Xii BST Support Material

KENDRIYA VIDYALAYA SANGATHAN
CHANDIGARH REGION
SUPPORT MATERIAL
TERM-I
BUSINESS STUDIES
XII (2021-22)
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INDEX
S. Unit TOPIC Page No.
No.
1 1-Nature and Multiple choice questions 3-11
2 significance of Assertion reasoning questions 11-18
3 management Case based questions 18-22
4 Answer key 23-26
5 2- Principles of Multiple choice questions 27-35
6 Management Assertion reasoning questions 35-44
7 Case based questions 44-49
8 Answer key 50-54
9 3- Business Multiple choice questions 55-67
10 environment Assertion reasoning questions 67-77
12 Answer key 84-88
13 4- Planning Multiple choice questions 89-93
14 Assertion reasoning questions 93-96
16 Answer key 99-100
17 5- Organising Multiple choice questions 101-107
18 Assertion reasoning questions 108-115
21 11- Marketing Multiple choice questions 123-133
22 Management Assertion reasoning questions 133-140
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UNIT 1- NATURE & SIGNIFICANCE OF MANAGEMENT
(Management-Concept, Objectives and Importance, Management as
Science, Art and Profession, Levels of management, Functions of
management and Coordination)
MULTIPLE CHOICE QUESTIONS
S.NO. QUESTIONS
1 Name the process of working with and through others to effectively achieve organisational
objectives by efficiently using limited resources in a changing environment.
a) Management b) Planning
c)Organising d) Controlling
2 The objective of management which consistently creates economic values for various
sections of society is:
a) Organisational Objectives b) Social Objectives
c)Personal Objectives d) Both Social and Personal Objectives
3 Aarav has recently started a business to sell computers. He hired shop in Nehru Place in New
Delhi, where he assembles computers and various components, supplies them as per order.
He performs a series of composite but separate functions simultaneously and ensures that
computers are delivered in time as per orders. These functions are performed by all managers
at all times. The feature of management highlighted here is:
a) Management is a continuous process b) Management is pervasive
c) Management is a dynamic function d) Management is a group activity
4 Management is essential for the following Organisation(s):
a) Big or Small b) Profit or Non-Profit
c) Service or Manufacturing d) All of these
5 Match the concept of management in Column I with their respective meaning in column II:
Column I Column II
Effectiveness i) Doing the task correctly with minimum cost
Efficiency ii) Finishing the task on time
Process iii) The primary functions or activities that management
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performs to get the things done.
a) i), ii), iii) b) ii), i), iii)
c) iii), ii), i) d) i), iii), ii)
6 At times business may concentrate more on producing goods with fewer resources I.e.,
cutting down cost but not achieving the target production. Consequently, the goods do not
reach the market and hence the demand for them declines and competitors enter the market.
This is a case of:
a) Being efficient but not effective b) Being effective but not efficient
c) Being both effective and efficient d) All of these
7 Match the dimensions of management in Column I with their respective definition in Column
II:
Column I Column II
A) Management of i) In a factory, a product is manufactured, in a garment
work store, a customer’s need is satisfied and in a hospital a
patient is treated. Management translates the goals to be
achieved and assigns the means to achieve it.
B) Management of ii) No matter what the organisation, it has some basic
People product or service to provide in order to survive the flow
of input material and the technology for transforming this
input into the desired output for consumption.
C) Management of iii) The task of management is to make people work
operations towards achieving the organisation’s goals, by making
their strengths effective and their weaknesses irrelevant.

8 “Every member of an organisation has a different purpose for joining the organisation but as
members of the organisation they work towards fulfilling the common organisational goal.
This requires team work and coordination of individual effort in a common direction.”
Identify the characteristic of management highlighted above.
a) Management is a goal-oriented process b) Management is a group activity
c) Management is multi-dimensional d) Management is a dynamic function
9 “An organisation interacts with its external environment which consists of various social,
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economic and political factors. In order to be successful, an organisation must change itself
and its goals according to the needs of the environment.” Identify the characteristic of
management highlighted here.
10 “Management is a force that cannot be seen but its presence can be felt in the way the
organisation functions. The effect of management is noticeable in an organisation where
targets are met according to plans, employees are happy and satisfied and there is orderliness
instead of chaos.” Identify the characteristic of management highlighted above.
a) Management is an intangible force b) Management is a group activity
c) Management is multi-dimensional d) Management is a continuous process
11 “Management has to achieve variety of objectives in all areas considering the interest of all
stakeholders including shareholder, employees, customers and the government. The main
objective of any organisation should be to utilise human and material resources to the
maximum possible advantage.” Identify the objectives of management highlighted above.
a) Organisational objectives b) Social objectives
c) Personal objectives d) None of these
12 Match the objective of management in Column I with their respective definition in Column
II:
Column I Column II
A) Survival i) Increase in the number of employees, the number of products
or increase in the capital investment, etc.
B) Profit ii) A Vital Incentive for the continued successful operation of the
enterprise
C) Growth iii) An organisation must earn enough revenues to cover costs.

13 “The aim of manager is to reduce costs and increase productivity through better planning,
organising, directing, staffing and controlling the activities of the organisation.” Identify the
point of importance of management highlighted above”
a) Management helps in achieving group goals b) Management increases efficiency
c) Management creates a dynamic organisation d) Management helps in achieving
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personal objectives
14 “Through motivation and leadership, the management helps individuals to develop team
spirit, cooperation and commitment to group success” Identify the point of importance of
management highlighted above.
a) Management helps in achieving group goals b) Management increases efficiency
c) Management creates a dynamic organisation d) Management helps in achieving
personal objectives
15 Which of the following is not a part of importance of management-“Management helps in the
development of society?”
a) It creates employment opportunities
b) It provides good quality products and services
c) It adopts new technology for the greater good of the people
d) None of the above.
16 “All the management practices are based on the same set of principles, what distinguishes a
successful manager from a less successful one is the ability to put these principles into
practice.” Identify the nature of management highlighted above.
a) Management as a science b) Management as an art
c) Management as a profession d) management is both science and art
17 Which of the following proves that management is not an exact science?
a) Management has its own theory and principles that have developed over a period of time,
but it also draws on other disciplines such as economics, sociology, psychology and
mathematics. Like any other organized activity, management has its own vocabulary of terms
and concepts.
b) Since management deals with human beings and human behaviour, the outcomes of these
experiments are not capable of being accurately predicted or replicated.
c) The application and use of principles of management is not universal. They have to be
modified according to a given situation.
d) Both b & c
18 “Unlike professions such as medicine and Law which require a practicing doctor or lawyer to
possess valid degrees. Nowhere in the world it is mandatory for a manager to possess any
such specific degree.” Identify the characteristic of profession that management does not
fulfill in the statement being discussed above.
a) Ethical code of conduct b) Restricted entry
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c) Professional association d) Service motive
19 “Profit maximization as the objective of management does not hold true and is fast changing.
Therefore, if an Organisation has a good management team that is efficient and effective it
automatically serves society by providing good quality products at reasonable prices. Identify
the characteristic of the profession that is not fully present in management.
a) Ethical code of conduct b) Restricted entry
c) Professional association d) Service motive
20 “McDonalds the fast-food giant made major changes in its menu to be able to survive in the
Indian market. “
Identify the characteristic of management highlighted in the above statement
21 Why management is considered a multi-faceted concept?
a) Because management is a complex activity that has three main dimensions: management
of work, management of people and management of operations.
b) The activities involved in managing an enterprise are common to all organizations whether
economic, social or political.
c) The process of management is a series of continuous, composite, but separate functions
(planning, organizing, directing, staffing and controlling). These functions are
simultaneously performed by all the managers at all the times.
d) None of the above
22 Radhey ltd. is diversifying its product lines. What organisational objective it is trying to
achieve?
a) Survival b) Profit
c) Growth d) All of above
23 Which of the following statement best explains the “Management is an Art”?
a) Two managers deal with the same problem differently.
b) Management has drawn its knowledge from other disciplines also.
c) No formal qualification is required for the appointment as the manager in a company.
d) Outcomes of managerial actions cannot be predicted accurately.
24 Bonnie limited is able to achieve the target production of 5000 units within the prescribed
period. However, to achieve the target on time, additional Rs.40,000 were paid as overtime
wages to employees. Bonnie limited is_________
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a) Efficient but not effective b) Effective but not efficient
c) Both effective and efficient d) Neither effective nor efficient
25 Directors of Atul Limited assigned the task of implementing the plans and policies framed by
the board to all the department heads. Department heads appointed supervisors,
superintendent, executives, etc. so that work can be assigned to workers as per the plan.
Supervisors kept a check on the workers as per the plan.
Identify the feature of management highlighted in above lines.
26 To which level of management do managers of first line belongs?
A. Lower level
B. Top level
C. Middle level
D. None of the above
27 Coordination is
A. A Function of management
B. The essence of management
C. An objective of management
28 The General Manager of ‘Uthranchalwood put ltd called a meeting of production manager
and Sales manager both of his company. He explained to them that both of these departments
are the base of company’s success. Therefore it is necessary for both of them to work with
coordination. Also, they were told whatever decision they were taken for their respective
departments would affect others; they must give its information to them immediately. They
did the same. As a result of this, there never arouse a situation in the company, when the
sales orders could not be compiled with because of the shortage of goods.
Identify the characteristic of coordination in the paragraph given below
A. Coordination is the continuous process
B. Coordination ensures unity of action
C. Coordination is a deliberate function
D. Coordination is an all pervasive action
29 The process of coordinating the activities of an organization begins at the ————- stage
itself
A. Planning
B. Staffing
C. Directing
D. Controlling
30 The words cooperation and coordination are
A. Opposite
B. Synonym
C. Complementary
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D. All of these
31 The objective of marketing departments of S Lodi’s to increase the sales by 10% by offering
discounts. But, the finance department may not approve of such discounts as it means loss of
revenue. These kinds of conflict arise in organizations because each department is
performing activities in isolation of other departments and barriers between departments are
becoming more rigid.
Identify the point of importance of coordination to which this case is related:
A. Growth in size
B. Functional differentiation
C. Specialisations
32 ”Coordination is not a separate function of management but it happens to be the final truth of
all the functions. “In what context this observation this observation has been made?
A. Coordination is the essence of management
B. Coordination is not established automatically
C. Coordination is a continuously moving process
33 The process by which manager integrates and synchronizes the activities of different
departments is called
A. Management
B. Controlling
C. Planning
D. Coordination
34 As Top level of management is responsible for the welfare and operations of whole
organization, Middle level is responsible for the welfare and operations of
A. Workers
B. Department
C. Both a and b
35 Mr. Top the Managing director of A ltd appointed Production manager Mr. Produce who was
assisted by Mr. Ustad who was to take care of ensuring the proper and safe working
conditions for workers. Where will Mr. Ustad be placed in management hierarchy?
A. Middle level
B. Top level
C. Operational level
36 The Force that binds all other functions of management is called
A. Controlling
B. Coordination
C. Cooperation
D. Planning
37 Which of the following functions is performed by operational level management
A. Looking for the safety of workers
B. representing the problems of workers before the middle level management
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C. To ensure quality standards are properly followed
D. All of the above
38 Which function of management ensure work accomplishment as per plans
A. Controlling
B. Planning
C. Directing
D. Organizing
39 It involves leading, influencing and motivating the employees to perform the assigned task
A. Staffing
B. Planning
C. Directing
D. Controlling
40 Identify the feature of coordination being highlighted in the given statement:” coordination
is not a one-time function it begins at planning stage and continue till controlling“
A. Controlling ensures unity of action
B. Coordination is an all pervasive function
C. Coordination is a continuous process
D. Coordination is a deliberate function
41 Name the level of management at which the managers are responsible for implementing and
controlling the plans and strategies of the organization.
A. Top level management
B. Middle level management
C. Lower level management
42 Your grandfather has retired as the director of a manufacturing company.
At which level of management was he working
43 Fab India Ltd is a private limited company with several branches all over the country. It
needs a team of designers and craftspeople. Similarly, another company Infosys technologies
which develops software needs system analysts and programmers.
Identify that which function of management is needed to satisfy the need of other companies.
A. Planning
B. Organizing
C. Staffing
D. Controlling
44 Name the concept of management which involves the grouping of the required tasks into
manageable departments or work units and establishment of authority and reporting
relationships within the organizational hierarchy.
A. Planning
B. Organizing
C. Staffing
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D. Controlling
45 Which of the following is not included in level of management
B. Supervisory level of management
C. Sub level management
D. Middle level management
46 Which of the following is not a function of management
A. Planning
B. Staffing
C. Cooperating
D. Controlling
47 Arun is responsible for making annual appraisal reports of line managers. At which level of
management Arun is working?
D. Supervisory level management
48 Which concept of management requires balancing, timing, and integration of activities to
ensure planned objectives are achieved with minimum conflicts.
A. Cooperation
B. Coordination
C. Management
D. Planning
49 ————- unifies unrelated or diverse interest into purposeful activity
A. Planning
B. Controlling
C. Organizing
D. Coordination
50 The sales department accuses the production department for the poor sales due to late
delivery of goods. The production department accuses the purchase department for not
delivering the raw material in time and the purchase department accuses the finance
department for not releasing funds on time. Which quality of management is missing in the
above situation?
A. Planning
B. Management
C. Coordination
ASSERTION- REASONING BASED QUESTIONS
S.NO. QUESTIONS
Read the following statements: Assertion and Reason, Choose one of the correct alternatives
given below
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1 Assertion (A): Successful Organisation need not follow a deliberate process, called
management, to achieve its goals.
Reason(R): Management is the dynamic, life-giving element in every business. Without it,
the resources of production remain resources and never become production.
Alternatives:
A) Both Assertion (A) and Reason(R) are True and Reason ( R)is the correct explanation of
Assertion(A).
B) Both Assertion (A) and Reason(R) are True , but Reason ( R)is not the correct explanation
of Assertion(A).
C) Assertion(A) is True, but Reason(R) is False.
D) Assertion(A) is False, but Reason(R) is true.
2 Assertion(A): Management is termed as a ‘Process’.
Reason(R): Management involves a series of inter-related functions, such as Planning,
Organising, Staffing, Directing and Controlling.
Alternatives:
A) Both Assertion(A) and Reason(R) are True and Reason (R)is the correct explanation of
Assertion(A).
B) Both Assertion(A) and Reason(R) are True , but Reason ( R)is not the correct explanation
of Assertion(A).
3 Assertion(A): Social objective of management involve creation of benefits or economic
values to the society.
Reason(R): Now a days, profit maximisation is the only objective of management.
Alternatives:
Assertion(A).
B) Both Assertion(A) and Reason(R) are True, but Reason (R)is not the correct explanation
of Assertion(A).
4 Assertion(A): Management is an inexact science.
Reason(R): It is based on human behaviour. It is neither precise nor as comprehensive as the
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pure science like physics or chemistry.
Alternatives:
Assertion(A).
of Assertion(A).
5 Assertion(A): Management is considered as a tangible force.
Reason(R): Management cannot be seen and touched but its presence can be felt.
Alternatives:
Assertion(A).
B) Both Assertion(A) and Reason(R) are True, but Reason ( R)is not the correct explanation
of Assertion(A).
6 Assertion(A): Management translates the work in terms of goals to be achieved and assigns
the means to achieve it.
Reason(R): All organisations exist for the performance of some work.
Alternatives:
Assertion(A).
of Assertion(A).
7 Assertion(A): Satisfaction of personnel objectives is very important in an organisation.
Reason(R): Employees are one of the most valuable resources for an organisation,
Alternatives:
Assertion(A).
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of Assertion(A).
8 Assertion(A): Management is termed as a group activity.
Reason(R): Every member of a firm joins the organisation with a different purpose and work
towards achievement of personal goals and not organisational goals.
Alternatives:
Assertion(A).
of Assertion(A).
9 Assertion(A): Art is the skillful and personal application of existing knowledge to achieve
desired results.
Reason(R): If an organisation has good management team which is efficient and effective, it
automatically serves society by providing good quality products at reasonable prices.
Alternatives:
Assertion(A).
of Assertion(A).
10 Assertion(A): In order to enter into a profession, one has to acquire an educational degree by
clearing specified examination conducted by required institutes.
Reason(R): All professions are bound by a code of conduct which guides the behaviour of its
members.
Alternatives:
Assertion(A).
of Assertion(A).
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11 Assertion(A): Management increases efficiency.
Reason(R): As a result of excellent managerial competence, business organisations can
reduce costs and increase productivity by making optimum use of available resources.
Alternatives:
A) Both Assertion(A) and Reason(R) are True and Reason ( R)is the correct explanation of
Assertion(A).
B) Both Assertion(A) and Reason(R) are True , but Reason ( R)is not the correct explanation
of Assertion(A).
12 Assertion(A): Management principles are developed through observation and repeated
experimentation.
Reason(R): Outcomes of management principles can be predicted accurately.
Alternatives:
Assertion(A).
of Assertion(A).
13 Assertion(A): Management creates a dynamic organisation.
Reason(R): It is generally seen that individuals in an organisation readily accept changes and
face challenges.
Alternatives:
Assertion(A).
of Assertion(A).
14 Assertion(A): The task of a manager is to give a common direction to the individual effort in
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achieving in achieving the overall goal of the organisation.
Reason(R): Management is goal-oriented.
Alternatives:
Assertion(A).
of Assertion(A).
15 Assertion(A): Every manager has his/her own unique style of managing things and people,
despite learning same management theories and principles.
Reason(R): Just like Art, management is based on practice and Creativity.
Alternatives:
A) Both Assertion(A) and Reason(R) are True and Reason ( R)is the correct explanation of
Assertion(A).
of Assertion(A).
16 Assertion: In any organisation coordination is required so that the production and sales
department work hand-in-hand.
Reason: coordination integrates group efforts.
A. Both Assertion (A)and Reason(R) are true and R is the correct explanation of A
B. Both Assertion (A) and Reason (R) are true but R is not the correct explanation of A
C. Assertion (A)is true but Reason (R)is false
D. Assertion (A)is false but Reason(R)is true
17 Assertion: The activities of each department need to be linked through coordination
Reason: Specialists usually think that they only are qualified to evaluate, judge and decide
according to their personal criteria.
18 Assertion: Coordination is a one-time function of the top management
Reasons: Coordination begins at the planning stage and continues till controlling.
19 Assertion: Coordination is not an exclusive of function of the top management
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Reasons: Coordination is the responsibility of all managers- top, middle and operational
levels.
20 Assertion: Coordination is the essence of management
Reason: Coordination is the process by which a manager synchronizes the activities of
different departments. It is the force that binds all other functions of management and thus
called the essence of management.
Both A and R are true and R is the correct explanation of A
21 Assertion: Coordination is not a separate function of management
Reasons: Like a thread in a garland, coordination is a part management functions.
22 Assertion: planning cannot prevent problems
Reason : Planning can only predict the problems and prepare contingency plan to deal with
them if and when they occur
23 Assertion : Coordination is an all pervasive function
Reason: Coordination is required at all levels of management due to the interdependent nature
of activities of various departments it integrates the efforts of different departments and
different levels
24 Assertion: Coordination is a deliberate function
Reason: A manager has to coordinate the efforts of different people in a conscious and
deliberate manner
25 Assertion: There is a need of coordination due to functional differentiation
Reasons: all individuals differ in their habit of work, background, approaches to situation and
relationship and they have their individual goals
A. Both Assertion (A)and Reason(R) are true and R is the correct explanation of
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26 Assertion: Coordination ensure unity of action
Reason: it is a common focus to the efforts of people with diverse interests.
27 Assertion: Coordination is a voluntarily binding force between individuals and departments.
Reason: Coordination gives a direction to the willing spirit
A. Both Assertion (A) and Reason(R) are true and R is the correct explanation of A.
28 Assertion: The job of the lower level is complex and stressful, demanding, long hours and
commitment to the organisation.
Reason: Lower level manager interacts with the actual work force, pass on the instructions
and supervise their work, maintain quality of products, maintain safety standards and so on.
29 Assertion: Foreman and supervisors may both be considered first line managers
Reason: First line supervisors are responsible for directing the day today activities of
operative employees
30 Assertion : Cooperation in absence of coordination leads to waste of efforts
Reason: Coordination without cooperation has no roots and cooperation without coordination
bears no fruits.
CASE BASED QUESTIONS

S.NO. QUESTIONS
Read the following and answer questions from 1 to 5 on the basis of the same:
Anu and Shilpa are good friends, considering the fact that the activities involved in managing
an enterprise are common to all organizations, after completing their master’s in business
management, both of them take up a job at managerial level in different organizations as per
their individual areas of interest. Anu joined as a marketing manager in a company selling
Ladies handbag, she added new product lines in the business viz. Ladies shoes and cosmetics.
Shilpa joins an NGO and works diligently to realize its objective by providing employment to
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especially abled persons.
Both Anu and Shilpa make conscious efforts to build team spirit and coordination among
diverse individuals. They motivate their employees in such a manner that individual members
are able to achieve personal goals while contributing to the overall organisational objective.
Both of them gained experience over a period of time and became more effective.
1 Which feature of management is highlighted in above para:
a) Management is dynamic b) Management is Pervasive
c)Management is a continuous process d) Management is a continuous activity
2 Which objective of management is pursued by Anu by adding new product lines in the
business:
c)Personal objectives d) None of these
3 Which objective(s) of management is pursued by Shilpa by providing employment
opportunities to especially abled persons?
b) Organisational objectives b) Social objectives
c)Personal objectives d) Both (a) & (b)
4 “They motivate their employees in such a manner that individual members are able to achieve
personal goals while contributing to the overall organisational objective.”
Which importance of management is highlighted here?
a) Management helps in achieving group goals
b) Management helps in development of society
c) Management helps in achieving personal objectives
d) Management increase efficiency
5 “Both of them gained experience over a period of time and became more effective.”
Identify the nature of management highlighted in this line.
a) Management as Profession b) Management as Science
c) Management as an Art d) None of the above
Read the following and answer questions from 6 to 10 on the basis of the same:
Apex Ltd is a company operating on a large scale. Co. realizes that human resources are the
most important assets of their business, So HRM Department is set up to show a
developmental path to the employees through proper training modules and job enrichment.
Time to time incentives and awards are given to employees based on their performance,
which keeps the employees highly motivated. Sagar, just a graduate in humanities is
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appointed as the Plant superintendent in the company. Sagar knew that there are certain
theories and principles of management based on deep observation and experimentation. So,
he studied various theories and principles of management before joining the Company. Sagar
is very energetic and he likes to deal with severe situations. On November 20th, He informed
his boss that the goal he had been given had been achieved and the quality was the highest.
The best part is that there is one day left for the deadline, which is November 21. However,
his boss was dissatisfied because the expenses incurred by his team to complete the project
exceeded the upper limit.
6 Which objective of management is pursued by management of Apex Ltd.:
c)Personal objectives d) None of these
7 Identify the feature of profession which is not applicable here - “Sagar, just a graduate in
humanities is appointed as the Plant superintendent in the company.’
a) Well defined body of knowledge b) Restricted Entry
c) Ethical code of conduct d) Service Motive
8 Which aspect of management is violated by Sagar in above case?
a) Planning b) Efficiency
c) Effectiveness d) Controlling
9 Identify the nature of management highlighted in this line - “Sagar knew that there are certain
theories and principles of management based on deep observation and experimentation.”
b) Management as Profession b) Management as Science
c) Management as an Art d) None of the above
10 Which aspect of management is followed by Sagar in above case?
a) Planning b) Efficiency
c) Effectiveness d) Controlling
Read the extract given below and answer the question on the basis of the same.
Mona is the branch manager of Vidushi handicraft Private Limited. The company objective is
to promote the sale of Indian handlooms and handicraft products. It sells fabrics, furnishings,
ready-made and household items made out of traditional Indian fabrics. Mona decides
quantities, variety , colour and texture of all the above items and then allocates resources for
their purchase from different suppliers. She appoints a team of designers and craft people in
the company, who developed some prints for bed covers in bright colour on silk. Although
the product looked very attractive and impressive, they are relatively expensive on the front
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of affordability for an average customer. Mona suggested that they should keep the silk bed
covers for special festive occasions and offer the cotton bed covers on regular basis to keep
the cost under control.
11 She appoints a team of designers and crafts people in this company who developed some
prints for bed covers in bright colour on silk”. Which function of management is highlighted
in this context?
A. Controlling
B. Staffing
C. Planning
D. Directing
12 With reference to the given case, which level of management is working

A. Lower level
B. Top level
C. Middle level
D. Shop floor level
13 Mona suggested that we should keep the silk covers for special festive occasions and offer
the cotton bed covers on regular basis to keep costs under control.”
A. Staffing
B. Planning
C. Organizing
A very innovative firm has decided to increase its sales. The company is good but they have
noticed that their growth has stagnated for last couple of years. The top management calls an
emergency meeting. For this, they have outlined a series of activities to be performed by each
person. The people are told about the activities they have to perform. Then, the work is
divided among individuals. The efforts taken by the firm turns out to be very productive for
the organization and it gains huge profit. The newspaper and the management institutes also
praised the company for its high standards of management. However, as time passes the size
of the organization grows and thus they think of bringing another concept of management
with lots of precision. The concept of management is not voluntary but rather based on a lot
of clear-cut thinking in advance. The main idea is to reduce confusion among employees
regarding activities they have been assigned.
14 Identify the function of management discussed in the given case which the company follows
A. Planning
B. Organizing
C. Directing
D. Controlling
15 Identify the concept of management discussed which the company tries to bring
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A. Coordination
B. Controlling
C. Cooperation
D. Planning
16 Find out one importance of the concept highlighted in the given case
A. Growth in size
B. Specialization
C. Functional differentiation
17 Find out the feature of concept highlighted in the given case

A. Continuous process
B. Deliberate effort
C. Pervasive
D. Responsibility of all managers
Mohit is the managing director of S Limited manufacturing different varieties of cheese. He
has an efficient team working under him consisting of Rajan who is the Production manager ,
Vineet the Marketing manager and Asif the finance manager. They understand and interpret
the policies made by Mohit to ensure that their department has adequate manpower, assign
them the necessary duties and motivate them to achieve the desired objective.
18 Mohit is working at which level of management

A. Top level
B. Middle level
C. Lower level
D. Operational level
19 Identify another function of the level highlighted in the given case

A. Oversee the efforts of the workforce
B. Integrate diverse elements and coordinate the activities of different departments
according to the overall objectives of the organisation.
C. Cooperate with other departments for smooth functioning of the organization
20 The departmental managers Rajan, Vineet and Asif are working at which level of
management
A. Supervisory level
B. Middle level
C. Lower level
D. Top level
21 Identify another function of the level highlighted in the given case

d A. Formulate overall organisational goals and strategies
22
B. Analyze the business environment and its implication for the survival of the firm
C. It with other departments for smooth functioning of the organization
D. Maintain quality of output, minimize material wastage and maintain safety standards
ANSWER KEY
CHAPTER 1: NATURE AND SIGNIFICANCE OF MANAGEMENT
MCQs
1 A
2 B
3 A
4 D
5 B
6 A
7 D
8 B
9 D
10 A
11 A
12 C
13 B
14 A
15 D
16 B
17 D
18 B
19 D
20 D
21 A
22 C
23 A
24 B
25 B
23
26 A
27 B
28 A
29 A
30 B
31 B
32 A
33 D
34 B
35 C
36 B
37 D
38 A
39 C
40 C
41 A
42 A
43 C
44 B
45 C
46 C
47 B
48 B
49 D
50 C
ASSERTION REASONING BASED QUESTIONS
1 (D)
2 (A)
3 (C)
24
4 (A)
5 (D)
6 (A)
7 (A)
8 (C)
9 (B)
10 (B)
11 (A)
12 (C)
13 (C)
14 (A)
15 (B)
16 B
17 B
18 D
19 A
20 A
21 D
22 A
23 A
24 A
25 B
26 B
27 D
28 D
29 B
30 A
25
1 B
2 A
3 B
4 C
5 C
6 C
7 B
8 B
9 B
10 C
11 B
12 C
13 B
14 A
15 A
16 A
17 B
18 A
19 B
20 B
21 C
26
Unit 2: Principles of Management
Multiple Choice Questions
S.No. Questions
1 The application of this principle of management leads to higher production and
better work for the same effort. Identify the related principle of general
management.
(a) Discipline
(b) Equity
(c) Division of work
(d) Order
2 According to this principle of general management, “an organisation should
safeguard against abuse of managerial power, but at the same time a manager
should have the necessary authority to carry out his responsibility.” Name the
principle of management being described in the given statement.
(a) Discipline
(b) Authority and responsibility
(c) Unity of command
(d) Unity of direction
3 Name the principle of management suggested by Henri Fayol, which advocates
that, “there should be good superiors at all levels, clear and fair agreement and
judicious application of penalties.”
(a) Authority and responsibility.
(b) Esprit De Corps
(c) Order
(d) None of the above
4 According to Henri Fayol, if this principle of general management is violated,
“authority is undermined, discipline is in jeopardy, order disturbed and stability
threatened.” Identify the principle.
(a) Authority and responsibility
(b) Discipline
(d) Equity
5 Through this principle of management, Henri Fayol guides the managers to
exhibit exemplary behaviour and advises that they should not fall into temptation
of misusing their powers for personal benefit at the cost of general interest of the
organisation. Which principle of management is being described in the above
statement?
(a) Remuneration of employees
27
(b) Centralisation and decentralisation
(c) Subordination of individual interest to general interest
(d) Equity
6 Which principle of general management advocates that, “Employee turnover
should be minimised to maintain organisational efficiency.”?
(a) Stability of personnel
(b) Remuneration of employees
(c) Equity
(d) Esprit De Corps
7 The principles of pure science are considered to be _________ in nature.
(a) Flexible
(b) Rigid
(c) Creative
8 The principles of management enhance the understanding of the relationship
between human and material resources for the achievement of organisational
goals. Identify the feature of the principles of management being described in the
given statement.
(a) Cause and effect relationships
(b) Optimum utilisation of resources and effective administration
(c) Formed by practice and experimentation
(d) Mainly behavioural
9 Which principle of management aims at securing the loyalty and devotion of the
employees by giving them fair and just treatment?
(a) Unity of direction
(b) Equity
(c) Order
(d) Unity of command
10 Sigma Ltd. is a large company manufacturing electric motors. The company has
several departments- Production, Marketing, Finance, and HR. Mr. Shashank,
CEO of the company set the target sales of ₹10 crore in a month. To increase the
sales, the marketing manager, Mr. Ishaan insists on offering 10% discount to
customers. But the finance manager, Mr. Mohak does not approve such a discount
as it would mean loss of revenue. Because of dual subordination, the sales
manager, Mr. Anshik could not achieve the sales target. Which principle of
management has been overlooked by this company?
(a) Division of Work
(b) Coordination
(d) Unity of Direction
11 In today’s dynamic business environment, companies are specialising in their core
competency and divesting non- core businesses. In this context, one may cite the
decision of Hindustan Unilever limited in divesting non-core businesses of
chemicals and seeds. Some companies are outsourcing their non-core activities
28
like share-transfer management and advertising to outside agencies. So much so,
that even core processes such as R&D, manufacturing and marketing are being
outsourced today. Thus, the significance of ‘Business Process outsourcing’ (BPO)
and ‘Knowledge Process outsourcing’ (KPO) has increased.
Identify the significance of principles of management highlighted above.
(a) Providing managers with useful insight into reality
(b) Optimum utilisation of resources
(c) Meeting changing requirements
(d) Scientific decisions
12 Employees in an organisation deserve fair and just remuneration. But what is just
and fair is determined by multiple factors, such as contributions of the employee,
paying capacity of the employer and also prevailing wage rate for the occupation
under consideration.
Identify the characteristics of principles of management highlighted above.
(a) Universal Applicability
(b) Flexible
(c) Contingent
(d) Behavioural
13 A worker directly contacts the CEO of the company with a complaint regarding
working conditions in the factory. Which of the following principles is being
violated here?
(a) Unity of command
(b) Unity of direction
(c) Scalar chain
(d) Discipline
14 Principles of Management are not:
(a) Applicable only in large firms
(b) Formed by practice and experience of managers
(c) Flexible
(d) Contingent
15 The principles of management are significant because of
(a) Increase in efficiency
(b) Initiative
(c) Optimum utilisation of resources
(d) Adaptation to changing technology
16 Kushal Ltd. is a leading automobile company in which the various departments

are setting up their own objectives without paying any interest in the
organisational objectives.
Identify the principle of management which has been overlooked by this
organisation.
(a) Subordination of Individual interest to general interest.
(b) Equity
(c) Centralisation
29
(d) Authority and Responsibility
17 The manager of an organisation knows that one of the newly appointed workers
belongs to the reserved category and he always undermines that employee’s
performance.
Identify the principle of management violated by the manager.
(a) Division of work
(b) Discipline
(c) Esprit de corps
(d) None of these
18 If an organisation does not provide the right place for physical and human
resources in an organisation, which principle is violated?
(a) Equity
(b) Order
(c) Initiative
(d) Discipline
19 Which of the following statement is related to division of work
A. Resources should be divided equally among departments
B. Work should be divided into smaller parts
C. Subordinates should be divided among superiors
D. Departments should be divided into sub sections
20 The Delhi Government imposes ban on use, storage, sale and manufacture of
plastic after considering its adverse impact on environment and ecology. Which
principle of Fayol is mentioned in the above decision.
(a) Initiative
(b) Division of work
(c) Esprit de corps
(d) None of these
21 Rishab, a manager, very often speaks to people at all levels, passing on
instructions regarding his department and also the other departments.
Which principle of management is being overlooked?
(a) Unity of command
(b) Remuneration of employees
(c) Scalar chain
(d) Gang plank
22 The sales manager assigned a target of selling 40 RO water Purifiers in a month
to a group of 10 sales executives. They mutually decided to sell 4 purifiers each.
However, after selling 1 purifier, Kshitij (one of the sales executives) met with an
accident. The other executives did not pay any attention to the remaining target of
Kshitij and concentrated on their individual sales target. At the end of the month,
only 37 purifiers could be sold. Identify the principle of management violated in
the given case?
30
(a) Esprit de corps
(b) Stability of personnel
(c) Remuneration of employees
(d) Equity
23 Match the following by choosing the correct option.
Column A Column B
(i) Each work is done by a trained (a) Unity of Command
specialist
(ii) Judicious application of (b) Unity of Direction
penalties
(iii) Dual subordination should be (c) Division of work
avoided
(iv) One head and one plan (d) Discipline
(a) (i)-(a); (ii)-(b); (iii)-(c); (iv)-(d)

(b) (i)-(b); (ii)-(a); (iii)-(d); (iv)-(c)
(c) (i)-(c); (ii)-(d); (iii)-(a); (iv)-(b)
(d) (i)-(d); (ii)-(c); (iii)-(a); (iv)-(b)
Column A Column B
(i) Affects an individual employee (a) Scalar chain
(ii) Affects the entire organisation (b) Centralisation and Decentralisation
(iii) Formal lines of Authority (c) Unity of Direction
between superiors and Subordinates
(iv) Concentration of decisions (d)Unity of Command
making authority
(a) (i)-(a); (ii)-(b); (iii)-(c); (iv)-(d)

(b) (i)-(b); (ii)-(a); (iii)-(d); (iv)-(c)
(c) (i)-(c); (ii)-(d); (iii)-(a); (iv)-(b)
(d) (i)-(d); (ii)-(c); (iii)-(a); (iv)-(b)
Column A Column B
(i) Manager should replace ‘I’ (a) Equity
with ‘We’ in all his conversations with
workers.
(ii) Employees should not be (b) Order
transferred frequently.
(iii) Right material should be placed (c) Esprit de corps
at the right place
(iv) No worker should be unduly (d) Stability of personnel
favoured
(a) (i)-(c); (ii)-(d); (iii)-(b); (iv)-(a)
31
(b) (i)-(b); (ii)-(a); (iii)-(d); (iv)-(c)
(c) (i)-(a); (ii)-(c); (iii)-(d); (iv)-(b)
(d) (i)-(d); (ii)-(c); (iii)-(a); (iv)-(b)
26 In which two departments did Taylor divide the work of a factory manager?
i) Department of Planning and Production
ii) Department of Planning and Finance
iii) Department of Planning and Marketing
iv) Department of Planning and Research
27 Under fatigue study:
i) Tiring work is given to employees
ii) Employee’s movements are increases
iii) Record is maintained for time consumed on employee’s work
iv) Rest is given to employees during work
28 According to Taylor, the Gang Boss works under the planning authority.
(True/False)
29 According to Taylor, “even a small production activity like loading figures of
iron into boxes can be scientifically planned and managed. This can result in
tremendous savings of human energy as well as wastage of time and materials.”
Identify the related principle of scientific management.
i) Harmony, not discord
ii) Science, not rule of thumb
iii) Development of each and every person to get his/her greatest
efficiency and prosperity
iv) None of the above
30 According to this principle of scientific management, “Scientific management
has for its foundation the firm conviction that true interest of the management
and workers are one and the same; the prosperity for the employer cannot exist
for a long time unless it is accompanied by prosperity for the employees and vice
versa.”
i) Science, not rule of thumb
ii) Co-operation, not individualism
iii) Harmony, not discord
iv) All of the above
31 According to this principle of scientific management, the employees should be
rewarded for their suggestions which results in substantial reduction in the cost.
i) Science, not rule of thumb
ii) Co-operation, not individualism
iii) Harmony, not discord
32
32 According to Taylor, “each specialist is to be assigned work according to his/her
qualities, the employees who possess technical mastery should be involved in
planning work whereas those with energy and good health may be assigned
execution work.” Name the related principle of scientific management.
i) Functional foremanship
iii) Development of each and every person to his or her greatest efficiency
and prosperity
iv) None of the above
33 Sharing of gains with the workers is the objective of the principle:
ii) Science, Not rule of Thumb
iii) Cooperation, Not Individualism
iv) Development of each and every person to his or her greatest
efficiency
34 Which technique of Taylor differentiates between an efficient worker and
an inefficient worker?
i) Time Study
ii) Functional foremanship
iii) Fatigue study
iv) Differential Piece wage system
35 Management should find ‘one best way’ to perform a task. Which technique of
scientific management is defined in this sentence?
i) Time Study
ii) Method Study
iii) Fatigue Study
iv) Motion Study
36 The Basic aim of Functional foremanship is:
i) Not to provide free time to workers
ii) To separate Top level management from Chief Executive officers
iii) To separate planning functions from executive functions
iv) Not to divide the work
37 Which of the following statements justifies the principle ‘Cooperation, not
individualism’?
i) Management and workers should transform their thinking towards
each other.
ii) There should be an equal division of work between management and
workers
iii) Industrial efficiency depends to a large extent on personnel
33
competencies
iv) There is only one best method to maximise efficiency
38 What did Taylor want to standardise?
i) Material
ii) Machine and tools
iii) Methods
39 Scientific management brings
i) Social change
ii) Economic change
iii) Mental change
iv) Industrial change
40 ‘She/he keeps machines, materials, tools etc., ready for operations by concerned
workers’. Whose work is described by this sentence under functional
foremanship.
i) Instruction Card Clerk
ii) Repair Boss
iii) Gang Boss
iv) Route Clerk
41 Which of the following is NOT a Principle of management given by Taylor?
i) Science, not rule of the Thumb
ii) Functional foremanship
iii) Maximum not restricted output
iv) Harmony not discord
42 Which of the following statements best describes ‘Mental Revolution’?
i) It implies change of attitude
ii) The management and workers should not play the game of one
upmanship.
iii) Both management and workers require each other.
iv) Workers should be paid more wages.
43 Fredrick Winslow Taylor’s Mechanism of Scientific Management includes
i) Scientific task setting
ii) Planning the task
iii) Standardisation of tools and equipments
44 What is meant by Simplification as a technique of Scientific management?
i) Making simple methods of doing a job
ii) Putting an end to the unnecessary types, qualities, sizes etc.
34
iii) Simplification of selling techniques
iv) Simplifying the production techniques.
45 Even a small production activity like loading pigs of iron into boxcars can be
scientifically planned and managed. This can result in a tremendous saving of
human energy as well as wastage of time and materials. Which of the following
principles of scientific management emphasize the above situation?
iii) Initiative
iv) Development of each person to his or her greatest efficiency.
46 Which of the technique of scientific management violates the Principle of Unity
of Command
i) Differential piece wage system
ii) Fatigue study
iii) Functional foremanship
iv) Simplification of work
47 Taylor was of the view that the foundation of job efficiency is laid down in the
very process of staff selection. (True/False)
48 The function of speed boss is to keep the machines and tools in working
condition. (True/False)
49 The job of ___________________ is to see whether all the workers are doing
their respective job as per the speed laid down or not.
50 The objective of ______________ is to decide the required number of workers.
(Time study/Fatigue Study)
ASSERTION-REASONING QUESTIONS
Directions (Q Nos. 01 – 15)
In the questions given below are two statements labelled as Assertion (A) and
Reason (R).
1 Assertion (A) The principles of management are yet to be evolved.
Reason (R) Principles of Management are said to be evolutionary in nature as
these principles have evolved over a long period of time with continuous
practice and experimentation.
Codes
35
(a) Both A and R are true. R is the correct explanation of A
(b) Both A and R are true, but R is not the correct explanation of A
(c) A is correct, but R is incorrect

(d) A is incorrect, but R is correct
2 Assertion (A) Principles of pure science are different from Management
principles.
Reason (R) Principles of pure science are to be rigid in nature whereas
management principles are flexible in nature.
Codes

3 Assertion (A) The application of the principle of Division of work leads to
higher production and better work for the same effort.
Reason (R) It does not lead to specialisation.
Codes

4 Assertion (A) If two employees at the same level are not treated at par by their
superior, it would lead to job dissatisfaction.
Reason (R) Principle of Equity
Codes

36
5 Assertion (A) Personnel should be selected and appointed after due and
rigorous procedure. But once selected they should be given reasonable time to
show results.
Reason (R) According to Fayol’s ‘Remuneration of employees’ Principle.
Codes

6 Assertion (A) Principle of Equity says that we should treat male and females
equal.
Reason (R) Everyone is equal in the eyes of law.
Codes
7 Assertion (A) Employees should be paid fair wages, which should give them at
least a reasonable standard of living.
Reason (R) Remuneration of employees should be just and equitable.
Codes

8 Assertion (A) Workers and management both should honour their
commitments towards one another without prejudice.
Reason (R) Principle of Subordination of individual interest to general interest.
Codes
37
9 Assertion (A) Unity of command resembles military organisation.
Reason (R) It prevents dual subordination.
Codes

10 Assertion (A) Gang plank is a shorter route.
Reason (R) It helps in a communication to reduce not delayed in an
emergency.
Codes

11 Assertion (A) The interests of the group will supersede the interest of any one
individual.
Reason (R) Principle of Subordination of Individual Interest to General
interest.
Codes

12 Assertion (A) Each group of activities having the same objective must have
‘one head and one plan’.
Reason (R) Principle of “unity of command”.
38
Codes

13 Assertion (A) “There is a need to balance subordinate involvement through
decentralisation with managers’ retention of final authority through authority
and responsibility."
Reason (R) Fayol’s Principle- centralisation and decentralisation
Codes

14 Assertion (A) Manager requires authority commensurate with their
responsibility.
Reason (R) There should be a balance between authority and responsibility.
Codes

15 Assertion (A) “Workers should be encouraged to develop and carry out their
plans for improvements, within the prescribed limits of authority.”
Reason (R) As per Fayol’s Principle-Initiative.
Codes

39
16 Assertion (A): A tenet of scientific management is cooperation and harmony

between workers and managers.
Reason (R): Taylor believed in participative management.
In the context of the above two statements, which one of the following is
correct?
Codes
i) A and R are true and R is the correct explanation of A
ii) A and R are true and R is not the correct explanation of A
iii) A is true but R is false
iv) A is false but R is true
17 Assertion (A): Functional foremanship technique divide the work of factory
manager into two sub departments
Reason (R): Functional foremanship develop specialisation
correct?
Codes
18 Assertion (A): Standardisation means setting standards for one type of activity
Reason (R): To ensure quality standards
correct?
Codes
19 Assertion (A): Time study refers to determining the standard time required to
complete a particular activity.
Reason (R): Time study is done to get the estimated figure of labour costs
40
correct?
Codes
20 Assertion (A): the movie camera is used to conduct the motion study.
Reason (R): Motion study is to study the movements those are necessary for
doing a well-defined job/work
correct?
Codes
21 Assertion (A): Differential piece wage system is a technique which does not
differentiate between efficient and less efficient workers.
Reason (R): Differential piece wage system acts as an incentive for less
efficient workers to be motivated to perform better.
correct?
Codes
22 Assertion (A): The principle of Science, Not rule of thumb says that we
should not get stuck in a set routine
Reason (R): The principle of science, not rule of thumb, makes the work
much simpler, easier and quicker.
correct?
Codes
41
23 Assertion (A): The principle of Harmony, Not Discord states that there should
be complete harmony between the management and the workers.
Reason (R): There is no need for a mental revolution.
correct?
Codes
24 Assertion (A): The route clerk specifies the sequence of completing a
particular work.
Reason (R): The route clerk specifies the stages through which the work shall
have to pass before being finalised.
correct?
Codes
25 Assertion (A): According to the principle of cooperation, not individualism all
the activities done by different people must be carried on with a spirit of
mutual cooperation.
Reason (R): Workers and managers should separately determine the
standards.
correct?
Codes
26 Assertion (A): The instruction card clerk only prepare the instruction card for
the workers
Reason (R): The card prepares by the Instruction card clerk contain the
42
information about the nature of work, procedure of doing work, material to be
used and details about machinery
correct?
Codes
27 Assertion (A): The method study identifies the most suitable way to do a
particular activity.
Reason (R): To conduct method study process chart and operation research
techniques are used.
In the context of the above two statements which one of the following is
correct?
Codes
28 Assertion (A): The development of each and every person to his or her
greatest efficiency principle concerned with efficiency of employee which
could be built in right from the process of employee selection
Reason (R): The work assigned to employees should suit their capabilities
correct?
Codes
29 Assertion (A): Simplification putting an end to the unnecessary types,
qualities, sizes etc.
Reason (R): Simplification effects economy in the use of machine
correct?
Codes
43
30 Assertion (A): The discipline officer ensure presence of staff everyday
Reason (R): the discipline officer ensure that every work is being performed
in a disciplined manner
correct?
Codes

Case Read the following text and answer the following questions on the basis of the
study same:
no.
1 After completing her Bachelors in Fashion Designing from a well-known college in

France, Aditi has opened a boutique in a posh market in Kolkata. She has divided
the work in smaller units and each employee is well trained to perform his/her task
efficiently. The sales persons are allowed to close a deal with a buyer by giving a
maximum of 5 percent discount, whereas the decision to give any further discount
rests with Aditi as the final authority. In the earlier period of her business venture,
employees were asked to put in extra hours of work. In return she had promised to
give them a special incentive within a year. Therefore, when the business was
doing well, she honoured her commitment by giving a bonus to her employees. She
also instructed her employees that communication from top to bottom should
follow the official lines of command. However, she tends to be more biased
towards her female employees, when it comes to solving the conflicts among
employees.
Q.1 Aditi has divided the work in smaller units and each employee is well trained
to perform his/ her task efficiently. Which principle of management is being
followed here?
(a) Centralization and Decentralization (c) Division of work
(b) Discipline (d) Order
Q.2 "The sales persons are allowed to close a deal with a buyer by giving a
44
maximum of 5 percent discount, whereas the decision to give any further discount
rests with Aditi as the final authority." Identify the principle of Management being
followed here:
(a) Centralization and Decentralisation
(b) Authority and Responsibility
(c) Unity of Command
(d) Unity of Direction
Q.3“Therefore, when the business was doing well, she honoured her commitment
by giving a bonus to her employees.” Which principle of management is being
highlighted here?
(a) Discipline (b) Order (c) Remuneration to Employees (d) Unity of Direction
Q.4 Aditi tends to be more biased towards her female employees, when it comes to
solving the conflicts among employees. Which principle is being violated here?
(a) Discipline (b) Order (c) Equity (d) None of these
2. Satyam Ltd manufactures curtain clothes. Noticing its popularity in the market, the
company decided to manufacture bed sheets also. The decision was executed with
immediate effect. But the company did not increase the workforce to the desired
extent. The company wanted the existing staff to manage the work for some time,
by working overtime. The result was that on the one hand the new product of the
company failed to keep its hold on the market and on the other hand due to
overwork the efficiency of the employees declined. On several occasions it was
discovered that a subordinate was getting instructions from two or more managers.
Managers had started giving simple and easy work to their known employees and
complex and difficult work to other employees. The company was now ignoring
the rules completely.
Q.1 On several occasions it was discovered that a subordinate was getting
instructions from two or more managers. Which principle is being violated here?
(a) Equity
(b) Unity of command
(c) Unity of Direction
(d) Order
Q.2 The company was now ignoring the rules completely. Which principle is being
violated here?
(a) Equity
(b) Unity of command
(c) Unity of DIrection
45
(d) Discipline
Q.3 The company ignored one more Fayol’s principle in the above case study?
Name them.
(a) Equity
(b) Unity of Command
(c) Esprit de corps
(d) Discipline
3 Anuj Gupta and Mangala Sharma are both qualified dentists and good friends.
After obtaining a certificate of practice, they decided to pursue a career of their
own choice. Anuj Gupta starts a dental care centre in the city whereas Mangala
Sharma joins a government hospital. They meet after a long time at a party. Anuj
Gupta invites Mangala Sharma to visit his dental care centre and she accepts his
invitation. She observes at his clinic that there is a fixed place for everything and
everyone and tools and equipment are lying in an organised manner. Also, Anuj
Gupta always tends to replace ‘I’ with ‘We’ while having a conversation with the
staff members. Later on Anuj Gupta also shares with her that he always deals with
lazy staff sternly to send the message that everyone is equal in his eyes.
Q.1 Mangala Sharma observes at his clinic that there is a fixed place for everything
and everyone and tools and equipment are lying in an organised manner. Which
principle of management is being overlooked?
(a) Equity
(b) Order
(c) Esprit de corps
(d) None of these
Q.2 Anuj Gupta also shares with her that he always deals with lazy staff sternly to
send the message that everyone is equal in his eyes. Which principle of
management is being overlooked?
(a) Equity
(b) Order
(c) Discipline
(d) Initiative
Q.3 Anuj Gupta always tends to replace ‘I’ with ‘We’ while having a conversation
with the staff members. Which principle of management is being overlooked?
(a) Equity
46
(b) Esprit de corps
(c) Discipline
(d) Initiative
4 Read the extract given below and answer the questions on the basis of the
same:
One of the techniques of scientific management calls for using the best method
of each activity in the organisation. The best method must be selected through
application of scientific analysis and not by intuition or hit and trial methods,
says one of the scientific managements.
Moreover, one other principle of scientific management emphasizes that” to
make the employees learn, the best method” of production, training of workers is
essential. It further emphasizes that each person should be scientifically selected
and the work assigned to the employees should suit their physical, mental and
intellectual capabilities.
If physical, mental and intellectual capabilities of employees are to be harnessed
to the maximum, then they must be given adequate breaks and rest in between
their work as well.
(1) Name the technique of scientific management highlighted in the given
line of the extract, “one of the techniques…………. organisation.
(i) Method study
(ii) Time study
(iii) Fatigue study
(iv) Motion study
(2) Name the principle of scientific management highlighted in the given line
of extract, this best method ………………scientific management.
(i) Science, not rule of thumb
(ii) Harmony, not discord
(iii) Cooperation not individualism
(iv) None of the above
(3) Which principle of scientific management is highlighted in the given

line of extract, “moreover, one other …………… intellectual
capabilities.”?
(i) Science, not rule of thumb
(ii) Harmony, not discord
(iii) Cooperation not individualism
(iv) Development of each and every personnel to their greatest efficiency
and prosperity.
47
(4) Which techniques of scientific management are highlighted in the given
line of extract, ‘if physical, mental…………as well’?
(i) Time study
(ii) Method study
(iii) Fatigue study
(iv) Motion study.
same:
Mona, a student of management at IIM, Ahmedabad, likes to relate what she has
learnt in her classes during study to real life situations around her. She observed
many situations while watching educational programmes on television that
remind her of concepts of scientific management. In one such programme,
factory manufacturing parts of products like automobiles, computers and mobile
phones were being telecast. These factories had defined benchmarks during
production and were continuously aiming at eliminating superfluous verities,
sizes and dimensions and devising new verities instead of the existing ones,
while watching the programme. Mona realised that these companies could adopt
one best way of doing the job in order to be more productive. She also felt that
the employees of these companies were working for long hours continuously and
needed to adopt certain strategies in order to improve their efficiency. The
programme also showed a few interviews where some workers were found to be
highly efficient as compared with a few others.
1. Name the technique of scientific management that these factories are
adhering to while manufacturing parts of such products.
(i) Method study
(ii) Motion study
(iii) Standardisation and simplification of work
(iv) Time study
2. Which scientific management technique would Mona suggest for these
factories if they have to find out one best way of doing the job?
(i) Motion study
(ii) Method study
(iii) Time study
(iv) Fatigue study
factories if they have to help the workers regain their stamina and enable
them to work again with the same capacity?
(i) Motion study
(ii) Time study
(iii) Fatigue study
(iv) Method study
factories to implement in order to motivate the inefficient workers to
perform better?
(i) Functional foremanship
48
(ii) Method study
(iii) Time study
(iv) Differential piece wage system.
same:
Cool ice cream Ltd. Is a very famous company in Bombay and has many
branches in different parts of the city. They also have major expansion plans as
they expect that their customers will increase in number in the next two years.
Cool Ice cream Ltd. Produces a variety of ice creams which are extremely
popular in the city and one brand of ice cream’ Thunder’ sells the most. Thus, the
company undertakes the maximum production for’ Thunder’ and it contributes to
their revenue to the extent of 25% and has the largest market share. The company
has undertaken different strategies to ensure that they remain the market leader in
Bombay. One of the methods it follows is a differential piece wage system to
differentiate between efficient and inefficient workers. It is so because the
company believes that in this way inefficient workers would be encouraged to
perform better and improve their productivity. This will motivate them to be at
par with the efficient workers. Thus, Cool ice creams Ltd. Has determined the
standard time and other parameters on the basis of the work study techniques of
scientific management. It has been determined that the standard output per
worker per day is 10 units and those who made standard or more than standard
will get₹ 50 per unit and those below will get ₹ 40 per unit.
(1) What will be the earning of a worker producing 15 units?
(i) ₹ 600
(ii) ₹ 750
(iii) ₹ 400
(iv) ₹ 500
(2) Such a worker producing 15 units is termed as………...
(i) Efficient
(ii) Inefficient
(iii) Neither i nor ii
(iv) Both i and ii
(3) What will be the earning of a worker producing 7 units?

(i) ₹ 350
(ii) ₹ 400
(iii) ₹ 280
(iv) ₹ 500
(4) Such a worker producing 7 units is termed as………

(i) Efficient
(ii) Inefficient
(iii) Neither i nor ii
(iv) Both i and ii
49
ANSWER KEY
1 (c)
Explanation:
(c) The application of the principle of division of work enables an employee to
gain proficiency in work by doing it repetitively over a period of time.
2 (b)
Explanation:
(b) Through the principle of authority and responsibility, Taylor advocated that
there should always be a balance between the authority granted and the •
responsibility entrusted to an employee.
3 (d)
Explanation:
(d) The correct answer is Discipline.
4 (c)
Explanation:
(c) According to Fayol, there should be one and only one boss for every individual
employee and dual subordination should be avoided.
5 (c)
Explanation:
(c) Through this principle, Fayol advocates that the interest of the organisation
should supersede individual interest of an employee under all kinds of situations.
6 (a)
Explanation:
(a) According to Fayol, due care should be taken while carrying out the
recruitment and selection process and the new recruits should be placed at a
particular position for a sufficient tenure.
7 (b)
8 (d)
9 (b)
10 Unity of command
11 (c) Meeting changing environment requirements
12 (c) Contingent
13 (c) Scalar Chain
50
14 (a) Applicable only in large firms
15 (c) Optimum utilisation of resources
16 (a) Subordination of Individual interest to general interest.
17 (d) None of these
Explanation. The correct answer is Equity.
18 (b) order
19 (b)
20 (a) Initiative
21 Scalar chain
22 (a) Esprit de corps
23 (c)
24 (d)
25 (a)
26 Department of Planning and Production
27 Rest is given to employees during work
28 False
29 Science, not rule of thumb
Explanation:
Taylor believes that there is only one method to maximize efficiency which can be
developed to study and analyse.
30 Harmony, not discord
31 Co-operation, not individualism
32 Development of each and every person to his or her greatest efficiency and
prosperity
33 Harmony, not discord
34 Differential Piece wage system
35 Method Study
36 To separate planning functions from executive functions
37 There should be an equal division of work between management and workers
38 All of the above
39 Mental change
51
40 Gang Boss
41 Maximum not restricted output
42 It implies change of attitude
43 All of the above
44 Putting an end to the unnecessary types, qualities, sizes etc.
45 Science, not rule of thumb
46 Functional foremanship
47 True
48 False
49 Speed Boss
50 Time study
ASSERTION REASONING ANSWERS
1 (d) Correct assertion - The principles of management are in the

continuous process of evolution.
2 (a)
3 (c)
4 (a)
5 (c)
6 (a)
7 (b)
8 (c)
9 (b)
10 (b)
52
11 (a)
12 (c)
13 (d)
14 (a)
15 (c)
16 iii)A is true but R is false

17 i)A and R are true and R is the correct explanation of A
18 iv)A is false but R is true
19 i) A and R are true and R is the correct explanation of A
20 ii) A and R are true and R is not the correct explanation of A
22 i) A and R are true and R is the correct explanation of A
24 ii) A and R are true and R is not the correct explanation of A
Case Study 1 1. (c) Division of work

2. (a) Centralization and Decentralisation
3. (a) Discipline
4. (c) Equity
53
Case Study 2 1 (b) Unity of Command
2 (d) Discipline
3 (a) Equity
Case Study 3 1 (b) Order
2 (a) Equity
(b) Esprit De Corps
Case Study 4 1.(i) 2. (i) 3. (iv) 4. (iii)

Case Study 5 1.(iii) 2. (iii) 3. (iv) 4. (iv)
Case Study 6 1. (ii) 2. (ii) 3. (iii) 4. (ii)
54
Unit 3: BUSINESS ENVIRONMENT
Multiple Choice Questions (MCQ)
Q.No. Multiple choice questions (MCQ)
Which of the following is not a part of the business environment of business?

1 (a) Customers
(b) Suppliers
(c) Competitors
2 Which of the following is not a component of specific forces of business

environment?
(a) Technological conditions

(b) Customers
(c) Employees
(d) Investors
3 The growing awareness about healthcare has led to an increase in the demand for
healthcare products and services in the country. Identify the feature of business
environment being described in the above case.
(a) Dynamic nature
(b) Uncertainty
(c) Relativity
(d) Interrelatedness
Since more number of people have become more beauty and health conscious,
4 our economy has witnessed an unprecedented surge in the number of health and
beauty spas and wellness clinics. Related feature of business environment being
described in the above lines is —
(a) Totality of external forces
(b) Dynamic nature
55
(c) Interrelatedness
(d) Relativity
‘Twinkle Stars’ is a well-known resort for organising parties, especially for

5 children. However, in past 6 months its popularity has reduced considerably as a
new resort with better ambience and facilities has opened within its vicinity.
Name the related feature of business environment which has influenced the
business of ‘Twinkle Stars’ adversely.
(a)Totality of external forces
(b) Dynamic nature
(d) Uncertainty
6 Any kind of external devices, like compact discs (CD’s) for computer, have
become obsolete. Google, with its Google Drive service, Apple with its iCloud
offering, enables the users store documents, photos, music and movies on web-
based servers. Identify the feature of business environment being described in the
above lines.
(a) Relativity
(b) Dynamic nature
(c) Uncertainty
7 According to the United Nations Environmental Agency, the world produces

around 300 million tons of plastic each year, half of which constitutes single-use
items. Ford is recycling over one billion plastic bottles every year to develop
elements of the car’s interior, reducing the amount of plastic ending up in a
landfill. The American car maker has revealed that their Romanian-built Eco
Sport SUVs’ carpets are made using 470 recycled single-use plastic bottles. The
process for making Ford EcoSport carpets involves shredding bottles and their
caps into tiny flakes and then heating them to 260° C. Identify the related
dimension of business environment.
(a) Economic dimension
56
(b) Social dimension
(c) Technological dimension
(d) Political dimension
8 Digi Locker is the country’s first secured cloud-based platform for the storage,
issuance and verification of documents with the Driving Licence & Vehicle
Registration System of the Road Transport Ministry. The integration of a
government department with Digi Locker since its launch last year is one of the
biggest of its kind. It will spare 1 people the trouble of carrying licences &
vehicle papers, which can be accessed on phones using the Digi Locker app.
Identify the related dimension of business environment.
(a) Economic dimension
(b) Technological dimension
(c) Social dimension
The Uttarakhand government has developed surveillance network using latest

9 satellite technology. Under this system, the state’s mining department would be in
a position to check illegal mining activities across the state. The state government
is also considering the use of drones in its proposed campaign against illegal
mining. Identify the related dimensions of business environment.
(a) Economic dimension and Legal dimension
(b) Social dimension and Economic dimension
(c) Technological dimension and Political dimension
(d) Political dimension and Economic dimension
10 In order to boost and double India’s export of goods and services to over USD
1,000 billion by 2025, it is important to lower effective corporate tax rate, bring
down cost of capital and simplify regulatory and tax framework. Identify the
related dimension of business environment.
(a) Social dimension and Legal dimension
(b) Technological dimension and Political dimension
(c) Political dimension and Social dimension
57
(d) Economic dimension and Legal dimension
11 The Economic Survey, 2019 suggests that the psychological biases can be used in
the realm of tax compliance. It is in favour of using religious norms such “dying
in debt is a sin” to improve tax compliance. Identify the related dimensions of
business environment.
(a) Legal dimension and Social dimension
(b) Social dimension and Economic dimension
(c) Technological dimension and Political dimension
(d) Political dimension and Economic dimension
Electric vehicles with zero tail pipe emission are emerging as a good alternative
12 to ‘problems like climate change, surging pollution leading to ill health, crude
import bill and energy security. Identify the related dimensions of business
environment.
(a) Economic dimension, Legal dimension and Social dimension
b) Social dimension, Political dimension and Economic dimension
c) Economic dimension, Technological dimension and Social dimension
(d) Social dimension, Political dimension and Legal dimension
‘Yo Tummy’ began its business by offering the classic combo of hamburgers and
13 fries. But over time, their customers wanted healthier foods, so ‘Yo Tummy’
responded and began offering healthy alternatives such as salads, fruits, wraps
and oatmeal. If ‘Yo Tummy’ hadn’t responded, they may have lost customers that
wanted to eat healthier foods. The above case highlights one of the points related
to the importance of business environment and its understanding by managers.
Identify it.
(a) It helps in coping with rapid changes.
(b) It helps in improving performance.
(c) It helps the firm to identify threats and early warning signals.
(d) It enables the firm to identify opportunities and getting the first mover
advantage.
58
14 Through environmental scanning business can enjoy______
a) First mover advantage
b) Benefit of taxes
c) Last mover advantage
According to the World Health Organization, 39% of adults are overweight. Over
15 the last 40 years, the prevalence of obesity has tripled around the world. With
over half of consumers drinking at least one sugary drink on a given day,
regulations towards the beverage sector are likely to become increasingly
onerous. In the U.K., for example, a sugar tax was introduced in 2018 on
beverages containing more than 5% sugar. Identify the related dimensions of
business environment.
(a) Legal dimension and Social dimension
(b) Social dimension and Technological dimension
(c) Technological dimension and Legal dimension
(d) Political dimension and Technological dimension
India’s population is expected to grow under 0.5 per cent during 2031-41 due to
16 decline in fertility rate and increase in life expectancy. These changes in India’s
demography will also have implications such as the proportion of elementary
school-going children will witness significant declines, lack of hospital beds and
increase in retirement age. The related feature of business environment being
described in the above lines is
(b) Dynamic nature
(d) Relativity
17 India continues to be a lower-middle-income country along with 46 others, while

Sri Lanka has climbed to the upper-middle-income group for the fiscal year (FY)
2020, according to the World Bank’s classification of countries by income levels,
59
released on July 1, 2019.
Identify the related dimensions of business environment.
(a) Social dimension
(b) Technological dimension
(c) Economic dimension
Advance understanding of business environment will help in

18
a) Planning and policy formulation

b) Privatisation
c) Developing new principles of management
d) Liberalisation
Advertisement of cigarettes carries the statutory warning. This is because of

19
a) Legal environment
b) Social environment
c) Political environment
________ refers to negative and unfavorable external factors that are likely
20 to create hurdles for a firm:-
(a) Opportunities
(b) Warning
(c) Threats
(d) None of these
Which of the following are the dimensions of the business environment:-
21 (a) Economic & Social
(b) Technological & Economic
(c) Legal & Social
(d) All of the above
22 Proper understanding of business environment is not a prerequisite for

(a) tapping of useful resources.
60
(b) identification of opportunities and threats.
(c) formulation of strategies.
(d) better coordination of employee efforts.
___ nature of business environment suggests that environment keeps on

23 changing.
(a) Dynamic
(b) Pervasive
(c) Continuous
(d) Multidimensional
24 ___ feature of business environment states that various factors of business

environment affect each other.
(a) Pervasive
(b) Continuous
(c) Dynamic
25 Which of the following is not a feature of Business environment

(a) Interrelated Elements
(b) Dynamics
(c) Complexity
(d) Continuous
Identification of opportunities to get first more advantage is one of the importance

26 of business environment
(a) True
(b) False
(c) Cannot say
(d) Partially correct
Legal rules and regulations relevant to business are included in ___ environment
27 of business.
(a) Legal
61
(b) Political
(c) Economic
(d) Technological
28 The term business environment refers to …….. factors which impact functioning
of a firm
a) External factors
b) Internal factors
c) Management related factors
d) Internal and External factors
………are generally considered as controllable factors.

29 a) Internal factors
b) External factors
c) Cost of production
d) None of these
30 Factors which are beyond the control of a business are called…..
a) Supply
b) Demand
c) Profit
d) External factors
Value system followed by the management of a firm as certain influence on its

31 ……. environment.
a) Internal
b) External
c) Macro
32 General forces consist of…..
a) Political system
b) Demographic factors
62
c) Culture of the society
d) All the above
33 Technological improvements and innovations results in ______
a) Render existing products obsolete

b) Increase in tax
c) Reduction in profit margin
d) none of the above
34 Which one of the following is a part of economic environment?

(a) Public debt
(b) Lifestyle of people
(c) Technological changes
(d) Level of education
35 …… is the process of analysing the environment for the identification of the

factors which impact on the business.
a) Environmental analysis
b) Environment scanning
c) Business analysis
d) Factor analysis
36 …………….. is a part of economic policy of a country
a) Industrial policy
b) Import policy
c) Export policy
d) All the above
Which of the following best indicates features of business environment

37 a) Identification
63
b) Improvement in performance
c) Coping with rapid changes
d) All of them
38 Which of the following is an example of social environment?
a) Money supply in the economy

b) Consumer protection act
c) The constitution of India
d) Composition of family
39 Business environment is group of forces
a) Specific
b) General
c) Internal
d) Specific and general
40 ___ feature of business environment states that various factors of business

environment affect each other.
(a) Pervasive
(b) Continuous
(c) Dynamic
Legal rules and regulations relevant to business are included in ___ environment
41 of business.
(a) Legal
(b) Political
(c) Economic
(d) Technological
42 Which of the following cases, would a continuous study of business environment
64
help in : –
a) Raw material supplying company increases the price of raw material ;
b) Handset mobile phone manufacturer losing its market due to failure
to introduce android mobile phones.
c) Information that labour union is going on strike
d) All of the above
43 The entry of multinational companies in the Indian markets has created
a) Huge demand
b) Huge supply
c) Tough competition
d) Huge demand and supply
Increase in price of petrol can increase the sale of diesel cars. This is an example
44 of business environment being : –
a) Inter-related
b) Unrelated
c) Perfect correlation
45 What creates fear in the minds of investors to invest in long term projects?
a) Political uncertainty
b) Society
c) Reserve Bank of India
d) All of the above
Given that the Business environment is relative even within the same industry ,
46 Negative impact on one company ; –
a) Would be negative for another

b) Would be positive for another
c) Can be either negative for positive for another
65
47 As a result of major government initiatives, more and more people are going
‘green’. In order to keep in line with the trend, ‘Clap away’ a carpet cleaning
company has advertised that they only use natural cleaners that come from
renewable resources and that all their service vehicles are hybrid vehicles that use
both gas and electricity. Identify one of the points related to the importance of
business environment and its understanding by a manager which is being
highlighted in the above case.
(a) It helps in assisting in planning and policy formulation.
(b) It helps in coping with rapid changes.
(c) It helps in improving performance.
(d) It enables the firm to identify opportunities and getting the first mover
advantage.
With the introduction of photocopier machines in the market the carbon paper
48 industry was badly affected. Which component of environment was responsible
for it
a) Economic
b) Political
c) Technological
d) All of the above
49 Which factor is not included in internal environment
a) Objectives
b) Policies
c) Public
d) Production methods
50 Company image and brand loyalty is factor affecting business
66
a) Externally
b) Internally
c) Government policy
ASSERTION AND REASONING QUESTIONS (ARQ)
Q.No. Assertion and Reasoning
1 Direction: In the questions given below are two statements labelled as Assertion
(A) and Reason (R). In the context of the two statements, which one of the
following is correct?
Assertion (A) Increase in technology will benefit in expansion of business.
Reason (R) Social environment for business provides freedom of choice to
consumer.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct
explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the
correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d} Assertion (A) is False but Reason (R) is True.
Assertion (A) The internal factors are generally regarded as controllable factors.
Reason (R) Since, the company has control over internal factors
Alternatives:
67
Assertion (A) Desire competition is generally very high in countries characterised
by limited disposable incomes.
Reason (R) In competitive world the firms has to compete, not only the other
firms which market the same or similar products, but also all those who compete
for the discretionary income of the consumer.
Alternatives:
Assertion (A) Economic environment includes the social forces like customs and
traditions.
Reason (R) Reserve bank of India is the key regulator of county’s economic
environment.
Alternatives:
Assertion (A) High intensity of competitive rivalry can make an industry more
competitive and decrease profit potential for the existing firms.
Reason (R) Industry with excess production capacity will have greater rivalry
among competitors.
Alternatives:
68
Assertion (A) Business environment does not affect much the decision-making of
the companies.
Reason (R) Business environment is related to all external forces outside the
organisation.
Alternatives:
and Reason (R). In the context of the two statements, which one of the following is
correct?
Assertion (A) Environmental understanding provide enough information
regarding the need of consumers.
Reason (R) Environmental understanding is not an early warning system.
Alternatives:
Assertion (A)
Reason (R)
Alternatives:
69
Assertion (A) The image and brand equity of the company matters a lot in raising
finance forming joint ventures and other alliance.
Reason(R) The main motive of any business should be wealth maximisation.
Alternatives:
Assertion (A): Business environment is the sum total of all the external forces.
Reason (R): The different elements of business environment are closely inter-
related.
Alternatives:
11 Read the following statements: Assertion and Reason. Choose one of the correct
alternatives given below:
Assertion (A): Management is required to remain highly cautious, alert and
adaptable.
Reason (R): The business environment is dynamic in nature.
Alternatives:
explanation of Assertion (A).
(b) both assertion(A)and reason(R)are true and assertion (R )is not the correct
70
explanation of assertion(A)
(d)Assertion (A) False but Reason (R) is True.
Assertion (A): Business environment differs from country to country and even
region to region.
Reason (R): Business environment consists of numerous interrelated and dynamic
forces.
Alternatives:
Assertion (A): Political factors play a major role in shaping the environment, in
which business firms operate.
Reason (R): Political instability builds up confidence among the business people to
invest in the long term projects.
Alternatives:
Assertion (A): Business Environment is largely uncertain.
Reason (R): It is very difficult to predict future happenings
Alternatives:
71
Assertion (A): Timely understanding of Business Environment helps to make
suitable changes in the organisation.
Reason (R): A firm gets various resources or inputs from its business
environment.
Alternatives:
(d) Assertion (A) is False but Reason (R) is True.
Assertion (A): A company, which is conscious about the changes of business
environment, can take better advantage of opportunities instead of losing them to
competitors.
Reason (R): External environment provides numerous opportunities for business
units.
Alternatives:
Assertion (A): Equal pay to male and female workers for equal work is an
example of social environment.
72
Reason (R): Analysis and understanding of social environment is important as it
determines the products, services and standards of conduct that are acceptable to
society.
Alternatives:
Assertion (A): Business environment is aggregative in nature.
Reason (R): Business environment is the sum total of all things external to
business firms (Totality of external forces)
Alternatives:
Assertion (A): Social, political, legal and technological conditions are the specific
forces of business environment.
Reason (R): They have impact on all business enterprises and. thus may affect an
individual firm only indirectly.
Alternatives:
73
Assertion (A): Business environment is dynamic.
Reason (R): It becomes easy to comprehend at once what exactly constitutes a
given environment.
Alternatives:
Assertion (A): Business environment is a complex phenomenon.
Reason (R): It is relatively easier to understand in parts but difficult to grasp in
its totality;
Alternatives:
Assertion (A): Each business firm is not an island unto itself; it exists, survives
and grows within the context of the element and forces of its environment.
Reason (R): A good understanding of environment by business managers enables
them not only to identify and evaluate, but also to react to the forces external to
their firms.
Alternatives:
74
Assertion (A): Business environment helps in improving performance.
Reason (R): Enterprises that continuously monitor their environment and adopt
suitable business practices are the ones which not only improve their present
performance but also continue to succeed in the market for a longer period.
Alternatives:
Assertion (A): Economic environment refers to all the forces and factors which
directly influence the economy of your country.
Reason (R): Economic environment consist of gross domestic product, national
income at national level and per capita level, profit earning rate, productivity and
employment rate, monetary and fiscal policy of the government, etc.
Alternatives:
Assertion (A): Social environment consist of the customs and traditions of the
society in which business is existing.
Reason (R): High inflation rate set as constraint as they increase the cost of
production.
Alternatives:
75
Assertion (A): The political environment has immediate and great impact on the
business transactions so businessmen must scan this environment very carefully.
Reason (R): The business man has to make changes in his organisation according
to the changing factor of political environment.
Alternatives:
Assertion (A): Technological environment includes forces related to scientific
improvements and innovations which provide new ways of producing goods and
services and new way of operating business.
Reason (R): Import and export of technology is important for a nation to develop.
Alternatives:
Assertion (A): Business environment cannot be predicted. It is highly uncertain
and unpredictable.
Reason (R): Business environment keeps on changing. Sometimes there is a
change in technology, tastes and preferences of consumers, etc.
Alternatives:
76
Assertion (A): Business environment is very complex.
Reason (R): it helps the firm to identify threats and early warning signals.
Alternatives:
Assertion (A): Study of business Environment helps in coping with rapid changes.
Reason (R): Changes in Business environment affects all firms in the same way.
Alternatives:
77
Q.No. Case studies

Case I: Naman and Govind after finishing their graduation under vocational stream decided to
start their own travel agency which will book Rail Tickets and Air Tickets on
commission basis. They also thought of providing tickets within ten minutes through the
use of internet. They discussed the idea with their Professor Mr. Mehta who liked the
idea and suggested them to first analyse the business environment which consists of
investors’, competitors and other forces like social, political etc. that may affect their
business directly or indirectly. He further told them about the technological
improvements and shifts in consumer preferences that were taking place and hence they
should be aware of the environmental trends and changes which may hinder their
business performance. He emphasised on making plans keeping in mind the threat posed
by the competitors, so that they can deal with the situation effectively. This alignment of
business operations with the business environment will result in better performance.
Q1 Identify the component of business environment highlighted in the above Para.
(a) technological environment

(b) Social environment
(c) Legal environment
(d) Economic environment
Q2 State features of business environment as discussed by Professor Mehta with Naman and
Govind.
(a) Dynamic nature and inter-relatedness

(b) Uncertainty and specific
(c) Complex and general
(d) Relativity and complexity
Q3 State any point of importance of business environment as stated by Professor Mehta in

the above situation.
(a) Helps in making planning and policy
78
(b) Improvement in performance
(c) It enables the firm to identify opportunities and getting the first mover
advantage:
(d) Helps to adapt change
Case Gallant’ is a well-known FMCG (Fast Moving Consumer Goods) company in India.
II: However, for the past few years its profitability is diminishing due to the presence of a
new company ‘Prakritik’. ‘Prakritik’ has gradually acquired a reasonable share in a wide
variety segments like soaps, shampoos, detergents, dish wash and oral care. One of the
key reasons is that ‘Prakritik’ has positioned itself as a natural/Ayurvedic brand and this
approach has worked well with the Indian consumer. In order to compete with this threat
‘Gallant’ has acquired a premium Ayurvedic brand ‘Madhumita’ from another group.
Moreover it’s likely to increase its advertising budget to counter the threat from
‘Prakritik’.
In the context of the above case:
Q4 Identify the related component of the business environment which has contributed
effectively towards the success of Prakritik.
(a) Economic aspect

(b) Legal aspect
(c) Political aspect
(d) Social aspect
Q5 Identify one way in which ‘Gallant’ has responded to the changes in its business
environment.
(a) Acquisition
(b) Brand building
(c) Both (a)& (b)
(d) Only (b)
Q6 What was the plan of the Gallant company to counter the threat from ‘Prakritik’?
(a) To increase its total budget
79
(b) Increase its advertising budget
(c) To increase its sales
(d) To increase its expenditure
Case “World Softwares” is a software giant. It has many branches throughout the world. The
III: company knows that it has great opportunities in its path. Earlier it was limited only to its
native country but with the passage of time within 20 years the economies of various
countries have integrated. This has come as a great advantage to this company which has
expanded. In many of the countries where it has its, branches the control of government
in the public sector enterprises has diluted leading to more control in the hands of the
private sector. One of the major reasons for the success of the company has been the role
of the initiator the company has played as it was the first company of its kind to enter the
market.
Q7 Which type of advantage has been indicated in the last line of the above case?
(a) First mover advantage
(b) Disinvestment
(c) Both (a) &(b)
Q8 Identify the Business of the company
(a) Hardware
(b) Malware
(c) Software
Case The name and taste of Coca-Cola is known to almost each and every individual in India
IV: as well as throughout the world. This carbonated soft drink holds the most market share
in the soft drink market and got itself a special seat in each and every gathering. The
Coca-Cola Company has on occasion introduced other cola drinks under the Coke name.
The most common of these are Diet Coke, along with others including Caffeine free
Coca-Cola, Diet Coke Caffeine free, Coca-Cola Zero Sugar, CocaCola Cherry, Coca-
Cola Vanilla and the list goes on. It has capitalized on each and every opportunity to
market itself effectively and place itself in the middle of every gathering. The main
reason for such an outstanding placement of product goes to the way they have
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established the connection between every occasion and the need for Coke to be present
there, product design and creative advertising.
Q9 Which of the following is not a product of COCA-COLA?
a) Diet Coke Caffeine free
b) Coca-Cola Zero Sugar
c) Coca-Cola Avocado
d) Coca-Cola Cherry
Q10 In the context of the above given case, identify one valid importance of Business
Environment.
a) Enables a firm to identify opportunities and getting first mover advantage
b) Uncertainty
c) Delay in action
d) Pervasive function
Q11 Identify the feature of Business Environment which The Coca-Cola Company managed
to get in their favour.
a) Complex
b) Specific and general forces
c) Futuristic
d) Mental Exercise
Q12 Which business environment did Coca-Cola majorly tap into?
a)Technological Environment
b)Social Environment
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c) Political Environment
d) Economic Environment
Case ‘On Your Marks’ is a good shoe manufacturing company. The company is the first to
V: start a shoe having a unique technology giving it a long life. However, the company
knows that it exists in an environment where everything around it counts; so everything
around it matters. Therefore, it is trying to observe every small aspect of the business
environment. There are various factors which are closely related to each other and can’t
be understood in isolation like change in lifestyle which can be linked to the improved
demand of technologically advanced shoes. However, the company can’t be self-
satisfied. It will have to adjust to rapidly changing technology, fragmentation of market,
changing brand loyalties, etc. It has got good man power and a very well established
production department. It knows that various resources in the form of inputs have to be
transformed into the best products and sold for increasing its revenue. However, there are
various challenges which the company is facing. These are in the form of protests done
by labour unions throughout the country which sometimes assume the form of strikes.
The board of directors is keen to adapt to this difficult situation. Government is playing a
very positive role, like it did a few years back, and is freeing the business environment
from unnecessary restrictions and government controls. The company is hopeful of
emerging as a winner under such government support.
Q13 Which features of business environment are highlighted in the above case?

(b) Inter-relatedness.
(c) Both (a) &(b)
Q14 Identify the importance of business environment highlighted in the above case?
(a) It helps in coping with rapid changes.

(b) It helps in tapping useful resources
(c) Both (a)&(b) are incorrect
(d) Both (a)&(b) are correct
Q15 Which dimension of business environment is highlighted above?
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(a) Political Environment
(b) Legal environment
(c) Social environment
(d) Economic Environment
Q16 What strengths of the company are discussed in this case.
a) Good relationship with suppliers

b) Good manpower
c) Good customers
Case ‘Runners Ahead’ is an emerging software consultancy company. The company has
VI decided to prepare an emergency plan to meet unpredictable challenges which change the
business in a very fast manner particularly in the field of Information Technology. The
changes in the IT sector are very fast. So the chances of success are high; like in the case
of new software launched where the company has the advantage of entering the market
early. However, things are not so easy. Every time circumstances pose new challenges.
The organization has decided to monitor the external business environment so that it can
adopt suitable measures to increase its client base.
Recently the company has been given a project by the government to study and analyses
its new policy. The policy of the government is to give a bigger role to the private sector
by reducing its own role in the Public Sector Undertakings.
In order, to meet new challenges the company has to exploit various aspects of business.
Recently it has invented a new type of advanced software for social networking sites for
the aged people catering to their specific needs. The company is expecting huge rise in its
revenue through the help of this project.
Q17 “The changes in the IT sector are very fast. So the chances of success are high”
Which features of business environment is highlighted in the above case?
(a) Specific and general forces

(b) Uncertainty
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(c) Dynamic
Q18 Identify the importance of business environment highlighted in the above case.
(a) It enables the firm to identify opportunities and get the first mover
advantage.
(b) Early warning signal
(C) Both (a)&(b) are correct
(d) Both (a)&(b) are incorrect
Q19 Which dimension of business environment is highlighted in the above case?
(a) Economic
(b) Legal
(c) Political
(d) Technological
Q20 “The organization has decided to monitor the external business environment so that it can
adopt suitable measures to increase its client base.”
Which importance of business environment is highlighted in the above lines from the
case study
a) It helps in improving performance
b) It helps in assisting planning and policy formulation
c) It helps in coping with rapid changes
ANSWER KEY
MULTIPLE CHOICE QUESTIONS (MCQs)
Q.No Answer
1 D
2 A
3 D
4 C
5 B
6 C
7 C
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8 B
9 C
10 D
11 B
12 C
13 A
14 A
15 A
16 C
17 C
18 A
19 A
20 C
21 D
22 C
23 A
24 A
25 D
26 A
27 D
28 D
29 A
30 D
31 A
32 D
33 A
34 A
35 B
36 D
37 D
38 D
39 D
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40 D
41 A
42 D
43 C
44 A
45 A
46 C
47 C
48 C
49 C
50 A
ASSERTION REASONING QUESTIONS (ARQ)
Q.No Answer
1 B
2 A
3 B
4 D
5 B
6 D
7 C
8 C
9 A
10 B
11 A
12 B
13 C
14 A
15 B
16 B
17 B
18 A
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19 D
20 C
21 A
22 A
23 A
24 A
25 B
26 A
27 B
28 B
29 B
30 C
Q.No Answer
1 (a) Technological environment
2 (a)Dynamic nature and inter-relatedness
3 (c)It enables the firm to identify opportunities and getting the first mover
advantage
4 (d) Social aspect
5 (c) Both (a) & (b)
6 (b) increase its advertising budget

7 (c) Both (a) &(b)
8 (c) Software
9 c) Coca-Cola Avocado
10 a) Enables a firm to identify opportunities and getting first mover advantage
11 b) Specific and general forces
12 b)Social Environment
13 (c) Both (a) &(b)
14 (d) Both (a)&(b) are correct
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15 (a) Political Environment
16 (b) Good manpower
17 (c) Dynamic
18 (a) It enables the firm to identify opportunities and get the first mover
advantage.
19 (d) Technological
20 ( C) It helps in assisting planning and policy formulation
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Unit 4:PLANNING
Ques Question
No.
1 Planning is closely related with
i) creativity ii) innovation iii) both (iv) none of these
2 All managers dream to increase their sales and strive to achieve the organisational goals
but it return these dreams into reality managers need to work hard in thinking about future
and in making business predictions identify the function of management highlighted in
the para
i) Controlling ii) Organising iii) Planning (iv) All of these
3 Planning has no meaning unless it contributes to the achievement of predetermined
organisational goals. Identify the feature of planning from above statement:
(i) planning focuses on achieving objectives
(ii) Planning is futuristic
(iii) planning is continuous
(iv) Planning is pervasive.
4 Objectives provide direction for all managerial decisions and actions this function of
management provides a rational approach for achieving predetermined objectives and
setting the targets which need to be achieved and against which actual performance is
measured. Identify the function of management.
i) Controlling ii) Planning (iii) Both of these
5 Planning precedes other functions as all the other managerial functions are performed
within the framework of planning. Identify the feature of planning from above statement:
(i) Planning is futuristic
(ii) Planning is continuous
(iii) Planning is primary function of management
(iv) Planning involves decision making
6 Identify the feature of planning
(i) It leads to rigidity
(ii) It reduces creativity
(iii) It is pervasive
(iv) It involves huge cost
7 Planning involves thorough examination and evaluation of each alternative and choosing
the most appropriate one. Identify the feature from above statement
(i) Planning is pervasive
(ii) it is a mental exercise.
(iii) it is continuous process.
(iv) it involves decision making
8 Competition in the market can also upset financial plans, sales targets have to be revised
accordingly, cash budget also needed to be modified. Identify the limitation of planning.
(i) Planning may not work in dynamic environment
(ii) Planning leads to rigidity
(iii) Planning is time consuming
(iv) Planning involves decision making
9 Planning is required at all the levels of management and in all the departments of an
organisation. Identify the feature of planning from above statement.
(i) Planning is pervasive
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(ii) Planning is futuristic
(iii)Planning is continuous
(iv) it involves decision making
10 It requires application of intelligent imagination and sound judgement. it determines the
action to be taken with the logical and systematic thinking. identify the feature of one of
the function of management.
(i) It involves decision making.
(ii) It is a mental exercise
(iii)It is futuristic.
(iv) It is pervasive.
11 Which is not a feature of planning?
(i) It focuses on achieving objectives
(ii) It is the primary function of management.
(iii) It is pervasive.
(iv) It leads to rigidity
12 A co. is manufacturing garments. The manager wants to increase profits by purchasing
new high speed machines or increasing the sale price or using waste materials in
manufacturing stuffed toys. He decided that “using waste material” is the best solution for
him. Identify the concept of management involved.
i) Effectiveness ii) Efficiency iii) Planning (iv) All of these
13 A manager is required to make certain assumptions about the future which may be in the
form of forecast. This step of planning is known as
i) Follow up ii) Developing Premises
iii) Evaluating alternative courses of action (iv) Identifying alternative courses of action
14 . Rahim wanted to start with a stationery business to reach the students of schools and
colleges to provide stationery to them. He felt that students were not able to get the
needed stationery easily and hence wanted to provide the stationery directly in the school.
He listed out the various of setting up this business and finally selected the best way to
set up this business by developing the app. Suggest what should be the next step to be
followed by him:
i) Identifying alternative courses of action
ii) Evaluating alternative courses of action
iii) Implementation of plan
(iv) follow up
15 On the Introduction of GST act, experts in the field of business started analysing and
forecasting its impact on various sectors and industries. Vivek, an established
businessman attended a few seminar and conferences organised by such experts to
familiarise himself with this information. He wanted to use these forecasts to reduce the
uncertainty in making decisions for future in his business. Name the step of planning that
will be followed after the step mentioned in the paragraph.
i) Developing Premises
iv) Identifying alternative courses of action
16 Planning instructs business organisations to follow a certain methodology. If there is a
deviation in the plan, there is a possibility of loss. Which one of the following limitation
is indicated here:
i) Reduces creativity
ii) Lack of flexibility
iii) May not work in dynamic environment
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iv) Does not provide guarantee to success
17 To see whether plans are being implemented and activities are being performed according
to schedule in a step of planning process. Identify the step.
i) Follow up of plan
iv) Identifying alternative courses of action
18 Planning Cannot foresee everything, thus, there may be obstacles to effective planning.
Identify the related limitation.
i) Reduces creativity
ii) Lack of flexibility
iii) May not work in dynamic environment
iv) Does not provide guarantee to success
19 Planning requires peeping into near future, analysing it and predicting it. Identify the
related feature of planning.
i) Planning is futuristic
ii) Planning is goal oriented
iii) Planning is mental exercise
iv) Planning focuses on achieving objectives
20 Identify the correct sequence of steps of planning process
i) Setting objectives, Identify alternative courses of action, Implementation of plan,
Evaluation of alternative courses of action
ii) Setting objectives, Implementation of plan, Evaluation of alternative courses of action,
Identify alternative courses of action
iii) Setting objectives, Identify alternative courses of action, Implementation of plan,
Evaluation of alternative courses of action
iv) Setting objectives, Identify alternative courses of action, Evaluation of alternative
courses of action, Implementation of plan
21 Which of the following statement not true with reference to planning?
i) Planning is prerequisite for controlling
ii) Planning does not look into future
iii) Planning facilitates coordination in organisation
22 All the managerial functions are performed within the framework of the plans drawn.
Identify the related feature of planning.
i) Planning is futuristic
ii) Planning is primary function of a manager
iv) Planning is pervasive
23 Planning involves rational thinking to choose the best alternative among the various
available alternatives in order to achieve the desired goals effectively and efficiently.
Identify the related feature of planning.
i) Planning involves decision-making
ii) Planning is primary function of a manager
24 This function of management fills the gap between where we are and where we want to
be. Identify the function.
i) Controlling ii) Organising iii) Planning (iv) Directing
25 Employees become blind followers of plan as stated by superiors, so planning..........
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i) leads to improve decision-making
ii) leads to reduce creativity
iii) leads to rigidity
iv) leads to guarantee to success
26 If an organisation sets the objective to increase the sales by 10%, then the sales can be
increased by
a) Adding more lines of products
b) Offering products at discount
c) increasing the expenditure on advertising
Identify the step of planning process :
i) Implementation of plan
ii) Identifying alternative courses of action
iii) Follow up of plan
iv) Evaluating alternative courses of action
27 If the end result is clear it becomes easier to work towards the goal.
i) Setting up of objectives
iii) Follow up of plan
28 Most plans may not always be subjected to a mathematical analysis. In such cases,
subjectivity and the manager's experience and judgement are taken into consideration.
i) Setting up of objectives
iii) Selecting alternative courses of action
29 Useless and redundant activities are minimised. It is easier to detect inefficiencies and
take corrective measures to deal with them. Which importance of planning is highlighted
in the paragraph?
i) It reduces the risk of uncertainty
ii) It reduces overlapping and wasteful activities
iii) It establishes standard for controlling
iv) It facilitates decision making
30 Which of the following statement about planning is true?
i) Planning promotes innovative ideas in rigid environment
ii) Planning promotes innovative ideas as employees are not allowed to deviate from
plans
iii) Planning promotes innovative ideas as it guides all future actions
iv) Planning promotes innovative ideas as changes cannot be eliminated
31 “A plan is framed; it is implemented and is followed by another plan and so on."
Identify the feature of planning highlighted above:
a) Planning is continuous
b) Planning is futuristic
c) Planning is pervasive
d) Planning involves decision making
32 Departments and individuals in the organization are able to work in coordination. Which
importance of planning is highlighted in the above statement?
a) Planning provides direction.
b) Planning reduces overlapping and wasteful activities.
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c) Planning reduces the risk of uncertainty.
d) Planning facilitates decision making.
33 “It is not always true that just because a plan has worked before it will work again.
Besides, there are so many other unknown factors to be considered. This kind of
complacency and false sense of security may actually lead to failure of planning.
Identify the limitation of planning being highlighted above:
a) Planning leads to rigidity
b) Planning may not work in a dynamic environment
c) Planning does not guarantee success
d) Planning involves huge cost
34 Formation of major plan and framing of overall policies is the task of top level managers
whereas departmental managers form plan for their respective departments. And lower
level managers make plans to support the overall objectives and to carry on day to day
activities.
Identify the feature of planning highlighted above:
ASSERTION AND REASON BASED QUESTIONS

Ques Questions
no .
1 Assertion (A) Planning is closely connected with creativity and innovation.
Reason (R): Before doing something, the manager must formulate an idea of how to work
on a particular
(a) Both Assertion (A) and Reason (R) are true.
(b) Both Assertion (A) and Reason (R) are false.
(c) Assertion (A) is true and Reason(R) is false.
(d) Assertion (A) is false and Reason(R) is true.
2 Assertion (A) At the end of a certain period, there is need for a new plan to be drawn on
the basis of requirements and future conditions
Reason (R) All the plans expire after a certain period.
3 Assertion (A): Planning seeks to bridge the gap between where we are and where we want
to go.
Reason (R): Planning involves setting objectives and developing appropriate courses of
action to achieve these objectives. Planning provides a rational approach for achieving
predetermined objectives.
4 Assertion (A): Planning will be a futile exercise if it is not acted upon or implemented.
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Reason (R): Planning is time consuming and sometimes not much time is left for its
implementation.
5 Assertion (A): Planning does not reduce overlapping and wasteful activities.
Reason (R): Planning ensures clarity in thought and action, work is carried on smoothly
without interruptions.
6 Assertion (A): Planning is the most challenging activity for the management. Reason (R):
It guides all future actions leading to growth and prosperity of the business
7 Assertion (A) Planning is not an exclusive function of top management or of any specific
department.
Reason (R) Planning is foremost function of management.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation
of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct
8 Assertion (A) Through forecasting, future events and conditions are anticipated and plans
are drawn accordingly.
Reason (R) Planning essentially involves looking ahead.
of Assertion (A).
(d) Assertion (A) is False but Reason (R) is True
9 Assertion (A) Following a pre-decided plan, when circumstances have changed, may turn
out to be in organisations interest.
Reason (R) The plans decide future course of action and managers may not be in a
position to change it.
of Assertion (A).
10 Assertion (A) Sometimes plans to be drawn up take so much of time that there is not
much time left for their implementation.
Reason (R) Planning involves huge costs.
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of Assertion (A).
11 Assertion (A) Objectives should be stated clearly for all departments units and employees.
Reason (R) The end results do not have any significance in planning process.
of Assertion (A).
12 Assertion (A) A manager is not required to make certain assumptions about future in
planning process.
Reason (R) Planning is concerned with future which is uncertain.
of Assertion (A).
13 Assertion (A): Planning is basically an intellectual activity of thinking rather than doing.
Reason (R): Planning requires application of the mind involving foresight, intelligent
imagination and sound judgement.
of Assertion (A).
14 Assertion (A) The more risky the investment, the higher the returns it is likely to give. To
evaluate such proposals, detailed calculations of earnings, interest, taxes and dividends
are made and decisions taken.
Reason (R) The positive and negative aspects of each proposal have least consideration in
defining objectives of an organisation.
of Assertion (A).
15 To see whether plans are being implemented and activities are performed according to
schedule is also a part of planning process.
Reason (R) Monitoring the plans is equally important to ensure that objectives are
achieved.
of Assertion (A).
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16 . Assertion (A) Planning seeks to bridge the gap between where we are and where we
want to go.
Reason (R) It provides some standards against which actual performance is measured.
of Assertion (A).
17 Assertion (A) Planning enables manager to look ahead and anticipate changes to deal with
uncertain events.
Reason (R) Planning involves rational decisions.
of Assertion (A).
Q.N Questions
1 Read the following case carefully and answer question number 35 to 38 on that basis:
Excel Business' is a balloon manufacturing firm. With the arrival of foreign firms it is
feeling the pressure of improving its business strategy. Because of the firm's advance
planning it could not suddenly bring changes in its plans as the whole organisation had
started implementing the decided plan. But this year the organisation wants to ensure
success. However, the firm knows that the external environment is changeable and
continues to vary in a fast manner. The organisation wants to prepare in advance for a
better future. It has decided to allocate a portion of its budget specifically for proper
planning as it knows there are going to be expenses like Expert's fee, survey charges,
etc.
What does the acronym SMART stands for?
(A) Suitable, measurable, actionable, rewarded and timely
(B) Specific, measurable, actionable, resourced and timely
(C) Standardised, measurable, achievable, realistic, and timely
(D) Specific, measurable, achievable, realistic and timely
2 Which limitations of planning have been identified in the above case?
(A) Planning Does Not Work in a Dynamic Environment
(B) Planning Reduces Creativity
(C) Planning Involves Huge Costs
(D) Both (A) and (C)
3 "Planning leads to rigidity." In context to above paragraph, Is the statement?
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I) True
ii) False
4 The organisation wants to prepare in advance, the line describes the feature of
planning?
5 Read the following case carefully and answer question number 39 to 43 on that basis:
It is deciding in advance what to do and how to do? It is one of the basic managerial
functions. It requires thinking before doing something; the manager must formulate an
idea of how to work on a particular task. This function is closely connected with
creativity and innovation. It seeks to bridge the gap between where we are and where
we want to go and is performed at all levels of management.
What function of management is referred to here?
a) Planning. b) Organizing c) Staffing. d) Controlling
6 What are the two limitations of planning?
a) Reduces creativity & Rigidity. b) Competitive edge & Co-ordination
c) Both (A) and (B). d) Minimizes uncertainties
7 Which of the following is a feature of planning?

a) Focuses on achieving goals. b) Pervasive
c) Mental exercise. d) All of Above
8 By comparing...............with standards manager can know whether the goals are
achieved or not.
a) Ideas. b) Cost. c) Actual Performance. d) Risk
9 Read the following case carefully and answer question number 43 to 46
on that basis:
Simplex limited had been taken over by Mundhra Group immediately following India’s
Independence. Since then, it enjoys a rich record of industry presence and experience.
In
2005, with the aim to accelerate growth the company had gone through several rounds
of meetings and discussions before launching ERP system to attract large projects. The
management had done effective forecast and critical thinking regarding allocation of
resources to reduce wastage. For this purpose, the company had laid down multiple
courses of action to meet the challenge of adverse situations. In 2008, the company
suffered loss in many projects due to the great recession despite taking many cost
cutting measures. The management had taken utmost care regarding the possible
outcome and timely review of the plans to achieve the set target during that hard time.
In 2010 the system implemented successfully which subsequently helped the company
to execute numerous projects with precision and timeliness.
“In 2005, with the aim to accelerate growth the company had gone through several
rounds of Meetings and discussions.” What is the objective mentioned here according
to the process stated here?
a) Developing Premises
b) Growth & development
c) Launching IT enabled system
d) Cost cutting
10 “In 2008, the company suffered loss in many projects due to the great recession
despite taking many cost cutting measures.” Which limitation of the management
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process is indicated here?
a) It fails to cope with sudden changes
b) It involves huge cost
c) It requires critical thinking
d) Economic Environment
11 State whether the given statement is True or False:
“The management had done effective forecast and critical thinking regarding allocation
of resources to reduce wastage.”
a) True
b) False
12 “The management had taken utmost care regarding the possible outcome and timely
review of the Plans to achieve the set target during that hard time.” Which is the step
of Planning Process mentioned here?
a) Implementation of plan
b) Timely execution of projects
c) Follow up
d) To prepare alternative course of action
13 Read the following text and answer question no. 47-50 on the basis of the same:
Flows Technology deals in bulb manufacturing business. It plans for a successful year
of production and sale this year. It has in advance given targets to all its departments
and employees. The departments and employees are happy about this. They know that
now they won't have to do unconcerned activities thus leading to more focused
approach resulting in saving of resources. The company is thinking of starting two new
plants in the southern portion of India. For this some concrete plan has to be made. The
main core team of the company has decided to weigh all the options and then choose
the best one. The road might be long but the company is geared to face all the
challenges.
Highlight the importance of planning mentioned above:
(A) Planning provides directions.
(B) Planning reduces overlapping and wasteful activities
(C) Planning facilitates decision making
(D) All of Above
14 Which of these do not define concrete plan?
(A) An abstract one
(B) A realistic one
(C) A specific one
(D) None of the above
15 The company is thinking of starting two new plants in the southern portion of India
This defines -
(A) Setting objectives
(B) Identify alternative courses of action
(C) Evaluating alternative courses of action
(D) None of the above
16 What one of the following is not a key management skill in planning?
(A) Conceptual skills
(B) Technical expertise skills
(C) IT and computing skills
(D) Communication skills
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ANSWER KEY
1 (iii)
2 (iii)
3 (i)
4 (ii)
5 (iii)
6 (iii)
7 (iv)
8 (i)
9 (i)
10 (ii)
11 (iv)
12 (iii)
13 (ii)
14 (iii)
15 (iv)
16 (ii)
17 (i)
18 (iii)
19 (i)
20 (iv)
21 (ii)
22 (ii)
23 (i)
24 (iii)
25 (ii)
26 (ii)
27 (i)
28 (iii)
29 (ii)
30 (iii)
31 (a)
32 (a)
33 (c)
34 (c)
ASSERTION AND REASON BASED QUESTIONS

1 (A)
2 (C)
3 (a)
4 (c)
5 (d)
6 (a)
7 (b)
8 (a)
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9 (d)
10 (b)
11 (c)
12 (d)
13 (a)
14 (c)
15 (a)
16 (b)
17 (b)

1 (D)
2 (D)
3 (I)
4 (b).
5 (a)
6 (a)
7 (d)
8 (c)
9 (b)
10 (a)
11 (a)
12 (c)
13 (d)
14 (A)
15 (A)
16 (c)
100
Unit : 5 ORGANISING
S.NO. QUESTIONS
1 Name the process which co-ordinates human efforts, assembles resources and integrates
both into a unified whole to be utilised for achieving specified objectives,
(a) Management
(b) Planning
(c) Organising
(d) Directing
2 Organising is a process by which the manager
(a) Establishes order out of chaos
(b) Removes conflict among people over work or responsibility sharing
(c) Creates an environment suitable for teamwork
3 It is defined as the framework within which managerial and operating tasks are
performed.
(a) Span of management
(b) Organisational structure
(c) Informal organisation
4 It refers to the number of subordinates that can be effectively managed by a superior,
(a) Organisational structure
(b) Informal organisation
(c) Span of management
5 As the span of management increases in an organisation, the number of levels of
management in the organisation
(a) Increases
(b) Decreases
(c) Remains unaffected
6 Uranus Limited is a company dealing in metal products. The work is mainly divided
into functions including production, purchase, marketing, accounts and personnel.
Identify the type of organisational structure followed by the organisation.
(a) Functional structure
(b) Relational structure
(c) Divisional structure
7 Identify the type of organisational structure which facilitates occupational
specialisation,
(b) Horizontal structure
(c) Network structure
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(d) Divisional structure
8 Identify the type of organisational structure which makes training of employees easier,
as the focus is only on a limited range of skills.
(a) Network structure
(b) Divisional structure
(c) Functional structure
(d) Matrix structure
9 This type of organisational structure is most suitable when the size of the organisation is
large, has diversified activities and operations require a high degree of specialisation,
(a) Divisional structure
(b) Functional structure
10 Under this type of organisational structure, manpower is grouped on the basis of
different products manufactured.
(a) Divisional structure
(b) Functional structure
11 Which of the following is not a feature of functional structure?
(a) It promotes functional specialisation.
(b) Managerial development is difficult.
(c) It is easy to fix responsibility for performance.
(d) It is an economical structure to maintain.
12 Rishabh has joined as a Creative Head in an entertainment company. He always ensures
that the work has been divided into small and manageable activities and also the
activities of similar nature are grouped together. Identify the related step in organising
process being mentioned in the above lines.
(a) Identification and division of work
(b) Departmentalisation
(c) Assignment of duties
(d) Establishing reporting relationships
13 Indigo Limited has a staff of 300 people which is grouped into different departments.
The organisational structure depicts that 100 people work in Production department, 150
in Finance department, 20 in Technology department and 30 in Human Resource
department. Identify the type of organisational structure being followed by the
company.
(c) Informal structure
14 Which of the following is not a merit of divisional structure?
(a) It promotes product specialisation.
(b) It ensures that different functions get due attention.
(c) It promotes flexibility and faster decision making.
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(d) It facilitates expansion and growth as new divisions.
15 Which of the following is not a demerit of divisional structure?
(a) It is an expensive structure to maintain, since there may be a duplication of activities
across products.
(b) All functions related to a particular product are integrated in one department.
(c) Conflict may arise among different divisional heads due to different interests.
(d) Authority provided to the managers to supervise all activities related to a particular
division may lead to undesirable consequences.
16 Identify the correct sequence of steps to be followed in an organising process.
(a) Departmentalisation, Establishing reporting relationships, Assignment of duties,
Identification and division of work
(b) Identification and division of work, Departmentalisation, Assignment of duties,
Establishing reporting relationships
(c) Identification and division of work, Assignment of duties, Departmentalisation,
Establishing reporting relationships
(d) Identification and division of work, Establishing reporting relationships,
Departmentalisation, Assignment of duties.
17 Which of the following is not a demerit of functional structure?
(a) It places more emphasis on the objectives pursued by a functional head than on
overall enterprise objectives.
(b) It may lead to conflict of interests among departments due to varied interests.
(c) It leads to occupational specialisation.
(d) It may lead to difficulty in co-ordination among functionally differentiated
departments.
18 Lakshay has been given the task of arranging for five-day conference for foreign
delegates. In order to ensure smooth functioning of the event, he has made two people
as co-ordinators to take care of activities related to registration and refreshment. Identify
the function of management being carried out by Lakshay.
(a) Planning
(b) Staffing
(c) Organising
(d) Directing
19 Under which function of management, the relationship between different posts is
explained?
(a) Planning
(b) Communication
(c) Organising
(d) Supervision
20 Number of subordinates under a superior is called?
(a) Office environment
(b) Strict control
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21 What is the key to managerial posts?
(a) Responsibility
(b) Authority
(c) Accountability
(d) All of the above.
22 Which of the following is not part of organising process?
(a) Grouping of activities
(b) Departmentalisation
(c) Complete centralisation
23 ……………….may be defined as the framework within which managerial and
operating tasks are performed.
(a) Organisational structure
(b) Delegation
24 Which of the following is not an importance of organising?
(a) Increase cost
(b) Clarity in working relationship
(c) Adoption to change
25 Which of the following is not structure of organisation?
(a) Functional
(b)Divisional
(c)Control
(d)None of the above
26 If a manager is overburdened then she/he must use the following concept.
(a) Delegation
(b) Decentralisation
(c) Span of Management
27 Evenly distribution of authority at every level leads to
(a) Delegation
(c) Informal Organisation
(d) Formal Organisation
28 Fast decision can be taken by using the concept of
(a) Delegation
(b) Formal Organisation
(c) Decentralisation
29 In Delegation, we have sharing of authority and responsibility between
(a) Two levels
(b) Multiple level
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Department wise
(c) None of the above
30 In Decentralisation, we have sharing of authority and responsibility at
(a) Two levels
(b) Multiple level
(c) Department wise
31 Which of the following a policy matter
(a) Decentralisation
(b) Delegation
(c) Formal Organisation
(d) Informal Organisation
32 Which of the following is a routine activity
(a) Decentralisation
(b) Delegation
(c) Formal Organisation
33 Centralisation refers to
(a) Retention of decision making authority
(b) Opening new branches
(c) Separation of divisions or levels
(d) Dispersal of decision making authority
34 The main purpose of ____________ is to reduce the workload of managers.
35 The main purpose of ___________ is involvement of all the employees working at different
levels.
36 Selective Dispersal of Authority leads to _____________.
37 Accountability can be delegated by using the process of delegation. (True/ False)
38 In delegation, we multiply the authority with two, whereas in decentralisation, we multiply

with many. (True/False)
39 Which of the following is not an element of delegation?

(a) Accountability
(b) Authority
(c) Responsibility
40 For delegation to be effective it is essential that responsibility be accompanied with

necessary.
(a) Authority
(b) Manpower
(c) Incentives
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(d) Promotions
41 The extent of _________ decides the power that each job position enjoys in the organisation.
(a) Authority
(b) Responsibility
(c) Delegation
(d) Decentralisation
42 Under Accountability a person is answerable for the

(a) Growth of company
(b) Final outcome of the assigned task
(c) Delegation of authority
(d) None of these
43 ___________ keeps the subordinates in a state wherein they are constantly challenged and
have to develop solutions for the various problems they encounter.
(a) Delegation
(c) Controlling
(d) Responsibility
44 In many organisations the top management plays an active role in taking all decisions while
there are others in which this power is given to even the lower levels of management.
Decision making authority is shared with lower levels and is consequently placed nearest to
the points of action. Identify the concept of management highlighted by the phrase “Decision
making authority is shared with lower levels and is consequently placed nearest to the points
of action.”
(a) Authority
(b) Accountability
(c) Delegation
45 The extent of __________ decides the power that each job position enjoys in the
organisation.
(a) Authority
(b) Responsibility
(c) Delegation
46 When decisions taken by the lower levels are numerous as well as important an organisation
can be regarded as greatly __________.
(a) Centralised
(b) Decentralised
(c) Efficient
(d) None of these
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47 ____________ keeps the subordinates in a state wherein they are constantly challenged and
have to develop solutions for the various problems they encounter.
(a) Delegation
(c) Controlling
(d) Responsibility
48 Decentralisation should be applied with caution as _________.

(a) It can lead to organisational disintegration if departments start to operate on their own
guidelines which may be contrary to the interest of the organisation.
(b) Decentralisation must always be balanced in areas of major policy decisions.
(c) It recognises the decision maker’s need for autonomy.
(d) It propagates the belief that people are competent, capable and resourceful.
49 Match the concept of management in Column I with their respective explanation in Column
II :
A. Authority (i) Obligation of a subordinate to properly perform the assigned

duty.
B. Responsibility (ii) Answerability for the final outcome of the assigned task.
C. Accountability (iii) It refers to the right to take decisions inherent in a

managerial position to tell people what to do and expect them to
do it.
(a) (i), (ii), (iii)

(b) (iii), (i), (ii)
(c) (ii), (iii), (i)
(d) (iii), (ii), (i)
50 It flows downwards, from superior to subordinate:

(a) Authority
(b) Accountability
(c) Responsibility
(d) None of these
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ASSERTION REASON BASED QUESTIONS
In the questions given below there are two statements labelled as Assertion (A) and
Reason (R). Choose the correct code:
S.NO. QUESTIONS
1 Assertion (A) Identification of division of work is the first step of organising process.
Reason (R) Organising process starts with dividing work among employees of the
organisation to make sure that there is no duplication of work and there is no extra
burden of work on one person.
Codes:
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
2 Assertion (A) Assignment of duties is important part of organising process.
Reason (R) Under organising all the individuals assigned some authority matching with
responsibility.
Codes:
3 Assertion (A) Organising leads to specialisation.
Reason (R) In organising, clarity in working relations cannot be possible.
Codes:
4 Assertion (A) In organising there are very few chances of duplication of work or
overlapping of work because the jobs are assigned to different individuals by clearly
defining the job in job description document.
Reason (R) Changes can be easily adapted with organising by opening separate
department.
Codes:
5 Assertion (A) organising leads to effective administration.
Reason (R) In these similar jobs are grouped under one department which leads to
unification of efforts.
Codes:
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(d) A is incorrect but R is correct
6 Assertion (A) In functional structure emphasis is placed on specific functions.
Reason (R) Minimum cost leads to increase in profits.
Codes:
7 Assertion (A) Due attention to different functions is the demerit of functional structure.
Reason (R) Each department is specialised in its own function so they fail to
understand the priority of other department.
Codes:
8 Assertion (A) Changes cannot take place easily in functional structure of organisation.
Reason (R) In functional structure, employees develop, narrow prospective as they get
training in one area or one skill only.
Codes:
9 Assertion (A) Divisional structure leads to product specialisation.
Reason (R) When organisation is large and producing more products divisional
structure should be followed.
Codes:
10 Assertions (A) There are more chances of managerial development in functional
structure.
Reason (R) Managers perform multifunctions in divisional structure.
Codes:
11 Assertion (A) Organisation structure is indispensable means, and the wrong structure will
seriously impair business performance and even destroy it.
Reason (R) A proper organisation structure is essential to ensure a smooth flow of
communication and better control over the operations of a business enterprise. It specifies the
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relationship between people, work and resources.
Codes:
12 Assertion (A) The need for an adequate organisation structure is felt by an enterprise
whenever it grows in size or complexity.
Reason (R) As an organisation grows, coordination becomes difficult due to emergence of
new functions and increase in structural hierarchies. Thus, for an organisation to function
smoothly and face environmental changes, it becomes necessary to pay attention to its
structure.
Codes:
13 Assertion (A) Organisation structure is the outcome of the planning process.
Reason (R) The organising process leads to the creation of an organisation structure which
include designing of roles to be filled by suitable skilled people.
Codes:
14 Assertion (A) Functional structure places less importance to organisation objective.
Reason (R) In functional structure all departments focus on their own objectives not on
organisational objectives.
Codes:
15 Assertion (A) In divisional structure there is problem of coordination among different
departments.
Reason (R) All departments want to achieve their goal that’s why everyone tries to get more
resources.
Codes:
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16 Assertion (A): Decision-making is very slow in a centralised organisation.
Reason (R): In a centralised organisation, every decision is taken by top
management and information has to pass through many levels.
Alternatives:
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the
17 Assertion (A): Delegation is an optional policy decision and is done at discretion of

top management.
Reason (R): No individual can perform all tasks on his own.
Alternatives:
18 Assertion (A): Organising stimulates creativity among the managers.

Reason (R): Delegation allows the managers to reduce their workload and gives
them time to explore new areas for growth.
Alternatives:
19 Assertion (A): Delegation helps a manager to extend his area of operations as
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without it, his activities would be restricted to only what he himself can do.
Reason (R): A manager, no matter how capable he is, cannot manage to do every
task on his own. The volume of work makes it impractical for him to handle it all by
himself.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
20 Assertion (A): Delegation does not mean abdication.

Reason (R): A manager is under obligation to perform the delegated task.
Alternatives:
21 Assertion (A): While Authority is delegated, responsibility is imposed,

accountability is assumed.
Reason (R): Authority can be delegated by a manager to a subordinate, which means
granting of authority to subordinates to operate within prescribed limits.
Responsibility is the obligation of a subordinate to properly perform the assigned
duty. Accountability implies being answerable for the final outcome.
Alternatives:
22 Assertion (A): Responsibility is derived from authority and accountability is derived

from responsibility.
Reason (R): Responsibility is the obligation of a subordinate to properly perform the
assigned duty, for which he/she has been delegated authority by his/her superior.
Once authority has been delegated and responsibility accepted, one cannot deny
accountability.
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Alternatives:
23 Assertion (A): A large sized organisation can be totally decentralised.

Reason (R): As an organisation grows in size and complexity, there is tendency to
move towards decentralised decision-making. Complete centralisation would imply
concentration of all decision making functions at the apex of the management
hierarchy.
Alternatives:
(d) Assertion (A) is False and Reason (R) is True
24 Assertion (A): Decentralisation is extending delegation to the lowest level.

Reason (R): Decentralisation refers to delegation of authority throughout all the
levels of the organisation. Decision making authority is shared with lower levels and
is consequently placed nearest to the points of action.
Alternatives:
(d) Assertion (A) is False and Reason R) is True.
25 Assertion (A): Delegation is considered essential for effective organising.

Reason (R): Delegation helps a manager to extend his area of operations as without
it, his activities would be restricted to only what he himself can do.
Alternatives:
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26 Assertion (A): Decentralisation is a compulsory decision of the top management.
Reason (R): Decentralisation is done at the discretion of the top management.
Its purpose is to increase the role of the subordinates in the organisation by giving
them more autonomy.
Alternatives:
27 Assertion (A): Decentralisation must always be balanced with centralisation in areas

of major policy decisions.
Reason (R): Decentralisation recognises the decision maker’s need for autonomy.
The management, however, needs to carefully select those decisions which will be
pushed down to lower levels and those that will be retained for higher levels.
Alternatives:
28 Assertion (A): Decentralisation should be applied with caution by the top

management.
Reason (R): It can lead to organisational disintegration if the departments start
to operate on their own guidelines which may be contrary to the interest of the
organisation.
Alternatives:
29 Assertion (A): Delegation of authority is essential for effective operation of any

business organisation.
Reason (R): Accountability cannot be delegated or transferred.
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Alternatives:
30 Assertion (A): The scope of authority is limited to the extent of the work assigned.
Reason (R): Responsibility is an obligation of an employee to complete the work
assigned.
Alternatives:

Read the following text and answer Question No. 1 to 4 on the basis of the same:
‘Himalaya Ltd. Is engaged in manufacturing of washing machines. The target of the
organisation is to manufacture 500 washing machines in a day. There is an occupational
specialisation in the organisation which promotes efficiency to employees. There is no
duplication of efforts in such type of organisation structure.
1 Identify the organisation structure in the above paragraph?
(a) Divisional
(b) Functional
(c) Matrix
2 Which feature of above identified structure is highlighted in the above para?
(a) Increase cost
(b) Occupational specialisation
(c) Duplication of efforts
(d) None of the above.
3 How the above structure leads to efficiency?
(a) No duplication of efforts
(b) Increase cost
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(c) Departmentalisation
4 Which of the following is not a feature of the structure identified above?
(a) Occupational specialisation
(b) No duplication of efforts
(c) Improves efficiency
Harish recently took over as Chief Executive Officer (CEO) of ‘Dream Big’ a company
diversified into two segments namely telecom and education. He has convinced the
Board of Directors of company to close down telecom division as it is running into huge
losses due to entry of a new competitor.
5 What type of organisation structure allows for easy closure of undesirable product lines
without interrupting the existing operations of a business enterprise?
(c) Matrix structure
6 Which of the following is not a feature of functional structure?
(a) It promotes functional specialisation
(b) Managerial development is difficult
(c) It is easy to fix responsibility for performance on one department
(d) It is an economical structure to maintain.
7 Which of the following is not a merit of divisional structure?
(a) It promotes product specialisation
(b) It leads to minimal duplication of efforts which result in economies of scale
(c) It promotes flexibility and faster decision making
(d) It facilitates expansion and growth as new divisions
8 What type of organizational structure is advisable for “Dream Big’ after it closed down
telecom division?
(c) Matrix structure
Jolly Good Ltd. Is a well-known entertainment company in Bangalore. The main
divisions of company include television, print and films. Each unit has a divisional
manager responsible for performance and who has authority over the unit. All its
divisions are multifunctional as within each division functions like production, human
resource, marketing, finance, purchase etc, are performed simultaneously for the
accomplishment of desired goals. Keeping in view, the nature of work the company has
shaped a narrow span of control across all levels.
9 Identify the type of organisational structure being followed by the company?
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10 Which of the following may not be a reason for the company to adopt this type of
structure as identified in question 9?
(a) Promotes product specialisation
(b) Helps in fixation of responsibility in cases of poor performance
(c) Leads to economies of scale and this lowest cost
(d) Promotes flexibility and initiative
11 Which of the following statement is true about span of management?
(a) It gives shape to the organisational structure
(b) It determines the levels of the management in the structure
(c) Both (a) and (b)
12 Keeping in the view the policy of the Jolly Good Ltd. It is likely to
have…………number of levels in management.
(a) More
(b) Less
(c) Difficult to define
Read the following text and answer question no. 13-15 on the basis of the same:
Infocom has diversified itself into several product lines: Telecommunications,

Engineering, Financial Services. Each subsidiary is self-sufficient with their own
administrative functions, propagating the belief that people can assume the responsibility
for the effective implementation of their decisions and should be given autonomy. This
has reduced the need for direct supervision by superiors, has promoted flexibility,
initiative and faster decision making. The orders of customers are never delayed, as a
result of good policy decisions of top management. The philosophy of the top
management awards greater autonomy to the lower levels of management.
13 Identify the philosophy of the top management highlighted in the above case
(a) Centralisation
(c) Delegation
(d) None of these
14 “This has reduced the need for direct supervision by superiors, has promoted flexibility,
initiative and faster decision making.” Identify the point of importance of the philosophy
of the top management, as highlighted above:
(a) Develops initiative among subordinates
(b) Develops managerial talent for the future
(c) Relief to top management
(d) Better control
15 “The philosophy of the top management awards greater autonomy to the lower levels of
management.” Identify the point of importance of the philosophy of top management, as
117
highlighted above.
(a) Quick decision making
(b) Better control
(c) Relief to top management
(d) Facilities growth
Aman Chadha started ‘Bulls Eyes’ a company for providing cyber security solutions to
businesses. Its objective is to prevent, detect and respond to cyber-attacks and protect
critical data. He was a hardworking software engineer and an expert in cyber security.
His reputation grew by leaps and bounds as he was not only a person of integrity but
also did his work with utmost honesty and sincerity. The business started growing day
by day. He was delighted when he was offered a big project by the Ministry of Defence.
While working on the project, he found that the volume of work made it impractical for
him to handle all the work by himself. He decided to expand the team. The company
maintained a close liaison with a local engineering college. During a campus placement,
Ishan and Vrinda were appointed to work for the new project.
He found the new employees capable, enthusiastic and trustworthy. Aman Chadha was
thus able to focus on objectives and with the help of Ishan and Vrinda, the project was
completed on time. Not only was this Aman Chadha also able to extend his area of
operations. On the other hand, Ishan and Vrinda also got opportunities to develop and
exercise initiative.
16 Identify the concept used by Aman Chadha in the above case which helped him in
focusing on objectives.
(a) Delegation
(c) Centralisation
(d) Authority
17 Which of the following statement is Not true for the concept of management identified?
(a) It means granting of authority to subordinates to operate within prescribed limits.
(b) It facilitates growth and expansion of the organisation.
(c) It is a process followed to share tasks.
(d) It has a wide scope.
18 What is the main purpose of the concept of management identified?
(a) To lessen the burden of the manager.
(b) To provide relief to the top management.
(c) To increase the role of the subordinates by giving them more autonomy.
(d) Both (b) and (c)
A company X limited manufacturing cosmetics, which has enjoyed a pre-eminent

position in business, has grown in size. Its business was very good till 1991. But after
that, new liberalised environment has seen the entry of many MNC’s in the sector. With
the result the market share of X limited has declined. The company had followed a very
centralised business model with Directors and divisional heads making even minor
decisions. Before 1991 this business model had served the company very well as
consumers had no choice. But now the company is under pressure to reform.
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19 What organisation structure changes should the company bring about in order to
retain its market value?
(a) It should adopt functional structure.
(b) It should adopt divisional structure.
(c) It should adopt centralisation.
(d) It should adopt decentralisation.
20 How will the changes suggested by you help the firm?

(a) It will help in increasing managerial and operational efficiency, resulting in
increased profit.
(b) It will facilitate expansion and growth as new divisions can be added without
interrupting the existing operations by merely adding another divisional head
and staff for the new product line.
(c) It will help in quick decision-making since decisions will be taken at levels
which are nearest to the points of action.
(d) It will facilitate effective management.
21 ___________ explains the manner in which decision-making responsibilities are

decided among hierarchical levels.
(a) Delegation
(c) Authority
(d) Accountability
22 Shreya Ltd. has been awarded recently with the ‘Best Employer of the Year Award’.
The company has believed in the ideas and suggestions of its employees. There is
selective dispersal of decision making authority at all levels. There is no delay in
delivery of orders to customers due to prompt decisions taken by employees.
Identify the concept of management followed by the company.
(a) Authority
(b) Responsibility
(c) Delegation
ANSWER KEY
1 (c)
2 (d)
3 (b)
119
4 (c)
5 (b)
6 (a)
7 (a)
8 (c)
9 (b)
10 (a)
11 (c)
12 (b)
13 (a)
14 (b)
15 (b)
16 (b)
17 (c)
18 (c)
19 (c)
20 (c)
21 (b)
22 (c)
23 (a)
24 (a)
25 (c)
26 (a)
27 (b)
28 (c)
29 (a)
30 (b)
31 (a)
32 (b)
33 (a)
34 Delegation
35 Decentralisation
36 Delegation
120
37 False
38 True
39 (d)
40 (a)
41 (a)
42 (b)
43 (b)
44 (d)
45 (a)
46 (b)
47 (b)
48 (a)
49 (b)
50 (a)
ASSERTION AND REASONING QUESTIONS

1 (a)
2 (b)
3 (c)
4 (b)
5 (a)
6 (b)
7 (d)
8 (a)
9 (b)
10 (d)
11 (a)
12 (a)
13 (d)
14 (b)
15 (d)
16 (a)
17 (d)
18 (a)
19 (a)
20 (c)
21 (d)
22 (a)
23 (d)
24 (a)
25 (a)
26 (d)
27 (a)
121
28 (a)
29 (b)
30 (b)

1 (b)
2 (b)
3 (a)
4 (d)
5 (b)
6 (c)
7 (b)
8 (a)
9 (a)
10 (c)
11 (c)
12 (a)
13 (b)
14 (c)
15 (d)
16 (a)
17 (d)
18 (a)
19 (d)
20 (c)
21 (b)
22 (d)
122
Unit :11 MARKETING MANAGEMENT
Ques. no Questions
1 Which one of the following is not a marketing mix?
(a) Product
(b) Physical distribution
( C ) Product pricing
(d) Production process
2 With which element is exchange mechanism related?
(a) Publicity
(b) Marketing
( C) Advertising
(d) Branding
3 Which one of the following is a marketing management philosophy?
(a) Societal marketing concept
(b) Distribution concept
(c) Direct marketing concept
(e) Channel concept
4 Which one of the following factors is not relevant to price fixation?
(a) Obtaining market leadership
(b) Age of an organisation
( C ) Value for money
(d) Product differentiation
5 ______ ensures that products reach the ultimate customers from the manufacturers.
(a) Selling
(b) Marketing
(C )Physical distribution
(d) Sales promotion
Column A Column B
1) Social process A) Market
2) Set of potential customers. B) Marketing
3) Controllable variables C) Functions of marketing
123
4) Marketing activities D) Marketing mix
(a) (1 ) – ( D ) , (2) – ( C), (3) –( A), (4)- ( B).

(b) (1 ) – ( B ) , (2) – ( A), (3) –( D), (4)- ( C ).
(c) (1 ) – ( C ) , (2) – ( D ), (3) –( A), (4)- ( B).
(d) (1) – (D), (2) – ( c), (3) –( B), (4)- ( A).
7 Mahesh is planning to launch an online education portal. In order to understand the
varied needs of the students, she conducted an online survey. Based on the
feedback of the survey, she had decided to offer educational packages to the
prospective buyers. Identify the type of Marketing concept been described in the
given line.
(A ) product concept. (B) production concept
(C ) Marketing concept. ( D ) societal Marketing concept.
8 Anita decided to start a business of selling dress material from her house. She did
various online service to find out about the preferences of prospective customers.
Based on this, she prepared a detailed analysis of the business. She then made
important decisions including deciding about the features, quality, packaging,
labelling and branding of the dress material. Identify the element of marketing mix
discussed above.
(A) Production. ( B ) Market
(C ) Product. ( D ) Place
9 Which of the following is a feature of marketing process?
(A) satisfying needs and want of the consumers.
(B ) creating a market offering
(C) developing and exchanging mechanism
( D ) All of the above
10 A cardboard box consisting of 10 packs of toothpaste is an example of:
a) primary packaging. B) secondary packaging
c) transportation packaging. D) none of these
11 Which component of product mix provides status symbol as the advantage to
customer?
A) labelling. B) branding
C) packaging. D) none of these
12 The main function of ………………….is to provide information regarded by law.
A) labelling. B ) packaging
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C) branding. D) Both A and B
13 It is necessary that goods and services must be made available to the consumers at
the right place, in the right quality and at right time. Identify the concerned
elements of marketing mix.
A) product mix. B) price mix
C) place mix. D) promotion mix
14 Mohan is engaged in the manufacturing of refrigerators. He surveyed the market

and found that customers need a refrigerator with a separate provision of water
cooler in it. He decided and launched the same refrigerator in the market. Identify
the marketing philosophy involved.
A) Marketing concept. B) selling concept
C) product concept. D) production concept
15 Q 15. A popular brand of hair conditioner comes in different categories for
different hair, say for normal hair and for other categories.”
Identify the function of labelling in the above example.
A) Providing information regarded by law
B) Describe the product and specify its contents
C) Grading of products
D) Promotion of products.
16 Raman is a wholesaler of food grains. He categorises his stock into different groups
on the basis of their quality and also fixes up the prices accordingly. Identify the
type of marketing function being mentioned in the given lines.
A) physical distribution
B) transportation
C) warehousing
D) standardization and grading
17 Folk Ltd. Is a leather bags manufacturing company. The company is using
prohibited animal skin to make leather bags, in order to satisfy some of its
customers. Which Marketing concept is being violated in the given case?
A) Product concept
B) Production concept
C) Societal Marketing concept
D) Marketing concept
18 In order to improve upon its competitive edge, Khushboo Ltd. has changed the
packaging of its hair care products. They are now available in customer friendly
design, which has a nozzle attach to the lid so that at the time of usage, the
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consumer doesn't need to open the cap of the bottle. Name the marketing function
being explained in the given lines.
A ) product design and development
B ) customer support services.
C) promotion.
D ) physical distribution
19 In order to get feedback about its recently launched immunity booster ayurvedic
medicine, Atulya Ltd. Conducted online survey using a questionnaire, to gather
consumers view and opinions. Identify the marketing function being used by
Atulya limited.
A) standardization
B) product designing.
C) consumers support service.
D) gathering and analysing market information.
20 Which of the following is the function of marketing?
A ) branding
B ) promotion
C ) physical distribution
D ) All of these
21 Manmeet went to a shop and expressed her desire to buy a copper water bottle only
of Prestige company. Identify the component related to branding being described in
the above case.
(a) Trademark
(b) Generic name
(c) Brand name
(d) Brand mark
22 Identify the component of branding being depicted below.
(a) Brand name

(b) Brand mark
(c) Trademark
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(d) Generic name
23 What does the symbol given below denote?
(a) Brand name

(b) Brand mark
(c) Trademark
(d) Generic name
24 Manav has decided to start a business of manufacturing crockery and cutlery items.
In order to give a unique identification to his products, he has decided to assign the
brand name ‘Opel’ as it will enable the firm to secure and control the market for its
products. Identify the relative advantage of branding to the marketers being
described in the above case.
(a) Facilitates differential pricing
(b) Ease in the launching of new products
(c) Facilitates product differentiation
(d) Assists in advertising and display programmes
25 Sohum is fond of a particular brand of stationery. Every time he buys his favourite
brand stationery products, he does not need make a close inspection of that product.
Identify the relative advantage of branding to the customers being described in the
given case.
(a) Supports in product identification
(b) Certifies quality
(c) Considered to be a status symbol
26 Krish had started the business of producing exclusive home decor items under the
brand name ‘Decor’ 15 years back. Over the years, he has diversified into new
segments like home furnishing, furniture and kitchenware. However, all the
products are being sold under the same brand name ‘Decor’, as it appears to be apt
for all of them. Identify the relative feature of a good brand name being described
in the given case.
(a) Short and easy to pronounce, spell and remember
(b) Reflects the functions of the product
(c) Distinctive/easily identifiable
(d) Versatile, can be used for brand extension
27 Amita purchased a pack of crayons for her daughter from a nearby stationery shop.
She noticed that the crayons were packed in a portable transparent plastic bag.
Identify the level of packaging being described in the above lines.
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(a) Primary package
(b) Secondary packaging
(c) Transportation packaging
28 Lavanya runs a Play School from her residence. Recently, she placed an order
online for 200 chalk boxes. The boxes were delivered to her in a corrugated box.
Identify this level of packaging which facilitated movement of the product.
(a) Primary package
(b) Secondary packaging
(c) Transportation packaging
29 In an inter school quiz competition, the participants were shown empty bottles of
soft drinks and were asked to identify the brands. All the participants were able to
do so. Identify the related point highlighting the importance of packaging which is
being described in the given case.
(a) Rising standards of health and sanitation
(b) Facilitates product differentiation
(c) Innovative packaging adds value to a product.
(d) Useful in self service outlets
30 When Seema had sent her servant to the market to buy a pack of chips, she asked
him specifically to bring the yellow coloured packet of chips of a particular brand.
Identify the function of packaging being described in the above line.
(a) Helps in product identification
(b) Provides protection to the product
(c) Facilitates the use of product
(d) Assists in promotion of the product
31 On visiting a supermarket to buy a pack of moisturizer, Harsha noticed that the
packaging of most of the beauty products exhibited a photograph of a celebrity.
Identify the related function of packaging being described in the given case.
(a) Facilitates the use of product
(b) Assists in promotion of the product
(c) Helps in product identification
(d) Provides protection to the product
32 The labelling of a pack of oats cookies explains how the product is beneficial in
adding fibre to the diet and the other related health benefits. Identify the related
function of labelling being described in the given case.
(a) Describes the product and specifies its content
(b) Identification of the product or brand
(c) Grading of products
(d) Helps in promotion of the products
33 _____________ is father of Modern Marketing.
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a) Abraham Maslow
b) Lester Wunderman
c) Peter Drucker
d) Philip Kotler
34 Vinny refused to buy an insulated lunch box for Rs.1500 as she felt that the real
worth of the product was much less than its monetary value. Identify the factor
related to pricing decision being described in the given case.
(a) Cost of the product
(b) The utility and demand
(c) Government and legal regulations
(d) Pricing objectives
35 Under which of the following conditions is a marketer not likely to fix the price of
his products at higher end?
(a) When the product is unique in terms of packaging, product difference and
product differentiation
(b) When he wants to attain market share leadership
(c) When he faces high degree of competition
(d) When the demand for the product is low
36 Under which of the following situations is a company not likely to fix a lower
price for its product?
(a) When the competition has introduced a substitute product
(b) When the demand for the product is low
(c) When the company wants to attain market share leadership
(d) If the demand for a product is inelastic
37 Luxury products such as Rolex watches are known as :
a) Convenience product
b) Shopping product
c) Speciality product
d) Emergency products
38 Bread and milk are which kind of products

a) Convenience product
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b) Shopping product
c) Specialty product
d) Emergency products
39 Match the following levels of packaging with their examples

1) Milk packets in crates a) Primary Packaging
2) Shirt in cardboard box b) Secondary Packaging
3) Ice-cream cup c) Transportation packaging
40 Production cost is the only important component while fixing up the price.
True/False
41 Bee Limited has decided to market its products through the conventional network
of manufacturer-wholesaler-retailer-consumer. Identify the function of marketing
being described in the above line.
(a)Physical distribution
(b) Transportation
(c) Warehousing
(d) Standardization and grading
42 MOHAN Limited has hired 300 salesmen who will be assigned the task of
contacting prospective buyers and creating awareness about the new range of
organic incenses introduced by the company. Identify the element of promotion
been described in the given lines.
(a) Advertising
(b) Sales promotion
(c) Personal selling
(d) Public relation
43 Within 2 years of its inception, BHAMA Limited has created a very positive
reputation about itself and its products in the eyes of general public by
participating extensively in various social welfare programs. Identify the
component of promotion mixing described in the given lines.
(a) Advertising
(b) Personal selling
(c) Public relation
(d) Sales promotion
44 In order to promote the sale of company. ABC Ltd. Has decided to offer consumer
durable products at 0% finance. Identify the type of marketing factor being
described here:
a) Product
b) Price
c) None of above
d) Promotion
45 Keeping in view the recent trends of sales regression, Sona Limited has decided to
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offer a flat 15% discount on all its products. Identify the related function of
marketing being described in the given lines.
(a) Packaging and labelling
(b) Promotion
(c) Pricing
(d) Branding
46 While reading the label of a pack of aluminium foil, Rohan discovered that the
product was manufactured at Hyderabad but was available for sale in many states
across the country. Identify the function of marketing which has made this
possible.
(a) Warehousing
(b) Standardization and grading
(c) Transportation
(d) Warehousing
47 AAA Limited is marketing its products online. Identify the channel of distribution
being adopted by the company.
(a) Zero level channel
(b) One level channel
(c) Two level channel
(d) Three level channel
48 ____________ is the deliberate action of an organization for promoting goodwill

between itself and the society.
(a) Marketing mix
(b) Advertising
(c) Public relations
(d) Selling
49 __________ ensures that products reach the ultimate customers from the
manufacturers.
(a) Selling
(b) Marketing
(c) Physical distribution
(d) Sales promotion
50 Advertising is the impersonal communication in case of promotion.

a) True
b) False
51 Which one of the following promotion tools has mass reach?
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(a) Advertising
(b) Public relation
(c) personal selling
(d) none of above
52 Mail order selling is a ______________ channel of distribution.
(a) Direct
(b) Indirect
(c) Direct and Indirect
(d) Sale
53 ____________ Ensures that products reach the ultimate customers from the
manufacturers.
(a) Selling
(b) Marketing
(c) Physical distribution
(d) Sales promotion
54 __________ is the marketing function which is concerned with informing the
customers about the firm’s products.
(a) Transportation
(b) Selling
(c) Advertising
(d) Public Relations
55 _____________refers to the act of storing and assorting products in order to
create time utility in them
(a) transportation
(b) warehousing
(c) Order processing
(d) none of them
56 Personal selling allows a sales person to develop personal relationship with
prospective customers.
(a) True
(b) False
57 Free gifts and free samples distribution is the part of _______.

(a)Advertising
(b) Public relation
(c) Sale promotion
(d) Public relation
58 The company can draw attention to new products by arranging sports and cultural
events is called:-
(a)Advertising
(b) Public relation
(c)Sale promotion
(d) none of above
59 Publicity is the paid form of promotion of product
(a) True
(b) False
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60 Advertisement is undertaken by identify sponsor
(a) True
(b) False
ASSERTIONS AND REASON TYPE QUESTIONS

DIRECTION (Q.NO 1 – 10): Each of the following questions consists of two statements, one
is assertion ( A ) and the other is reason ( R) .
(a) Both assertion ( A ) and reason ( R ) are correct.
(b) Assertion (A) is wrong but reason (R ) is correct.
(c) Assertion ( A ) is correct but reason ( R ) is wrong.
(d) Both assertion ( A ) and Reason ( R ) wrong
Ques. no Questions
1 Assertion (A ) From package of chips, cosmetics, etc. people can make some guess
about quality of the product contained in it.
Reason ( R ) packaging helps in products production.
( a) Both assertion ( A ) and reason ( R ) are correct.
(b ) Assertion (A) is wrong but reason (R ) is correct.
( c ) Assertion ( A ) is correct but reason ( R ) is wrong.
( d ) Both assertion ( A ) and Reason ( R ) wrong
2 Assertion (A ): A company should not produce anything ( say drugs ), just to
satisfy a consumer.
Reason ( R ) : As per societal Marketing concept, any activity which satisfies
human needs but is detrimental to the interest of society at large cannot be justified.
3 Assertion (A ): Tata differentiates it’s three quality of tea with three different
labels ( Tata Agni ,Tata Premium and Tata Gold).
Reason ( R ) : labelling helps to describe a product and specify its contents.
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4 Assertion (A ): labelling is also an important feature of the product.
Reason ( R ) : it does not only protect the products but also serve as a promotional
tool.
5 Assertion (A ): companies like Samsung, Motorola , redmi etc. Price their products
without considering the price set by competitors firms.
Reason ( R ) : They help in ascertaining price only on the basis of worth of their
product, product cost, pricing objectives etc.
6 Assertion (A ): Advertising and sales promotion are different from each other.
Reason ( R ) : Advertising is a short-term prospective where as sales promotion is a
long-term perspective.
7 Assertion (A ): Advertisement is very costly affair.
Reason ( R ) : It requires the huge amount of money to advertise on newspaper ,
television, etc.
8 Assertion (A ): No other firms can use the brand mark of ' NIKE’ in the country.
Reason ( R ) : ' Nike ' has taken legal protection for its brand mark and then it has
exclusive right for its use.
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9 Assertion (A ): Events like fashion show , experience like lunch with celebrity can
also be marketed.
Reason ( R ) : Anything that is of value to the other can be marketed.
(c ) Assertion ( A ) is correct but reason ( R ) is wrong.
10 Assertion (A): Maggie (noodles) extended this brand name to introduce many of its
new products such as Tomato Ketchup, soup, etc.
Reason (R): Branding helps in advertising and display programmes.
(c ) Assertion ( A ) is correct but reason ( R ) is wrong.
11 Assertion (A) Packaging ensures safety of the products.
Reason (R) It helps in promoting the product in the market.
Codes
(e) Both A and R are incorrect.
12 Assertion (A); Utility and Demand affect the price of a product
Reason (R): utility provided by the product and the intensity of demand of the
buyer sets the upper limit of price.-
Codes
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13 Assertion (A) : Government can declare a product as essential product and regulate
its price.
Reason (R): In order to protect the interest of public against unfair practices in the
field of price fixing.
Codes
14 Assertion (A): Grading is the function performed by packaging
Reason (R ): Sometimes marketers assign different grades to indicate different
features or quality of the product.
Codes
15 Assertion (A) : Refrigerator is a convenience product
Reason ( R ) : consumer products, which are purchased frequently, immediately
and with least time and effort are convenience products
Codes
16 Assertion (A): Trademark is not a part of brand.
Reason (R ) : Trademark does not have legal protection
Codes:
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17 Assertion (A) : Packaging helps to maintain Rising Standards of Health and
Sanitation
Reason (R ): The chances of adulteration in packed goods are less.
Codes:
18 Assertion (A): Label Helps in Promotion of Products.
Reason (R ): The label may vary from a simple tag attached to the product to
complex graphics.
Codes:
(e) Both A and R are incorrect
19 Assertion (A): There are broadly three types of costs: Fixed Costs, Variable Costs
and Semi Variable Costs.
Reason (R ) : One of the most important factor affecting price of a product or
service is its cost.
Codes:
137
20 Assertion (A): A brand name should be suggestive
Reason (R ) : a brand name should hint the qualities of the product
Codes:
(e) Both A and R are incorrect
21 Assertion (A) In inventory control a balance should be maintained in respect

of cost and customer satisfaction.
Reason (R) Higher the level of inventory, higher will be the level of service to
customers but the cost of carrying the inventory will also be high.
Codes:
(a) Both (A) and (R) are true. R is the correct explanation of A
(b) Both (A) and (R) are true. R is not the correct explanation of A
(c) A is correct but (R) is incorrect
(d) A is incorrect but (R) is correct
22 Assertion (A) Advertising is a very economical mode of communication
Reason (R) Because of its wide reach the overall cost of advertising gets
spread, as a result per unit cost of reach comes low.
Codes:
(a) Both (A) and ( R )are true. R is the correct explanation of A
(b) Both (A) and (R )are true. R is not the correct explanation of A
(c) A is correct but R is incorrect
23 Assertion (A) Maintain good public relations lower the promotion cost
138
Reason (R) Because of its wide reach the overall cost o gets spread, as a result
per unit cost of reach comes low.
Codes:
(a) Both (A) and (R )are true. R is the correct explanation of A
24 Assertion (A) Channel of distribution assist in transferring the title of Goods

and services.
Reason (R) As it moves goods by transportation.
Codes:
25 Assertion (A) Higher the level of service to customer will be the need to keep
more Inventory.
Reason (R) the demand of product is high.
Codes:
(a) Both (A) and (R ) are true. R is the correct explanation of A
(b) Both (A) and (R ) are true. R is not the correct explanation of A
26 Assertion (A) Advertising is personal form of communication.
Reason (R) Advertising creates monologue and not a dialogue
Codes:
139
(b) Both (A) and (R )are true. R is not the correct explanation of A
27 Assertion (A) In personal selling a direct face to face dialogue takes place.
Reason (R) As personal selling is impersonal form of promotion
Codes :
(a) Both (A) and (R ) are true. R is the correct explanation of A
(b) Both (A) and ( R) are true. R is not the correct explanation of A
28 Assertion (A) Personal selling promote travel and tourism in the country
Reason (R) due to mobility of sales people
Codes:
(b) Both (A) and (R) are true. R is not the correct explanation of
29 Assertion (A) Publicity is a paid form of communication
Reason (R) Publicity does not involve any direct expenditure by marketing
firm
Codes:
(a) Both (A) and (R )are true .R is the correct explanation of A
30 Assertion (A) Public relation department can place story and dramatize the
product in the media.
Reason (R) This will build market place excitement before the reach in the
market, it will create favourable impression on target customer
Codes:
140
Ques. Question
No.
1 Fat to Fit Ltd. manufactures vitamin ‘c’ tablets to improve the immunity of
people in this pandemic. These tablets are packed in strips of 12 tablets each.
Each of these strips is packed in a cardboard box, 48 such boxes are then
placed in a big corrugated box and delivered to various retailers for sale. State
the purpose of packaging the tablets in a corrugated box.
(a) To facilitate their transportation.
(b) Warehousing.
(c) Easy identification.
(d ) All of the above
2 Anu, Manu and Rohit were friends from college days and now they are doing
different kinds of business. They regularly meet and discuss their business ideas and
exchange notes on customer satisfaction, marketing efforts, product designing,
selling techniques, social concerns etc.
In one of such meetings, Anu drew the attention of Manu and Rohit towards the
exploitation of consumers. She told that most of the sellers were exploiting the
consumers in various ways’ and were not paying attention towards the social, ethical
and ecological aspects of marketing, whereas she was not doing so.
Manu told that they were under pressure to satisfy the consumers, but stated that the
consumers would not buy or not buy enough unless they were adequately convinced
and motivated for the same.
Rohit stressed that a company cannot achieve its objectives without understanding
the needs of the customers. It was the duty of the businessmen to keep consumer
satisfaction in mind because business is run by the resources made available to them
by the society. He further stated that he himself was taking into consideration the
needs of the customers.
Identify the various types of thinking that guided Anu, Manu and Rohit in the
marketing efforts of their business. Also, state one more feature of the various types
of thinking identified that is not given in the above para.
The various types of thinking that guided by Anu, Manu and Rohit in the marketing
efforts of their business are described below:
(A ) “She told that most of the sellers were exploiting the consumers in various
ways’ and were not paying attention towards the social, ethical and ecological
aspects of marketing, whereas she was not doing so”.
Identify the marketing concept of marketing management discussed in these lines.
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(i) Selling concept
(ii) Societal marketing concept
(iii) Marketing concept
(iv) Product concept
( B)” Rohit stressed that a company cannot achieve its objectives without
understanding the needs of the customers. It was the duty of the businessmen to keep
consumer satisfaction in mind because business is run by the resources made
available to them by the society.”
Identify the marketing concept of marketing management discussed in these lines.

( i)Selling concept and marketing concept
(ii)Societal marketing concept
(iii)Marketing concept
(iv)Product concept and selling concept
3 “IBF” washing machine manufacturing company is a renowned company for
marketing washing machine. It performs various activities like, market analysis,
product designing or merchandising, packaging, warehousing, branding, pricing,
promotion and selling. The company maintains good customer relations through
various follow up activities. This helps the company in procuring repeated sales
orders.
1. Name the concept related to the activities mentioned in the above paragraph.
(a) Marketing
(b) Selling
(c) Branding
2. Identify the features of the concept identified in part

( a) Needs and wants
(b) Creating a market offering
(c ) Exchange mechanism
( d ) All of the above
4 ‘Masala mix’ is a famous chain selling a large variety of products in the Indian
market. Their products include chips, biscuits, sweets and squashes. It charges
comparatively higher price than its competitors as it sells quality products. Besides,
it offers discount to its customers and easy credit terms to its retailers on regular
basis. It has five of its own retail shops. It also sells its products through various
grocery stores so that the products are made available to customer at right place , in
142
the right quality and at the right time. It regularly uses different communication tools
to increase its sales. But it is also concerned about the impact as the potential
consumers or the prospect buyers who could not be delivered the message. So, there
is one scheme the company has decided to launch where chips will be provided with
an additional cold drink for a particular time period. It not only satisfies its
consumers but also provides employment to handicapped people.
( A ) The above para describe the combination of variables used by Masala Mix to
prepare its market offering. The combination of variables used by Masala Mix to
prepare its market offer is termed as…………….
(I ) Promotion mix
(II ) Sales mix
(III) Marketing mix
(IV) Price mix.
(B) “ it also sells its products through various grocery stores so that the products are
made available to the consumers at the right place, in the right quantity and in the
right time”
Identify the element of marketing mix stated above.
( I) product
(II) price
(III) Place
(IV) Promotion
5 As a project work in Business Studies, the Commerce students of Himachal Public
School, Himachal Pradesh thought of preparing apple jam from the apples grown in
their school premises and sell it in the school annual fete. They approached the
Principal who not only appreciated the students but also gave her consent for the
same. The school decided to donate 50% of the revenue generated from the sale to a
nearby orphanage. After the school fete, the school also decided to extend this
project by providing employment to visually challenged and disadvantaged sections
of society on regular basis.
1. Identify any two product-related decisions which the students had to take.
(e) Branding and packaging.

(f) Pricing and packaging.
(g) Branding and pricing
(h) None of the above
2.Identify t the two values communicated to the society by the project of Himachal
Public School are:
(a) Generating employment opportunities
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(b) Welfare of Humanity
(c) concern about disabled people
( d) All of the above
6 Unilever has found a new way to make ice creams by using an ingredient called ‘ice
structuring protein’ which is widely found in nature especially, in fishes which
allows them to survive in freezing arctic waters. Combining ISP with stabiliser
technology allows making ice creams that don’t melt so easily thereby making it
more convenient for small children and consumers in hot countries.
In the context of above case:
1. Identify the component of marketing mix being taken into consideration by

the company.
(i) Place
(j) price
(k) promotion
(l) product
2. Explain briefly the function of marketing highlighted here.

(a) Product designing and development
(b) Packaging and labelling
(c) Marketing planning
(d) Gathering and analysing marketing information
7 Vijay Anand is planning to start a company manufacturing room fresheners. He

intends to use natural fruit extracts for adding fragrance to them. He estimates an
investment of Rs. 20 crores to set up the factory. As it is difficult for him to raise the
entire capital amount alone, he gives a partnership offer to his school friend, Sanjay
who is an angel investor. Sanjay, after being convinced about the feasibility of the
project, accepts his offer. Sanjay tells Vijay Anand that they should also focus on
other important decisions related to the product ‘room fresheners’ besides deciding
about its features, price, variety and quality. Branding is one of the important such
decision.
In the context of above case:
1. Identify the two important decisions related to a product by the company.

(a) Labelling
(b) Packaging
(c) Both (a) and (b)
2. Branding considered as an important function by the marketers.
(a) It facilitates product differentiation.
(b) Helps in advertisement
(c) Easy introduction of new product
144
8 Good Living Ltd. manufactures mosquito repellent tables. These tablets are packed
in strips of 12 tablets each. Each of these strips are packed in a cardboard box, 48
such boxes are then placed in a big corrugated box and delivered to various retailers
for sale.
State the purpose of packaging the tablets in a corrugated box.
9 ‘Texla Ltd.’ entered into the market with coloured television and have now
introduced products like audio systems, air-conditioners, washing machines, etc. the
company is not only offering the products but also handling complaints and offering
after-sales services.
Identify the element of marketing-mix discussed here.
(a) Product
(b) Price
(c) Place
(d) Promotion
10 Crackers Ltd., a fire-cracker manufacturing company launched some new products

on eve of Diwali which attracted many buyers. To meet the increased demand, the
company employed children from nearby villages. Although the product was in
great demand, appropriate safety warning for use were not mentioned on the packets
that led to many accidents.
Identify the important product-related decision that was not taken into consideration
by the company.
a) Packaging
b) Branding
c) Labelling
11 ABC Crackers Ltd., a fire-cracker manufacturing company, launched some new

products on the eve of Diwali in the market which attracted many buyers. To meet
the increasing demand, the company employed people from nearby villages where
there was a lot of unemployment. Because of the good behaviour of the
management with the employees, more and more people wanted to join the
company. As the products were in great demand in the market, a competitor
imitated the products. The products of the competitor were not accepted by the
consumers as it was a status symbol to buy the products of ABC Crackers Ltd.
because of their quality.
Identify the product-related decision because of which consumers preferred the
products of ABC Crackers Ltd.
145
a) Packaging
b) Branding
c) Labelling
12 As a project work in Business Studies, the Commerce students of Himachal Public

School, Himachal Pradesh though of preparing apple jam from the apples grown in
their school premises and sell it in the school annual fete. They approached the
Principal who not only appreciated the students but also gave her consent for the
same. The school decided to donate 50% of the revenue generated from the sale to a
nearby orphanage. After the school fete, the school also decided to extend this
project by providing employment to visually challenged and disadvantaged sections
of society or regular basis.
Name any two product-related decisions which the students had to take.
a) Product designing and labelling

b) Packaging and labelling
c) Branding and labelling
d) Packaging and branding
13 A five star hotel has decided to include picking up of clients from airports and
railway stations. This will definitely improve the image of the hotel. It will add to
the comfort of the clients. The hotel has done this to fight the tough competition
with the new entrants in the market. This step is expected to increase the charges of
the stay at the hotel.
In the above case which element of the marketing mix will be affected?
a) Product
b) Price
c) Place
d) Promotion
14 In a retail store a product was contained inside boxes of dark colour. The outside
surface of boxes were covered by labels which gave information about the product
inside the box and by reading the labels it could also be identified what were the
contents of the material. Atul was one customer who purchased this item. It was an
insecticide. There was a picture of a dead insect and a signal of warning which
showed that the product was poisonous and had the required killing impact on the
insects thus attracting attention of Atul and helped him purchase it. As he carried the
product to his house, his neighbour inquisitively asked about the product in his hand.
146
He told him it was insecticide. On hearing the neighbour reacted negatively and said
that it could be dangerous for children. He told him that there was required
information printed on the box based on the directives given by the government
which made it mandatory for the company to put warning. Thus labelling helped in
acting as a medium of information between the seller and the buyer.
Which function of labelling is highlighted in above case?
a) Labelling helps in Identifying the Product and Specify its Contents.

b) Labelling helps in Promotion of Products
c) Label helps in Providing Information Required by Law.
d) All of the above
e) None of the above
15 ‘Agni Cables’ deals in cables of all varieties. Recently it has launched a new product
to increase its revenue and take the company to a new height. The company is
confused about keeping the price of a newly launched cable which is meant for all
types of household works. For its metro cities based customers the company has
decided to adopt various methods like improvement in quality of salesmen,
innovation in packaging, liberal credit terms, etc. Whatsoever the conditions the
company can’t go beyond a level as far as pricing is concerned. Identify the factor
affecting price determination in the above case.
a) Government regulations
b) Extent of competition in the market
c) Marketing method used
d) Product cost
CASE Ravi has decided to set up a small factory to manufacture hand wash and toilet soaps
in a rural area in Haryana. In order to promote the product initially, he plans to
STUD
distribute small sachets of the hand wash as free samples, besides deploying a team
Y
of salesmen to sell the product door to door in the different parts of the city.
Moreover, he has decided to conduct a hygiene camp in rural areas wherein he will
distribute a kit comprising of hand wash and soap and also plans to organize street
plays to highlight the importance of hygiene and sanitation in our daily lives. He
also decided to give information about product in print media.
In the context of above case identify the tools of promotion being taken into
consideration by Ravi.
16 “He plans to distribute small sachets of the hand wash as free samples” Identify tool
of promotion in given line
A) Personal Selling
B) Sale promotion
147
C) Advertisement
D) Public Relation
17 “Deploying a team of salesmen to sell the product door to door in the different parts
of the city” Identify tool of promotion in given line.
A) Personal Selling
B) Sale promotion
C) Advertisement
D) Public Relation
18 “Moreover, he has decided to conduct a hygiene camp in rural areas wherein he will
distribute a kit comprising of hand wash and soap and also plans to organize street
plays to highlight the importance of hygiene and sanitation in our daily lives.”
Identify tool of promotion in given line.
A) Personal Selling
B) Sale promotion
C) Advertisement
D) Public Relation
19 “He also decided to give information about product in print media” Identify tool of
promotion in given line.
A) Personal Selling
B) Sale promotion
C) Advertisement
D) Public Relation
CASE “Tasty Ltd.” are the manufacturer of vegetarian frozen dessert food products made
STUD with coconut milk, agave syrup and other certified ingredients. The founders of the
Y company originally developed this treat to meet their own needs but found that their
friends and families around were also keen to use the products. It was not only the
vegetarians, but also those who could not get enough environment friendly
sustainable food, that appreciated the product. It did not take long for founders to
recognize the potential of their little venture. In the beginning they started from their
home with the product being sold through local family parties that enable guests to
personally meet the owner. This helped to establish strong connections with the
prospective buyers and the company could put the product on shelves of natural food
store. The company used* all marketing activities to grow and expand. The
company began sponsoring booths at festivals, drawing attention to its newly created
vegetarian products. It also disseminated relevant information to media about its
products and the people who helped in building the company’s reputation. Founders
were invited for an interview with one of the leading TV channels in which they
talked about their environment friendly vegetarian products. To show its gratitude to
customers, local business and government officials who supported the company
from the beginning, “Tasty Ltd.” hosted a gala event and involved all of them to
148
raise funds for a few local NGO’s. The company also asked its fans and customers
to send songs and poetry conveying their impression about “Tasty Ltd.” products.
20 “It was not only the vegetarians, but also those who could not get enough
environment friendly sustainable food, that appreciated the product.” Identify the
marketing concept in given line.
a) Product
b) Production
c) Marketing
d) Societal
21 Identify the marketing mix in above case.
a) Product
b) Price
c) Place
d) Promotion
22 “Tasty Ltd.” hosted a gala event and involved all of them to raise funds for a few
local NGO’s. The company also asked its fans and customers to send songs and
poetry conveying their impression about “Tasty Ltd. Products. “Identify the tool of
promotion in given lines.
a) Advertisement
b) Promotion
c) Advertisement
d) Public relation
23 “It also disseminated relevant information to media about its products. “Identify the
tool of promotion in given lines.
a) Advertisement
b) Promotion
c) Advertisement
d) Public relation
149
ANSWER KEY
Ans no Answer
1 (d) Production process
2 (b) Marketing
3 (a) Societal marketing concept
4 (b) Age of an organization
5 (c ) Physical distribution
6 (b) (1 ) – ( B ) , (2) – ( A), (3) –( D), (4)- ( C ).
7 (C ) Marketing concept
8 (c.)Product
9 ( D ) All of the above
10 (c) transportation packaging
11 (B) branding
12 (A) Labelling.
13 ( C) place mix
14 (A) Marketing concept.
15 ( C) Grading of products
16 ( D) standardization and grading
17 (C) Societal Marketing concept.
18 (A ) product design and development
19 ( D) gathering and analysing market information

20 (D ) All of these
21 (c) Brand name
22 (b) Brand mark
23 (c) Trademark
24 (c) Facilitates product differentiation
25 (a) Supports in product identification
26 (d) Versatile, can be used for brand extension
150
27 (a) Primary package
28 (c) Transportation packaging
29 (b) Facilitates product differentiation
30 (a) Helps in product identification
31 (b) Assists in promotion of the product
32 (d) Helps in promotion of the products
33 (d) Philip Kotler
34 (b) The utility and demand
35 (a) When the product is unique in terms of packaging, product difference and
product differentiation
36 (d) If the demand for a product is inelastic
37 (b) Shopping product
38 (a) Convenience product
39 1)c ; 2) b ; 3) a
40 False
41 A
42 C
43 C
44 D
45 B
46 C
47 A
48 C
49 C
50 A
51 A
52 A
53 C
54 C
151
55 B
56 A
57 C
58 B
59 B
60 A
ASSERTIONS AND REASON TYPE QUESTIONS
Ans no Answer
1 ( c ) Assertion ( A ) is correct but reason ( R ) is wrong

4 ( c ) Assertion ( A ) is correct but reason ( R ) is wrong.
5 ( d ) Both assertion ( A ) and Reason ( R ) wrong
6 ( c ) Assertion ( A ) is correct but reason ( R ) is wrong.
7 ( d ) Both assertion ( A ) and Reason ( R ) wrong
8 ( a) Both assertion ( A ) and reason ( R ) are correct.
9 ( a) Both assertion ( A ) and reason ( R ) are correct
10 (c ) Assertion ( A ) is correct but reason ( R ) is wrong.
11 b) Both A and R are true, but R is not the correct explanation of A
12 (a) Both A and R are true. R is the correct explanation of A
14 d) A is incorrect, but R is correct
15 (d) A is incorrect, but R is correct
16 (e) Both A and R are incorrect.
18 (b) Both A and R are true, but R is not the correct explanation of A
19 (b) Both A and R are true, but R is not the correct explanation of A
152
20 a) Both A and R are true. R is the correct explanation of A
21 (a)
22 (a)
23 (b)
24 (b)
25 (c)
26 (d)
27 (c)
28 (a)
29 (d)
30 (a)
Ans Answers
no.
1 ( d) All of the above
2 ( A) (ii)Societal marketing concept
(B ) (iii) Marketing concept
3 1. (a) Marketing
2. (d) All of the above.
4 A. (III) marketing mix

B. (III ) Place
5 1. (a ) branding and packaging.
2. (d) All of the Above
6
1. ( d ) Product’.
2. ( a) Product designing and development
7 1 (c )Both (a) and (b)

2 (d) All of the above
8 storage, identification and transportation.
9 (a) Product
153
10 (c ) ‘Labelling’
11 (b) Branding
12 (c ) branding and packaging.
13 (b) Price
14 d) All of the above
15 e) Marketing method used
16 (b)
17 (a)
18 (d)
19 (c)
20 (d)
21 (d)
22 (d)
23 (a)
154

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KENDRIYA VIDYALAYA SANGATHAN

a) i), ii), iii) b) ii), i), iii)

a) i), ii), iii) b) ii), i), iii)

ASSERTION- REASONING BASED QUESTIONS

CASE BASED QUESTIONS

12 With reference to the given case, which level of management is working

17 Find out the feature of concept highlighted in the given case

18 Mohit is working at which level of management

19 Identify another function of the level highlighted in the given case

21 Identify another function of the level highlighted in the given case

ASSERTION REASONING BASED QUESTIONS

16 Kushal Ltd. is a leading automobile company in which the various departments

(a) (i)-(a); (ii)-(b); (iii)-(c); (iv)-(d)

(a) (i)-(a); (ii)-(b); (iii)-(c); (iv)-(d)

(a) (i)-(c); (ii)-(d); (iii)-(b); (iv)-(a)

(c) A is correct, but R is incorrect

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

(a) Both A and R are true. R is the correct explanation of A

16 Assertion (A): A tenet of scientific management is cooperation and harmony

CASE BASED QUESTIONS

1 After completing her Bachelors in Fashion Designing from a well-known college in

(3) Which principle of scientific management is highlighted in the given

(3) What will be the earning of a worker producing 7 units?

(4) Such a worker producing 7 units is termed as………

MULTIPLE CHOICE QUESTIONS

ASSERTION REASONING ANSWERS

1 (d) Correct assertion - The principles of management are in the

16 iii)A is true but R is false

CASE BASED QUESTIONS

Case Study 1 1. (c) Division of work

Case Study 4 1.(i) 2. (i) 3. (iv) 4. (iii)

Multiple Choice Questions (MCQ)

Q.No. Multiple choice questions (MCQ)

Which of the following is not a part of the business environment of business?

2 Which of the following is not a component of specific forces of business

(a) Technological conditions

‘Twinkle Stars’ is a well-known resort for organising parties, especially for

7 According to the United Nations Environmental Agency, the world produces

The Uttarakhand government has developed surveillance network using latest

17 India continues to be a lower-middle-income country along with 46 others, while

Advance understanding of business environment will help in

a) Planning and policy formulation

Advertisement of cigarettes carries the statutory warning. This is because of

22 Proper understanding of business environment is not a prerequisite for

___ nature of business environment suggests that environment keeps on

24 ___ feature of business environment states that various factors of business

25 Which of the following is not a feature of Business environment

Identification of opportunities to get first more advantage is one of the importance

………are generally considered as controllable factors.

30 Factors which are beyond the control of a business are called…..

Value system followed by the management of a firm as certain influence on its

32 General forces consist of…..