskilled labor, contributing to reduced unemployment rates.
2. Economic Growth: Small businesses stimulate economic growth by fostering entrepreneurship and innovation. They often lead to the creation of new products, services, and markets, which can drive economic development.
3. Poverty Alleviation: Small businesses, particularly in rural areas, help alleviate poverty by providing livelihoods and income sources to individuals who may not have access to other employment opportunities.
4. Regional Development: Small businesses are dispersed across various regions, including rural and remote areas. Their presence can lead to more balanced regional development by promoting economic activity beyond major urban centers.
5. Contribution to GDP: Small businesses collectively contribute a significant portion of India’s Gross Domestic Product (GDP). They are a crucial component of the country’s economic landscape, supporting various sectors such as manufacturing, services, and agriculture.

Question – 23 Explain any five objectives of ‘Marketing’.

Answer – Five objectives of Marketing are:

1. Customer Satisfaction: One of the primary objectives of marketing is to identify and meet customer needs and preferences effectively. By doing so, marketing aims to create products or services that satisfy customers, leading to repeat business and loyalty.
2. Profit Maximization: Marketing seeks to generate revenue and maximize profits for a business. This involves setting competitive prices, managing costs, and optimizing sales and distribution channels to ensure profitability.
3. Market Expansion: Marketing aims to expand the organization’s market reach. This can include entering new geographical areas, targeting new customer segments, or introducing new products or services to capture additional market share.
4. Brand Building: Marketing strives to build and strengthen the brand’s reputation and identity. Effective branding helps create a distinct image in the minds of consumers, fostering trust and recognition, which can lead to increased sales and market share.
5. Market Research: Marketing objectives include conducting market research to gather valuable insights into consumer behaviour, market trends, and competition. This information is used to make informed decisions, adapt marketing strategies, and stay competitive in the market.

Question -24 Is management a ‘Science’? Explain.

Answer –  Management as a Science:

• Management is considered a science because it involves the systematic study, analysis, and application of principles, theories, and techniques to achieve specific objectives. Managers use a structured approach to planning, organizing, leading, and controlling activities within an organization.
• Scientific management principles, such as those developed by Frederick Taylor, emphasize the use of data and empirical methods to improve efficiency and productivity. These principles involve systematic observations, data collection, and experimentation to identify the best ways to perform tasks and manage resources.
• Management also draws from various social sciences, including psychology, sociology, economics, and organizational behaviour, to understand human behaviour in the workplace and make informed decisions.

Question – 25 ‘Planning is of great importance to management. Inspite of this fact it suffers from many limitations’. Explain any three such limitations.

Answer –

1. Inflexibility: One limitation of planning is that it can be rigid and inflexible. Once a plan is formulated and implemented, it may be challenging to adapt to changing circumstances, such as shifts in market conditions, unexpected events, or new opportunities. This inflexibility can hinder an organization’s ability to respond effectively to dynamic environments.
2. Time and Cost-Intensive: The process of planning can be time-consuming and costly. Developing comprehensive plans often requires a significant amount of resources, including time, money, and personnel. Small businesses, in particular, may find it challenging to allocate these resources for planning activities.
3. Uncertainty and Incomplete Information: Planning is based on assumptions and predictions about the future. However, the future is inherently uncertain, and plans may not always account for unforeseen events or changes in the competitive landscape. Additionally, plans are often developed with incomplete or imperfect information, which can lead to inaccuracies in forecasting and decision-making.

Question – 26 ‘Directing is management in action’. In the light of this statement state any six points of importance of directing function of management.

Answer –

1. Achieving Objectives: Directing ensures that employees understand their roles and responsibilities, aligning their actions with the organization’s objectives. It helps bridge the gap between planning and execution.
2. Motivation: Effective directing involves motivating employees to perform at their best. Managers use various motivational techniques, recognition, and rewards to encourage high levels of effort and commitment.
3. Clarity of Instructions: Directing provides clear and specific instructions to employees, reducing ambiguity and the potential for misunderstandings. This clarity enhances productivity and minimizes errors.
4. Conflict Resolution: Directing involves addressing conflicts and issues among employees or teams. Managers play a crucial role in resolving conflicts, promoting a harmonious work environment.
5. Communication: Communication is a key element of directing. Managers must communicate goals, expectations, and feedback effectively to ensure that employees understand their tasks and the organization’s vision.
6. Leadership: Directing includes leadership aspects, where managers set an example and serve as role models for employees. Effective leadership fosters trust and inspires employees to follow a shared vision.

Question – 27 The three levels of management taken together form the ‘hierarchy of management’. Explain the functions, positions and relations of different levels of management with the help of a diagram.

Answer –

1. Top-Level Management:

Functions: Top-level managers are responsible for setting organizational goals, formulating policies, and making strategic decisions. They provide direction and vision for the entire organization.

Positions: Includes roles such as Chief Executive Officer (CEO), Chief Operating Officer (COO), and Chief Financial Officer (CFO).

Relationships: Top-level managers interact with the board of directors, stakeholders, and middle-level managers to communicate strategic goals and monitor performance.

2. Middle-Level Management:

Functions: Middle-level managers bridge the gap between top-level and lower-level management. They translate the strategic plans into specific objectives for their departments and coordinate activities.

Positions: Consists of positions like department heads, branch managers, and division managers.

Relationships: Middle-level managers communicate both upward (to convey departmental needs and updates to top-level management) and downward (to guide lower-level managers and employees in executing plans).

3. Lower-Level Management:

Functions: Lower-level managers oversee day-to-day operations, ensuring that tasks are completed efficiently and effectively. They focus on supervising employees and implementing operational plans.

Positions: Comprises roles such as supervisors, team leaders, and forepersons.

Relationships: Lower-level managers have direct relationships with front-line employees, providing guidance, feedback, and support.

Question – 28 Explain ‘work studies’ as a technique of scientific management.

Answer – Work studies, as a technique of scientific management, involve a systematic and scientific analysis of work processes to optimize efficiency and productivity. This technique comprises two primary components:

• Method Study: Method study is the examination of existing work methods and processes to identify inefficiencies and areas for improvement. It aims to streamline operations, eliminate unnecessary steps, and develop more efficient work methods. The goal is to enhance productivity, reduce waste, and improve the quality of work.
• Time Study: Time study involves measuring and establishing the standard time required to complete a specific task or job. This process entails breaking down the job into its individual elements, measuring the time taken for each element, and determining the overall standard time for the entire task. Time study helps in setting performance standards, optimizing workloads, and allocating resources effectively.

Question – 29 Differentiate between equity shares and preference shares on the basis of

(a) Choice

(b) Payment of dividend

(c) Return on capital

(d) Voting rights

Answer –

(a) Choice:

Equity Shares: Equity shareholders have no fixed claim on the company’s earnings and assets. They participate in profits and losses and have ownership rights, including voting rights, giving them a say in the company’s decisions.

Preference Shares: Preference shareholders have a fixed claim on the company’s earnings in the form of a fixed dividend rate. They do not typically have voting rights and have a more limited say in the company’s management.

(b) Payment of Dividend:

Equity Shares: Equity shareholders receive dividends at the discretion of the company’s management. The dividend amount may vary based on the company’s financial performance.

Preference Shares: Preference shareholders are entitled to a fixed dividend at a predetermined rate. This dividend must be paid before any dividend is distributed to equity shareholders. It is often cumulative, ensuring that unpaid dividends accumulate and must be paid in the future.

(c) Return on Capital:

Equity Shares: The return on capital for equity shareholders is variable and depends on the company’s profitability and share price performance. It can be potentially higher but also carries higher risk.

Preference Shares: The return on capital for preference shareholders is fixed and predictable, as they receive a predetermined dividend rate. It provides a stable income but generally offers lower returns compared to equity shares.

(d) Voting Rights:

Equity Shares: Equity shareholders typically have voting rights and can participate in decision-making during shareholder meetings.

Preference Shares: Preference shareholders often do not have voting rights, especially in matters related to the company’s management or day-to-day operations. However, they may gain voting rights in specific situations, such as the non-payment of dividends for a specified period.

Question – 30 Selection is the process of choosing the most suitable candidates. State the steps of the selection process.

Answer – Application and Resume Screening: Employers collect job applications and resumes from interested candidates and review them to identify those who meet the basic qualifications and criteria specified in the job description.

1. Interviews: Shortlisted candidates are invited for interviews, where they are assessed based on their qualifications, skills, experience, and fit for the organization and job role.
2. Testing and Assessments: Some organizations conduct various tests, such as aptitude tests, skills assessments, or personality assessments, to evaluate specific competencies or attributes required for the job.
3. Reference Checks: Employers contact a candidate’s former employers or colleagues to verify information and gain insights into their work history, performance, and character.
4. Background Checks: Background checks may include criminal background checks, credit checks (where applicable), and verification of education and professional certifications.
5. Final Interview: Shortlisted candidates may undergo a final interview with senior management or key decision-makers to assess alignment with the organization’s values, culture, and long-term goals.
6. Job Offer: The organization extends a formal job offer to the top candidate, including details such as salary, benefits, and terms of employment.
7. Acceptance and Onboarding: Once the candidate accepts the offer, they officially become an employee. The organization initiates the onboarding process, which includes orientation, training, and paperwork to ensure a smooth transition into the new role.
8. Candidate Rejection: Candidates who were not selected are informed of the decision in a professional and respectful manner.

Question – 31 Public deposits are very popular and convenient method of raising short term and medium-term finance. Explain any four merits of this method.

Answer –

• Accessibility: Public deposits are accessible to a wide range of investors, including individuals, small businesses, and institutions. This broad investor base makes it a convenient source of funds, especially for smaller enterprises that may have limited access to capital markets.
• Quick Source of Funds: Public deposits can be mobilized relatively quickly. Once the terms and conditions are established and the offering is made to the public, funds can be collected within a short period. This agility in raising funds can help companies address immediate financial needs.
• Flexibility: Companies have flexibility in setting the terms of public deposits, including the deposit amount, interest rate, and maturity period. This flexibilityallows them to tailor deposit offerings to their specific financial requirements and the prevailing market conditions.
• Diverse Investor Base: Public deposits attract a diverse group of investors, reducing dependency on a single source of finance. This diversity can contribute to financial stability and reduce risk for the company.

Question – 32 Explain ‘Single-line stores’ and ‘speciality stores’ as fixed shop retailers.

Answer – Certainly! Here’s a concise explanation of “Single-line stores” and “Specialty stores” as fixed shop retailers:

1. Single-line Stores: These retailers specialize in selling a single product category or a narrow range of closely related products. They offer a focused selection within their chosen category, such as shoes or electronics.
2. Specialty Stores: Specialty stores also focus on a specific product category but may offer a broader range of related products within that category. They aim to provide a unique and specialized shopping experience, often catering to a niche market.

Question – 33 Why is the employee training necessary in an organization? State any six reasons.

Answer – Employee training is essential in an organization for several reasons:

1. Skill Enhancement: Training helps employees develop and improve their skills, making them more proficient in their roles.
2. Adaptation to Technological Changes: It ensures that employees stay current with technological advancements, enabling them to work effectively with new tools and systems.
3. Increased Productivity: Well-trained employees tend to be more productive, leading to improved job performance and efficiency.
4. Employee Morale: Training demonstrates that the organization values employee growth, which can boost morale, motivation, and job satisfaction.
5. Safety Compliance: In industries where safety is critical, training ensures that employees understand and adhere to safety protocols, reducing accidents and risks.
6. Succession Planning: Training prepares employees for future leadership roles, facilitating smooth transitions when key positions become vacant.

Question  -34 State any five difficulties faced by the buyers and sellers engaged in external trade.

Answer –

1. Currency Exchange Fluctuations: The volatility of exchange rates can impact the cost of goods and affect profit margins for both buyers and sellers.
2. Trade Barriers: Tariffs, import/export restrictions, and trade regulations imposed by governments can create barriers to trade and increase costs.
3. Logistics Challenges: Shipping delays, transportation costs, and customs procedures can lead to logistical challenges for both buyers and sellers.
4. Quality Assurance: Buyers may face difficulties in ensuring the quality of products purchased, while sellers may encounter issues related to meeting quality standards and customer expectations.
5. Cultural and Language Differences: Differences in culture and language can lead to communication barriers and misunderstandings between buyers and sellers engaged in international trade.

Question – 35 Explain ‘Investment decision’ and ‘Dividend Decision’ as types of financial decision

Answer – Investment Decision: This type of financial decision involves determining how a company will allocate its funds or resources for various investment opportunities. The investment decision focuses on choosing which projects, assets, or ventures the company should invest in to generate future income and growth. It often includes assessing the potential risks and returns associated with different investment options and selecting the most suitable ones to achieve the company’s financial objectives.

Dividend Decision : The dividend decision is a financial decision that pertains to how a company distributes its profits to its shareholders. It involves determining the portion of profits that will be paid out to shareholders in the form of dividends and how much will be retained for reinvestment in the business. This decision is essential in balancing the interests of shareholders who seek income through dividends and the company’s need for retained earnings to support growth and financial stability.

Question – 36 ‘Consumer Protection Act was passed to protect consumers’ . State any three points of importance of consumer Protection from the point of view of consumers.

Answer –

1. Legal Safeguards: Consumer protection laws provide legal rights and safeguards, ensuring fair treatment, accurate information, and safe products/services.
2. Confidence and Trust: Consumers can trust that businesses adhere to ethical practices, enhancing confidence in the marketplace.
3. Recourse and Redress: These laws offer avenues for dispute resolution, allowing consumers to seek remedies and compensation when dissatisfied or harmed by products/services.

 Question – 37 State any three essential elements of a sound financial plan.

Answer – Three essential elements of a sound financial plan are:

1. Clear Goals and Objectives: A financial plan should define specific short-termand long-term financial goals, such as saving for retirement, buying a home, or funding education. These goals provide direction and purpose for the plan.
2. Budget and Spending Plan: Creating a budget that outlines income, expenses, and savings is crucial. It helps individuals or households manage their finances effectively by tracking where money comes from and where it goes.
3. Diversified Investment Strategy: A well-balanced investment strategy, including a mix of assets like stocks, bonds, and savings accounts, is essential for growing wealth and achieving financial goals while managing risk. Diversification helps spread risk and maximize returns.

Question – 38 Identify and state the component of product mix which is used as an identification of a product in the form of a name, sign, symbol or design. Also state two other component of product mix.

Answer – The component of the product mix used as an identification of a product in the form of a name, sign, symbol, or design is called the “brand.” Branding is a critical element of marketing that helps differentiate products from competitors and build customer recognition and loyalty.

Two other components of the product mix are:

1. Product Attributes: This component refers to the specific features and characteristics of the product itself. It includes aspects like size, color, quality, functionality, and any unique selling points or benefits that make the product attractive to consumers.
2. Packaging and Labeling: Packaging involves the physical container or wrapping that holds the product, while labeling includes the information and graphics displayed on the package. Effective packaging and labeling can influence consumer perception and buying decisions.

Question – 39 Explain the following money market instrument

(a) call money

(b) Treasury Bill

Answer –

(a) Call Money: Call money is a short-term borrowing and lending instrument among banks and financial institutions, usually with maturities ranging from one day to a few days.

(b) Treasury Bill: A Treasury Bill, or T-Bill, is a short-term government debt security with maturities typically ranging from a few days to one year, sold at a discount to its face value, with the difference representing the investor’s interest earnings.

Question – 40 Explain the following money market instruments:

(i)  Certificate of deposit

(ii) Commercial paper

Answer –

(i) Certificate of Deposit (CD): A CD is a time deposit offered by banks and financial institutions with a fixed maturity date and interest rate. It is a low-risk money market instrument where investors deposit a specific amount of money for a predetermined period in exchange for a higher interest rate than regular savings or checking accounts.

(ii)Commercial Paper: Commercial paper is an unsecured, short-term debt instrument issued by corporations and financial institutions to raise funds for their immediate financing needs. It has a brief maturity period, making it an attractive choice for companies seeking short-term capital.

 Question – 41 Explain any four qualities of a good salesman.

Answer – Four qualities of a good salesman are:

1. Effective Communication: A good salesman should be able to communicate clearly and persuasively to convey the value of a product or service to potential customers.
2. Empathy: Understanding the customer’s needs and concerns and showing empathy towards them helps build trust and rapport.
3. Product Knowledge: In-depth knowledge about the product or service being sold is crucial to answer customer questions and provide solutions.
4. Resilience: Sales can be challenging, so a good salesman needs to be resilient and persistent in the face of rejection and setbacks.

Question – 42 Distinguish between ‘delegation’ and ‘decentralisation’ giving any four points.

Answer –

1. Authority Control: Delegation involves the transfer of authority while retaining control and accountability at a higher level, whereas decentralization distributes decision-making authority more broadly, allowing lower-level units more autonomy.
2. Scope: Delegation typically applies to specific tasks or responsibilities within a manager’s purview, while decentralization encompasses entire departments or divisions.
3. Hierarchy: Delegation occurs within the existing organizational hierarchy, whereas decentralization may involve creating semi-autonomous units with their own management structures.
4. Decision-Making: In delegation, managers provide instructions and supervision, whereas decentralization empowers lower-level units to make decisions independently.

Question – 43 State any four services provided by retailers to the consumers.

Answer – Four services provided by retailers to the consumers are:

1. Product Selection: Retailers offer a wide range of products, allowing consumers to choose from different brands, styles, sizes, and price points, catering to various preferences and needs.
2. Convenience: Retail stores are often conveniently located, making it easy for consumers to access products and services without extensive travel or effort. Online retailers offer the convenience of shopping from home.
3. Customer Assistance: Retailers typically employ sales associates who can provide information about products, assist with selection, answer questions, and offer guidance to enhance the shopping experience.
4. Returns and Exchanges: Many retailers have return and exchange policies that allow customers to return or exchange products within a specified timeframe if they are unsatisfied or if the product is defective, providing peace of mind to consumers.

Question – 44  Explain any five financial incentives that motivate the employees.

Answer – Financial incentives play a vital role in motivating employees to excel in their roles.

Here are five such incentives:

1. Salary Increases: Periodic pay raises or salary increments based on performance encourage employees to strive for better results, as it directly impacts their take-home pay.
2. Bonuses: Performance-based bonuses, such as annual or project-related bonuses, reward exceptional effort and achievement, providing employees with extra income.
3. Commission: Sales teams often receive commissions tied to their sales performance, giving them a direct financial stake in meeting or exceeding targets.
4. Profit Sharing: Sharing a portion of company profits with employees can align their interests with the company’s success, fostering a sense of ownership and motivation.
5. Stock Options: Offering stock options or equity in the company can tie employees’ financial gains to the organization’s growth and long-term success, motivating them to contribute to its growth.

Question – 45 Explain any five functions of a wholesale.

Answer –Wholesalers perform several essential functions in the distribution of goods:

• Bulk Buying: Wholesalers purchase products in large quantities from manufacturers, allowing them to benefit from economies of scale and lower unit costs.
• Warehousing: They store and manage inventory, ensuring products are available when needed by retailers, reducing stockholding costs for retailers.
• Distribution: Wholesalers efficiently distribute products to retailers and may offer delivery services, saving retailers time and resources.
• Assortment: They offer a wide range of products, giving retailers access to a diverse product mix to meet customer demands.
• Credit and Financing: Wholesalers may extend credit terms to retailers, helping them manage cash flow and reduce the need for immediate payments.

Question – 46 Consumers have various rights which help them in protecting their interests. Explain any three such rights.

Answer – Consumers have several rights that protect their interests and ensure fair treatment in the marketplace. Here are three such consumer rights:

1. Right to Information: Consumers have the right to access accurate and complete information about products and services. This includes information about the product’s quality, price, ingredients, safety instructions, warranty, and terms of use. This right empowers consumers to make informed choices and avoid misleading or deceptive practices.
2. Right to Choice: Consumers have the right to choose from a variety of products and services at competitive prices. This means they are not forced into purchasing from a specific supplier or limited to a single option. The right to choice promotes competition, which can lead to better quality and lower prices for consumers.
3. Right to Redress: When consumers purchase a product or service that is faulty, substandard, or does not meet the promised standards, they have the right to seek redress or compensation. This may involve returning the product for a refund or exchange, getting a repair, or receiving compensation for damages. The right to redress ensures that consumers are not financially harmed by defective products or poor services.

These rights, along with others such as the right to safety, the right to be heard, and the right to consumer education, help protect consumers from unfair practices and ensure a fair and transparent marketplace.

Question – 47 Business organisations need of short-term finance is best fulfilled by ‘Bank Credit’ through various ways. Explain these ways.

Answer – Business organizations meet their short-term financing needs through bank credit in several ways:

• Working Capital Loans: Banks offer loans to cover day-to-day operational expenses.
• Overdraft Facilities: Businesses can overdraw their accounts to address temporary cash shortfalls.
• Cash Credit: A flexible credit line where companies withdraw as needed.
• Trade Finance: Banks facilitate international trade through letters of credit and guarantees.
• Invoice Discounting: Firms receive immediate funds by selling invoices at a discount.
• Short-Term Loans: Specific loans for short-term financial requirements.
• Commercial Paper: Larger corporations issue this short-term debt instrument with bank support.
• Cash Management Services: Banks offer services to optimize cash flow and reduce financing costs.

Question – 48 you have received an order for export of certain hosiery item to USA What document will be used in export procedure? Explain in brief any six such documents.

Answer – In the export procedure for hosiery items to the USA, several documents are crucial:

• Commercial Invoice: An itemized bill for the goods, including pricing and terms of sale.
• Packing List: Details the contents of each package and their quantities.
• Bill of Lading: Acknowledges the receipt of goods and serves as a shipping contract.
• Certificate of Origin: Confirms the origin of the goods.
• Customs Declaration: Provides information for customs clearance.
• Export License: If required, it permits the export of specific goods.

Question – 49 Explain the role of Consumer Organizations and NGOs.

Answer – Consumer Organizations advocate for consumer rights, provide education, and resolve disputes. They ensure fair treatment, product safety, and policy influence. NGOs work on various social and environmental causes, raise awareness, provide services, conduct research, and hold entities accountable. Both play essential roles in safeguarding consumer interests and addressing societal issues.

Question – 50 What are Mutual Funds? Explain any one type of mutual funds.

Answer-Mutual Funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities, managed by professional fund managers. Investors in mutual funds own shares in the fund, representing their proportional ownership of the underlying assets.

One type of mutual fund is an “Equity Mutual Fund.” Equity mutual funds primarily invest in stocks or equities. They aim to generate capital appreciation by investing in a diversified portfolio of company stocks across various sectors and industries. Equity funds can be further categorized into various subtypes, such as large-cap, mid-cap, small-cap, or thematic funds, depending on their investment focus and risk profile. The goal of equity mutual funds is to provide investors with the potential for long-term capital growth, although they also come with varying degrees of risk depending on the type of stocks in their portfolio.

Question -51 Choice of an appropriate distribution channel is important for pricing and promotion strategy. Explain any three factors that will guide to make such choice? 

Answer – Choosing an appropriate distribution channel is crucial for pricing and promotion strategies. Here are three factors that guide this choice:

• Target Market: Understanding your target market is essential. Factors such as demographics, geographic location, purchasing behaviour, and preferences influence which distribution channels are most effective. For instance, if your target market is tech-savvy and prefers online shopping, e-commerce channels may be ideal.
• Product Characteristics: The nature of your product plays a significant role. Perishable or fragile items may require shorter, more direct distribution channels to maintain product quality. Complex or high-value products might benefit from personalized service through direct sales channels.
• Competitive Environment: Analysing your competitors’ distribution strategies is essential. If competitors are successfully using certain channels, it may be wise to consider similar options. Conversely, finding untapped distribution channels can provide a competitive advantage.

Question – 52 In internal trade, buyers and sellers meet together and transactions take place. But in external trade, it is not possible. The business people face various problems. Explain any four such problems.

Answer –

1. Currency Exchange and Exchange Rate Fluctuations: Dealing with multiple currencies is one of the primary challenges in external trade. Buyers and sellers may use different currencies, and exchange rates between these currencies can fluctuate, impacting the value of transactions. Exchange rate volatility can lead to uncertainties in pricing and profit margins for businesses engaged in international trade.
2. Trade Barriers and Tariffs: Different countries often impose trade barriers, such as import tariffs and quotas, to protect their domestic industries or generate revenue. These barriers can increase the cost of importing goods and make it more challenging for sellers to access foreign markets. Navigating complex trade regulations and compliance requirements can be a significant hurdle.
3. Language and Cultural Differences: Language barriers can complicate communication between buyers and sellers in different countries. Misunderstandings can occur due to language differences, leading to mistakes in contracts or product specifications. Additionally, varying cultural norms and business practices may require businesses to adapt their strategies and approach when conducting international trade.
4. Logistics and Transportation: Shipping goods across borders involves complex logistics and transportation challenges. Issues such as customs clearance, shipping delays, and the risk of damage or loss during transit can disrupt supply chains and impact the timely delivery of goods. High shipping costs and the need for efficient transportation solutions are also significant concerns for businesses engaged in external trade.

Question – 53 State any three types of services provided by retailers to wholesalers.

Answer – These are the three services provided by the retailers to wholesalers.

a) Market Information: Retailers supply valuable information to wholesalersabout changes in tastes, fashion etc. of consumers.

1. b) Help in Distribution: Retailers relieve the manufacturers and wholesalers

of the burden of collecting and executing a large number of small orders fromvariousconsumers.

1. d) Sell New Products: New products will be displayed in retail outlets in aattractive way so as to persuade consumers to buy these products.

Question – 54 What is meant by Internal Trade? Name any four documents used in Internal Trade.

Answer – Internal trade, also known as domestic trade, refers to the buying and selling of goods and services within the borders of a single country.

Here are four common documents used in internal trade:

1. Invoice: An invoice is a document issued by the seller to the buyer, detailing the products or services provided, their quantities, prices, and terms of sale.
2. Purchase Order: A purchase order is a document issued by the buyer to the seller, specifying the products or services they wish to purchase, quantities, prices, and delivery terms.
3. Delivery Note: A delivery note, also known as a packing slip or delivery receipt, accompanies the shipment of goods from the seller to the buyer. It lists the items included in the shipment, their quantities, and sometimes their condition.
4. Payment Receipt: A payment receipt is issued by the seller to the buyer once the payment for the goods or services has been made. It confirms that the payment has been received and may include details such as the payment date, amount, payment method, and a reference to the original invoice.

Question – 55 Briefly explain the different types of goods classified on the basis of tangibility.

Answer –

1. Tangible Goods: These are physical products you can touch and see, such as electronics, clothing, or vehicles.
2. Intangible Goods: These lack physical presence but have value, including services, digital products (e.g., software), intellectual property (like patents), and experiences (e.g., concert tickets).
3. Durable Goods: Tangible items designed for long-term use, like appliances and furniture, which have a longer lifespan.
4. Non-Durable Goods: Tangible products that are consumed quickly or have a limited shelf life, like food and toiletries.
5. Virtual Goods: Intangible, digital items existing in virtual environments, such as in-game items or digital downloads.
6. Consumer Goods: Products for personal use, including both durable and non-durable items.
7. Capital Goods: Tangible items used by businesses for production or service provision, like machinery or commercial vehicles.

Question – 56 How is management multi – disciplinary? explain

Answer – Management is inherently multi-disciplinary because it incorporates principles and insights from a wide array of fields such as economics, psychology, sociology, finance, marketing, and more. Managers need to understand human behaviour, economic trends, financial strategies, and societal dynamics to make informed decisions. This cross-disciplinary approach helps them navigate complex organizational challenges, adapt to changing environments, and achieve strategic objectives, making management a dynamic and versatile field.

Question – 57 Explain a ‘documentary bill’ as a document used in external trade.

Answer – A “documentary bill” in external trade refers to a collection of vital documents, such as the bill of lading, commercial invoice, and certificates, that verify the terms and conditions of an international trade transaction. These documents ensure that both the buyer and seller fulfill their obligations and provide essential information for customs clearance and payment. They serve as a critical tool to facilitate and secure cross-border trade, reducing risks and uncertainties for all parties involved. Compliance with the documentary bill is crucial for the successful execution of international trade deals.