B.ST - STUDY MATERIAL KVS 2021-22 Term 1

KENDRIYA VIDYALAYA SANGATHAN
JAIPUR REGION
STUDENT SUPPORT MATERIAL TERM-I

BUSINESS STUDIES XII
(2021-22)
INSPIRATION
Shri B. L. Morodia, Deputy Commissioner, KVS RO Jaipur
Shri D. R. Meena, Asstt. Commissioner, KVS RO Jaipur
MENTOR
Mr. B. K. Kothari
Principal
KV Chittorgarh
COORDINATORS
Mr. Shiv Lal Choudhary, PGT Commerce, KV 3 NAL Bikaner
Ms. Santosh, PGT Commerce, KV Chttorgarh
CONTENT TEAM
Ms. Snigdha Surbhi, PGT Commerce, KV No.1 Kota
Ms. Poonam Bhardwaj, PGT Commerce, KV Eklingarh Udaipur
Mr. Mahidhar Saraswat, PGT Commerce, KV Anupgarh BSF
Ms. Manisha Kadam, PGT Commerce, KV No. 2 Jaipur
Ms. Seema Menaria, PGT Commerce, KV Banswara
Mr. Rohit Batra, PGT Commerce, KV Jhalawar
SAMPLE PAPER
Ms. Vishakha Bansal, PGT Commerce, KV Dabla Jaisalmer Dabla
Ms. Kiran Tiwari, PGT Commerce, KV Deoli Tonk
Mr. Dinesh Kumar Sharma, PGT Commerce, KV 1 Suratgarg ASF
Mr. Deepak Awasthi, PGT Commerce, KV Mount Abu
Mr. Deepak Kumar Soni, PGT Commerce, KV Itarna Alwar
COMPILATION
Mr. B. K. Kothari, Principal KV Chittorgarh
Mr. K. L. Meena, PGT Commerce, KV Dungarpur
Business Studies / XII (2021-22)
Term-1
INDEX
S. No. Unit Topic Page No.
1 Syllabus for Term-1 (2021-22) 3-3

2 1. Nature and significance of Revision 4-8
management Material
Questions 9 -21
Answers 22–22
3 2. Principle of Revision 23-28
Management Material
Questions 29-37
Answers 38-38
4 3. Business environment Revision 39-40
Material
Questions 41-54
Ans(mcq 55-55
& A&R)
5 4. Planning Revision 56-58
Material
Questions 58-67
Answers 67-67
6 5. Organising Revision 68-74
Material
Questions 75-83
Answers 84-84
7 11. Marketing Management Revision 85-93
Material
Questions 93-105
Answers 106-106
SAMPLE PAPER Q.P Ans

Paper-1 107 117
Paper-2 118 127
Paper-3 128 143
Paper-4 144 154
Paper-5 155 166
Page 2 of 168
Term-1
BUSINESS STUDIES
CLASS XII
SYLLABUS
Session 2021-22 (Term -1)
Page 3 of 168
Term-1
CHAPTER 1
NATURE AND SIGNIFICANCE OF MANAGEMENT
Revision Notes
Business Studies
CHAPTER 1
NATURE AND SIGNIFICANCE OF MANAGEMENT
Revision Notes
Management is an art of getting things done with and through others.

Management can be defined as, the process of getting things done with the aim of achieving
organizational goals effectively and efficiently.
CHARACTERISTICS OF MANAGEMENT
1. Goal oriented Process It is a goal oriented process, which is to achieve already specified
and desired objectives by proper utilization of available resources.
2. Pervasive: Management is universal in nature. It is used in all types of organizations
whether economic, social or political irrespective of its size, nature and location and at each
and every level.
3. Multidimensional: It is multidimensional as it involves management of work, people and
operations.
4. Continuous: It consists of a series of function and its functions are being performed by all
managers simultaneously. The process of management continues till an organization exists
for attaining its objectives.
5. Group Activity: It is a group activity since it involves managing and coordinating activities
of different people as a team to attain the desired objectives of the organization.
6. Dynamic function : It is a dynamic function since it has to adapt according to need, time
Page 4 of 168
Term-1
and situation of the changing business environment. For example, McDonalds made major
changes in its ‘Menu’ to survive in the Indian market.
7. Intangible Force: It is intangible force as it can’t be seen but its effects can be felt in the
form of results like whether the objectives are met and whether people are motivated or not
and there is orderliness and coordination in the work environment.
OBJECTIVES OF MANAGEMENT
(1) Organizational objectives:

Organizational Objectives can be divided into Survival (Earning enough revenues to cover
cost); Profit (To cover cost and risk); and Growth (To improve its future prospects).
(2) Social Objectives: Social objectives is to provide some benefits to society like applying
environmental friendly practices in the production process and giving employment to
disadvantaged sections of society, etc. Example: TISCO, ITC, and Asian Paints
(3) Personal Objectives : Personal Objectives is to focus on diverse personal objectives of
people working in the organization which need to be reconciled with organizational
objectives.
IMPORTANCE OF MANAGEMENT
(1) Achieving Group Goals: Management creates team work and coordination in the group.
Managers give common direction to individual efforts in achieving the overall goals of the
organization.
(2) Increases Efficiency: Management increases efficiency by using resources in the best
possible manner to reduce cost and increase productivity.
(3) Creates Dynamic organization: Management helps the employees overcome their
resistance to change and adapt as per changing situation to ensure its survival and growth.
(4) Achieving personal objectives: Management helps the individuals achieve their
personal goals while working towards organizational objectives.
(5) Development of Society: Management helps in the development of society by producing
good quality products, creating employment opportunities and adopting new technologies.
Page 5 of 168
Term-1
NATUE OF MANAGENMENT
Management as an Art
Art refers to skillful and personal application of existing knowledge to achieve desired results.
It can be acquired through study, observation and experience. The features of art as follows:
(1) Existence of theoretical knowledge: In every art, Systematic and organized study
material should be available compulsorily to acquire theoretical knowledge.
(2) Personalized application: The use of basic knowledge differs from person to person and
thus, art is a very personalized concept.
(3) Based on practice and creativity: Art involves in consistent and creative practice of
existing theoretical knowledge.
In management also a huge volume of literature and books are available on different aspects
of management. Every manager has his own unique style of managing things and people. He
uses his creativity in applying management techniques and his skills improve with regular
application. Since all the features of art are present in management. so it can called an art.
Management as a Science
Science is a systematized body of knowledge that is based on general truths which can be
tested anywhere, anytime. The features of Science are as follows:
(1) Systematized body of knowledge: Science has a systematized body of knowledge based
on principles and experiments.
(2) Principles based on experiments and observation: Scientific principles are developed
through experiments and observation.
(3) Universal validity: Scientific principles have universal validity and application.
Management has systematic body of knowledge and its principles are developed over a period
of time based on repeated experiments & observations which are universally applicable but
they have to be modified according to given situation. As the principles of management are not
as exact as the principles of pure science, so it may be called-an inexact science. The prominence
of human factor in the management makes it a Social Science.
Management as Profession
Profession means an occupation for which specialized knowledge and skills are required and
entry is restricted. The main features of profession are as follows:
(1) Well-defined body of Knowledge: All the professions are based on well defined body of
knowledge.
(2) Restricted Entry: The entry in every profession is restricted through examination or
through some minimum educational qualification.
(3) Professional Associations: All professions are affiliated to a professional association
which regulates entry and frames code of conduct relating to the profession.
(4) Ethical Code of Conduct: All professions are bound by a code of conduct which guides
the behavior of its members.
(5) Service Motive: The main aim of a profession is to serve its clients.
Management does not fulfill all the features of a profession and thus it is not a full-fledged
profession like doctor, lawyer, etc., but very soon it will be recognized as full-fledged profession.
Page 6 of 168
Term-1
LEVELS OF MANAGEMENT:
Top Level
Consists of Chairperson, Chief Executive Officer, Chief Operating Officer or equivalent and
their team. . Chief task is to integrate and to coordinate the various activities of the business,
framing policies, formulating organizational goals & strategies.
Middle Level
Consists of Divisional or Departmental heads, Plant Superintendents and Operation Managers
etc. Main tasks are to interpret the policies of the top management to ensure the availability of
resources to implement policies, to coordinate all activities, ensure availability of necessary
personnel & assign duties and responsibilities to them.
Lower Level/Supervisory Level
Consists of Foremen and supervisor etc. Main task is to ensure actual implementation of the
policies as per directions, bring workers’ grievances before the management & maintain
discipline among the workers.
FUNCTIONS OF MANAGEMENT
1. Planning: Thinking in advance what to do, when to do, and who is going to do it. It bridges
the gap between where we are and where we want to reach.
2. Organising: organization means deciding the framework of working how many units and
sub-units are needed,how many posts are needed, how to distribute the authority and
responsibilities.
3. Staffing: It refers to recruitment, selection, training, development and appointment of the
employees.
4. Directing: It refers to guiding, instructing, inspiring and motivating the employees.
5. Controlling: are the main functions of management. Controlling is monitoring the
organizational performance towards the attainment of the organizational goals.
Page 7 of 168
Term-1
COORDINATION (The Essence of Management):

Coordination is the process of synchronizing the activities of different departments and individuals
from the stand point of time and sequence of execution for the achievement of common goal.
FEATURES/CHARACTERISTICS OF COORDINATION
l. Coordination integrates group efforts: It integrates diverse business activities into

purposeful group activity ensuring that all people work in one direction to achieve
organizational goals.
2. Coordination ensures unity of action: It directs the activities of different departments
and employees towards achievement of common goals and brings unity in individual efforts.
3. Coordination is a continuous process: It is not a specific activity matter it is required at
all levels, in all departments till the organization continues its operations.
4. Coordination is all pervasive function: It is universal in nature. It synchronizes the
activities of all levels and departments as they are interdependent to maintain organizational
balance.
5. Coordination is the responsibility of all managers: It is equally important at all the
three-top, middle and lower levels of management. Thus it is the responsibility of all
managers that they make efforts to establish coordination.
6. Coordination is a deliberate function: Coordination is never established by itself rather it
is a conscious effort on the part of every manager. Cooperation is voluntary effort of
employees to help one another. Effective coordination cannot be achieved without
cooperation of group members.
IMPORTANCE OF COORDINATION
1. Growth in size of complexities of large scale organization: Any increase in the scale of
business results in the number of employees and activities. Each person has different interest,
way of working, nature etc. So, it is necessary that a proper environment is created through
coordination, so that everyone will give full contribution towards organizational goals.
2. Functional differentiation: Division of work create difficulty because every person wants
to do his work in his own way without having any regard for the total work to be perform. So,
coordination is necessary.
3. Specialization: Modern organizations are highly specialized & they appoint a number of
specialists. Normally they don‟t take advice in their area of specialization. It creates conflicts.
So coordination is required by an independent person to reconcile the differences in opinions
of specialists.
Page 8 of 168
Term-1
MULTIPLE CHOICE QUESTIONS
1. Effectiveness is relates a task

(a) being completed on time
(b) being completed on time with least resources.
(c) being completed on time added resources
(d) none of the above
2. After every three months, Mr. Ramakant offers new schemes to its distributers. He
tries to bring in changes keeping in mind the needs of a customer and offers from his
competitors. This gives him an edge over his competitors. Identify the characteristics
of management in the above paragraph.
(a) Intangible force (b) Goal oriented
(c) Multi dimensional (d)Dynamic
3. A. R. Rehman is the first Indian to win the Oscar award for his composition ‘Jai Ho’. His
composition of music and different as he has used the singing notes in a manner that is
entirely his own interpretation. Which nature of management is highlighted above.
(a) Management as a science (b) Management as a Profession
(c) Management as an art (d) Management both as an art and science
4. Rahul Ltd., a leading manufacturer of iron and steel decided to open up a new branch
in a remote area in Rajasthan. His aim was to provide equal opportunities to the
unemployed youth from the rural areas. This initiative has raised the standard of
living of people in rural areas. All children in the area are getting good education and
the families in the rural areas are also actively contributing towards the nation
building through their dedicated work. Identify the objective of management
mentioned in above case
(a) Social objective (b) Personal objective
(c) Organisational Objective (d) Managerial objectives
5. Identify the basic characteristic of management involoved in the statement – ‘The

activities involoved in managing an organization are common to all organisations,
whether economic, social or political.
(a) Dynamic (b) Pervasive
(c) Continuous (d) Goal oriented
6. Which of the following is not a characteristic of science

(a) based on practice and creativity (b) based on experiments
(c) based on facts and logic (d) all of the above
7. Professionals need to be associated with respective professional bodies. There are

professional bodies for management which have some membership rules and set of
ethical codes but not compulsory for mangers to be associated with these bodies.
Which characteristic of profession is highlighted here
(a) Well defined body of knowledge (b) Professional association
(c) Service motive (d) Ethical code of conduct
8. Mr Hari Mohan and MsMalti both are fast friends and working as managers in Mata
Fabrics Ltd. They are playing a very important role in the company. Through their
Page 9 of 168
Term-1
efforts quality output is maintained, wastage of material is minimized and safety

standards are maintained. Identify level of management at which they are working.
(a) Top level (b) Middle level
(c)Supervisory level (d) None of these
9. Name the process which provides the requisite amount, quality, timing and sequence
of efforts and ensures that planned objectives are achieved with a minimum conflict.
(a) Planning (b)Coordination (c) Directing (d) Controlling
10. Identify the feature of co-ordination being highlighted in the given statement:
“Coordination is not a one time function, it begins at the planning stage and continue
till controlling.”
(a) Coordination ensures unity of action
(b) Coordination is an all pervasive function
(c) Coordination is a continuous process
(d) Coordination is a deliberate function
11. Maruti Ltd. decided to give more stress on the following: to use environmental
friendly methods of production, to provide employment opportunities to the
disadvantaged section of the society and to make available basic amenities like
schools and creches to the employees. Identify the objective of management discussed
above.
(a) Organisational objective (b) Social objective
(c) Personal objective (d) None of the above
12. A sales manager may spend more time planning and staffing during the launch of a
new product but at the same time, he does organize current orders, direct his sales
team and solve customers problem. Identify the characteristics of management.
(a) Dynamic (b) Pervasive
(c) Continuous (d) Goal oriented
13. Each individual performs his/her role at his/her status and department, then only
management function can be executed. Use of we not I to represent management
Which characteristic of management is highlighted here.
(a) Group activity (b) Multidimensional
(c) Dynamic (d) Goal oriented
14. Human resources are an organisations greatest assets. Despite all developments in
technology ‘getting work done from people is the major task of a manager’. Identify
dimension of management being described above
(a) Management of work (b) Management of people
(c) Management of operations (d) All of the above
15. Rama enterprises is running into losses. It has lost most of its customer because of
indifferent attitude of its employees. Employees take leave without notice and often
come late. No notice is taken against employees because the boss Mr. Rohit Kumar
himself comes late. Ther is too much chaos and indiscipline.
Which characterisitic of management is lacking in the above situation
(a) Intangible force (b) Goal oriented
(c) Multi dimensional (d) Dynamic
Page 10 of 168
Term-1
16. Today most organisations give competitive salaries, provide recreational facilities for
staff, hold annual meets they recognize the contribution of employees, provide creche
facilities to women employees so they can work comfortably. Such activities enable
management to keep staff happy and retain the good employees for long. Identify the
objective of management highlighted here
(a) Organisational objective (b) Social objective
17. While determing the ___________ objectives, the management keeps in mind the all the
members having interest in the business
(a) Organisationalobjective (b) Social objective
18. Principles of science are based on cause and effect relationship. For example, the
phenomenon of an apple falling from a tree towards the ground is explained by the
law of gravity. Identify the feature of science to which the above statement is related.
(a) Systematised body of knowledge (b) Universal validity
(c) Principles based on experimentation (d) None of the above
19. A good orator can learn the art of debating by reading literatures, books or by joining
a personally development course etc. Even most managers aquire their skills by
reading management books especially ‘Management by Philip Kotler’ a book
considered to be the Bible of management. Identify the feature of art which is present
in management
(a) Existence of theoretical knowledge (b) Personalised application
(c) Universal validity (d) Based on practice and creativity
20. To pursue, CA one has to clear the entrance exam ‘CPT’, similarly, to get admission in
management colleges one has to clear entrance through ‘CAT’ on GMAT. Which
characteristic of profession is highlighted here.
(a) Well defined body of knowledge (b)Professional association
(c) Service motive (d) Restricted entry
21. The objective of the Marketing Department of ‘Sunderam Kids Wear Ltd.’ is to increase
sales by 10 per cent 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
organisations because each department is performing activities in isolation from
others 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) Specialisation (d) None of these
22. The practice of management is unique in nature. However, managers can work better
if their practice is based on the principles of management. These principles constitute
the core of management. Which characterisitic of management as an art is described
here
(a) Existence of theoretical knowledge (b) Personalised application
(c) Universal validity (d) Based on practice and creativity
Page 11 of 168
Term-1
23. A company’s target production is 5000 units in a year. To achieve this target the
manager has to operate on double shifts due to power failure most of the time. The
manager is able to produce 5000 units but at a higher production cost. In this case the
manager is
(a) Efficient (b) Effective
(c) Efficient as well as effective (d) Neither efficient nor effective
24. The actual work progress is compared with planned work performance to find out
deviations, if any, and remove these by taking corrective actions.
(a) Planning (b) Staffing (c) Directing (d) Controlling
25. Successful organisations do not achieve goals by chance but by following a deliberate
process known as
(a) Planning (b) Co-ordination (c) Controlling (d) Management
26. “To maintain quality of output, safety standards and to minimize the wastage of
materials” is a work of which level of management.
(a) Top level Management (b) Middle level management
(c) Lower level management (d) All of Above
27. It means dividing and grouping the activities and specifying working relationships of
the employees in the organizations.
(a) Organizing (b) Staffing (c) Directing (d) Controlling
28. Management is an
(a) Art (b) Profession (c) Science (d) All of Above
29. “The objectives which aim at existence, prosperity and growth of an organization”.
These are core objectives of organisation
(a) Organisational objectives (b) Social objectives
(c) Personal objectives (d) General objectives
30. “The task of a manager is to give a common direction to the individual efforts in
achieving the overall goals of organization”. Identify the importance of management
(a) It helps in achieving in group goals
(b) It increases efficiency
(c) It creates dynamic organization
(d) It helps in achieving personal objectives
31. 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
Page 12 of 168
Term-1
32. 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.
33. “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
34. 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
35. 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
36. Principles of science are based on cause and effect relationship. For example, the
phenomenon Nature and Significance of Management of an apple falling from a tree
towards the ground is explained by the law of gravity. Identify the feature of science to
which the above statement is related.
(a) Systematised body of knowledge (b) Universal validity
(c) Principles based on experimentation (d) None of the above
37. The objective of the Marketing Department of ‘Sunderam Kids Wear Ltd.’ is to increase
sales by 10 per cent 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
organisations because each department is performing activities in isolation from
others 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) Specialisation (d) None of these
38. The process of coordinating the activities of an organisation begins at the _____________
stage itself.
(a) Planning (b) Staffing (c) Directing (d) Controlling
Page 13 of 168
Term-1
39. The words cooperation and coordination are:

(a) Opposite (b) Synonym (c) Complementary (d) All of these
40. Fabmart 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 systems analysts and programmers.
Identify that which function of management is needed to satisfy the need of the above
companies.
(a) Planning (b) Organising (c) Staffing (d) Controlling
41. Ashoka handloom Industries is a company specially manufactures bedcovers/bed-

sheets. Mr Ashok Khadhidhari is the production manager in the company. His design
team developed some prints for bedcovers in bright colours on silk. Although they
looked very impressive, the use of silk made the product too expensive for the average
customer. Praising their effort, Mr Ashok suggested that they keep the silk bed-covers
for special occasions like Diwali and Christmas and offer the bedcovers on a regular
basis. Name the main function of management to which is the above case related.
(a) Planning (b) Organising (c) Directing (d) Controlling
42. Mr. Ranjan Pathak is working in a well reputed company of USA. In the company he is
responsible for all the activities of the business and for its impact on society. Identify
the management level at which he is working.
(a) Top Management (b) Middle Management
(c) Operational Management (d) Supervisory Management
43. Authority-responsibility relationship binds individuals as superiors and subordinates

and give rise to different _____________ in an organisation.
(a) functions (b) levels ( c) objectives (d) policies
44. Which of the following is not an organizational objective

(a) Survivalof organiastion (b) Profit earning
(c) Growth of organisation (d) Providing employment opportunities
45. Arun is responsible for making annual appraisal reports of line managers. At which
level of management Arun is working?
(a). Top level management (b). Middle level management
(c). Lower level management (d). Supervisory level management
46. It involves leading, influencing and motivating the employees to perform the assigned
task
(a). Staffing (b) Planning (c)Directing (d) Controlling
47. 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
Page 14 of 168
Term-1
48. 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
49. Coordination is
(a) A Function of management (b). The essence of management
(c)An objective of management (d) None of the above
50. The Force that binds all other functions of management is called
(a) Controlling (b)Coordination (c) Cooperation (d) Planning
ASSERTION- REASONING BASED QUESTIONS

51. Read the following statements – Assertion (A) and Reason (R). Choose one of the
correct alternatives given below :
Assertion(A): Management is a tangible force
Reason (R): The effect of management is noticeable in an organization where
targets are met according to plans
(a) (A) is incorrect and (R) is correct.
(b) (A) is correct (R) is incorrect.
(c) Both (A) and (R) are correct and, (R) is the correct explanation of (A).
(d) Both (A) and (R) are correct and, (R) is not the correct explanation of (A).
Assertion (A): Management has to ensure that the organization makes a profit.
Reason (R): The basic objective of any business is growth.
(a)(A) is incorrect and (R) is correct.
Assertion (A): Coordination is not a one time function but a continuous process.
Reason (R): Coordination begins at the directing stage and continues till
controlling
Assertion (A): Management can be stated as an inexact science
Reason (R): Management principles are also developed through observation
And experiments but human behavior cannot be accurately
predictable
(b)(A) is correct (R) is incorrect.
Page 15 of 168
Term-1
Assertion (A): Planning bridges the gap between where we are and where we want to
go
Reason (R): Controlling finds out the reason for deviation and suggests c
corrective action
Assertion (A): Supervisory level managers minimize the wastage of materials and
maintain quality standards
Reason (R): Supervisory level managers interact with actual work force and boost
their morale
57. 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.
58. 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.
(d) Both (A) and (R) are correct and, (R) is not the correct explanation of (A)
59. Assertion (A): Management is a universal activity.

Reason (R): Management is followed only in business organisations all over the
world.
(d) Both (A) and (R) are correct and, (R) is not the correct explanation of (A)
Page 16 of 168
Term-1
60. Assertion (A): Management emphasizes on effectiveness of work.

Reason (R): The aim of a manager is to reduce costs and increase productivity with
minimizing wastage through better planning, organizing, staffing, directing and
controlling the activities of organization.
61. Assertion(A):Management principles are developed through observation and

repeated experimentation.
Reason(R): Outcomes of management principles can be predicted accurately.
62. Assertion (A): Coordination is a voluntarily binding force between individuals and
departments.
Reason (R): Coordination gives a direction to the willing spirit
63. Assertion (A): Reward and recognition is one of the organisational objectives of the
management.
Reason (R): Management has multiple objectives.
64. Assertion (A): Profit is only main objective of every management.

Reason (R): Profit is necessary for the existence of business.
65. Assertion(A): Satisfaction of personnel objectives is very important in an

organisation.
Reason(R): Employees are one of the most valuable resources for an organization.
Page 17 of 168
Term-1
66. Assertion (A): Management is an art completely.

Reason (R): A manager need not be a member of any professional association.
67. Assertion (A): Management is on the path of becoming a profession.

Reason (R): Management does not have all the features of a profession.
68. Assertion (A): Management helps in achieving organisational objectives only.

Reason (R): A manager motivates and leads his team in such a manner that individual
members are able to achieve organizational goals.
69. Assertion (A): Top level management includes only chairman and president of
organisation.
Reason (R): Management consists of senior most executives of the organization.
70. Assertion(A): The job of the lower level is complex and stressful, demanding, long
hours and commitment to the organisation.
Reason (R): 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.
71. Assertion (A): Survival is the primary organisational objective of management.

Reason (R): Every organisation needs to survive in the competitive market first, only
thenhe strives for profits.
72. Assertion (A): Planning precedes all functions of management.

Reason (R): Management consists of various functions which include planning,
Page 18 of 168
Term-1
organising, staffing, directing and controlling.

73. Assertion (A) : Cooperation in absence of coordination leads to waste of efforts

Reason(R): Coordination without cooperation has no roots andcooperation without
coordination bears no fruits.
CASE BASED MCQs
Read the following text and answer the questions (74-77) on the basis of the same:
Sara is the branch manager of ABG Handicrafts Pvt. Ltd. The company's objective is to
promotethe sales of Indian handloom and handicraft products. It sells fabrics,
furnishings, ready-mades andhousehold items are made out of traditional Indian
fabrics.
Sara decides quantities, variety, colour and texture of all the above items and then
allocates resourcefor their purchase from different suppliers. Sheappoints a team of
designers and crafts people in the company, who developed some prints for bed
covers in bright colour on silk. Although the products
looked very attractive and impressive, they were relatively expensive on the front of
affordability for anaverage customer.
Sara suggested that they should keep the silk bed covers for special festive occasions
and offer thecotton bed covers on a regular basis to keep costs under control.
74. “She appoints a team of designers and crafts people in the company, who developed
someprints 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
75. In the above case "company's objective is to promote the sales of Indian handloom and
handicraft products."
The above line focus on which feature of management?
(a) Management is an intangible force
(b) Management is a goal oriented process
(c) Management is pervasive in nature
(d) Management is a continuous process
76. With reference to the above case, at which level of management Sara is working?
(a) Lower level (b) Top level (c) Middle level (d) Shop floor
77. “Sara suggested that they should keep the silk bed covers for special festive occasions
and offer the cotton bed covers on a regular basis to keep costs under control.”
(a) Controlling (b) Staffing (c) Planning (d) Directing
Read the following text and answer the questions (78 -81) on the basis of the same:
Three groups of employees of 'Gama Limited' are working at different posts. The first
group of employees is responsible for the welfare and survival of the organisation. In
order to discharge its view to coping with the changes going on in the Business
Page 19 of 168
Term-1
Environment, this group immediately discusses responsibility properly , this group

continuously keeps a watch over the Business Environment . With a the change to be
brought about in the company's plans. The second group of employees is responsible
for maintaining quality and safety standards, and minimising wastages. The
responsibility of third group of employees is to explain the policies decided by the top
management and developing the feeling of cooperation among all the departments of
the company.
78. Identify the concept of management described in the paragraph given above:
(a) Functions of management
(b) Levels of management
(c) Nature of management
(d) Coordination
79. “The first group of employees is responsible for the welfare and survival of the
organisation."
The above statement is related to which level of management:
(a) Top Level Management (b) Middle Level Management
(c) Lower Level Management (d) Both (b) and (c)
80. “The second group of employees is responsible for maintaining quality and safety
standards, and minimising wastages."
The above statement highlighted the level of management:
81. “The responsibility of third group of employees is to explain the policies decided by
the top management and developing the feeling of cooperation among all the
departments of the company."
The above statement explained the functions of the
Read the text given below and answer the questions (82 - 85) based on it
Vikas has completed his C.A. by clearing a specified examination by the Institute of
Chartered Accountant of India. No body can become a C.A. without this step. He is
working as finance manager in Kajaria Ltd. which is involved in manufacturing of tiles.
There are other Chartered Accountants, too, in the company but Vikas has the
reputation of creative application of existing theoretical knowledge which he has
gained during his education. He integrates the activities of finance department with
production and sales department due to which performance of the company is geting
better day-by-day.
82. Mention the characteristic of profession discussed above.
(a) Well defined body of knowledge (b)Service motive
(c) Ethical code of conduct (d) Restricted entry
83. At which level of management Vikas is working in the company?

(c) Supervisory level (d) Both (b) and (c)
Page 20 of 168
Term-1
84. Which nature of management is mentioned above?

(a) Management as a science (b) Management as a Profession
(c) Management as an art (d) Management both as an art and science
85. Name the concept of management which Vikas is performing by integrating the
activities of his department with other departments.
(a) Cooperation (b) Coordination
(c) Organising (d) Directing
Read the extract given below and answer the questions (86 - 89) on the basis of the
same.
Lohit 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.
86. Lohit is working at which level of management
(c) Lower level (d) Operational level
87 Identify another function of the top 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
D. None of the above
88. 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
89. Identify another function of the middle level highlighted in the given case
A. Formulate overall organisational goals and strategies
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
Page 21 of 168
Term-1
ANSWER KEY
1. a 2. d 3. c 4. a 5. b
6. c 7. b 8. c 9. b 10. c
11. b 12 c 13. a 14. b 15. a
16. c 17. a 18. c 19. a 20. d
21. c 22. a 23. b 24. d 25. d
26. c 27. a 28. a 29. a 30. a
31. d 32. d 33. d 34. a 35. a
36. a 37. b 38. a 39. c 40. c
41. c 42. a 43. b 44. d 45. b
46. c 47. a 48. b 49. b 50. b
51. a 52. d 53. b 54. c 55. d
56. c 57. a 58. c 59. b 60. d
61. b 62. a 63. a 64. a 65. c
66. d 67. c 68. a 69. a 70. a
71. c 72. d 73. c 74. b 75. b
76. c 77. c 78. b 79. a 80. c
81. b 82. d 83. b 84. c 85. b
86. a 87. b 88. b 89. c
Page 22 of 168
Term-1
CHAPTER:-2
PRINCIPLES OF MANAGEMENT
Revision notes:
Concept of principles of management:-
The principles of management are defined as broad and general guidelines that serve as the
basis for all managerial decisions and actions. They are not rules, but only a guide to action.
Derivation of principles of management:-
Observation:- The management thinkers and the researchers observe actual practices and
events and analyses them so as to get general guidelines.
Experimentation:- The guidelines tested in different organizations with different

environmental conditions, so as to test their validity. If the guidelines provide same results,
then the guidelines are declared as management principles.
Nature/ Features/ Characteristics of Principles of Management:-
1. Universally applicable:- The principles of management can be applied to all

kinds of organization, irrespective of their nature, size or type. However these
principles are applied with modification according to the situation.
2. General guidelines :- Management principles are general guidelines for
managerial actions but they can’t be used as ready-made solutions to all managerial
problems. They need to be adjusted according to the complex and dynamic business
situations.
3. Formed by practice and experimentation:- Principles of management are
formed by managerial experts through observations, personal experiences and
experimentation. The principles are repeatedly tested to check their validity.
4. Flexible:- Management principles are not rigid rather they are flexible in nature and
can be modified according to the organizational needs. They can’t be applied blindly in
same situations.
5. Mainly behavioural:- The principles of management focuses on influencing the
human behaviour which is very complex and dynamic in nature. In practice the
management principles works on Changing the attitude and motivation level of
employees.
6. Cause and effect relationship:- The principles of management are based upon
cause and effect relationship between various factors so that they can be used in
similar situations in large number of cases.
7. Contingent:- The applicability of management principles depends on the prevailing
situation at particular point of time. So in order to achieve organisational goals, the
managerial principles can be changed or amended as per situation.
Significance of Principles of Management:-

The principles of management derive their significance from their utility. Managers may
apply these principles to fulfil their tasks and responsibilities. Principles guide managers in
taking and implementing decisions.
Page 23 of 168
Term-1
1. Providing managers with useful insight into reality:- The knowledge of

principles of management enhances the knowledge and understanding of different
types of managerial situations and so enables the managers to deal with various issues
and situations. These promote managerial efficiency.
2. Optimum utilisation of resources and effective administration: The
principles of management focuses on well planned activities and systematic
arrangement of different resources in the organization. The principles are designed to
ensure optimum utilisation of resources and promotes effective administration.
3. Scientific decisions:- The knowledge of principles of management enables the
managers to objectively assess the situation and problems in the organisation as a
result it enables the managers to take decisions based on logic rather than guesswork.
4. Meeting changing environmental requirements:- The business
environment is dynamic in nature and can be modified according to the given
situations thus the principles of management meet the changing business
requirements.
5. Fulfilling social responsibility :-The knowledge of principles of management
helps the organisation in fulfilling its social responsibility towards various interest
groups like employees, customers, government, investors etc. by ensuring optimum
utilisation of resources.
6. Management training, education and research:- The principles of
management focuses on scientific judgment and logical thinking. These principles
provide complete body of knowledge to perform research work and generate more
and more knowledge
Fayol’s Principles of Management:-
Henry Fayol: Henry Fayol (1841-1925) got degree in Mining Engineering and joined
French Mining Company in 1860 as an Engineer. He rose to the position of Managing
Director in 1988, when the company was on the verge of bankruptcy. He accepted the
challenge and by using rich and broad administrative experience, he turned the
fortune of the company.
For his contributions, he is well known as the “Father of General Management”.
Henri fayol's 14 principles of management
1. Division of work:- According to this principle the whole work must be divided
into small tasks or jobs and each job must be assigned to a trained specialist who is
competent to perform it. It leads to specialization, simplifies the work and increases
efficiency.
2. Authority and Responsibility:- Authority refers to right of a person to
command or give orders. Responsibility refers to the obligation of performing the
assigned task with maximum efficiency. According to this principle there must be a
parity between authority and responsibility. Higher authority may be misused and
higher responsibility may lead to non-achievement of targets.
3. Discipline :- In Management discipline refers to obedience to rules and regulations
of organization. regulating behavior of employees, feeling of respect for one another,
clear and fair agreement and judicious application of penalties.
Page 24 of 168
Term-1
4. Unity of command:- According to this principle each subordinate should receive

orders and should be accountable to only and only one superior at one point of time.
Dual subordination should be avoided as it creates confusion in subordinates mind
and conflicts between superiors.
5. Unity of direction:- This principle states that there should be one head and one
plan for each group of activities which has same objective. It shows unity of action,
coordination and avoids unnecessary duplication of work.
6. Subordination of individual interest to general interest:- According to
this principle when choice is to be made between in the interest of individuals and the
interest of organization as a whole, priority must be given to the organizational
interest.
7. Remuneration of employees:- According to this principle overall pay and
compensation should be fair to both employees and organisation. Employee should be
paid fair wages at least to maintain reasonable standard of living. Moreover the
remuneration decided must be within the paying capacity of the organisation.
8. Centralisation and decentralization:- According to this principle there must
be a balance between centralization and decentralization. Complete centralization
must be avoided as it leads to delay in work. Complete decentralization must be
avoided as it leads to loss of control by the top management. So balance should be
maintained between the two. It leads to quick decisions at middle and operational
level, decrease is workload of superiors and encourage the subordinates.
9. Scalar chain:- According to this principle organisations must have a chain of
authority and communication. It should be followed by managers and subordinates.
The formal line of authority from highest to lowest rank is known as Scalar Chain.
Gang Plank- in case of urgency gang plank allows direct communication between two
employees of same level without following the scalar chain principle.
10. Principle of order:- According to this principle there must be a proper place for
everything and everyone and they must be placed at their proper place. In other
words it means orderly arrangement of man, machine and material resources so as to
avoid wastage of time in tracing the resources. It leads to smooth and systematic
working of organization.
11. Principle of equity:- According to this principle there should not be any kind of
discrimination among employees on the basis of religion, language, cast, gender,
nationality etc. This principle ensures justice in the behavior of Management
towards workers. It increases satisfaction and motivation among employees and
encourages cordial relations between management and workforce.
12. Stability of personnel:- According to this principle there should be stability
and continuity of tenure of personnel. Fayol states that employees must be selected
and appointed rationally and they should be kept at their position for a minimum
period and must be given reasonable time to show results. Continuous changes in
terms of transfers and terminations may create insecurity among employees which
on one hand reduces the efficiency of the employees and on the other hand reduces
the reputation and goodwill of the firm as well.
13. Principle of initiative:- According to this principle, Fayol states that workers
should be encouraged and given an opportunity to take initiative in making, creating
and executing the plans. Initiative means taking responsibility as a first step with
self-motivation. Initiative should be encouraged in the organisation by adopting
employees suggestion system and giving rewards for best suggestions. It increases
loyalty, satisfaction and belongingness in employees.
Page 25 of 168
Term-1
14. Principle of Esprit de Corps:- According to this principle management should

promote Team Spirit and harmony among its employees. It should encourage team
targets and replace “I” with “we” in all the conversations with the team.
Management should develop atmosphere of mutual trust and belongingness.
Taylor’s Scientific Management

Fredrick Winslow Taylor (1856-1915) was a person who within a very short duration
(1878-1884) rose from ranks of an ordinary apprentice to chief engineer in Midvale
Steel Company, U.S.A.
Taylor conducted a number of experiments and came to conclusion that workers were
producing much less than the targeted standard task. Also, both the parties –
Management and workers are hostile towards each other.
He gave a concrete shape to the theory of Scientific management.
His two important contributions are:-
“ Shop Management” and “ Principles of Scientific Management”.
Meaning of Scientific Management :- Scientific management refers to use of

scientific, systematic, objective and logic based principles and techniques to all the
managerial functions. Scientific management focuses on one best way of doing a work.
It is also defined as application of science for each and every element of Management.
Principles of Scientific Management
1. Science not rule of thumb:- According to this principle there should not be rule
of thumb ie. hit and trial method, rather there should be scientific study and approach
for each element of a job. Taylor states that while determining standard time or
standard method one should not consider estimates, past experience, hit and trial
method. Standards must be scientifically analyzed and proper investigation is needed
to determine standards.
2. Harmony, Not Discord (Conflict):- According to Taylor in an organization there
should be complete harmony between the management and workers. Both should
realize that each one is important. To achieve harmony, Taylor suggested a technique
of complete ‘Mental Revolution ‘on the part of both management and workers.
Management should share the gains of the company with workers, fulfill their
promises and at the same time workers must contribute their level best for the
organization.
3. Co-operation, not individualism – This principle is an extension of “Harmony,
not discord”. This principle states that there should be complete cooperation between
management and workers instead of individualism. Management should take workers
into confidence and give them participation in decision making. Workers should not
indulge in unnecessary strikes and raise unreasonable demands. Taylor suggested that
there should be equal division of work and responsibility between the workers and the
management.
4. Development of each and every person to their greatest efficiency
and prosperity – This principle states that the efficiency of all workers is a must for
which they have to be provided with maximum prosperity. For this, Taylor advocated
scientific methods for selection, training and development of workers. If workers put
in their best effors, it ensures maximum prosperity not only to workers but also to the
organization.
Page 26 of 168
Term-1
Techniques of Scientific Management
1. Functional Foreman-ship: In this technique Taylor suggested the division of

factory into two departments-Planning Department and Production (execution)
Department. There are eight types of specialized, professionals, four each under
planning and execution who keep a watch on all workers to extract optimum
performance.
Planning Department In charges:
1. Route Clerk :-He specifies the exact sequence and route of production.
2. Instruction card clerk :- He is responsible for drafting instructions for the
workers.
3. Time and cost clerk:-He prepares time and cost sheet for the job.
4. Disciplinarian :- He ensures discipline and enforcement of rules and
regulations among the workers.
Production Department In charges:

1. Gang boss:- He is responsible for keeping tools and machines ready for
operation.
2. Speed boss:- He is responsible for timely and accurate completion of job.
3. Repair boss:-He ensures proper working conditions of tools and machines.
4. Inspector:-He checks quality of work and output.
2. Standardization and Simplification of Work :-Standardisation refers to

the process of setting standards for every business activity, i.e standardization of
process, standardization of raw materials, standardization of time, standardization
of product etc. Standardisation does not mean quality standards only but it refers
to setting up standards for size, type, weights and quality of product.
Simplification aims at eliminating unnecessary diversity of products.
The objectives of standardization are:
a) To establish standards of performance of men and machines.
b) To establish interchangeability of manufactured parts and equipments.
c) To specify a given line of products to fixed type, size, colour etc.
d) To maintain quality standards
3. Work Study: Work study is a systematic, objective oriented, analytical and critical
assessment of the performance of workers in various operations in a workshop. Its
various aspects are:
(a) Method study :- The objective of method study is to find out one best way of
doing the job to maximize efficiency in the use of materials, machinery,
manpower and capital. Taylor suggested that method of production should not
be decided by the rule of thumb method but all the methods must be tried in
the organization and the one which brings maximum benefits with minimum
cost must be selected.
Page 27 of 168
Term-1
(b) Motion Study :- Motion study refers to the study of movements like lifting,
putting objects, sitting and changing positions etc., which are undertaken
while doing a typical job. Unnecessary movements are sought to be eliminated
so that it takes less time to complete the job efficiently.
(c) Time Study :- It determines the standard time taken to perform a well-defined
job. The objective of time study is to determine the number of workers to be
employed, frame suitable incentive schemes & determine labour costs.
(d) Fatigue Study:- Fatigue study seeks to determine time and frequency of rest
intervals in
completing a task. The rest interval will enable workers to regain their lost
stamina thereby avoiding accidents, rejections and industrial sickness.
4. Differential Piece Wage System:- Differential piece rate system is a system

of wages’ payment in which efficient and inefficient workers are paid at different
rates. Taylor has suggested two types of wages for similar work. Differential piece
rate system suggests two piece rate-higher rate for efficient workers who produce
the standard output or more and lower rate for inefficient workers who produce
less than the standard output.
5. Mental Revolution: It involves a complete change in mental outlook and

attitude of workers and management towards one another from competition to
cooperation. The management should create pleasant working conditions &
workers should work with devotion and loyalty. Instead of fighting over
distribution of profits, they must focus attention on increasing it.
Page 28 of 168
Term-1
Practice questions:-
MCQ ie. Multiple Choice Questions
S.no. Questions:-
1. Name the principle of management given by Fayol which when applied would mean
that the workers and management both honour their commitments without any
prejudice towards one another.
(a) Discipline
(b) Mental Revolution
(c) Remuneration of employees
(d) Scalar chain
2. The principle of management given by Fayol which aims at preventing overlapping of
activities is:
(a) Division of work
(b) Unity of Command
(c) Unity of Direction
(d) Order
3. Taylor believed that there was only one best method to maximize efficiency. This
method can be developed through study and analysis. Identify the principle of Scientific
management being discussed above:
(a) Harmony not discord
(b) Science not rule of thumb
(c) Development of each and every person to his or her greatest efficiency and
prosperity
(d) Cooperation not individualism
4. The CEO of Radhe Cycles Pvt Ltd. Mr. Kumar wants to get maximum output from the
employees at a competitive cost. On the other hand Ramakaant, an employee of the
company wants to get the maximum salary while working the least.
The Principle of management given by Fayol being violated by Ramakaant is ------------.
(a) Remuneration
(b) Equity
(c) Discipline
(d) Subordination of individual interest to general interest.
5. The technique of Scientific Management given by Taylor, which aims to establish
interchangeability of manufactured parts and products is ...……………………..
(a) Method Study
(b) Motion study
(c) Standardization
(d) Differential Piece wage system.
6. “ Panchayats in our country have been given more powers to decide and spend funds
granted to them by the government for welfare of villages. Identify the principle of
management highlighted in the statement.
(a) Equity
(b) Centralisation and decentralization
(c) Authority and Responsibility
(d) Espirit De corps
7. Which foreman is keeping the machinery and tools ready for operation by workers:
(a) Repair Boss
(b) Gang Boss
(c) Speed Boss
(d) Inspector
Page 29 of 168
Term-1
8. Gagan Limited is desirous of setting up a small factory to manufacture component parts

4 cell phone business he plans to cubes logical approach and take every decision based
on facts and figures with proper reasoning rather than relying upon hit and trial
method state the principle of scientific management used by Gagan
(a) harmony not discord
(b) cooperation not individualism
(c) science not rule of thumb
(d) development of employees to their greatest efficiency and prosperity
9. The technique of scientific management aims to determine the amount and frequency
of rest intervals that should be provided to employees during working hours
(a) time study
(b) method study
(c) motion study
10. 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 can't be exist for a long time unless
it is accompanied by prosperity for the employer and vice versa.
(a) science not rule of thumb
(b) cooperation not individualism
(c) harmony not discord
(d) All of the above
11. 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
12. Surya Limited, which is a car manufacturing company has been established for more
than 20 years. The company has made excellent profits in the past and it has a plan to
expand further. So the company did not declare bonus for last three years. The
workforce got frustrated and the trade union declared strike and demanded bonus and
other facilities, but the management decided not to accept their demands. Which
creates conflict between them.
Which principle of scientific management is overlooked in the given case?
(a) science not rule of thumb
(b) differential piece wage system
(c) harmony not discord
(d) Standardization and simplification
13. In a school, Principal makes sure that every instruction, order or information given by
him must be passed to Vice Principal then Head of the Department and then to the
teachers. Students must be informed by teachers only. In the same manner every
problem or complaint from students must pass on to the Principal through teachers,
Head of the Department and then Vice Principal. He never allows direct communication
with him.
State the principle given by Henri Fayol followed in the school.
(a) unity of command
(b) unity of direction
(c) scalar chain
(d) authorities and responsibility
Page 30 of 168
Term-1
14. The application to 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
15. Considering the fact that it is difficult to find one single person with all the needed
qualities Taylor suggested appointment of a specialist through this technique of
scientific management. Identify the technique.
(a) standardisation and simplification of work
(b) method study
(c) functional foremanship
(d) motion study
16. 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
the 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
(b) subordination of individual interest to general interest
(c) centralization and decentralization
(d) equity
17. This technique of scientific management helps in the development of concept of
assembly line, which is widely used in automobile companies these days as well.
Identify the technique.
(a) motion study
(b) standardisation and simplification of work
(c) method study
(d) Time study
18. 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) Order
(b) unity of command
(c) discipline
(d) authority and responsibility
19. In a readymade garment showroom, it is permitted that the salesmen can give discount
up to 10% at their own discretion to the customers and also the credit facility to
regular customers. But if the salesmen want to give more than 10% discount for any
special order then they have to take permission from the top level. Identify the
principle of management given by Henri Fayol.
(a) unity of direction
(b) authority and responsibility
(c) centralisation and decentralization
20. Rajiv works as a plant superintendent in a candle manufacturing company. Due to
increase in demand during festive season of Diwali, the sales manager insisted the
workers to faster the production but the production manager asked the workers to
work overtime instead of increasing the speed to maintain the quality of production.
Where as the finance manager is strictly against this practice of overtime because it will
increase the cost of production.
Page 31 of 168
Term-1
Identify and explain the management principle violated in the above case.
(a) unity of direction
(b) division of work
(c) Esprit de Corps
(d) unity of command
21. The effect of managerial principles vary from situation to situation. It is related to
which characteristic of Management principles.
(a) flexible
(b) cause and effect relationship
(c) contingent and
(d) universally applicable
22. A manager should have the right to punish a subordinate for willfully not obeying a
legitimate order but only after sufficient opportunity has been given to his or her case.
Identify the principle of management highlighted here:-
(a) equity
(b) unity of direction
(c) authority and responsibility
(d) centralisation and decentralization
23. Rajat, a manager, expects his subordinates to work for the happiness and pleasure of
being in the organisation.
Which principle of management is being overlooked?
(a) Subordination of individual to general interest
(b) Remuneration to employees
(c) Espirit de corps
(d) Centralisation and Decentralisation
24. A purchase manager of a company has to purchase 500 tonnes of raw material. Apart
from the other suppliers in the market, his son also supplies that raw material. The
manager purchases the raw material from the firm of his son at a rate higher than the
market rate.
Which principle of management has been violated in this situation?
(a) Unity of command
(b) Unity of direction
(c) Subordinating personal interest to general interest
(d) Equity
25. ‘She/He keeps machines, materials, tools, etc., ready for operations by concerned
workers’.
Whose work is described by this sentence under functional foremanship? [NCERT]
(a) Instruction Card Clerk
(b) Repair Boss
(c) Gang Boss
(d) Route Clerk
26. Which of the following statements best describes ‘Mental Revolution’? [NCERT]
(a) It implies change of attitude.
(b) The management and workers should not play the game of one upmanship.
(c) Both management and workers require each other.
(d) Workers should be paid more wages.
27. Reena and Harish are working in a company having the same educational qualification.
Hina is getting Rs. 3,000 per month and Harish Rs. 4,000 per month as salary for the
same working hours. Which principle of management is violated in this case?
(a) Unity of command
Page 32 of 168
Term-1
(b) Discipline
(c) Scalar chain
(d) Equity
28. Which of the following statements is false about Taylor and Fayol? [NCERT]
(a) Fayol was a mining engineer, whereas Taylor was a mechanical engineer.
(b) Fayol’s principles are applicable in specialised situations, whereas Taylor’s
principles have universal application.
(c) Fayol’s principles were formed through personal experience, whereas Taylor’s
principles were formed through experimentation.
(d) Fayol’s principles are applicable at the top level of management, whereas
Taylor’s principles are applicable at the shop floor.
29. How are principles of management formed? [NCERT]
(a) In a laboratory
(b) By experiences of managers
(c) By experiences of customers
(d) By propagation of social scientists
30. The Basic aim of Functional foremanship is:
(a) Not to provide free time to workers
(b) To separate Top level management from Chief Executive officers
(c) To separate planning functions from executive functions
(d) Not to divide the work
Assertion and Reasoning type questions:-

Read the following statements assertion and reason and select alternative in each case
1. Assertion (A) :- Each group of activities having the same objective must have one head
one plan.
Reason (R):- The principle of management highlighted here is “unity of direction”. All
the units of an organisation should be moving towards the same objective through
coordinated and focused efforts.
(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) :- the principles of management establish accurate cause and effect
relationships.
Reason (R):- the principles of management tell us if a particular principle was applied
in a particular situation what would what would be it's likely effect.
(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
3. Assertion (A):- The objective of time study is to determine the number of workers to be
employed; frame suitable incentive schemes and determine labour costs.
Reason (R):- Time Study is done so that a business firm can provide suitable
equipment and tools to educate workers on their use.
Choose the correct option:
(a) Both Assertion and Reason are correct and Reason is the correct explanation of the
Assertion.
Page 33 of 168
Term-1
(b) Both Assertion and Reason are correct but Reason is not the correct explanation of
the Assertion.
(c) Only Assertion is Correct
(d) Only Reason is correct
4. Assertion (A):- Each group of activities having the same objective must have ‘ONE
HEAD AND ONE PLAN’.
Reason (R):- The interest of an organization should take priority over the interest of
any individual employee.
Choose the correct option:
(a) Both Statements are correct and Reason is the correct explanation of the Assertion.
(b) Both Statements are correct but Reason is not the correct explanation of the
Assertion.
(c) Only Assertion is Correct
(d) Only Reason is correct
5. Assertion (A): According to Taylor, there should be complete cooprtation instead of
individualism between workers and management.
Reason (R): The principle of ‘harmony not discord’ says that there should be complete
harmony between management and workers.
Find the correct option:
(a) Both A and R are true and 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 true but R is false
(d) A is false but R is true
6. Assertion (A): The principles of management are intended to establish relationship
between cause and effect so that they can be used in similar situation.
Reason (R): Real business situations are predictable and perfect principles give
solutions to the problems.
7. Assertion (A): Each person should be scientifically selected and the work assigned
should suit his/her physical, mental, and intellectual capabilities so that there is no
need of training.
Reason (R): According to Taylor, the industrial efficiency depends to a large extent on
personnel competencies so concern for efficiency could be built in right from the
process of selection.

Page 34 of 168
Term-1
8. Assertion (A): Unity of command with the objective of one head and one plan ensures
unity of action and coordination.
Reason (R): As dual subordination is avoided through unity of command, there are no
confusions regarding the task to be done.
9. Assertion (A): Differential piece wage technique is based on the principle of harmony
not discord.
Reason (R): Harmony not discord emphasis on sharing the gains of the company, if any,
with the workers.
10. Assertion (A): Manager is involved in the activities of the organisation, studies critical
situations and formulates his own theories for use in a given situation. Reason (R): The
principles of management have evolved over a period of time based on repeated
experimentation and observation in different types of organisations.
Case based questions:-

Answer the following questions on the basis of given case study.
1. Raj Sharma and Madhuri Goyal are both qualified Chartered Accountants and good
friends. After obtaining a certificate of practice, they decided to pursue a career of
their own choice. Raj Sharma starts his own office in the city whereas Madhuri Goyal
joins a public company. They meet after a long time at a party. Raj Sharma invites
Madhuri Goyal to visit his office and she accepts his invitation. She observes at his
office that there is a fixed place for everything and everyone and tools and equipment
are lying in an organised manner. Also, Raj Sharma always tends to replace ‘I’ with
‘We’ while having a conversation with the staff members. Later on Raj Sharma 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 Madhuri Goyal observes at his office 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 applied?
(a) Equity
(b) Order
(c) Esprit de corps
(d) None of these
Page 35 of 168
Term-1
Q.2 Raj Sharma 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 applied?
(a) Equity
(b) Order
(c) Discipline
(d) Initiative
Q.3 Raj Sharma always tends to replace ‘I’ with ‘We’ while having a conversation with
the staff members. Which principle of management is being applied?
(a) Equity
(b) Esprit de corps
(c) Discipline
(d) Initiative
2. Jaya, a student of management at IIT, Delhi, 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 program Jaya 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.
Q.1. Name the technique of scientific management that these factories are adhering to
while manufacturing parts of such products.
(a) Method study
(b) Motion study
(c) Standardisation and simplification of work
(d) Time study
Q.2. Which scientific management technique would Jaya suggest for these factories if
they have to find out one best way of doing the job?
(a) Motion study
(b) Method study
(c) Time study
(d) Fatigue study
Q.3. Which scientific management technique would Jaya suggest for these factories if
they have to help the workers regain their stamina and enable them to work again
with the same capacity?
(a) Motion study
(b) Time study
(c) Fatigue study
(d) Method study
3. Rajat and Rashmi are students of a management course at a famous MBA college.
They were asked to prepare a project report on applicability of principles of
management in real business situations. In order to conduct the survey Rajat had
Page 36 of 168
Term-1
selected an outlet of a popular chain of fast food restaurant whereas Rashmi visited a
nearby department store. When Rajat presented his report to class, Rashmi realised
that their observations were matching on various grounds. In both the business units,
work is divided into small tasks and each is performed by a trained employee. A set of
rules are predetermined and communicated to employees for compliance and there is
a fixed place for every thing and all employees have been allotted individual space.
Moreover, the manager encourage a spirit of mutual trust and belongingness among
the employees so that need for imposing penalties is reduced.
Q.1. Identify the principal of management in the following lines “work is divided into
small tasks and each is performed by a trained employee.”
(a) Unity of direction
(b) Unity of command
(c) Division of work
(d) Initiative
Q.2. Identify the principal of management in following lines “A set of rules are
predetermined and communicated to the employees for compliance.”
(a) Discipline
(b) Scalar chain
(c) Unity of command
(d) Unity of direction
Q.3. Identify the principles of management in the following lines: “There is a fixed
place for everything and all employees have been allotted individual space”
(a) Unity of direction
(b) Order
(d) Scalar chain
(d) Equity
Page 37 of 168
Term-1
ANSWER KEY
MCQ Multiple Choice Question
S. no. 1 2 3 4 5 6 7 8 9
Ans. (a) (c) (b) (d) (c) (b) (b) (c) (d)
S. no. 10 11 12 13 14 15 16 17 18
Ans. (c ) (b) (c) (c) (c) (c) (b) (c) (c)
S. no. 19 20 21 22 23 24 25 26 27
Ans. (c) (d) (c) (c) (b) (c) (c) (a) (d)
S. no. 28 29 30
Ans. (b) (b) (c)
Assertion and Reasoning type questions:-

S. no 1 2 3 4 5 6 7 8 9
Ans. (a) (d) (c) (b) (b) (c) (d) (d) (a)
S. no 10
Ans. (b)
Case based questions:-

1. CASE Q. 1. Q.2. Q.3.
Ans. (b) (a) (b)
2. CASE Q. 1. Q.2. Q.3.
Ans. (c ) (b) (c)
3. CASE Q. 1. Q.2. Q.3.
Ans. (c) (a) (b)
Page 38 of 168
Term-1
CHAPTER – 3
BUSINESS ENVIRONMENT
QUICK REVISION
1.BUSINESS ENVIRONMENT MEANING
Business environment means the sum total of all individuals, institutions and other forces that
are outside the control of a business enterprise but that may affect its performance.
2.NATURE/FEATURES OF BUSINESS ENVIRONMENT

i) Totality of external force :- Business environment is the sum total of all those
factors/forces which are available outside the business and over which the business has no
control
ii) Specific and general force :- Specific force affects individual enterprises directly and
immediately in their day to day working like, consumers, investors, general force affects all
business enterprises indirectly and equally like, political, economic and technological
conditions.
iii) Inter-relatedness :- The different facts or parts of the business environment are closely
inter – related.
iv) Dynamic nature :- it is clear that the environment is a mixture of many factors and
changes in some or the other factors continue to take place. Therefore, it is said that the
business environment is DYNAMIC.
v) Uncertainty :- It is uncertain as it is difficult to predict the behavior of environmental
factors as they continue to change quickly.
vi) Complexity :- Business environment is a complex phenomenon that is relatively easier to
understand in parts but difficult to grasp in its totality.
vii) Relatively :- Business environment is a relative concept since it differs from county to
county and even region to region.
3. IMPORTANCE OF BUSINESS ENVIRONMENT

i) Helps to get the first mover advantage:- It helps to reorganize opportunities from the
business environment, thus, taking first mover advantage.
ii) Helps the firm to identify threats and early warning signals :- It is necessary to detect
warning signals in advance. It enables the managers to make new strategies to handle such
threats and minimize its effects.
iii) Helps in tapping useful resources :- If growth indicators are available, then business
will arrange human resources, higher working capital, etc. In advance to increase production
and for other activities like marketing.
iv) Helps in coping with rapid changes :- Today’s business environment is getting
increasingly dynamic where changes are taking place at a fast pace. Therefore, to cope up with
rapid changes it becomes necessary for the managers to understand the business
environment.
Page 39 of 168
Term-1
v) Helps in assisting in planning and policy formation :- It provides various clues about
competitors, investors , customers and employees, etc. Which helps in planning and policy
making.
vi) Helps in improving performance :- Identifying organizational opportunities and threats

by scanning business environments and framing policies in the light of strengths and
weaknesses of an enterprise ensures improvement in organization performance.
4.Dimensions of Business Environment

Dimensions or the factors constituting the business environment consist of the external
forces, which directly or indirectly affect the functioning of a business enterprise.
The following are the dimensions of the business environment
(i)Economic Environment :-It consists of the factors and forces concerning means of
production and distribution of wealth . e.g. balance of trade, balance of payment, money
supply in the economy, etc.
(ii)Social Environment :- It consists of all the social and cultural forces within which
business firms operate . e.g. Quality of life, Family structure and Value, etc.
(iii)Technological Environment :-It includes forces relating to scientific improvement and

innovations , which provide new ways of production , method and techniques . e.g. Innovation
and Invention, Scientific improvement, etc.
(iv)Political Environment :-It consists of the forces concerning management of public affairs
and their impact on business. e.g. Political structure, Political system, Foreign policy, Trade
policy, etc.
(v)Legal Environment :-It provides the regulatory framework, within which business has to
function . e.g. Packets of cigarettes must carry the statutory warning , Workers should be paid
minimum wages ,etc .
Page 40 of 168
Term-1
MULTIPLE CHOICE QUESTIONS

Choose the correct option in the following questions :
1. Business environment is the sum total of all things external to business firms and , as such ,
is aggregative in nature. Which feature of the business environment is highlighted by this
statement .
[A] Specific and General Forces.
[B] Dynamic Nature.
[C] Inter-Relatedness.
[D] Totality Of External Forces.
2. Increase life expectancy of people and increased awareness for healthcare have increased
the demand for many health products and services like diet coke , fat-free cooking oil , and
health resorts. which feature of the business environment is highlighted by the above
statement .
[A] Specific And General Forces.
[B] Dynamic Nature.
[C] Inter-Relatedness.
[D] Totality Of External Forces.
3. The attitude of the government officials towards business may have either positive or
negative impact upon business. Which factor of the general environment of business is
highlighted by this statement.
[A] Technological Environment.
[B] Political Environment.
[C] Social Environment.
[D] Legal Environment.
4 .Which of the following does not characterise the business environment?

[A] Uncertainty
[B] Employees
[C] Relativity
[D] Complexity
5. Which of the following best indicates the importance of the business environment ?
[A] Identification
[B] Improvement In Performance.
[C] Coping With Rapid Changes.
[D] All Of Them .
6 .Which of the following is an example of a social environment ?
[A] Money Supply In The Economy.
[B] Consumer Protection Act.
Page 41 of 168
Term-1
[C] The Constitution Of The Country.

[D] Composition Of Family.
7. Business environment is a group of ___________powers.
[A] Special
[B] General
[C] Internal
[D] Special And General.
8. Which of the following is not included in the special power of the business environment?
[A] Technical Situation.
[B] Customers
[C] Suppliers
[D] Investors
9. Which of the following is available in time with the help of the study of the environment?
[A] Government Help
[B] Foreign Aid
[C] Warning Signal.
[D] Material
10. The study of the environment makes available _______________resources .
[A] Costly
[B] Cheap
[C] Inferior
[D] Useful
11. Which of the following is undergoing quick changes ?
[A] Competition
[B] Fashion
[C] Technique
[D] All The Above
12. ITC Hotels made a study of the business environment and planned to open ______in India and
abroad.
[A] Factories
[B] Hotels
Page 42 of 168
Term-1
[C] Shops
[D] Offices
13. With the help of the study of the business environment an organisation can improve its
_____________.
[A] Present
[B] Future
[C] Present And Future
[D] Past
14.Which of the following is not a part of the internal environment?
[A] Customers
[B] Objectives
[C] Policies
[D] Organisation Structure
15.Which of the following is included in the micro environment {operating environment}?
[A] Suppliers
[B] Competitors
[C] Suppliers And Competitors
[D] Economic Environment
16 Which of the following is included in the macro environment{general environment}?
[A] Economic Environment
[B] Political Environment
[C] Legal Environment
[D] All The above
17.A firm should make efforts to have _________type of customers.
[A] One
[B] Two
[C] Three
[D] Many
18 . Which of the following is included in the economic environment?
[A] Economic System
[B] Economic Policies
Page 43 of 168
Term-1
[C] Economic Conditions

[D] All The Above
19.Determination of the economic policies is for the purpose of regulating __________
[A] Political Environment
[B] Social Environment
[C] Legal Regulatory Environment
[D] Economic Activities
20. Under which environmental effect , IBM and coca cola had to leave India.?
[A] Political
[B] Social
[C] Economical
[D] Technical
21.which of the following is a factor of the social environment of business ?

[A] Customs
[B] Level/Standard Of Education
[C] Rate Of Interest
[D] All The Above
22. Which component of business environment resulted in the relaxation of ban imposed on the
foreign direct investment?
[B] Political Environment
[C] Social Environment
[D] Legal Regulatory Environment
23. With the introduction of Photostat Machines in the market , the carbon paper industries was
adversely affected. Which component of the environment was responsible for it?
[A] Economic
[B] Political
[C] Technical
[D] All The Above
Page 44 of 168
Term-1
24. Which factor is not included in the internal environment?

[A] Objective
[B] Policies
[C] Public
[D] Production Method
25. Which factor is not included in the micro environment?
[A] Customer
[B] Public
[C] Supplier
[D] Production Capacity
26. Which factor is not included in the macro environment ?
[B] Competitors
[C] Social Environment
[D] Political Environment
27. 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 the business
environment being described in the above case.
[A] Dynamic nature
[B]Uncertainty
[C]Relativity
[D]Interrelatedness
28 . Which of the following is not a part of the business environment of business?

[A] Customers
[B] Suppliers
[C] Competitors
[D] None of the above
29 . Dynamic nature of the business environment suggests that it is pervasive. (true/False)
30 . Investors and customers are the two components of specific forces of business
environment .(True/False)
Page 45 of 168
Term-1
31. Match the following .
Column I Column II
A Lifestyle and values (i) Economical environment
B Payment through e-wallets (ii) Political environment
C Rise in inflation (iii) Legal environment
D Attitude of government towards (iv) Technological environment
business
E Statutory warning on advertisement (v) Social environment
Find the correct option.
A B C D E A B C D E
(a) (i) (ii) (iii) (iv) (v) (b) (ii) (v) (iv) (iii) (i)
(c) (v) (iv) (i) (ii) (iii) (d) (iv) (i) (ii) (iii) (v)
32. Match the “Features of Business Environment” in Column I with their respective
statements in Column II
Column I Column II
a. Relativity (i). Social , Political , Legal and technological
conditions .
b. Specific forces (ii) Business environment is related to the local
Conditions.
c. General forces (iii) Investors customers , competition and
suppliers
(a) (i) , (iii) , (ii) (b) (iii) , (ii), (i)

(c) (ii) , (iii) , (i) (d) (i) , (ii) , (iii)
33. Match the point of” Importance of Business Environment “in Column I with their
respective statements in Column II
Column I Column II
a. First mover advantage (i). Besides opportunities environment
Provides numerous threats as well .
b. Early warning signal (ii) Environment provide numerous
Opportunities.
c. Planning and policy formulation (iii) It provides the base for future course of
action and developing guidelines for
decision making .
(a) (ii) , (i), (iii) (b) (iii) , (i) , (ii)

(c) (iii), (ii), (i) (d) (i) , (ii), (iii)
Page 46 of 168
Term-1
34. Match the various “Dimensions of Business Environment” in Column - I with their
respective component in Column- II :
Column I Column II
a. Economic (i). Birth and Death rates .
b. Social (ii) Money supply in the economy .
c. Technological (iii) Medicines .
(a) (ii) , (i), (iii) (b) (i) , (ii) , (iii)

(c) (iii), (ii), (i) (d) (iii) , (i), (ii)
35. Match the various “Dimensions of Business Environment” in Column - I with their
respective Impact in Column- II :
Column I Column II
a. Technological (i) A decrease in the bank interest rates
Significantly increases the demand of
products and vice - versa.
b. Economical (ii) The demand shifts from typewriters to
computers .
c. Legal (iii) Baby food must necessarily informs the
Potential buyers that
“Mother food is the best ” .
(a) (i) , (ii), (iii) (b) (ii) , (i) , (iii)

(c) (ii), (iii), (i) (d) (iii) , (ii), (i)
Case Study Based MCQs

Q36. Read the following text and answer the following questions on the basis of the
same:
The name and taste of Coca-Cola is known to almost each and every individual in India 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, Coca- Cola 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
established the connection between every occasion and the need for Coke to be present
there, product design and creative advertising.
Page 47 of 168
Term-1
(a)In the context of the above given case, identify one valid importance of the Business
Environment.
(a) Enables a firm to identify opportunities and getting first mover advantage
(b) Uncertainty
(c) Delay in action
(d) Pervasive function
Ans. (a) Enables a firm to identify opportunities and getting first mover advantage
(b) Identify the features of the 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
Ans. (b) Specific and general forces
(b) Which business environment did Coca- Cola majorly tap into?
(a) Technological Environment
(b) Social Environment
(c) Political Environment
(d) Economic Environment
Ans. (b) Social Environment
(d) 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
Ans. (c) Coca-Cola Avocado
Q 37. Read the extract given below and answer the questions on the basis of the same:
Rapid Tours Ltd. is a travel agency which books rail tickets on commission basis. It takes
two days for Rapid Tours to get tickets from the Railway Reservation Counter and deliver
the tickets to the consumers. In the last one year, there has been a drastic decrease in its
business as most of the consumers have shifted to Satya Tour. (another travel agency)
who spotted this weakness of Rapid Tours Ltd. and came up with the option of providing
the tickets within 1/2 hour through the use of the internet. Moreover, Satya Tours also
provides discounts and special offers on bookings during the festive season .
(a) Which component of the business environment is being overlooked by Rapid Tours
Ltd.?
(i) Legal
(ii) Technological
Page 48 of 168
Term-1
(iii) Economic
(iv) Political
Ans. (ii) Technological
(b)Identify the features of the business environment highlighted in the following

statement:”Change of booking of rail tickets from Railway Reservation Counter to
Internet.”
(i) Inter-relatedness
(ii) Relatively
(iii) Dynamic nature
(iv) Totality of external forces
Ans. (iii)Dynamic nature
(c )Which dimension of the business environment is highlighted in the following

statement:” Satya tours also provides discounts and special offers on bookings during
festive season”.
(i)Social
(ii)Legal
(iii)Technological
(iv)Economic
Ans (i) Social
(d)“In the last one year …………………………………. the use of the internet.” This line
highlights one of the points of importance of the business environment. Identify it.
(i) Identification of opportunities and taking first move over advantage

(ii) Identification of threats and early warning signals
(iii)Tapping of useful resources
(iv)None of the above
Ans.(i) Identification of opportunities and taking first move over advantage
Q 38. Read the extract given below and answer the questions on the basis of the same:
Amit and Mohit 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 the internet.
They discussed the idea with Professor Mr. Kashyap who liked the idea suggested they
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.
Page 49 of 168
Term-1
(a)Identify the component of the business environment. highlighted in the above

paragraph
(i) Social
(ii) Economic
(iii) Technological
(iv) Legal
Ans. (iii) Technological
(b) "They discussed the idea with their Professor Mr Kashyap who liked the idea and
suggested they 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". Identify the features of the business environment
highlighted in these lines.
(i) Specific and general forces

(ii) Relativity
(iii) Inter-relatedness
(iv) Dynamic nature
Ans (i) Specific and general forces
(c)"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."
Identify which of the following points highlights the importance of the business
environment in the above lines.
(i) It helps the firm to cope up with rapid changes.

(ii) It helps the firm to identify threats and early warning signals.
(iii) It is dynamic in nature.
(iv) It helps in improving performance.
Ans. (ii) It helps the firm to identify threats and early warning signals.
(d) "This alignment of business operations with the business environment will result in
better performance.” Identify which of the following points highlights the
importance of the business environment in the given lines.
(i) It helps in planning and policy formulation.
(ii) It helps in improving performance.
(iii) It helps tapping useful resources.
(iv) It helps in coping up with rapid changes.
Ans. (i) It helps in planning and policy formulation
Q39. Read the extract given below and answer the questions on the basis of the same:
The organic food market in India is growing at 25-30% which reflects a clear shift in
consumer tastes and preferences. The current growth in the organic food market is driven
by multiplicity of factors like rising health consciousness, changing lifestyles, increase in
disposable income and growing availability of organic food products in shopping malls, retail
outlets and online.
Page 50 of 168
Term-1
(a) Identify the feature of business environment highlighted in the given line of the
extract, "The organic food.............. preferences.
(i) Dynamic nature
(ii) Complexity
(iii) Uncertainty
(iv) Relativity
Ans. (i) Dynamic nature
(b) Identify the feature of business environment highlighted in the given line of the
extract, "The current growth ………………….. online."
(i) Inter-relatedness
(ii) Uncertainty
(iii) Complexity
(iv) Relativity
Ans . (i) Inter-relatedness
(c) Which component of general forces is highlighted in the phrase, "Rising health
consciousness, changing lifestyles"?
(i) Social
(ii) Economic
(iii) Legal
(iv) Political
Ans . (i) Social
(b) Which dimension of business environment is highlighted in the phrase, Increase

in disposable income?
(i)Social
(ii)Economic
(iii)Technological
(iv)Legal
Ans. (ii) Economic
40. Read the extract given below and answer the questions on the basis of the same:
‘On Your Marks’ is a good shoe manufacturing company. The company is the first to 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 manpower 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
Page 51 of 168
Term-1
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.
(i)Which features of the business environment are highlighted in the above case?
(a) Totality of external forces
(b) Inter-relatedness.
(c)Both (a) &(b)
(d)None of the above
Ans . (c)Both (a) &(b)
(ii) Identify the importance of the 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

Ans . (d)Both (a)&(b) are correct
(iii) Which dimension of the business environment is highlighted above?

(a) Political Environment
(b) Legal environment
(c) Social environment
Ans . (a) Political Environment
(iv) What strengths of the company are discussed in this case.
(a)Good relationship with suppliers
(b)Good manpower
(c)Good customers
Ans. (b)Good manpower
ASSERTION – REASON QUESTIONS

Read the following statement -Assertion {A} and Reason {R}. choose one of the correct
alternatives given below :
[a] Both Assertion [A] and reason [R] are true and Reason [R] is correct
explanation of Assertion [A].
Page 52 of 168
Term-1
[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.
1. Assertion [A]: Totality of external forces is an important feature of the business

environment.
Reason [R]: Business environment is the sum total of all things external to business
organisations and ,as such, is aggregative in nature.
2. Assertion [A]: Business environment includes both specific and general forces.
Reason [R]: specific forces (such as social ,political ,legal and technological
conditions) have impact on all business enterprises.
3. Assertion [A]: Business environment has a dynamic nature.

Reason [R]: Business environment keeps on changing whether in terms of
technological improvement, shifts in consumer preferences or entry of new
competitors in the market.
4. Assertion [A]: Business environment is very certain.

Reason [R]: It is very difficult to predict future happenings.
5. Assertion [A]: Business environment is a complex phenomenon.

Reason [R]: It may be difficult to know the extent of the relative impact of various
factors ( Social ,economic ,etc) .on change in demand of a product.
6. Assertion [A]: Different elements of the business environment are closely interrelated.
Reason [R]: Business environment is a relative concept since it differs from country
to country and even region to region.
7. Assertion [A]: just like human beings, business enterprises do not exist in isolation.
Reason [R]: Each business organisation survives and grows within the context of the
element and the forces of its environment.
8. Assertion [A]: Maruti Udyog became the leader in the small car market.
Reason [R]: The understanding of business environment enables the firm to identify
opportunities and getting the first mover advantage.
9. Assertion [A]: It is not the fact of change itself that is shown as important as the place
of change.
Reason [R]: Today 's business environment it is getting increasingly stable
environment where changes are taking place at a slow speed.
Page 53 of 168
Term-1
10. Assertion [A]: The enterprise should design policies that allow it to get the resources
that it needs .
Reason [R]: the enterprise depends on the environment as a source of inputs or
resources and as an outlet for outputs.
11. Assertion [A]: In case of construction companies , low longer - term interest rates are
beneficial.
Reason [R]: They result in increased spending by consumers for buying homes on
Borrowed money.
12. Assertion [A]: Social trends present various opportunities and threats to business
enterprises.
Reason [R]: The health -and-fitness trend has created a demand for products like
organic food, Gyms , mineral water and food supplements.
13. Assertion [A] : Now- a - days manufacturers have flexible manufacturing systems.
Reason [R] : The retailers have direct links with suppliers who replenish stocks
when needed.
14. Assertion [A] : The advertisement of alcoholic beverages is prohibited.

Reason [R] : Impact of legal environment can be illustrated with the help of
government regulations to protect consumer's interests.
15.Assertion [A] : An adequate knowledge of rules and regulations framed by the

government is a prerequisite for better business performance.
Reason [R] : Non -compliance of laws can land the business enterprise into legal
problems.
____________________________
Page 54 of 168
Term-1
ANSWER KEY OF MULTIPLE CHOICE QUESTIONS

Q. NO ANSWER Q. NO ANSWER Q. NO ANSWER
1. (D) 16. (D) 31. (C)
2. (C) 17. (D) 32. (C)
3. (B) 18. (D) 33. (A)
4. (B) 19. (D) 34. (A)
5. (D) 20. (A) 35 (B)
6. (D) 21. (D)
7. (D) 22. (D)
8. (A) 23. (C)
9. (C) 24. (C)
10. (D) 25. (D)
11. (D) 26. (B)
12. (B) 27. (D)
13. (C) 28. (D)
14. (A) 29. FALSE
15. (C) 30. TRUE
ANSWERS KEY OF ASSERTION AND REASON

Q. NO ANSWER Q. NO ANSWER Q. NO ANSWER
1 (a) 6 (b) 11 (a)
2 (c) 7 (a) 12 (a)
3 (a) 8 (a) 13 (a)
4 (d) 9 (c) 14 (a)
5 (a) 10 (a) 15 (a)
Page 55 of 168
Term-1
CHAPTER-4
PLANNING
QUICK REVISION
⋆ Concept of Planning:- Planning is defined as the process of setting objectives for
a given time period, formulating various courses of action to achieve them and then
selecting the best possible alternative from among the various courses of action
available.
⋆ Steps in Planning Process:-

1) Setting objectives : Objectives may be set for the entire organisation and each
department or unit within the organisation . They specify what the organisation wants
to achieve.
2) Developing Premises: Planning premises are the assumptions made about the
future. Assumptions are made in the form of forecasts about the demand for the product
etc. Planning premises are base material upon which plans are to be drawn.
3) Identifying alternative courses of action: There may be many ways to achieve the
objectives , all the alternatives courses of action should be identified and thoroughly
discussed.
4) Evaluating alternative courses of action: The positive and negative aspects (i.e.,
feasibility & consequences) of each alternative are evaluated.
5) Selecting an alternative: It involves scrutinizing the feasibility and consequences of
each alternative before a choice is made. This is real point of decision-making. The best
plan would be the most feasible , profitable and with least negative consequences .
6) Implementing the plan: It means putting the plan into action. This is the step where
other managerial function also come into the picture. The step would also involve
organising for labour and purchase of machinery.
7) Follow up action : It involves seeing that activities are performed according to plans.
Monitoring the plans is equally important to ensure that objectives are achieved.
⋆ Features of Planning:-
1) Planning focuses on achieving objectives as specific goals are set out in the plans
along with activities to be undertaken to achieve the goals. (Thus, planning is
purposeful)
2) Planning is futuristic as it involves looking ahead and preparing for the future to meet
future events effectively to the best advantage of the organisation.
3) Planning involves decision making as it involves evaluation of each alternative course
of action and choose the most appropriate one.
4) Planning is a mental exercise as it is an intellectual activity of thinking rather than
doing. It requires application of mind involving foresight, intelligent imagination and
sound judgement.
Page 56 of 168
Term-1
5) Planning is the primary function of management as it lays down the basis for all other
functions of management. All other managerial functions are performed within the
framework of the plans drawn. Thus, planning precedes other functions. This is also
referred to as the ‘primacy of the planning'.
6) Planning is pervasive as it is required in all type of organisations, at all levels of
management and in all departments of an organisation. Top management undertakes
planning for the whole organisation. Middle management does the departmental
planning. At the lowest level, day-to-day operational planning is done by supervisors.
7) Planning is continuous because of plan is framed and implemented for a specific
period of time and is followed by another plan and so on.
⋆ Importance of Planning:-
1) Provides direction: Planning provides directions by deciding in advance what action
should be taken. If there was no planning, employees would be working in different
directions and the organisation would not be able to achieve its desired goals.
2) Reduces the risks of uncertainty: Planning reduces the risk of uncertainty by
anticipating changes and developing managerial responses to them. Planning cannot
eliminate changes/ uncertainties but can predict them and prepare contingency plans to
deal with them.
3) Reduces overlapping & wasteful activities: Planning reduces overlapping Ann
wasteful activities by coordinating the activities of different divisions, department and
individuals.
4) Promotes innovative ideas: Planning promotes innovative ideas requiring
Application of mind and foresight. It is the most challenging activity for the management
as it guides all futures plan actions leading to growth and prosperity of the business.
5) Facilitates decision making: Planning facilitates decision making by making a
choice from among the alternative courses of action.
6) Establishes standards for controlling: Planning establishes standards against
which actual performance is measured. (A comparison of actual performance with the
standards helps to identify that deviations and to take correct corrective action. Thus,
planning is a prerequisite for controlling.)
⋆ Limitations Of Planning:-
1) Planning leads to rigidity. Plan is drawn with specific targets in a specific time
frame. Once the plans are drawn, the managers may not be able to change them. It may
not be in the best interest of the organisation when circumstances change.
2) Planning may not work in a dynamic environment as the organisation has to
constantly adapt itself to changes.
3) Planning reduces creativity as it is Mostly done by the top management ;rest of the
members just carry out orders and think on the same lines as other. They are neither
allowed to deviate from plans nor are they permitted to act on their own. Thus, their
initiative or creativity gets lost or reduced.
Page 57 of 168
Term-1
4) Planning involves huge costs in terms of time and money. Sometimes cost incurred
may not justify the benefits derived from the plan.
5) Planning is time consuming and sometimes not much time is left for its
implementation.
6) Planning does not guarantee success unless it is translated into action. Managers
have a tendency to rely on previously tried and tested successfully plans which may
create a false sense of security and lead to failure.
⋆ Multiple Choice Questions:-
1) All managers dream to increase their sales and strive to achieve the organisational
goals but it changes 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
a) Controlling b) Organising c) Planning d) All of these
2) 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.
a) Controlling b) Planning c) Organising d) Staffing
3) Identify the feature of planning
(a) It leads to rigidity
(b) It reduces creativity
(c) It is pervasive
(d) It involves huge cost
4) Which of the following is not an advantage of Planning?

(a) Uniformity of action
(b) Flexibility of working
(c) Preventing misunderstandings and conflicts
(d) Reducing risk and uncertainties
5) At times, Planning is a mere ritual in modern organisation as it suffers from

(a) Rigidity
(b) Lack of forecasting
(c) Turbulent business environment
6) It requires application of mind involving of mind involving foresight, intelligent

imagination and sound judgement. Which feature of planning is being highlighted?
(a) Planning is pervasive
(b) Planning is a mental exercise
(c) Planning is futuristic
(d) Planning is futuristic
Page 58 of 168
Term-1
7) 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.
(a) Planning may not work in dynamic environment
(b) Planning leads to rigidity
(c) Planning is time consuming
(d) Planning involves decision making
8) 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.
(a) It involves decision making
(b) It is a mental exercise
(c) It is futuristic
(d) It is pervasive
9) 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.
(a) Effectiveness (b) Efficiency (c) Planning (d) All of these
10) 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
(a) Follow up
(b) Developing Premises
(c) Evaluating alternative courses of action
(d) Identifying alternative courses of action
11) 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.
(a) Developing Premises
(b) Evaluating alternative courses of action
(c) Implementation of plan
12) To see whether plans are being implemented and activities are being performed
according to schedule in a step of planning process. Identify the step.
(a) Follow up of plan
(b) Evaluating alternative courses of action
Page 59 of 168
Term-1
13) Planning requires peeping into near future, analysing it and predicting it. Identify
the related feature of planning.
(a) Planning is futuristic
(b) Planning is goal oriented
(c) Planning is mental exercise
(d) Planning focuses on achieving objectives
14) Which of the following statement not true with reference to planning?
(a) Planning is prerequisite for controlling
(b) Planning does not look into future
(c) Planning facilitates coordination in organisation
(d) Planning focuses on achieving objectives
15) All the managerial functions are performed within the framework of the plans
drawn. Identify the related feature of planning.
(b) Planning is primary function of a manager
(c) Planning is mental exercise
(d) Planning is pervasive
16) This function of management fills the gap between where we are and where we
want to be. Identify the function.
(a) Controlling (b) Organising (c) Planning (d) Directing
17) If the end result is clear it becomes easier to work towards the goal. Identify the step
of planning process :
(a) Setting up of objectives
(b) Identifying alternative courses of action
(c) Follow up of plan
(d) Evaluating alternative courses of action
18) 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?
(a) It reduces the risk of uncertainty
(b) It reduces overlapping and wasteful activities
(c) It establishes standard for controlling
(d) It facilitates decision making
19) “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
Page 60 of 168
Term-1
20) “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
21) 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:
(a) Planning is continuous

22) Planning is helpful for:

(a) Reducing inefficiency
(b) Better utilisation of resources
(c) Maintaining flexibility
23) Out of the following steps of planning. Which one precedes the step ‘Selecting an
alternative’?
(a) Setting Objectives
(c) Evaluating Alternative Courses
(d) Identifying Alternative Courses of Action
24) From the following steps of planning, identify the correct order of steps:
(i)Evaluating alternative courses
(ii)Setting objectives
(iii)Identifying alternative courses of action
(iv)Developing premises
(a) (i), (ii), (iii), (iv)

(b) (i), (iv), (iii),(ii)
(c) (ii), (iv), (iii), (i)
(d) (iv), (i), (ii), (iii)
25) Which of the following characteristic makes planning a forward looking function?
(a) Mental Exercise (b) Continuous (c) Futuristic (d) Pervasive
Page 61 of 168
Term-1
26) Sushma is planning to start an online coaching centre. She wants to introduce
innovative teaching techniques especially for slow learners. Therefore, she is
constantly interacting with parents and encouraging them to share their ideas. This
will make her aware of more alternatives. The step of planning being described in the
given lines is……..
(a) Identifying alternative courses of action

(b) Selecting the best course of action
(c) Evaluating the courses of action
(d) Follow up action
27) Suresh, owns a financial consultancy firm. He always explores new innovative ways
of marketing his services as he strongly believes that just because a plan has worked
before it is not necessary that it will work again. The limitation of planning that
Suresh tries to overcome is………….
(a) Planning does not guarantee success
(b) Planning is a time-consuming process
(c) Planning leads to rigidity
(d) Planning involves huge costs
28) Rohit selected the brand name for his new product line after carefully assessing the
various available alternatives. The feature of planning being highlighted in the given
lines is……….
(a) Planning involves decision-making
(d) Planning is continuous
29) Pervasiveness of planning indicates that planning:

(a) extends throughout the organisation
(b) is a top management function
(c) is the first element of management process
(d) is future-oriented activity
30) Which of the following statement is false with respect to planning?

(a) Planning is closely connected with creativity and innovation
(b) It is one of the basic managerial functions
(c) It requires taking decisions
31) Which of the following is a feature of planning?

(a) Reduces the risks of uncertainty
(b) Provides directions
(c) Focuses on achieving objectives
Page 62 of 168
Term-1
32) Which of the following statement is true regarding planning?

(a) Planning is required only at top level of management as plans are made by
top level of management
(b) Planning is a one-time process
(c) Once plans are made to decide the future course of action, the management
may not be in a position to change them
(d) Planning always leads to success
33) Planning is deciding in advance, what to do and how to do. The step of planning
process is:
(a) Follow up
(b) Setting objectives
(d) developing premises
34) While ‘Selecting an alternative’ under the planning process. Which of the following
are considered?
(a) Combination of plans may be selected instead of one best course
(b) Subjectivity and manager’s experience or judgement plays a role
(c) The most feasible, profitable plan with least negative consequences is chosen
35) Shilpa, a proofreader in ABC Publications, has been given a target of reading at least
30 pages per day. She has a habit of doing things differently. While doing her work, an
idea struck her that a summary of a chapter in the form of a map where all the
concepts related to that chapter would be interlinked, should be given in starting of
each chapter. It will give students a list of chapter as well as provide a competitive
edge over other publishers. But instead of appreciating her idea, her immediate boss
scolded her and asked her to complete the work as per prescribed format. Out of the
following, identify the limitation of planning stated in the given paragraph.
(a) Planning reduces creativity
(b) Planning involves huge cost
(c) Planning is a time-consuming process
(d) Planning does not work in dynamic environment
36) Suzata Ltd. Wants to increase their market share by 5.4% in next two years. It spent
a lot of money to hire specialised people for framing their plans, collecting important
facts about environment who took lot of time to frame plans for the company. The
competition has started increasing. And it is not able to beat its competitors because
it has already spent a huge amount. The plan failed and company suffered a huge loss.
Identify the limitation of planning stated in the given case.
Page 63 of 168
Term-1
⋆ ASSERTION AND REASON BASED QUESTIONS

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): 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.
(d) Assertion (A) is false and Reason(R) is true.
3) 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.
4) 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 explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
5) 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.
Page 64 of 168
Term-1
6) 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.
Explanation of Assertion (A).
(d) Assertion (A) is False but Reason (R) is True
7) 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.
8) 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.
9) Assertion (A) Planning enables manager to look ahead and anticipate changes to deal
with uncertain events.
Reason (R) Planning involves rational decisions.
(d) Assertion (A) is False but Reason (R) is True
10) 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.
Page 65 of 168
Term-1
Case Based Questions

1) Barrel 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) 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
3) Skylights limited had been taken over by Rudransh 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
Page 66 of 168
Term-1
4) 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
Answer Key MCQ
Q. No. Answers Q. No. Answers Q. No. Answers Q. No. Answers
1. (c) 11. (d) 21. (c) 31. (d)
2. (b) 12. (a) 22. (b) 32. (c)
3. (c) 13. (a) 23. (c) 33. (b)
4. (b) 14. (b) 24. (c) 34. (d)
5. (c) 15. (b) 25. (c) 35. (a)
6. (b) 16. (c) 26. (a) 36. (d)
7. (a) 17. (a) 27. (a)
8. (b) 18. (b) 28. (a)
9. (c) 19. (a) 29. (a)
10. (b) 20. (c) 30. (d)
ASSERTION AND REASON BASED

1. (a) 6. (c)
2. (a) 7. (a)
3. (d) 8. (b)
4. (b) 9. (b)
5. (d) 10. (c)
CASE BASED QUESTIONS ANSWER

1. (d) 3. (b)
2. (a) 4. (d)
Page 67 of 168
Term-1
CHAPTER 5
ORGANISING
Revision Notes
Organising: Definition
Organising can be defined as a process that initiates implementation of plans by clarifying
jobs and working relationships and effectively deploying resources for attainment of
identified and desired results(goals)
„Organizing is the process of identifying and grouping the work to be performed, defining And
delegating responsibility and authority and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing objectives.‟
Steps Involved in the Process of Organizing
Identification and division of work : The first step in the process of organising involves
identifying and dividing the work that has to be done in accordance with previously
determined plans. The work is divided into manageable activities so that duplication can be
avoided and the burden of work can be shared among the employees.
Departmentalisation: Once work has been divided into small and manageable activities then
those activities which are similar in nature are grouped together. Such sets facilitate
specialisation. This grouping process is called departmentalisation.
Departments can be created using several criteria as a basis. Examples of some of the most
popularly used basis are territory (north, south, west, etc.) and products (appliances, clothes,
cosmetics etc).
Assignment of duties: It is necessary to define the work of different job positions and
accordingly allocate work to various employees. Once departments have been formed, each of
them is placed under the charge of an individual, Jobs are then allocated to the members of
each department in accordance to their skills and competencies.
Page 68 of 168
Term-1
Establishing authority and reporting relationships:
Merely allocating work is not enough. Each individual should also know who he has to take
orders from and to whom he is accountable.
The establishment of such clear relationships helps to create a hierarchal structure and helps
in coordination amongst various departments.
Importance of Organising
Benefits of specialization:
In organizing every individual is assigned apart of total work and not the whole task. This
division of work into smaller units and repetitive performance leads to specialization. Thus
organizing promotes specialization which in turn leads to efficient & speedy performance of
tasks.
Clarity in working relationship:

It helps in creating well defined jobs and also clarifying the limits of authority and
responsibility of each job. The superior-subordinate relationship is clearly defined in
organizing.
Effective Administration:
It provides a clear description of jobs and related duties which helps to avoid confusion and
duplication. Clarity in working relationships enables proper execution of work which results
ineffective administration.
Optimum utilization of resources:

The proper assignment of jobs avoids overlapping/duplication of work. This helps in
preventing confusion and minimizing the wastage of resources and efforts.
Adoption to Change:
A properly designed organizational structure is flexible which
facilitates adjustment to changes in workload caused by change in external environment
related to technology, products, resources and markets.
Development of Personnel:
Sound organization encourages initiative and relative
thinking on part of the employees. When managers delegate their authority, it reduces their
workload so they can focus on more important issues related to growth & innovation. This
also develops the subordinates‟ ability and helps him to realize his full potential.
Expansion and growth:

It helps in growth & diversification of an enterprise by adding more job positions,
departments, products lines, new geographical territories etc
Organizational Structure
The organisation structure can be defined as the framework within which managerial and
operating tasks are performed. It specifies the relationships between people, work and
resources. It allows correlation and coordination among human, physical and financial
resources and this enables a business enterprise to accomplish desired goals.
Page 69 of 168
Term-1
The span of management, to a large extent gives shape to the organisational structure. Span of
management refers to the number of subordinates that can be effectively managed by a
superior. This determines the levels of management in the structure
An organisation structure provides the framework which enables the enterprise to function as
an integrated unit by regulating and coordinating the responsibilities of individuals and
departments.
Types of Organisational Structures
• Functional Structure
• Divisional Structure
Functional Structure:
Grouping of jobs of similar nature under functional and organising these major functions as
separate departments creates a functional structure. All departments report to a coordinating
head.
SUITABILITY
It is most suitable when the size of the organization is large, has diversified activities and
operations require high degree of specialization.
DIVISIONAL STRUCTURE
In a divisional structure, the organisation structure comprises of separate business units or
divisions. Each unit has a divisional manager responsible for performance and who has
authority over the unit. Manpower is grouped on the basis of different products
manufactured. Each division is multifunctional because within each division functions like
production, marketing, finance, purchase, etc., functions may vary across divisions in
accordance with a particular product line
Page 70 of 168
Term-1
S.No. Basis Functional Structure Divisional Structure

It is based on product lines and is
1. Formation It is based on functions. supported by functions.
It is difficult to fix on a department. It is easy to fix responsibility for
2. Responsibility performance.
3. Specialisation Functional specialization Product specialisation.
It is easier, autonomy as well as the
4. Managerial It is difficult, as each functional chance to perform multiple
Development manager has to report to the top functions helps in managerial
management. development.
It is economical as the functions are It is costly as there is duplication of
5. Cost not duplicated. resources in various departments.
It is easy, because all functions
6. Coordination It is difficult for a multiproduct related to a particular product are
company. integrated in one.
It is most suitable when the size of It is suitable for those business
the organisation is large, has enterprises where a large variety of
7. Suitability diversified activities and operations products are manufactured using
require a high degree of different productive resources.
specialisation.
Page 71 of 168
Term-1
DELEGATION OF AUTHORITY
Delegation of Authority: Definition
Delegation refers to the downward transfer of authority from a superior to a subordinate.
It is a pre-requisite to the efficient functioning of an organisation because it enables a manager to use his
time on high priority activities.
It also satisfies the subordinate’s need for recognition and provides them with opportunities to develop
and exercise initiative
Elements of Delegation
1. Authority: The power of taking decisions in order to guide the activities of others. Authority is the
power that influences the others.
2. Responsibility: It is the obligation of a subordinate to properly perform the assigned duty. When
a superior issues orders, it becomes the responsibility of the subordinate to carry it out.
3. Accountability: When a superior assigns some work to a subordinate, he is answerable to his
superior for its success or failure.
Difference between Authority, Responsibility and Accountability:
S.
No. Basis Authority Responsibility Accountability
Authority refers to Accountability implies being

the right of an Responsibility is the answerable for the final
individual to obligation of a subordinate outcome, one authority has
1 Meaning command his to properly perform the been delegated and
subordinates and to assigned duty. responsibility accepted, one
take action within the cannot deny accountability.
scope of his position.
Cannot be entirely
2 Delegation Can be delegated. delegated. Cannot be delegated at all.
Arises from formal

3 Origin position in the Arises from delegated Arises from responsibility.
organisation. authority.
Flows upward from
4 Flow Flows downward subordinate to superior. Flows upward from
from superior to subordinate to superior.
subordinate.
Page 72 of 168
Term-1
Importance of Delegation
1. Effective Management: It leads to effective management as by relieving the employees from

doing routine work; it provides them with time to excel in new areas.
2. Employee Development: It promotes employee development as they are entrusted with more
opportunities to utilize their
3. Motivation of employees: It helps to motivate employees as when a subordinate is entrusted

with a task; it is not merely the sharing of work but involves trust on the superior‟s part and
commitment on the part of the subordinate.
4. Facilitation of growth: It facilitates the growth of an organisation as it seeks to enrich the quality
of manpower and widens the scope of using internal recruitment by providing them with training
and experience through exposure to varied jobs.
5. Basis of management hierarchy: It provides the basis of management hierarchy as it establishes

superior-subordinate relationships, which are the basis of hierarchy of management.
6. Better coordination: It facilitates better coordination amongst the departments, levels and
functions of management by providing clarity in reporting relationships.
DECENTRALISATON
Decentralisation: Definition
Decentralisation refers to systematic dispersal of authority to the lowest level, except that which can be
exercised at central points.
CENTRALISATION AND DECENTRALISATION
An organization is said to be Centralised when the decision-making authority is retained by higher

management levels whereas it is Decentralised when such authority is delegated towards the
management levels.
Need for Decentralisation
As an organisation grows in size and complexity, the departmental or branch heads are directly and
closely involved with certain operations and are likely to have more knowledge about them as compared
to the top management which may be associated with individual operations only indirectly.
Importance of Decentralisation
1. It seeks to develop initiative in the subordinates by promoting self-reliance and confidence

amongst them and also helps to identify those executives who have the necessary potential to
become dynamic leaders.
2. It provides relief to top management as the subordinates are allowed to operate independently
within their area of jurisdiction. Consequently, the need for direct supervision is reduced.
3. It facilitates quick decision making as the employees are allowed to act independently within their
area of jurisdiction without consulting others.
Page 73 of 168
Term-1
4. It develops managerial talent for the future by providing the employees with the necessary
training and experience through exposure to varied challenging jobs and also facilitates
identification of those employees who may and those who may not be successful in assuming
greater responsibility.
5. It facilitates growth of the organisation by increasing its productivity and profitability through
assigning greater autonomy to the lower levels of management as well as divisional or
departmental heads.
6. It facilitates better control by ensuring continuous evaluation of performance at each level and the
contribution of each department so that they can be individually held accountable for their results.
Caution in Implementing a Decentralisation Policy
• Decentralisation must always be balanced with centralisation in areas of major policy decisions.
• Complete centralisation would imply concentration of all decision making functions at the apex of
the management hierarchy. This would eliminate the need for a management hierarchy.
• Complete decentralisation can lead to organisational disintegration as the departments may start
operating on their own guidelines which may be contrary to the interest of the organisation.
Difference between Delegation and Decentralisation:

S.
No. Basis Delegation of authority Decentralisation
It is a compulsory act because no It is an optional policy decision and is
1. Nature individual can perform all tasks on only implemented at the discretion of
his own. the top management.
The subordinates have less freedom The control over executives is less hence
2. Freedom of to take own decisions as there is they have a greater freedom of action.
action more control is exercised by the
superiors.
It is the result of the policy decision of
3. Status It is a process followed to share the top management.
tasks.
It has narrow scope as it is limited to It has wide scope as it implies extension
4. Scope superior and his immediate of delegation to the lowest level of
subordinate. management.
To increase the role of the subordinates
5. Purpose To lessen the burden of the manager. in the organisation by giving them more
autonomy.
Difficult, as it involves the extension of

6. Withdrawal Easy, as only two persons are delegation to the lowest level of
of authority involved in the process. management.
Page 74 of 168
Term-1
MCQ
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
(d) Divisional structure
Page 75 of 168
Term-1
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.
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 organizing 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.
(d) It facilitates expansion and growth as new divisions.
Page 76 of 168
Term-1
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,
(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
21. What is the key to managerial posts?

(a) Responsibility
(b) Authority
Page 77 of 168
Term-1
(c) Accountability
(d) All of the above.
22. Which of the following is not part of organising process?

(a) Grouping of activities
(c) Complete centralisation
23. ……………….may be defined as the framework within which managerial and

operating tasks are performed.
(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
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 Decentralisation, we have sharing of authority and responsibility at

(a) Two levels
(b) Multiple level
(c) Department wise
Page 78 of 168
Term-1
30. Which of the following a policy matter
(a) Decentralisation
(b) Delegation
(c) Formal Organisation
(d) Informal Organisation
ASSERTION BASED QUESTIONS
1. Assertion (A) Identification and 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:
Page 79 of 168
Term-1
(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
relationship between people, work and resources.
Page 80 of 168
Term-1
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:
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:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of
Assertion (A).
Page 81 of 168
Term-1
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct explanation of
Assertion (A).
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:
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the
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:
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the
CASE STUDY BASED QUESTION
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
3. How the above structure leads to efficiency?

(a) No duplication of efforts
(b) Increase cost
(c) Departmentalisation
Page 82 of 168
Term-1
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
Read the following text and answer question no. 5-7 on the basis of the same:
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 ofoperations. On the
other hand, Ishan and Vrinda also got opportunities to develop and exercise initiative.
5. Identify the concept used by Aman Chadha in the above case which helped him in focusing on
objectives.
(a) Delegation
(c) Centralisation
(d) Authority
6. 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.
7. 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)
Page 83 of 168
Term-1
ANSWER KEY
MCQ ASSERTION BASED CASE STUDY BASE

1 (c) 20 (c) 1 (a) 1 (b)
2 (d) 21 (b) 2 (b) 2 (b)
3 (b) 22 (c) 3 (c) 3 (a)
120 23 (a) 4 (b) 4 (d)
4 (c) 24 (a) 5 (a) 5 (d)
5(b) 25 (c) 6 (b) 6 (a)
6 (a) 26 (a) 7 (d) 7 (d)
7 (a) 27 (b) 8 (a)
8 (c) 28 (c) 9 (b)
9 (b) 29 (b) 10 (d)
10 (a) 30 (a) 11 (a)
11 (c) 12 (a)
12 (b) 13 (d)
13 (a) 14 (b)
14 (b) 15 (d)
15 (b) 16 (a)
16 (b) 17 (d)
17 (c) 18 (A)
18 (c)
19 (c)
Page 84 of 168
Term-1
CHAPTER-11
Marketing Management
REVISED CBSE SYLLABUS FOR 2021-2022 EXAMINATION
TOTAL MCQ FORM MARKETING IN SECTION A =➔7

TOTAL MCQ FORM MARETING IN SECTION B =➔ 5
TOTAL WEIGHTAGE OF MARKS IN SPQ ➔ 9.6
Page 85 of 168
Term-1
Marketing Management- Concept.
Marketing defined: It is a social process by which individuals and groups obtain what they need and
want through creating, offering and freely exchanging products and services of the value with other.
Marketing Management: It refers to planning, organizing, directing, and controlling the activities
which results in exchange of goods and services.
Marketing Management: It means management of all activities related to marketing of goods and
services.
FEATURES OF MARKETING
Need and want: A need is state of deprivation i.e., lack of something say when we feel hungry food
becomes our Need. A Want is culturally defined object which satisfies the Need. Like, need for food can be
satisfied by Roti or Rice depending upon culture, mood etc. The job of a marketer is to identify the need
and develop products to satisfy the need of the customer.
Creating a market offering: it means offering a product or service by specifying its features shape size,
colours etc.
Customer value: it means adding the value to the product to satisfy the need of the consumer. Like,
adding new pocket to carry a bottle in a design of school bag.
Exchange mechanism: The process of marketing involves exchange of products and services for money
or money’s worth. It has four dimensions. A) presence of at-least two parties. B) both parties must have
something viewed valuable by each other. C) both parties are free to accept or reject the offer. D) each
party feels desirable to deal with the other.
Marketing Functions.
• Gathering and analysing Market information: This function helps the marketer or firm to
identify the needs of the customers. Basically, this function deals with research on the market. It
helps in understanding the market, deciding what type of product will be suitable for consumers.
• Market Planning: It deals with all the steps which are necessary to achieve the marketing goals
of the firm. Like putting more stress on advertisement, more production etc.
• Product development and design: this function deals with deciding quality, shape, standards,
type of packaging, looks etc of the product.
• Standardisation and grading: Standardisation mean maintaining quality standards to achieve
uniformity in the product. Grading deals with classifying the product on some base like size,
quality etc.
• Packaging and labelling: Packaging deals with wrapping of product to keep it safe. A product’s
wrapper could be in form of packet, wrapper, cartons etc. Labelling is the informative part on
packaging.
• Customer Support Service: The purpose of the Customer Support Service is to provide service to
consumer even after sales of the product.
• Pricing of Product: It refers to the cost of product which a customer has to pay in order to buy
the product or service.
• Branding. A product can be sold in two ways by Generic name and Brand. Generic name of the
product is the category like Watch, Car, Bike, Juices. Whereas, A brand is the identification of
product. It can be in the form of a name, symbol or design etc. Branding helps in identification of
producer and also makes your product superior than competitors.
Page 86 of 168
Term-1
• Promotion: The promotion element of marketing mix is concerned with activities that are
undertaken to communicate with customers and distribution channels to increase the sales.
• Physical Distribution: Refers to important decision related to physical distribution of goods
and services. These decisions are deciding the (I) channels of distribution and (ii) physical
movement of goods.
• Transportation. Deals with physical movements of goods from one place to another.
• Storage and warehousing.: it deals with keeping the goods safe and ready for use in future to
utilize the gap between production and consumption.
Marketing Management philosophies.
Philoso Production Product Selling Marketing Societal -

phies/ Concept Concept Concept Concept Marketing
Bases Concept
1. Starts Factory Factory Factory Market Market, Society
2. Main Quantity of Quality, Existing Customer Customer
Focus product performance, product needs needs and
features of product society’s well
being
3.Means Availability and Product Selling and Integrated Integrated
affordability of improvements promoting marketing marketing
product
4. Ends Profit though Profit through Profit through Profit through Profit through
volume of product quality sales volume customer customerand
production satisfaction social welfare
Marketing Mix - Concept & elements

Marketing Mix Concept: Marketing mix is the set of marketing tools that firm uses to pursue its
marketing objectives in the target market. These tools help the producer to communicate with the target
market or consumers.
Elements of Marketing Mix: There are 4 elements of marketing mix
1) Product: This element signifies the tangible or intangible product offered to the customer which
is the satisfier of the need.
2) Price: price is the value which a buyer has to pay the seller for buying the product.
3) Place or Physical Distribution: Place refers to the set of decisions that need to be taken in
order to make the product available to the consumer.
4) Promotion: The promotion element is concerned with activities are undertaken to communicate
with customers and distribution channels to enhance the sales of firm.
Product Mix and its component

1. Branding: A brand is the identification of product. It can be in the form of a name, symbol or
design etc. Branding helps in identification of producer and also makes your product superior
than competitors.
Advantages of Brand Name:

1) Help in product differentiation
Page 87 of 168
Term-1
2) Help in advertising.
3) Differential pricing.
4) Easy introduction of new product.
Advantage to customers:
1) Help in identification of product.
2) Ensures quality
3) Status symbol
Characteristics of a Good Brand

1) it should be short and easy to pronounce.
2) it should suggest the product’s benefits and qualities
3) it should be distinctive.
4) it should be adaptable to packaging and labelling.
5) brand name should have stayed power.
6) it should be capable of being registered and legal protection.
7) it should be versatile for adopting new products.
ASSOCIATED TERMS WITH BRANDING

• Brand: A brand is the identification of a product. It can be in form of name, symbol, design or
combination of all. For example, Surf, Dettol etc.
• Brand mark: The part of brand which cannot be spoken but can be recognized is known as
Brand Mark. For example, Pepsi’s Red and Blue Ball.
• Brand name: The part of brand which can be spoken is called Brand Name. in the other words
we can say that it is the verbal part of Brand.
• Trade mark: A part of brand which is given legal protection. No other business can use this
part. Like:
2. Packaging: “A set of tasks or activities which are concerned with the designing, production of
an appropriate wrapper, container or bag for the product”
Levels of packaging:
Primary Level: it refers to the immediate packing of product. It remains with the product till it is
used.
Secondary Level: These are additional packing which give more protection to the product.
Generally, consumers throw that when they start using the product for example card board box to
keep tooth paste.
Transportation packaging: These are packaging used for storing or transporting the goods. This
packing gives protection to goods in travelling.
Importance of Packaging:
1) Rising standard of health and sanitation: In a packed good there is less chance of
contamination of products. Therefore, it raises standard of health and sanitation.
Page 88 of 168
Term-1
2) Self service outlets: in self service outlets product can easily be identified and purchased by
consumer without any help.
3) Product differentiation: Packaging help the customers to differentiate between goods on the
basis of quality as with the type of packing customer can guess about quality of goods.
4) Innovation opportunities: It provides innovation Al opportunities to the marketers. Due to
recent changes in techniques of packaging goods now can be stored for longer duration.
Functions of Packaging:
1) Protection: The main function of packaging is that it protects the product from damage.
Appropriate packaging protects the product from sun, rains moisture, breakage, insects etc/
2) Identification: With the help of packaging the product can be easily identified. For example,
Colgate is always packed in Red card board etc.
3) Convenience: The handling of product becomes more convenient with appropriate packing. It
makes it convenient to store and convenient to shift from one place to another and store the
product.
4) Promotion: Packaging plays a role of silent salesman because it promotes the sale of the product.
The attractive colourful and innovative packing attracts customer.
Labelling: It means putting identification marks on the package. Label is the carrier of information.
It provides information like the name of the product, name of manufacture, contents of products, date of
manufacturing and expiry, warnings etc.
Functions perform by Labelling:
1) Describe the product and specify its contents: the manufacturer cannot communicate to each
and every customer personally so if he wants to communicate and share information with
customer it is done through labels.
2) Identify the Product: The label helps the customer to identify the product from the various types’
available similar type of products.
3) Help in grading: With the help of label products can be graded in different categories. For
example, Lifebuoy+; lifebuoy total; lifebuoy green etc.
4) Promote Sales: Attractive and colourful labels excite and attract the customer and induce them to
buy the product.
5) Providing information required by Law: The Label is also used for providing information as
demanded by various Laws. For example, it is compulsory for a manufacture to provide
information regarding weight, date of manufacturing, date of batch, expiry etc on the label.
PRICE MIX & FACTORS AFFECTING IT
PRICE: Price is the value which a buyer passes on to the seller in lieu of the product or service provided.
It is the monetary sacrifice which a buyer makes when he buys something.
PRICE MIX: It refers to important decisions related to fixing of price of a commodity. These decisions can
be related to price of competitors, decisions related to demand, decisions related to fixing cost, etc.
FACTOR AFFECTING PRICE MIX

1. Pricing objectives: If the objective of the company is to maximize the profit, then generally high
price is fixed whereas the companies having the objective of sales maximization prefer low price
to increase the sales and capture a big share in the market.
Page 89 of 168
Term-1
OBJECTIVE PRICE OF PRODUCT FIXED
MARKET SHARE LEADERSHIP LOWER PRICE TO CAPTURE LARGE SHARE
SURVIVING COMPEITION DISCOUNTING ITS PRODUCTS
ATTENTING PRODUCT QUALITY HIGER PRICES TO COVER HIGHER QUALITY.
LEADERSHIP
2. Product cost: The second important factor which is kept in mind while fixing the price is the cost
of product. The price of product must be able to cover the total cost of product. Generally total
cost means sum of fixed cost and variable cost.
3. Extent of competition in the market: Level of competition also affects the price of a product.
When a firm does not face any competition then it can enjoy complete freedom in fixing the price.
But when the competition is more than price is fixed keeping in mind the price of competitor’s
product.
4. Customer’s demand and utility: Price of a product is also affected by its demand and utility. If
the demand is more than price can be fixed at higher level. If demand is less than the price will be
low. If the product is offering higher utility one can easily charge high price. Whereas if utility is
low, the producer cannot charge higher price.
5. Government and legal regulations: To protect the interest of general public, the government
has all the right to control the prices of various products and services by including the products in
the category of essential commodities.
6. Marketing Method Used: If a company depends heavily on advertisement, then the cost of
product will be higher.
PLACE / PHYSICAL DISTRIBUTION

Place Mix: refers to important decision related to physical distribution of goods and services. These
decisions are deciding the (I) channels of distribution and (ii) physical movement of goods.
Channel of distribution: refers to the people of middlemen who help in distributing the goods. These
are the firms and individuals who help in transferring the goods from place of manufacturing to place of
consumption. The common types of channels of distributions are Wholesaler and Retailer.
Functions of distribution channels:

1) Sorting and grading: i.e., repack them according to quality size or prize.
2) Accumulation: middlemen maintain a large stock of goods so that there is smooth supply of
goods.
3) Variety: Middlemen maintain variety of goods. They procure goods from various manufacturers
and assemble them at one place.
4) Packing: Generally, middlemen buy the goods in bulk and then they repack them in small lots.
5) Promotion: middlemen also offer some sales promotional tools to attract the customers.
6) Risk taking: Middlemen maintain large stock of goods they transport goods, transport from one
place to other then middlemen bear the risk of spoilage or damage of goods.
Types of distribution level

1. Zero level/ Direct Level: it is a case when firms sell their product directly to customers without
adopting any intermediary. It may include: sales by salesmen, mail order house, through internet,
teleshopping.
Page 90 of 168
Term-1
2. One level channel: in this only one intermediary is adopted i.e. The retailer. Firms supply the
product to retailer who sells the product direct to customer.
3. Two level channels: This is most commonly used distribution path where two intermediaries are
adopted by firms to sell the products i.e., the wholesaler and retailer. The manufacturer sells the
goods to wholesaler who sells in small lot to retailers who supply it to ultimate customer.
4. Three level channels: In this path one more middleman is added so there are three
intermediaries involved, these are distributors, wholesalers and retailer. When products are
distributed in deep corners of the country then distributors are appointed are wise.
PROMOTION MIX
Promotion: The promotion element of marketing mix is concerned with activities that are undertaken
to communicate with customers and distribution channels to increase the sales.
Promotion Mix: it refers to all decision related to promotion of sales of product. The important
decision of promotion mix is selecting advertising media, selection promotional techniques, using
publicity measure and public relation etc.
Following are the tools of promotion mix:
1) Advertising
2) Sales promotion
3) Personal selling
4) Public relation
Advertising: can be defined as the paid form of non-personal presentation and promotion of idea goods
or services by an identified sponsor.
Role of Advertising
1) Reach: advertising can reach a large market. As through various media of advertising there is
benefit of mass reach.
2) Choice: there is a wide variety of media available for advertising for video, audio, visual, print
media etc. under each category large variety is available.
3) Legitimacy: in advertisement the message regarding the product or service can be given
publicly to customers so there is always a proof for it and customers believe in it.
4) Expressive: in advertisement the messages are more expressive as they can use audio, video or
print to attract the customer.
5) Economy: it is always felt that advertising increases the cost of product or services but it is
considered economical as compared to other promotional techniques as it reaches wide areas.
SALES PROMOTION
Sales Promotion: it refers to short term use of incentives or other promotional activities that
stimulate the customer to buy the product.
Sales promotion techniques:
1) Rebate: It refers to selling product at a special price which is less than the original price for a
limited period of time. This offer is given to clear off the stock.
2) Discount: This refers to reduction of certain percentage of price from list price for a limited
period of time. The discount induces the customer to buy more.
3) Refund: this refers to refund or part of price paid by customer on presenting the proof of
purchase.
Page 91 of 168
Term-1
4) Premium or gift: It refers to giving a free gift on purchase of the product. Generally, the free gift is
related to product but it is not necessary.
5) Quantity deals: it refers to offer of extra quality in a special package at a less price or on extra
purchase some quantity free.
6) Samples: it refers to distribution of free sample of product to the customers. These are
distributed when the seller wants the customer must try the product.
7) Contest: it refers to participation of consumers in competitive events organised by the firm and
winners are given some rewards.’
8) Useable benefits: This includes offers like ’purchase goods worth Rs. 5,000 and get a holiday
package’
Merits of sales promotion
1) Attention value: he incentives offered in sales promotion attract attention of the people.
2) Useful in new product launch: The sales promotion techniques are very helpful in introducing
the new product as it induces people to try new products.
3) Synergy in total promotion: Sales promotion activities supplement advertising and personal
selling efforts of the company.
4) Aid to other promotion tools: Sales promotion techniques make other advertising and
promotional activities more effective.
PERSONAL SELLING
Personal Selling: It means selling personally. This involves face to face interaction between seller and
buyer for the purpose of sale.
PUBLIC RELATIONS - CONCEPT
The concept of Public Relations involves a variety of programs to promote and Protect a company’s
image or its products. It means to strengthen relations with various Stake holders like customers,
shareholders, employees, suppliers, investors etc. It is Done through – news, speeches by corporate
leaders, organizing events like sports
Events, concerts, seminars etc.
Role:
(i) Smooth functioning of business and achievement of objectives.
(ii) Building corporate image that affects favorably on its products.
– Up keep of parks, gardens, sponsoring sports activities etc.
(iii) Build interest in the established product and help in launching Products.
(iv) to overcome the complaints and dislikes of public
(v) to mould people’s attitude in favour of organisation.
Ways and means and tools of public relations
1) News: news about company’s policies, activities which creates positive reaction among public or
stakeholders. Like Reservation for Women in company etc.
2) Speeches: talks, speeches given by corporate leaders to influence various members of public,
bankers, shareholders etc.
3) Events: refers to organising press conferences, multi-media presentations matches etc.
4) Written materials: written material like balance sheet, Annual Report, special documents,
brochures etc.
5) Public service activities: Association of Corporate houses with social services events like charity
shows, up-keep of local parks etc.
Page 92 of 168
Term-1
BASIS ADVERTISING PERSONAL SELLING

Meaning Advertising is an impersonal Personal selling is a personal
form ofcommunication form ofcommunication
Flexibility Advertising is inflexible as the message Personal selling is highly flexible as the
can’ t beadjusted to the needs of the messagecan be adjusted.
buyer
Cost per In advertising the cost per person The cost per person is quite high in the
person reached is verylow case ofpersonal selling
Direct Advertising lacks direct feedback Personal selling provides direct and
feedback immediate feedback
M.C. Qs ON MARKETING
Q1. Which of the following statements is not true with regard to the concept of product?
(a) It is a bundle of utility.
(b) It is a source of satisfaction.
(c) It is confined to physical product.
Q2. Harshit is planning a start up a venture for offering mobile pet care services at door step. He has
decided to charge ?1000 for heated hydro bath & blow dry of a pet and ?500 for shampoo and
conditioning. Identify the element of marketing mix which is not being described in the above case.
(a) Product
(b) Place
(c) Price
Q3. Guneet 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
(c) Generic name
(d) Brand name
(e) Brand mark
Q4. The term ‘market’ may be understood in which of the following contexts?
(a) Geographical area covered
(b) Type of buyers
(c) Quantity of goods transacted
Q5. Which of the following is a feature of marketing process?

(a) Satisfying needs and wants of the consumers
(b) Creating a market offering
(c) Developing an exchange mechanism
Page 93 of 168
Term-1
Q6. Agile Limited has launched a new range of air conditioners in order to add value to the usability of
the product. The new range of air conditioners have an inbuilt air purifier and are available in
attractive colors. Identify the type of marketing philosophy being described in the above lines.
(a) Product concept
(b) Production concept
(c) Marketing concept
(d) Societal marketing concept
Q7. In order to promote the habit of health and hygiene among weaker sections of the society, Abhyas
Limited has launched low-cost packs of hand wash. Identify the type of marketing philosophy being
adopted by the company.
(a) Product concept
Q8. Sujhav Limited is a company dealing in various types of fire extinguishers. Considering the fact that
people generally don’t buy fire extinguishers, the company undertakes aggressive sales promotion
efforts in order to create and maintain demand for the product. Identify the type of marketing
philosophy being described in the given case,
(a) Product concept
(b) Selling concept
Q9. Madhubala 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 has decided
to offer educational packages to the prospective buyers. Identify the type of marketing concept being
described in the given lines.
(a) Product concept
Q10. Pragati Limited has chalked out an action plan in order to increase its market share in the
international market by 20% in the next one year. The action plan contains the details about how the
production levels will be increased, promotional activities will be carried out and so on. Identify the
type of marketing function being described in the given lines.
(a) Gathering and analysing market information
(b) Marketing planning
(c) Product designing and development
(d) Packaging and labelling
Q11. In order to improve upon its competitive edge, Khushboo Limited has change the packaging of its hair
care products. They are now available in a consumer-friendly design, which has a nozzle attached to
the lid so that at the time of usage, the consumer doesn’t need to open the cap of the bottle. Name the
marketing function being explained in the given lines.
(a) Product designing and development
(b) Customer support services
Page 94 of 168
Term-1
(c) Promotion
(d) Physical distribution.
Q12. In order to get feedback about its new product launch, Taggi Limited conducted an online survey
through a short questionnaire. Identify the marketing function being mentioned in the given line.
(a) Gathering and analysing market information
(b) Marketing planning
(d) Packaging and labelling
Q13. Gabbar is a wholesaler of food grains. He categories 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 line.
(a) Physical distribution
(b) Transportation
(c) Warehousing
(d) Standardizations and grading
Q14. In order to enhance the easy marketability of the products, Dev, a producer gets the home
furnishing products manufactured in confirmation to the predetermined specifications. Identify the
type of marketing function being described in the given case.
(b) standardization and grading
(c) Transportation
(d) Warehousing
Q15. Good Health Limited has decided to launch a new range of water bottles with in-built water purifier.
Instead of marketing the product by is generic name, the company has decided to call it Turifiere’.
Identify the type of marketing function being described in the given lines.
(a) Packaging and labelling
(b) Branding
(c) Pricing
(d) Promotion
Q16. Drishti Limited is a chain of trusted optical centers for prescription & fashion eyewear. It caters to
affluent people with a range of premium sunglasses for men, women and kids. In order to raise the
level of buyers’ satisfaction, the company has decided to create a special section in each of its outlets
for handling customer complaints and adjustment requirements. Identify the type of marketing
function described in the given lines.
(c) Promotion
(d) Physical distribution
Q17. Ecofriend Limited has decided to launch solar jackets, which will have an inbuilt solar charger as
well. In order to make its product competitive, the company has decided to offer it for sale within the
range of Rs.1500 to Rs. 4000. Identify the related function of marketing being mentioned in the given
case.
(b) Branding
Page 95 of 168
Term-1
(c) Pricing
(d) Promotion
Q18. Keeping in view the recent trends of sales regression, Sona Limited has decided to offer a flat 15%
discount on all its products. Identify the related function of marketing being described in the given
lines.
(b) Branding
(c) Pricing
(d) Promotion
Q19. While reading the label of a pack of aluminum foil, Reshma 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.
(b) standardization and grading
(c) Transportation
(d) Warehousing
Q20. Ranjan’s business is being adversely affected due to the delay in delivery on account of poor
weather conditions. Identify the marketing function which will be helpful to him in this regard.
(b) standardizations and grading
(c) Transportation
(d) Warehousing
Q21. Identify the legal component of branding being depicted below.
(a) Brand name

(b) Brand mark
(c) Trademark
(d) Generic name
Q22. Karan had started the business of producing exclusive home decor items under the brand name
‘Eleganza’ 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
‘Eleganza’, 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
Q23. 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
Page 96 of 168
Term-1
(c) Transportation packaging
Q24. 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
Q25. When Reema had sent her servant to the market to buy a pack of chips, she asked him specifically to
bring the yellow-colored 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
Q26. 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
Q27. Identify the component of promotion mix being described in the given exhibit?
(a) Advertising
(b) Sales Promotion
(c) Public relation
(d) Personal selling
Q28. Identify the related function of labelling being depicted below as given on the pack of the chips.
(a) Describes the product and specifies its content

(b) Grading of products
(c) Helps in promotion of the products
(d) Identification of the product or brand
Page 97 of 168
Term-1
Q29. Ria refused to buy an insulated lunch box for Rs.1200 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
Q30. Under which of the following conditions is a marketer likely to fix the price of his products at higher
end?
(a) When he faces high degree of competition
(b) When he wants to attain market share leadership
(c) When the product is unique in terms of packaging, product difference and product
differentiation
(d) When the demand for the product is low.
Q31. Nooper 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
Q32.Kannu has decided to sell her range of organic food products through her own retail outlets. Identify
the channel of distribution being adopted by the company.
Q33. Hena is planning to set up a small manufacturing unit for manufacturing eco-friendly packaging
material. She has decided to market her products through the conventional channel of distribution,
which involves wholesalers and retailers. Identify the channel of distribution being adopted by the
company.
Q34.Mehak 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
Q35. Within 2 years of its inception, Bhavishya 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.
Page 98 of 168
Term-1
(a) Advertising
(b) Personal selling
(c) Public relation
(d) Sales promotion
Q36. Large scale production done to reduce the average cost of production is the essence of
______________concept of Management.
A. Product;
B. Selling;
C. Production;
D. Marketing.
Q37. _______________sets the minimum level or the factor price at which the product may be sold.
A. Product cost.
B. The utility in the market.
C. Extent of competition in the market.
D. Government and legal regulations
Q38_________activities include offering cash discounts, sales contents, free gift offers, and free sample
distribution.
A. Advertising
B. Personal Selling
C. Sales promotion
D. Public Relations
Q39. Managing public relations of an organization is animportant task which can be performed
by__________:
A. The marketing department
B. The public relations department
C. Any outside public relations agency
D. All of these
Q40. Packaging has acquired great significance in themarketing of goods and services, because of:
A. Rising standards of health and sanitation
B. Self-service outlets
C. Innovational opportunity
D. All of these
TRUE FALSE AND FILL IN THE BLANKS TYPE
TRUE AND FALSE
Q1. Selling concept focuses on customers satisfaction
Q2. Understanding the quality of product is decided.
Page 99 of 168
Term-1
Q3. Packaging and labelling are same or synonyms of each other.
Q4. The spoken part of brand is called brand name.
Q5. The brand name should be suggestive.
Q6. In case the time required to respond to the additional demand for the product is high there is need to
maintain high level of inventories.
Q7. Personal selling is more rigid than other tools of promotion.
Q8. Transportation packaging refers to additional layers of protection that are kept till the product is
ready for use.
Q9. Grading of product is the important function performed by packaging.
Q10. In primary packaging the container is kept throughout the entire life of the product.
Q11. Marketing mix is a wider term than product mix.
Q12. Production cost is the only important component while fixing up the price.
Q13. Personal selling is best suited for promoting daily use products.
Q14. If a firm can meet additional demand for product in less time, then low level of inventory is needed.
Q15. Maruti Udyog sells its cars through company approved retailers. It means company is using direct
distribution channel.
Q16. Advertisement is less forceful than personal selling
Q17. The cost of production sets the maximum level at which the product may be sold.
Q18. The brand name should be adaptable to packing or labelling requirements.
Q19. Branding helps in charging price higher than the competing products.
Q20. Corrugated box containing 50 units of toothpaste is an example of Transportation packaging.
FILL IN THE BALANKS
1. ___________________ refers to any person or organization that takes more active part in the process of
exchange.
2__________________ refers to classifying the products into different groups with same characteristics.
3. __________ acts as a silent salesman as it induces customers to buy the product.
4__________creats time utility.
5. Mail order selling is a good example of ___________ channel.
6. the product’s immediate container is called ___________ packaging.
7. A brand or part of brand which is given legal protection is called________.
8. The impersonal form of communication which is paid for by which is paid for by the marketers to
promote goods or services is _________
9. _________ packaging is the additional package which provides additional layer of protection to the
product and is kept till the product is ready to use.
10. while the product_______ sets the lower limit of the price, the utility provided by the product sets
the upper limit of price which a buyer would be prepared to pay.
Page 100 of 168

Term-1
ASSERTION AND REASON BASED QUESTIONS
Q1. Assertion (A) Marketing helps in creating demand for products and services.
Reason (R) Understanding of consumer needs and wants remain the strength of marketing that
helps in developing products and services for better consumer satisfaction and demand creation.
(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
Q2. Assertion (A) Marketing Planning helps in collecting information’s about consumers, their
requirements and expectations.
Reason (R) These plans are made for increasing the level of production, sales and promotionof
products etc.
Q-3 Assertion (A) Standardization is a process of manufacturing products adopted as a
predetermined standard for maintaining quality, uniformity and consistent in performance.
Reason (R) It assures the consumers about quality, design and price of the product.

Q4 Assertion (A) Branding is the most important technique in the modern days globalized business.
Reason (R) Companies are decided to sell its products with name of the company or a special
brand name to cover a major share in the market.

Q5. Assertion (A) Changes in price level may affect the demand pattern for products.
Reason (R) People may go for buying products and services with increasing price level in the
market.
Page 101 of 168

Term-1
Q-6 Assertion (A) According to marketing concept products are bought because of their quality and
other features.
REASON (R): Marketing concepts aims to find out needs and requirements of customers and
satisfying them in an effective manner.

Q-7 ASSERTATION (A): Main focus of selling concept is to sell the existing product through aggressive
selling and promotion efforts
REASON (R): Selling concept assumes that customers can be persuaded and manipulated to buy the
products.

Q-8 ASSERTATION (A): An established brand name enables the firm to charge higher prices than the
competing product.
REASON (R): Many companies with established brand names decide to introduce new products in
the same name

Q-9 ASSERTATION (A): Warehousing creates time utility.

REASON (R): Warehousing bridges the gap between production and consumption of goods.
Page 102 of 168

Term-1
Q-10 ASSERTATION (A): Personal selling reaches limited people
REASON (R): Warehousing bridges the time gap between production and consumption of goods.

CASE STUDY-BASED QUESTIONS

Case study -1
Priya intends to start an enterprise that produces ICE-CREAMS. Initially in order to assess the test and
preferences of the people about ice-creams she used social media and online surveys. Thereafter she
prepared a detailed SWOT analysis of her enterprise to devise a strategy that will give her an edge over
competitor. Based on her analysis of the market she planned another segment of Ice-Cream called
“Indian Delight” She planned to fix up the price of Ice-cream relative lower in the beginning and
increasing on when demand picks.
Priya also decided while marketing her product she will use Eco-friendly packaging and she is
determined for following social responsibility of business. She also decided to label her product in bright
and unique colors combination. She will use her brand “Indian Delight” on packaging. She will use her
brand on new launches of product. She has also plan for launching new varieties of her ice-creams using
same brand name.
Q1. Identify the elements of marketing mix being discussed in above paragraph
a) Price
b) Product
c) both price and product
d) promotion.
Q2. Which are the functions are not mentioned in the paragraph
a) Gathering and analyzing market information.
b) Market planning
c) Storage and where housing
d) Pricing
Q3. Which are the functions are mentioned in the paragraph.
a) Product designing and development
b) Customer support
c) Physical distribution
d) Transportation
Page 103 of 168

Term-1
Q 4 Which marketing management philosophy or concept has been followed by Priya
a) Production Concept
b) Selling concept
c) Marketing Concept
d) Societal Concept.
Q5. What is “Indian Delight” in terms of marketing in this paragraph.
a) Generic Name.
b) Ice- Cream.
c) Brand Name.
d) Product.
Q6. She also decided to label her product in bright and unique colors combination. What is the advantage
of using such bright and unique colors combination for labelling?
a) Describe the product.
b) Provide information about the product.
c) Identification and sales promotion of the product.
d) Help in Grading of product
Case study -2
Mr. Ravi Prakash is a business man. He decided to start a new venture of recycling of paper and use
recycled paper for making notes books, register and other paper related stationery product. In order to
increase sale in short term he decided to give special discount to his first 1,000 customers. To capture
large share of market he decided to appoint Sales-men who will visit offices, schools and residential areas
to convince prospective buyers through personalized presentation. In order to cut the cost of production
he decided to produce stationery on large scale. In order to establish good image among the public in
large he decided to tell public about his “GREEN INITITAIVES” In his previous ventures.
Q1. Use of short-term discount to first 1,000 customers is an example of
a) Advertisement.
b) Personal selling.
c) Sales Promotion.
d) Public Relation
Q2. Appointment of Sales men for personalized presentation is an example of
a) Advertisement.
c) Sales Promotion.
d) Public Relation
Page 104 of 168

Term-1
Q3. Telling public about “Green Initiatives” of previous ventures to public is an example of
a) Advertisement.
c) Sales Promotion.
d) Public Relation.
Q 4 Which marketing management philosophy or concept has been followed by Mr. Ravi Prakash
a) Production Concept
b) Selling concept
c) Marketing Concept
d) Societal Concept.
Q5. What is the main focus of marketing management philosophy followed by Mr. Ravi Prakash?
a) Consumer Satisfaction
b) increase selling of product.
c) large scale of production to cut the cost.
d) improvement in product.
Q6. Which method of Promotion is ignored by Mr. Ravi Prakash?
a) Advertisement.
c) Sales Promotion.
d) Public Relation.
Page 105 of 168

Term-1
ANSWER KEY OF MCQs
Q1. C Q2. D Q3. C Q4. D Q5. D Q6. A Q7. B Q8. B Q9. C Q10. B
Q11. A Q12. A Q13. D Q14. B Q15. B Q16. B Q17.C Q18. D Q19. C Q20.D
Q21 C Q22 D Q23 C Q24 B Q25 C Q26 B Q27 B Q28 C Q29 B Q30. C
Q31A Q32 A Q33 C Q34 C Q35 C Q36 A Q37 A Q38 C Q39 D Q40 D
ANSWERS TRUE/ FALSE.
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
F F F T T T F F F T
Q1 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20
1T F F T F T F T T T
Answers for fill in the blanks
1.Marketer 2.Grading 3.Packaging 4.Warehousing. 5.Direct/

Zero
level
6. Primary 7. Trade 8.Advertisment. 9. Secondary 10. Cost
Mark
Answer Keys A-R
1A 2D 3B 4A 5C 6D 7A 8B 9A 10 B
Ans case study-1

1C 2C 3A 4D 5C 6C
Ans case study-2

1C 2B 3D 4A 5C 6A
Page 106 of 168

Term-1
Blue Print-Sample Paper 1
Business Studies-054(Term-1)
Section (B)-
Section (C) TOTAL
Unit wise Case
Name of the Section (A) Case MARKS
S.No Marks Studies/Case
Chapter OTQ’s/MCQ’s Studies/Case UNIT
Allocation Problems/
Problems WISE
Assertion-
Reasoning
Nature and
Significance
1 3 7 -
of
Management
16 20
Principles of
2 3 3 2
Management
Business
3 3 2 1
Environment
4 Planning 4 5(1 A-R) 1
14 17
5 Organising 4 2(1 A-R) 6
Marketing
6 10 7 5(1 A-R) 2 11
Management
48Mark
Total Questions(Section-wise) 24 24 12 s
Questions to be attempted (Section- 40
wise) 20 20 10 Marks
** Numbers shown in cells under each sections are no of questions from Chapter
shown against them.
** Each Question Carries .80 Marks. Total Marks Unit wise will exceed the Unit wise
Marks Allocation as there is a choice for Questions to be attempted section wise.
Page 107 of 168

Term-1
Sample Question Paper -1
(2021-22)
Term 1
Subject: Business Studies (054)
Time: 90 minutes Max. Marks: 40
General instructions:
1. The Question Paper contains 3 sections.
2. Section A has 24 questions. Attempt any 20 questions.
3. Section B has 24 questions. Attempt any 20 questions.
4. Section C has 12 questions. Attempt any 10 questions.
5. All questions carry .80 marks.
6. There is NO negative marking.
Section - A
1 Occupation which is backed by specialized knowledge and training and to which
entry isregulated by a representative body.
(a) Profession
(b) Art
(c) Science
(d) All of Above
2 Which of the following characteristic makes planning a forward looking function?
(a) Mental Exercise
(b) Continuous
(c) Futuristic
(d) Pervasive
3 For a good brand _________ is necessary.
(a)Short name
(b)To be memorable
(c) Attractive Design
(d) All of these
4 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 of management
(b) Middle level of management
(c) Supervisory level
5 What principle of management is violated if an employee gets orders from more than one
superior?
(a) Unity of Command
(b) Unity of Direction
(c) Remuneration of employees
(d) Scalar chain
6 ________ point of view lays stress upon customer’s welfare.
(a) Production
(b) Product
(c) Marketing
(d) Social Marketing
7 Management is multidimensional because it manages___________
(a) Management of work
(b) Management of people
Page 108 of 168

Term-1
(c) Management of operations
(d) All of these
8 Which of the following can offer expert opinion to the consumer?
(a) Publicity
(b)Advertisement
(c) Sale Promotion
(d) Personal Selling
9 It refers to the number of subordinates that can be effectively managed by asuperior,
(b) Informal organization
10 It requires application of mind involving of mind involving foresight, intelligent imagination
and sound judgement. Which feature of planning is being highlighted?
(a) Planning is pervasive
(b) Planning is a mental exercise
(c) Planning is futuristic
(d) Planning involves decision-making
11 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
12 Out of the following steps of planning. Which one precedes the step ‘Selecting an
alternative’?
(a) Setting Objectives
(c) Evaluating Alternative Courses
(d) Identifying Alternative Courses of Action
13 ‘Maruti Vega 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) Place Mix
(b)Product mix
(c) Promotion mix
(d) Price mix
14 The attitude of the government officials towards business may have either positive or
negative impact upon business.
Which factor of general environment of business is highlighted by thisstatement?
(a) Technological environment
(b) Political environment
(d) Legal environment
15 Which of the following statements is incorrect?
(a) Marketing is a social process
(b) Focus of the marketing activities is on customer needs
(c) Marketing is merely a post production activity.
(d) Marketing mix is a wider term than product mix.
Page 109 of 168

Term-1
16 Mohit selected the brand name for his new product line after carefully assessing the
various available alternatives. The feature of planning being highlighted in the given lines
is……….
(a) Planning involves decision-making
17 is the extension of the marketing concept as supplemented by the concern
for the long term welfare of the society .
(a) Product concept
18 Environment is a source of various resources for running a business. To engage in any
type of activity, a business enterprise assembles various resources called inputs like
Money, Machine, Material, Men, etc. from its environment including Financers,
Government andSuppliers.
Which importance of business environment is highlighted by this statement.
(a) It helps in tapping useful resources
(b) It helps in coping with rapid changes
(c) It helps in assisting in planning and policy formulation
(d) It helps the firm to identify threats and early warning signals
19 The principle of management given by Fayol which aims at preventing overlapping of
activities is:
(a) Division of work
(b) Unity of Command
(d) Order
20 Identify the type of organisational structure which facilitates occupational
specialization.
(b) Horizontal structure
(d) Divisional structure
21 is a process of classification of products into different groups on thebasis
of some important characteristics such as quality, size, etc.
(a) Standardization
(b) Grading
(c) Product Development
(d) Selling
22 Which of the following does not characterize the business environment?
(a) Uncertainty
(b) Employees
(c) Relativity
(d) Complexity
23 Which of the following elements should be kept in mind while determining fair
remuneration?
(a) Cost of Living
(b) Demand of laborer’s
(c) Qualification
(d) All of these
Page 110 of 168

Term-1
24 In Japanese companies, paternalistic style of management is in practice. There is complete
openness between the management and workers. If at all workers go to strike they wear a
black badge but work more than normal working hours to gain the sympathy of the
management.
Identify the principle of Scientific management being discussed above:
(c) Development of each and every person to his or her greatest efficiency and
prosperity
SECTION-B
25 The sum total of all individuals, institutions and other forces that are outside thecontrol
of a business enterprise but that may affect its performance is known
as
(a)Business environment
(b)Social environment
(c) Political environment
(d)Economic environment.
26 Sushmita is planning to start an online coaching centre. She wants to introduce innovative
teaching techniques especially for slow learners. Therefore, she is constantly interacting
with parents and encouraging them to share their ideas. This will make her aware of more
alternatives. The step of planning being described in the given lines is……..
(a) Identifying alternative courses of action
(b) Selecting the best course of action
(c) Evaluating the courses of action
(d) Follow up action
27 “Product are not purchased but sold.” Identify the concept of marketing management
highlighted by this statement.
(a) Production concept
(b) Product Concept
(c) Selling concept
(d) Marketing Concept
28 In the recent few years, the ‘Online business’ has become very much in vogue. Now, sitting at
home, we can get information about the sellers of any product and other related information
through the medium of internet. Through the internet only the process of ordering goods
and making payment is completed. The desired good reach home within the minimum
possible time. This new business system has very deeply affected the current business
system. The people doing business according to the traditional system are very much
worried, and they have started seeing their future as full of darkness.
Which particular dimension of the business environment is indicated in the event referred
to above?
(a) Economic Environment
(b)Social Environment
(c) Technological Environment
(d) Political Environment
29 Jyoti Ltd. Decided to give more stress on the following: to use environment friendly
methods of production, to provide employment opportunities to the disadvantaged section
of the society and to make available basic amenities like schools and crèches to the
employees. Identify the objective of management discussed above.
(a) Organisational Objective
(b) Social Objective
Page 111 of 168

Term-1
(c) Personal Objective
30 With the onset of the thought of producing a thing the process of______ Starts.
(a) Buying
(b)Selling
(c) Marketing
(d) Producing
31 Sushasini plans her winter collection in the month of June it self. She has to then ensure that
there is adequate workforce and continuously moniter whether production is proceeding
according to plans. Her marketing department also has to be briefed in time to prepare
their promotional and advertising campaigns.
The characteristic of coordination being highlighted above is :
(a) Coordination is the responsibility of all managers.
(b) Coordination is a deliberate function.
(c) Coordination integrates group efforts.
(d) Coordination is a continuous process
32 For the following two statements choose the correct option:
ASSERTION: Organizing leads to optimum utilization of authority.
REASON: It ensures proper allocation of jobs and minimizing the wastage of resources
and efforts.
Choose the correct option from the options given below:
( a) Both (A) and ( R ) are correct
( b) (A) is correct ( R) is incorrect
( c ) Both (A) and ( R) are correct, and R is the correct explanation of R
( d) Both (A) and ( R) are correct, and R is not the correct explanation of R
33 According to Fayol, “Organisation should have a chain of authority and communication that
runs from top to bottom and should be followed by managers and the subordinates.”
According to Fayol, this chain should not be violated in the normal course of formal
communication. Match the statement given by Fayol with his principle of management.
(a) Remuneration
(b) Equity
(c) Discipline
(d) Scalar Chain
34 National Vritech Ltd. has grown in size.It was a market leader but with changes in business
environment and with the entry of MNCs,its market share is declining.To cope up with the
situation CEO starts delegating some of his authority to the General Manager,who also felt
himself overburdened and with the approval of CEO disperses some of his authority to
various levels throughout the organization.
Identify the concept of management discussed above.
(a) Delegation
(b) Organising
(c) Decentralization
(d) Centralisation
35 Synchronisation of efforts is easy in Shine Tube-lights Ltd. as all the related functions
related to a particular product are integrated within one department. Identify the
organisational structure followed by Shine Tube-lights Ltd.
(a)Functional structure
(c) Informal structure
Page 112 of 168

Term-1
36 As the head of a financial consultancy firm. Mohit formulates the objectives forthe whole
year for the firm. The departmental managers on the other hand prepare the plans for
their respective departments. The feature of planning being described in the given lines is
………
(b) Planning is pervasive
(c) Planning is goal-oriented
(d) Planning is a mental exercise
37 Mr Hari Mohan Ms Malti Rana both are fast friends and working as managers in Mata fabrics
Ltd. They are playing a very important role in the company. Through their efforts quality
output is maintained, wastage of material is minimized and safety standards are maintained.
Identify the management level at which are they working.
(a) Top Management
(b)Middle Management
(c) Supervisory Management
(d) None of these
38 It is an impersonal form of communication, which is paid for by the marketers(sponsors)
to promotesome goods or services. Identify the promotional tool used by the marketer.
(a) Advertisement
(b) Personal Selling
(c) Publicity
(d) None of these
39 A petrol pump needs to be manage as much as a hospital or a school. What managers do in
India, the USA, Germany or Japan is the same. How they do it may be quite different .This
difference is due to the differences in culture, tradition and history. Identify the
characteristics of management that has been mentioned here.
(a) Management is a continuous process
(b) Management is all pervasive
(c) Management is multidimensional
(d) Management is goal oriented
40 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.
Identify the feature of science to which the above statement is related.
(a) Systematised body of Knowledge
(b)Principles based on experimentation
(c) Universal Validity
41 Sohan, owns a financial consultancy firm. He always explores new innovative ways of
marketing his services as he strongly believes that just because a plan has worked
before it is not necessary that it will work again. The limitation of planning that Sohan
triesto overcome is………….
(a) Planning does not guarantee success
(b) Planning is a time-consuming process
(d) Planning involves huge costs.
42 Taylor laid focus on____and saving energy of workers and focuses on increasing
productivity. Fayol focus was on development of principles for better management and ….....
(a) Eliminating wasteful movement, improving overall achievement.
(b) Personal observation, management efficiency.
(c) Management efficiency, personal observation.
Page 113 of 168

Term-1
(d) Improving overall achievement, eliminating wasteful movement.
Statement I: In modern marketing sense,the term marketing has a broader meaning.
Statement II: Market refers to a set of actual and potential buyers of a product or service.
44 The objective of the Marketing Department of ‘Sunderam Kids wear limited’ is to increase
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 conflicts arise in organisations because
each department is performing activities in isolation from others and barriers between
departments are performing more rigid.
Identify the point of importance of coordination to which this case is related:
(a) Growth in size
(b)Functional differentiation
(c) Specialisation
(d) None of these
45 Suzan Ltd. Wants to increase their market share by 5.4% in next two years. It spent a lot of
money to hire specialised people for framing their plans, collecting important facts about
environment who took lot of time to frame plans for the company. The competition has
started increasing. And it is not able to beat its competitors because it has already spent a
huge amount. The plan failed and company suffered a huge loss. Identify the limitation of
planning stated in the given case.
46 Taylor's techniques are expressed as............. management and Fayol’s techniques are
expressed as General theory of …………...
(a) Administration, Scientific
(b) Personal, Observation
(c) Observation, Personal
(d) Scientific, Administration
47 Guneet 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
Assertion (A): If target of a company is to produce 12,000 cars per year, thencompany must
ensure that at least 1,000 cars are produced per month.
Reason (R): It is necessary because follow up action is the last step of planning process that
requires monitoring of plans to ensure that objectives are achieved on time.
Page 114 of 168

Term-1
SECTION-C
Read the following text and answer question number 49-54 on the basis of thesame.
Mr Sarthak Gautam is working on the post of General Manager of ‘Gautam Medicare Private
Limited’.He has completed the first function of management,i.e Planning of his
company.Now he is preparing for the other fuction of management i.e organising.
Mr Gautam built a team of a specialist for this work. The team first of all , prepared a detail
list of the different activities to be done in the company for the completion of plans. While
preparing this list the care was taken that neither any activity should be left undone nor
should there be the repetition of any activity.
The members of the team thoroughly studied the activities included in the list prepared .
After studying the activities , the activities of similar nature were put together , so that they
should be completed under the supervision of the same manager For example ,
advertisements and sale were the activities of similar nature. The responsibility of
completing these activities was handed over to the Marketing Manager.
After this, the activities to be done on different posts were defined by the team. In other
words , it was clarified which activities would be performed by a particular department and
who would complete them. At the time of work distribution , a special care was taken to
assign the right work /job to the right person. Besides the team of specialists also settled
who would get orders from whom and to whom he would be answerable.
49 Identify the Concept of Organizing involved in the above paragraph

(a) functional Structure
(b) Organisational Structure
(c) Organising Process
50 Arrange the following steps in the process of organising in the correct sequence:
(a) Assignment of duties
(c) Identification and division of work
(d) Establishing reporting relationshipChoose
the correct option:
(a) (a ) ; (b) ; (d); (c)
(b) (c ) ; (b) ; (a); (d)
(c) (c ) ; (b) ; (d); (a)
(d) (b) ; (c) ; (a); (d)
51 ‘ A detailed list of the different activities to be done in the company was prepared by the
team of specialists’. Which particular stage of the organising process is indicated by this?
(a) First (b) Second
(b) Third (d) Fourth
52 ‘Receiving orders and being answerable was clarified by the team of specialists’. What does
this action of the team suggests regarding the organising process?
(a) Identification and Division of work
(d) Establishing Reporting relations
53 ‘At the time of distribution of work it was certain that the right person should be given the
right work’. To which stage of ‘ Organizing Process ‘ is this statement related?
Page 115 of 168

Term-1
(c) Assignment of Duties
(d) Establishing Reporting Relations
54 ‘ All the activities of similar nature were put together by the team, so that they should be
completed under the supervision of the same person’. Which of the stages of ‘Organising
Process’ is indicated by this action of the team ?
(d) Establishing Reporting Relations
55 ‘Neeraj Milk Producer Pvt Ltd.’ was established to produce tasty and nutritious dry milk for
small children.The company gave its product the brand name’Mother Love’.brand in no
time.Here one particular thing was that the company had lain its full emphasis on the
packaging of their product.On the milk box were written the ‘instructions of use’.Besides,it
was also written that ‘mother’s milk is the best.’To write this was the legal requirement.The
company was very much successful and within a days,it became the leader in its industry.
Which dimension of the business environment is perceived from the event quoted above?
(a) Economic environment
(b) Social environment
(c) Legal environment
(d) Political environment
56 Zolo, a marketer of cars having 40 % of the current market share of the country aims at
increasing the market share to 70% in next few years. For achieving this objective the
manager of the company specified the action programme covering various aspects.
Identify the function of marketing discussed above:
(a) Customer support services
(b) Gathering and Analysing market information
(d) Marketing Planning
57 In order to improve upon its competitive edge, Kritika Limited has changed the packaging
of its hair care products. They are now available in a consumer friendly design, which has a
nozzle attached to the lid so that at the time of usage, the consumer doesn’t need to open
the cap of the bottle. Name the marketingfunction being explained in the given lines.
(c) Promotion
(d) Physical distribution
58 A sanitizer manufacturing company wants to become a market leader. For this purpose
the manager follows an activity with certain logical steps. The first step suggested by him is
to increase profits by at least 30% in the next quarter. What will be the last step of the
activity being followed by the manager.
(a)Follow-up action
(b)Identifying alternative course of action
(c) Setting objectives
(d) Evaluating alternative courses of action
59 In Shalleen Pvt Ltd. there is one head Shalleen who has two lines of authority under her.
One line consists of Sara-Rajat-Abhishek-Ismail-Chris. Another line of authority under
Shalleen is Lata-Rupa-Geet-Hussain-Preeti. According to a Principle of Management given
Page 116 of 168

Term-1
by Fayol, If Ismail has to communicate with Hussain who is at the same level of
authority then illustrate the route he will have to traverse.
(a) Ismail-Abhishek-Rajat-Sara-Shalleen-Lata-Rupa-Geet-Hussain
(b) Hussain-Geet-Rupa-Lata-Shalleen-Sara-Rajat-Abhishek-Ismail
(c) Ismail-Chris-Shalleen-Preeti-Hussain
(d) Ismail-Abhishek-Rajat-Sara-Lata-Rupa-Geet-Hussain
60 A company wants to differentiate between its efficient and inefficient workers.For the
same,it is determined that standard output per worker per day is 8 units and those who
made standard or more than standard will get Rs 50 per unit and those below will get Rs 40
per unit.Now an efficient worker making 9 units will get 9x 50=Rs 450 per day whereas a
worker who makes 7 units will get 7x40=Rs 280 per day.
Identify the technique of scientific management highlighted in the above case.
(a) Differential piece wage system
(b) Method Study
(c) Time Study
(d) Fatique Study
Answer key-Sample Paper 1

1 A 16 A 31 C 46 D
2 C 17 D 32 C 47 C
3 D 18 A 33 D 48 A
4 A 19 C 34 C 49 C
5 D 20 A 35 B 50 B
6 D 21 A 36 B 51 A
7 D 22 B 37 C 52 A
8 D 23 D 38 A 53 C
9 C 24 A 39 B 54 B
10 B 25 A 40 A 55 C
11 C 26 A 41 A 56 D
12 C 27 C 42 A 57 A
13 B 28 C 43 C 58 A
14 B 29 B 44 B 59 A
15 C 30 C 45 D 60 A
Page 117 of 168

Term-1
Section (B)-
Section (C)
Unit wise Section (A) Case
Name of the Case
S.No Marks OTQ’s/Assertion- Studies/Case
Chapter Studies/Case
Allocation Reasoning Problems/
Problems
Assertion-
Reasoning
Nature and
1 Significance of 4 6 -
Management
Principles of 16
2 4 3 2
Management
Business
3 3 2 1
Environment
4 Planning 3 5 1
14
5 Organising 3 3 6
Marketing
6 10 7 5 2
Management
Total Questions(Section-wise) 24 24 12
Questions to be attempted
20 20 10
(Section-wise)
** Numbers shown in cells under each sections are no of questions from Chapter shown against
them.
** Each Question Carries .80 Marks.Total Marks Unit wise will exceed the Unit wise Marks
Allocation as there is a choice for Questions to be attempted section wise.
Page 118 of 168

Term-1
Sample Question Paper -2
(2021-22)
Term 1
Section –A
1 Which of the following statement is not relevant to the concept of “Management as an
inexact science “?
(a) The principles of management lack universal validity.
(b) The principles of management have universal applicability.
(c) The principles of management have to be modified according to the given situation.
(d) Management involves dealing with human behaviour and outcomes cannot be
predicted with utmost accuracy.
2 Which of the following statement is not true with reference to Planning?
(a) Planning is a prerequisite for controlling.
(b) Planning facilitates coordination among departments and individuals in the
organisation.
(c) Planning enables a manager to look ahead and anticipate changes.
(d) Planning does not lead to rigidity.
3 Raju has decided to open a school uniform shop in a local market but before doing so he
decided to conduct a survey to assess the needs and wants of the parents and students with
regard to the same. identify the type of marketing philosophy has been mentioned in the
given case.
(a) production concept
(b) marketing concept
(c) product concept
(d) selling concept
4 Identify the level of management which does not interact with the workforce directly.
(a) Supervisory management
(b) Operational management
(c) First line managers
(d) Middle level management
5 One of the principles of general management is in direct contradiction to technique of
scientific management. Name both the principle and the technique.
(a) Order and functional foremanship
(b) Unity of direction and differential piece rate system
(c) Unity of command and functional foremanship
(d) Equity and unity of command
6 Name the marketing function that seeks to protect against both unavoidable delays in
delivery and to meet out contingencies in the demand.
(a) Transportation
(b) Warehousing
Page 119 of 168

Term-1
(c) Promotion
(d) Gathering and analysing market information
7 It is difficult to Demark the time spent by a manager in performing a particular function on
a particular day as he may have to perform all the functions simultaneously while doing his
work. Identify the feature of management being highlighted in the given case.
(a) Management is goal oriented
(b) Management is multidimensional
(c) Management is continuous
(d) Management is all Pervasive.
8 In order to inform and persuade the prospective of consumers about its range of products, a
startup business decided to use non-personal form of communication. identify the element
of promotion mix been described in the given case.
(a) Personal selling
(b) Public relation
(c) Advertising
(d) Sales promotion
9 Ramesh and Suresh are working as departmental heads in XYZ limited. Ramesh has been
entrusted with the responsibility of shoe division. Where as Suresh is heading the garments
division. Identify the type of organisational structure adopted by XYZ Limited.
(c) Matrix structure
10 Planning cannot foresee everything, and thus, there may be obstacles to effective planning.
Identify the related limitation of planning.
(a) Planning leads to rigidity.
(b) Planning may not work in a dynamic environment.
(c) Planning does not guarantee success.
(d) Planning reduces creativity.
11 Name the process which coordinates 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
12 Identify the correct sequence of steps involved in the planning process.
(a) Evaluating alternative courses, Identifying alternative course of actions, Setting
objectives , Developing premises.
(b) Setting Objectives, Identifying alternative course of actions, Evaluating alternative
courses, developing premises.
(c) Setting Objectives, developing premises, identifying alternative course of actions,
Evaluating alternative courses.
(d) Setting Objectives, developing, evaluating alternative courses, premises Identifying
alternative course of actions.
13 Wholesaler of food grains 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 line.
(b) Transportation
(c) Warehousing
(d) Standardisation and grading
Page 120 of 168

Term-1
14 Which of the following is not a component of a specific forces of business environment?
(a) Technological conditions
(b) Customers
(c) Employees
(d) Investors
15 Which of he following s not a function of labelling?
(a) Describe the product and specifies its content
(b) Identification of the product or brand
(c) Grading of Product
(d) Facilitating the use of the product
16 Plans encourages new ideas that can take shape of concrete plans. Identify the related
importance of planning.
(a) Planning provides direction
(b) planning reduces the risk of uncertainty
(c) planning promotes innovation
(d) planning facilitates decision making
17 The size and shape of the package should be convenient to open,handle and use for the
consumers, which function of packaging being mentioned in the given line?
(a) facilitating use of the product
(b) Product identification
(c) Product protection
18 DigiLocker is the country’s first secured cloud-based platform for the storage, issuance and
verification of documents with the driving licence and vehicle registration system of the
road transport ministry. The integration of a government department with digiLocker since
its launch last year is one of the biggest of its kind. it will spare people the trouble of
carrying licences and vehicle papers which can be accessed on phones using the digilocker
app. identify the related dimension of business environment
(a) Economic dimension
(b) Technological dimension
(c) Social dimension P
(d) Political dimension
19 Rajesh has the objective of earning more wages by increasing the number of units to be
produced but in doing so there is huge wastage of materials and greater risk of breakdown
of machinery. The principle of management given by fayol being violated by Rajesh is
(a) Remuneration
(b) Equity
(c) Discipline
(d) Subordination of individual interest to general interest
20 What is the ranking of job positions on the basis of relative roles and responsibilities known
as?
(a) Span of management
(b) Hierarchy
(c) Decentralization n
(d) None of the above p
21 …………………………. of products and services involves informing the customers about the
firm’sproduct, its features etc. and persuading them to purchase these products:
(a) Branding
(b) Packaging and labelling
(c) Promotion
(d) Pricing
Page 121 of 168

Term-1
22 Business environment is a relative concept as:
(a) It consists of both specific and general forces
(b) Elements of business environment are closely interrelated
(c) It is dynamic in nature
(d) It differs from country to country and even region to region
23 …………………. refers to the right of an individual to command is subordinates and to take
action within the scope of his position.
…………………. is the obligation of a subordinate to properly perform the assigned duty.
(a) Authority, Responsibility
(b) Accountability, Authority
(c) Responsibility , Authority
(d) Responsibility, Accountability
24 ………………………….determines the amount and frequency of rest intervals in completing a
task.
(a) Time study
(b) Motion study
(c) Fatigue study
(d) Method study
Section -B
25 In order to boost and double India's export of goods and services to over USD thousand
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 dimensions of business environment:
(a) Social dimension and legal dimension
(b) Technological dimension and political dimension
(c) Political dimension and social dimension
(d) Economic dimension and legal dimension
26 This concept is applicable for the firms having overcapacity in which their goal is to sell
what they produce than what the consumer really wants. Identify the marketing concept
being referred to
(a) Product concept
(c) Selling concept
(d) Marketing concept
27 This philosophy holds that organisation’s task is to determine the needs, wants and
interests of target markets and to deliver the desired satisfaction more effectively and
efficiently than competitors in a way that preserves or enhances the consumers’ and the
society’s is well being.
(a) Product concept
(d) Societal Marketing concept
28 Advertisements for packets of cigarettes must carry the statutory warning “Cigarette
smoking is injurious to health” This is associated with
(a) Political Environment
(b) Legal Environment
(c) Social Environment
29 Both company X and company Y are using the same amount of resources however the
output of company X is higher than that of company Y. Identify the concept in which
company X has an edge over company Y
Page 122 of 168

Term-1
(a) Effectiveness
(b) Efficiency
(c) Both a and b
30 Abhinav started a courier service. For informing the people about his service he designed a
beautiful informative pamphlet, got it printed and started distributing it through the daily
newspapers. Identify the promotional tool used by Abhinav to communicate to the
customers:
(a) Personal selling
(b) Public relation
(c) Advertising
(d) Sales promotion
31 “Coordination is required at all levels of management as well as within and among all
departments”. Which feature of coordination is being highlighted here?
(a) Coordination is a continuous process
(b) Coordination is an all pervasive function
(c) Coordination is a deliberate function
(d) Coordination integrates group efforts
32 Assertion (A) Departmentalisation facilitates specialisation
Reason ( R ) Departments can be created using several criteria as a basis for division of
work.
(a) both the statements (A) and (R) are correct and (R) is the right explanation of (A)
(b) both the statements (A) and (R) are correct and (R) is not the right explanation of (A)
(c) Statement (A) is correct but statement (R) is incorrect.
(d) Both statement (A) and (R) are incorrect.
33 The Number of subordinates that can be effectively managed by a superior:
(a) Scalar chain
(b) Span of management
(c) Delegation of authority
(d) Hierarchy
34 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,
(c) Identification and division of work. Assignment of duties, Departmentalisation,
(d) Identification and division of work, Establishing reporting relationships,
Departmentalisation, Assignment of duties.
35 Which of the following may not be a reason for the company to adopt divisional structure?
(a) Promotes product specialisation
(b) Helps in fixation of responsibility in cases of poor performance of a unit
(c) Leads to economies of scale and this lowers cost
(d) Promotes flexibility and initiative
36 Which of the following is a benefit of planning ?

(a) Helps in avoiding confusion
(b) Clarity in thought and action
(c) Useless activities are minimised
Page 123 of 168

Term-1
37 Which of the following is not a designation related to top level management ?
(a) Production manager
(b) President
(c) Chairman
(d) Vice president
38 A company should attempt to provide high quality products, must stress on quality of
production rather than quantity of production. product improvement is considered the key
to success under the………………………….
(b) Product concept
(c) Selling concept
(d) Marketing concept
39 “Management involves creating an environment which is conducive to efficient and effective
program” which feature of management is highlighted here
(a) Management is a Continuous process
(b) Management is a deliberate process
(c) Management is adynamic function
(d) Management is an intangible force
40 Reena is one of the most successful managers of a company W limited. she uses her
creativity and initiative in handling challenging situations at work. The knowledge gained
by her during her student day at a renowned management institute as well as through her
observation and experience over the years is applied by her in a skillful manner in the
context of the realities of a given situation. She often reads books and other literature in
various fields of management to keep her knowledge updated, An aspect of the nature of
management is being highlighted in the above description. Identify the aspect:
(a) Management as an art
(b) Management as a science
(c) Management as a profession
41 India has 22 of the world's 30 most populated cities therefore the central government has
approved an outlay of 10000 crore for three years till 2022 to subsidize electric vehicles
and drive the adoption of electric mobility in the country. Identify the step in the planning
process being described in the above lines
(a) Setting objectives
(b) Developing premises
(c) Both a and b
42 Specialisation should be introduced at the supervisory level. For this purpose the task of
supervision should be divided into several specialised functions and each function should
be enterested to a specialised person. which technique of scientific management is being
discussed here:
(a) Method study
(b) Functional foremanship
(c) Motion study
(d) Differential piece wage system
43 Assertion (A)A brand name should be distinctive
Reason ( R ) It helps the customers to identify and differentiate one product from another
Page 124 of 168

Term-1
44 Corporate sector participating in rehabilitation of handicapped children, spending 10 crores
towards public conveniences, contributing regularly in the fields of education, agriculture,
healthcare. which objective is being pointed out in the description ?
(a) Social objective
(b) Personal objective
(c) Economic objective
45 The target of Bajaj limited is to produce 12000 bikes per year, then company must ensure
that at least 1,000 bikes are produced per month. In case of any shortage, corrective actions
must be taken. Which step of planning process is being highlighted in the above para?
(a) Developing premises
(c) Follow up action
(d) Implementing the plan
46 In XYZ limited there is no fixed place to keep the tools, similarly supervisor don't have the
fixed cabin place to be there. As a result lot of the time of workers get wasted for searching
his tools and their supervisors for guidance. Which principle is being violated here?
(a) Discipline
(b) Order
(c) Equity
(d) Initiative
47 ………………….refers to short term incentives which are designed to encourage the buyers to
make immediate purchase of a product
(a) Advertising
(b) Sales promotion
(d) Public relation
48 Assertion (A)Planning is regarded as a forward looking function.
Reason ( R ) planning essentially and looking ahead and preparing for the future
Section-C
Read the following text and answer question number 49-54 on the basis of the same:
Rajeev started a telecommunication company BE limited to manufacture economical mobile
phones for the Indian rural market with 15 employees. The company did very well as its
initial years as the product was good and marketed well ,the demand of its products went
up. To increase production the company decided to recruit additional employees. Rajiv
who was earlier taking all decisions, now started sharing his powers with the subordinates
in a systematic manner at various levels of organisation. They are competent , capable and
resource full and can assume responsibility for effective implementation of the decisions.
This paid off and the company was not only able to increase its production but also
extended its product range.
49 Identify the concept used by Rajiv through which he was able to steer his company to
greater heights:
(a) Delegation
(b) Decentralization
(d) Centralisation
Page 125 of 168

Term-1
50 Which is the basic requirement for decentralisation ?
(a) Authority
(b) Responsibility
(c) Delegation
(d) Accountability
51 ……………………arises from the established scalar chain which links the various job positions
and levels of an organisation.
(a) Authority
(b) Responsibility
(c) Accountability
52 What is the direction of flow of the element of delegation as identified in the previous
question?
(a) bottom to top
(b) Top to bottom
(c) In all directions
53 What is the importance of decentralisation ?
(a) Develops initiative among subordinates
(b) Develops managerial talent for the future
(c) Quick decision making
54 Which one of the following is not true ?
(a) Rajeev is related with top level management.
(b) BE limited is a technology based company
(c) Be limited recognises the importance of Decentralisation
(d) Rajeev does not delegate his authority
55 Amita owns a nursery in Delhi. She is now planning to venture into the business of setting
up a portal for selling terrarium plants ( art of growing plants inside glass jars with a
narrow opening).The market for indoor plants in India is estimated at over Rupees 250
crore annually and is growing at 15% to 20% .the terrarium plants require less water and
are much in demand now with the houses becoming small and virtually no gardens for
people residing in apartments in metro cities. the above case highlights one of the point
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
56 Rajan had started the business of producing exclusive home decor items under the brand
name “ homesupremia” 10 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 “home supremia” 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) Reflect the functions of the product
(c) Distinctive/ easily identifiable
(d) Versatile ,can be used for brand extension
57 XYZ limited manufacture room fresheners in block formats which can be used anywhere in
the houses. These blocks are first individually packed in a foil and then in a cardboard
box.50 such boxes are then placed in a big corrugated box and deliver to various retailers
Page 126 of 168

Term-1
for sale. Identify the level of package in which relates to putting the blocks in a corrugated
box:
(a) Primary packaging
(b) Secondary packaging
58 According to the technique of scientific management differential piece rate system how
much more will a worker making in 80 units earn as compared to a worker making69
units? if the standard output per day is 75 units and those who make standard output or
more than a standard get rupees 100 per unit and those below get rupees 80 per unit
(a) 2420 (b)2040
(c )2480 (d)4280
59 Indian railways has one of the world's largest rail network and it is the single largest
consumer of electricity in the country. It has an ambitious target through based on logical
thinking based on forecast to source 25% of its energy requirements from renewable
energy sources by the year 2025.Electricity accounts for 20% of railway’s operational cost
and it is estimated that 41000 crore rupees would be saved in 10 years by increasing the
use of renewable energy sources. Identify the function of management being described in
the above paragraph:
(a) Planning
(b) Directing
(c) Organising
(d) Controlling
60 In Arti private limited there is one head Arti who has two lines of authorities under her. One
line consists of Amir-Rohit-Suresh-Vinay-Ravi. another line of authority under Arti is
Ramesh-Kavi-Arif-Priti-Naveen according to principal of management given by fayol if
Vinay has to communicate with Priti who is at the same level of authority, then illustrate
the route he will have to traverse
(a) Vinay-Ramesh-Kavi-Arif-Amir-Suresh-Ravi-Priti
(b) Vinay-Arif -Naveen Amir-Rohit-Suresh -Ravi-Priti
(c) Vinay-Ramesh-Kavi-Arif -Naveen-Rohit-Ravi -Priti
(d) Vinay-Suresh -Rohit -Amir -Ramesh-Kavi-Arif-Priti
ANSWER KEY MCQ

1 B 16 C 31 B 46 B
2 D 17 A 32 A 47 B
3 B 18 B 33 B 48 A
4 D 19 D 34 B 49 B
5 C 20 B 35 C 50 C
6 B 21 C 36 D 51 A
7 C 22 D 37 A 52 B
8 C 23 A 38 B 53 D
9 A 24 C 39 B 54 D
10 B 25 D 40 A 55 D
11 C 26 C 41 C 56 D
12 C 27 D 42 B 57 C
13 D 28 B 43 A 58 C
14 A 29 B 44 A 59 A
15 D 30 C 45 C 60 D
Page 127 of 168

Term-1
Section (B)-
Section (C)
Name of the Case
Problems
Assertion-
Reasoning
Nature and
Management
Principles of 16
2 3 3 2
Management
Business
3 3 2 1
Environment
4 Planning 4 5 1
14
5 Organising 4 2 6
Marketing
6 10 7 5 2
Management
Questions to be attempted (Section-
20 20 10
wise)
** Numbers shown in cells under each section are number of questions from each
chapter shown against them.
Page 128 of 168

Term-1
Sample Question Paper- 3(2021-22)

Term 1
Subject: Business Studies
5. All questions carry equal marks (0.80 each).
Section - A
1. “Management is a systematised body of knowledge, whose principles are built up by

management practitioners over a period of time through observations and experiences.” Which
aspect of the nature of management is highlighted in the above statement?
(a) Management as a science
(b) Management as an art
(c) Management as a profession
(d) Management is an intangible force.
2. Ends and Means are the two words associated very closely to _____________ function of
management.
(a) Directing
(b) Staffing
(c) Planning
(d) Controlling
3.
A good design of the product can improve performance of a product and also give it a competitive
advantage in the market. The statement reflects the ___________ function of marketing,
(a) Market Planning
(b) Gathering and analysing market information
(c) Product Designing and Development
(d) Labelling
Page 129 of 168

Term-1
4. Which level of management is responsible for all the activities of first line managers?
(a) Top level of management
(b) Middle level of management
(c) Supervisory level
5. Name the technique suggested by F. W. Taylor for finding the one best way of doing a job which
will bring efficiency in the organisation.
(a) Science not rule of thumb
(b) Mental Revolution
(c) Method Study
(d) Motion Study
6. A brand or part of the brand that can be pronounced is called _____________

(a) Brand Mark
(b) Trademark
(c) Brand
(d) Brand name
7. McDonalds made a major change in the recipe of Burger by replacing Non Vegetarian Cutlet with
Vegetarian Cutlet to survive in Vegetarian Indian Market. Which feature of management is
discussed here?
(a) Management is intangible
(b) Management is Dynamic Function
(c) Management is goal oriented
(d) Management is pervasive
8. ___________________ is a short term incentive designed to encourage the buyers to make immediate
purchase of a product or service.
(a) Advertising
(c) Sales Promotion
(d) Public relations
Page 130 of 168

Term-1
9. Which type of organisational structure will you suggest for a firm manufacturing leather
currently and is planning to add leather hand bags and wallets to their product line so as to
expand their business?
(a) Centralised structure
(b) Decentralised Structure
(c) Divisional structure
(d) Functional structure
10. “Middle Management and other decision makers are neither allowed to deviate from plans nor
are they permitted to act on their own.” The statement suggests the following limitation of
planning:
(a) Planning reduces creativity
(b) Planning may not work in a dynamic environment
(d) Planning is a time consuming process.
11. “Each individual should also know who he has to take orders from and to whom he is
accountable.” Identify the function of management.
(a) Planning
(b) Organising
(c) Directing
(d) Staffing
12 Pervasiveness of planning indicates that……

(a) Planning extends throughout the organisation
(b) Planning requires logical and systematic thinking
(c) Planning is future oriented activity
(d) Planning precedes other functions
13 An element of marketing mix that communicates, availability, features and merits etc of the
products to the target customers and persuade them to buy it is___________.
(a) Physical Distribution
(b) Price
(c) Promotion
(d) Product
Page 131 of 168

Term-1
14. “The change in family composition has led to increase in nuclear family concept. It has increased
the demand for different types of household goods”. Which type of Business Environment is
discussed here?
(d) Social Environment
15. “Marketing is the process of exchanging goods and services of value with others.” The word value
in sentence means:
(a) Marketing is pre and post production activity.
(b) A product is purchased only when it gives greatest benefit to customers.
(c) Marketing involves the mechanism of exchange.
(d) Focus of the marketing activities is on customer needs
16. Planning can best be explained by which of the following options?

(a) Delegating the responsibility and making the subordinates accountable
(b) Following each level successively for communicating
(c) Peeping in future, analysing and predicting
(d) Coordinating all the resources
17. _______________ is an important function of marketing which continues even after sales, aims at
providing maximum satisfaction to customers and is effective in bringing repeat sales from
them.
(a) Warehousing
(b) Customer Support Services
(c) Pricing of product
(d) Branding
18. Most of the big companies and MNCs are hesitant to invest in some of the north eastern states of
India due to instability of government and lack of incentives by the government. Which
dimension of the business environment is highlighted in the above statement?
(a) Social Environment
Page 132 of 168

Term-1
19. “Worker training is essential to learn the best method developed as a consequence of the
scientific approach.” The scientific principle of management discussed is:
(a) Development of each and every person to his or her greatest efficiency and prosperity
(d) Mental revolution
20. The process where the decision making power is placed nearest to the point of action is
called___________.
(a) Centralisation
(b) Delegation
(c) Authority
(d) Decentralization
21. ____________ is a process of producing goods of predetermined specifications, which help in

achieving uniformity and consistency in the output.
(a) Selling
(b) Standardization
(c) Product Development
(d) Grading
22. “Society in general is more concerned about the quality of life so court passed an order that all
the schools must have water purifiers for the school children.” The dimensions focused in the
case are:
(a) Business environment and social environment respectively
(b) Social environment and legal environment respectively
(c) Social environment and Political environment respectively
(d) Economic environment only.
23 Name the framework within which managerial and operating tasks are performed and which
specifies the relation between people, work and resources.
(a) Organisation structure
(b) Span of management
(c) Hierarchy of authority
(d) Delegation of Authority
Page 133 of 168

Term-1
24 Fayol believed that “Employees turnover should be minimised to maintain organisational
efficiency.” Identify the principle of management being discussed above:
(c) Stability of Personnel
Section -B
25. Maruti Udyog became the leader in small car market because it was the first to recognise the
need for small car. Which importance of business environment is highlighted in above case?
(a) Helps in tapping useful resources
(b) Helps in coping changes
(c) Helps in improving performance
(d) Helps in identifying opportunities and getting first mover advantage
26. Having transformed 2,500 Kirana stores across eight cities in to virtual super market, the start
up Quick Bizz further decided in advance to collaborate with 15,000- 20,000 stores owners in
top 30 cities of the country by the end of this year. Name the last step in the process of the
functions of management discussed above.
(a) Follow up
(c) Setting objectives
(d) Selecting an alternative.
27 “The focus of business firm shifted to pushing the sale of product through aggressive selling
techniques with a view to persuade, lure or coax the buyers to buy the products.” Identify the
concept of marketing management highlighted by this statement.
(b) Selling Concept
(c) Societal concept
(d) Marketing Concept
Page 134 of 168

Term-1
28. With the rapid advancements in the field of replacing manual work with machines, a robot
named ‘Sujan’ has been invented and developed and is likely to get the citizenship of the country
of its origin.
It led to a stage where machines are being used in place of human beings. Which component of
business environment is highlighted above:
(a) Specific and general forces
(b) Technological environment
(c) Economic environment
(d) Totality of external forces
29 Climax Ltd. Is engaged in manufacturing calculators. The firm decided to provide employment to
disadvantaged section of society and also planned to open crèches for the babies of female
employees. Which objective of management is discussed here?
(a) Personal Objective
(b) Growth
(c) Organisational Objective
(d) Social Objectives
30. Kids Smile Ltd. manufactured new variety and colourful school bags, pencil kits and water
bottles and decided to keep the prices of the products at lower levels so that greater number of
children are attracted to purchase the products. Which is the nearest pricing objective the
company is planning to achieve?
(a) Profit maximization
(b) Surviving in competitive market
(c) Obtaining market share leadership
(d) Attaining product quality leadership
31. To become a Charted Accountant in India, a candidate has to clear a specified examination
conducted by the Institute of Charted Accountants of India. Which feature of profession is being
revealed?
(a) Ethical code of conduct
(b) Restricted Entry
(c) Well defined body of knowledge
(d) Professional association
Page 135 of 168

Term-1
Statement I: Organising stimulates creativity amongst the managers
Statement II: Delegations allows the managers to reduce their workload and
give them the time to explore new areas for growth
(a) Statement I is correct and II is wrong
(b) Statement II is correct and I is wrong
(c) Both the statements are correct
(d) Both the statements are incorrect
33 “The principles of management are the general guidelines to action but do not provide
readymade straitjacket solutions to all managerial problems.” The nature of principles of
management highlighted here is___________
(a) Contingent
(b) Universal applicability
(c) Mainly behavioural
(d) General guidelines
34 Find the correct combinations of alternatives given below:

A) Authority flows downward
B) Accountability flows upwards
C) Responsibility flows upwards
D) In some situations Authority flows upwards and responsibility flows downwards
(a) A, B, C are correct but D is incorrect
(b) A, B, C and D all are incorrect
(c) Only A and B are correct
(d) Only B and D are correct
35 Specialists usually think that they only are qualified to evaluate, judge and decide according to
their professional criteria. Therefore, some coordination is required by an independent person
to reconcile the differences in approach, interest or opinion of the specialists
The above explanation signifies which importance of coordination?
(a) Growth in size
(b) Functional differentiation.
(c) Specialization
(d) Efficiency
Page 136 of 168

Term-1
36 There are a number of incidental costs like expenses on boardroom meetings, discussions and
professional experts and preliminary investigations to find out the viability of the plan. The
limitation of planning revealed is__________.
(a) Planning is time consuming
(b) Planning involves huge costs
(d) Planning does not guarantee success
37 Navkar Ltd. has appointed Shri Kamal Kishore as its supervisor for the branch in Northern Zone.
What will be his basic task?
(a) To ensure the availability of resources for the entire organisation.
(b) To integrate diverse elements and coordinate activities of different departments.
(c) To analyse the strategies of competitors.
(d) Help to maintain quality of output, minimise the wastage of material and maintain safety
measures.
38 Mr. Bagga purchased a new car for his son on his 24th Birthday. His son was very happy to see
the new car of a well known brand in market. Moreover he can now go to college with
convenience. He very excitedly drove the car to his friends to show them his birthday gift. The
different type of utilities derived by him on receiving the gift in sequence are as follows:
(a) Psychological; Functional and Social
(b) Psychological; Social and Functional
(c) Functional ; Psychological and Social
(d) Functional ; Social and Psychological
39 Due to the increased demand of face masks in this phase of Corona Virus the production
department was given the target to manufacture 2000 face masks in one week time. The
department met the demand by working for extra hours but exceeded the given budget due to
more labour costs and electricity consumption. The production department is:
(a) Effective and efficient
(b) Effective but not efficient
(c) Efficient but not effective
(d) Neither efficient nor effective
Page 137 of 168

Term-1
40 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. The
management is ___________ in nature.
(a) Multidimensional
(b) Pervasive
(c) Intangible
(d) Goal oriented
41 “Planning provides goals and standards against which the actual performance is measured. If
there is any deviation it can be corrected. ” It signifies that:
(a) Planning reduces the risks of uncertainty
(b) Planning promotes innovative ideas
(c) Planning provides direction
(d) Planning provides the base for controlling.
42 The principles of management must be timely, realistic and subject to measurement and
evaluation. They should be based on facts, thoughtful and justifiable in terms of the intended
purposes. Which importance of principles of management is explained above?
(a) Scientific decisions
(b) Provides managers with useful insight into reality
(c) Helps in meeting changing requirements
(d) Management training, education and research

Statement I: Personal Selling is a personal form of communication.
Statement II: Personal Selling is an important element of Physical Distribution.
(a) Statement I is correct and II is wrong
(b) Statement II is correct and I is wrong
(c) Both the statements are correct
(d) Both the statements are incorrect
44 Management is required not for itself but for achieving the goals of the organisation. The task of
a manager is to give a common direction to the individual effort in achieving the targets of the
organisation. The following importance of management is highlighted above:
(a) Management helps in increasing efficiency
(b) Management helps in the development of society
(c) Management helps in achieving group goals
(d) Management helps in achieving personal objectives
Page 138 of 168

Term-1
45 Name the steps of planning process preceding and succeeding the step Identifying the
alternative course of actions.
(a) Setting the objectives; Selecting the alternatives
(b) Planning premises; Evaluating alternative courses
(c) Selecting an alternative and Evaluating alternative courses
(d) Implementing the plan and follow up action
46 The function of gang boss at the lowest level is

(a) Timely completion of work
(b) Prepare time and cost sheet
(c) Ensure proper working conditions of machines
(d) Keeping machines ready for operation by workers
47 Set of firms and individuals that take title or assist in transferring title to goods and services as it
moves from producers to the consumers.
The important feature of marketing illustrated above is:
(a) Transporter
(b) Channels of distribution
(c) Seller
(d) Retailers
48 Assertion :( A) Planning is continuous

Reason: (R ) Plans are prepared for a specific period of time and after that period there is need
for new plan to be drawn on the basis of new requirements and future conditions
( c ) Both (A) and ( R) are correct, and R is the correct explanation of A
Section C
Read the following text and answer question number 49-54 on the basis of the same.
Kanak Singhal was Managing Director of a restaurant in Lucknow called ‘Tasty and Healthy
Rasoi’. The restaurant was doing well and volume of work started increasing slowly and
steadily. Kanak was not able to manage all the work on her own. The increasing magnitude of
work made it impractical for her to handle it all by herself. Moreover her objective is to open
more branches at different places. She appointed Varnit Gupta, as a General Manager of ‘Tasty
Page 139 of 168

Term-1
and Healthy Rasoi’, Lucknow and gave him the right to command his subordinates and to take
actions within the scope of his position. For smooth running of the restaurant she also gave him
the authority to hire and train the staff as per the need. Kanak was satisfied with the work of
Varnit Gupta and was able to open other branches of restaurant in Agra and Kanpur also.
49 Identify the concept that is being followed by Kanak Singhal which helped her to open new
branches of the restaurant.
(a) Functional Foremanship
(b) Decentralization of authority;
(d) Delegation of Authority
50. The concept identified above does not relate to:

(a) Balance between authority and responsibility
(b) Abdication of responsibility
(c) Answerability of subordinates
(d) Taking back of authority if necessary
51 Kanak was able to open up many other branches at Agra and Kanpur also. What do you think
made her to do so?
(a) Facilitates growth
(b) Quick decision making.
(c) Effective management
(d) Better control
52 The line/lines from above passage which highlights the importance of the concept towards
providing opportunity for employee development are:
A) Gave him the right to command his subordinates
B) To take actions within the scope of his position
C) Kanak was satisfied with the work of Varnit Gupta
(a) Only A
(b) Only B
(c) Both C and D
(d) Both A and B
53 The benefit of the concept which cannot be quoted clearly in the above mentioned passage is:
(a) Employee development
Page 140 of 168

Term-1
(b) Better coordination
(c) Effective management
(d) Facilitation of growth
54 The concept identified in question 49 helps in the formation of:

(a) Corporate ladder
(b) Gang Plank
55 Due to a significant decrease in the goods and services tax in Gujarat, many of the fast growing
companies have planned to set up their production plants there. Identify the factor constituting
the general environment being discussed above.
(b) Social environment
(c) Economic environment
(d) Political environment
56 In order to protect the interest of public against unfair practices in the field of price fixing,
government can intervene and regulate the prices of certain commodities. Identify the type of
commodities or products discussed above:
(a) Essential products
(b) Consumer goods
(c ) Industrial goods
(d) Antique items
57 ‘Rangrez’ was the enterprise involved in the business of tie and dye dupattas and sarees. The
work was divided in planned manner among different individuals, departments and divisions. It
helped in avoiding confusions and misunderstandings. Such planning ensured clarity in
thoughts and action and work was carried on smoothly without interruptions.
Which significance of planning is highlighted in the above case?
(a) Planning promotes innovative ideas
(b) Planning reduces overlapping and wasteful activities
(c) Planning reduces the risk of uncertain0020ty
(d) Planning provides direction
Page 141 of 168

Term-1
58 The main task of this department is to disseminate information and build goodwill about the
business. During the time of negative publicity it does something drastic so that damage to
company’s image is controlled and minimised. This department also advise top management to
adopt certain programmes which will add to their public image.
Which important promotional task is done by the mentioned department?
(a) Advertising
(b) Publicity
(c) Branding
(d) Public Relations
59 Since last few months the performance and so the profits of Suhas Ltd. were continuously
declining. Worried about the situation a new HR manager Mr. Alok was appointed in the
organisation. Working for few weeks the new manager observed the entire working
environment of the organisation. He learnt that there is a kind of class conflict existing among
the management and workers. So he took the onus to correct the prevailing trend in the
organisation. He made both the groups realise that they both should transform their thinking
towards each other since each one is important in success of organisation. His efforts showed
positive results slowly. Management started sharing profits with workers and workers stopped
going on strikes.
What do you think which technique was adopted by Mr. Alok to improve the environment in
organisation?
(a) Mental Revolution
(b) Fatigue Study
(c) Differential Piece Wage System
(d) Division of work
60 A new MNC came into existence where individuals from different nations came together and
worked cordially with each other. There was no discrimination done among the employees on
the basis of nationality, religion, cast or gender. People working at same level got equal salaries
irrespective of any ground and were even bound by the same rules and regulations of the
company.
Which principle of general management is being followed in the above case?
(a) Remuneration
(b) Equity
(c) Discipline
(d) Order
Page 142 of 168

Term-1
MARKING SCHEME
SAMPLE PAPER 3
1. a 16. c 31. b 46. d
2. c 17. b 32. c 47. b
3. c 18. c 33. d 48. c
4. d 19. a 34 a 49. d
5. c 20. d 35. c 50. b
6. d 21. b 36. b 51. c
7. b 22. b 37. d 52. d
8. c 23. a 38. a 53. b
9. c 24. c 39. b 54. a
10. a 25. d 40. c 55. c
11. b 26. a 41. d 56. a
12. a 27. b 42. a 57. b
13. a 28. b 43. a 58. d
14. d 29. d 44. c 59. a
15. b 30. c 45. b 60. b
Page 143 of 168

Term-1

Business Studies(Term-1)
Section (B)-
Section (C)
Name of the Case
Problems
Assertion-
Reasoning
Nature and
Management
Principles of 16
2 3 3 1
Management
Business
3 5 5 2
Environment
4 Planning 3 3 4
14
5 Organising 4 2 4
Marketing
6 10 3 8 1
Management
Questions to be attempted (Section-
20 20 10
wise)
** Numbers shown in cells under each sections are no of questions from Chapter
shown against them.
Page 144 of 168

Term-1
Sample Question Paper -4(2021-22)
Term 1
Time:90minutes Max.Marks:40
Section-A
1 Which of the following is not a component of specific forces of business environment.
(a)Technical condition
(b)Customer
(c)Employees
(d)Investors
2 Identify the technique of scientific management which is contradictory to the principal of unity
of command.
(a)Time study
(b) Differential piece rate wage system.
(c)Functional foremanship
(d)Work study.
3 .………..is the process of designing and maintaining an environment in which individuals,
working together in groups , efficiently and accomplish selected aims.
(a) Management
(b) Planning
(c) Organising
(d)Coordination.
4 Which of the following is not a component of social environment of business.
(a)Growth rate
(b)per capita income
(c) Composition of population
(d)Life expectancy of people
5 ………………….. is the process of dividing work into manageable activities and then grouping the
activities which are similar in nature.
(a) Coordination
(c) Organisation Structure
(d) Delegation of authority.
(e)
6 The plans are monitored to ensure that the desired objectives are achieved effeciently and
effectively. Identify the related step in the planning process as described in the above line.
(a) Determining planning premises
(b) Follow up
(c) Evaluating all the alternative
(d) Implementing a plan
Page 145 of 168

Term-1
7 It is defined as the framework within which managerial and operating tasks are performed.
(a)Span of management
(b)Organisational structure
(c)Informal organization
8 The term Opportunities refer to …………….
(a)Any positive external trends
(b)Any changes in the environment that will help a firm to improve its performance
(c)Both (a) and (b)
9 Which among the following is not an element of delegation of authority.
(a) Authority
(c) Responsibility
(d) Accountability
10 Planning cannot foresee everything, and thus , there may be obstacles to effective planning.
Identify the related limitation of planning.
(a)Planning leads to rigidity
(b)Planning may not work in a dynamic environment
(c)Planning does not guarantee success
(d)Planning reduces creativity.
11 Name the technique of scientific management which aims to determine the amount and
frequency of rest intervals that should be provided to the employees during work hours.
(a)Time study
(b) Method study
(c)Motion study
12 The principles of Management are considered to be ………….as their application is dependent
upon the prevailing situation at a particular point of time.
(a) Flexible
(b) Contingent
(c) General Guidance
(d) Mainly Behavioral
13 Besttech Limited is one of the India’s largest information technology services company. It has
organised itself in a manner that allows customer orientation to dominate over other goals and
diversified on the basis of product lines. What type of organisational structure allows for the
addition of the new product lines without interrupting the existing operations in order to
facilitates expansion and growth of a business enterprise?
(a) Functional Structure

(b) Divisional Structure
(c) Matrix Structure
(d)None of the above.
14 Any one can be called a manager irrespective of the educational qualification processed.
Identify the characteristic of the profession that Management does not fulfill in the statement
being discussed above.
(a) Ethical code of conduct
(b) Professional Association
(c) Restricted Entry
(d) Service Motive
Page 146 of 168

Term-1
15 The technique of Functional foremanship is an extension of the principle of …………..to the shop
floor.
(a) Discipline
(b) Equity
(d)Order
16 Even when the members of a department willingly coordinate and work, a manager has to
coordinate the efforts of different people in a conscious manner. Identify the characteristic of
coordination discussed above.
(a)Coordination ensures unity of action
(b)Coordination is a deliberate function
(c)Coordination is a continuous process
(d)Coordination is an all-pervasive function
17 As a Span of management increases in an organisation, the number of levels of management in

the organisation
(a) Increases
(b) Decreases
(c) Remain unaffected
18 Om visiting a supermarket to buy a pack of moisturizer, Harsha noticed that the packaging of
most of the beauty product 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.
19 Every organization weather it is government owned a privately owned business or a company
in the private sector requires management. Name the feature of management highlighted in
the above statement.
(a) Management is an intangible force
(b) Management is a group activity
(c) Management is all pervasive
(d) Management is multidimensional.
20 It is one of the basic managerial functions and requires that before doing something , the
manager must prepare an idea of how to work on a particular task. It provides ample scope for
creativity and innovation and seeks to bridge the gap between where we are and where we
want to go. Name the function of management referred above.
(a) Planning
(b) Organising
(c) Staffing
(d) Directing
21 Feather Ltd is a large multinational company and operates in many countries of the world. The
company is in the business of Business process outsourcing, knowledge process outsourcing
etc. What is being marketed by the company?
(a) Ideas
(b) Place
(c) Events
(d) Services
Page 147 of 168

Term-1
22 Which of the following is not an organisational objective of management.
(a) Survival
(b) Growth
(c) Profit
(d) Generating employment opportunities.
23 Management is considered important because
(a)It helps an organization to adapt to the changes
(b)Seeks to integrate individual efforts
(c)It helps in development of the society
(d)All of the above
24 Name the marketing function which is one of the very important means of implementing
differential pricing strategy.
(a)Branding
(b) Labelling
(c)Packaging
(d)All of the above
SECTION-B
25 Sneha owns a nursery in Faridabad she is now planning to venture into the business of setting
up a portal for selling terrarium plants. The market for indoor plants in India is estimated at
over RS 250 crore annually and is growing at 15% to 20%. The terrarium plants require less
water and are much in demand now with houses becoming small and virtually no gardens for
people residing in apartments in metro cities. The above case highlights one of the point
related to the importance of business environment and it’s 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.
26 Gaurav works as a production manager in Garv Enterprises Limited. He has been given the
task of getting 5000 units oh hand woven table mats manufactured at the cost of Rs 150 per
unit with in 10 days. In order to be acknowledged as an effective manager he must ensure that
(a)The cost of production does not exceed Rs 150 per unit.
(b)The work is completed within 10 days even at higher cost per unit.
(c)The cost of production is less than Rs 150 per unit.
(d)All of the above
27 Any kind of external devices like compact disc (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
(d)Interrelatedness
28 Ketan works as a production manager in a company dealing in stationery products.Every year
at the time of drawing annual production plans he along with his team have to undertake
intellectual thinking involving foresight, visualization and judgement, this is because plans
cannot be made on guess work. Identify the related feature of planning being described above.
(a)Planning is a primary function.
(b)Planning is pervasive
(c)Planning invoice decision making
(d)Planning is a mental exercise.
Page 148 of 168

Term-1
29 Food safety is becoming a growing global concern with regulatory regimes worldwide facing
the challenge of minimizing food safety risks. With India being one of the biggest markets for
the import of various kinds of food products from across the globe, food safety has become a
major concern for our country. The government is focusing on the delivery of safe and
wholesale food to it’s citizens by setting up a single unified established standard. Enactment of
the Food safety and standards Act 2006(FSS(a))is a major step taken by the government in this
direction. Identify the related dimension of business environment.
(a) Legal dimension
(b) Social dimension
(c) Political dimension
(d)All of the above.
30 Karam limited is offering a travel package for 15 destinations worldwide with free insurance
on the bookings for the month of November 2021.Identify the feature of marketing being
described in the above lines.
(a)Needs and Wants
(b)Creating a market offering
(c)Customer value
(d)Exchange mechanism
31 Anuradha has been selling home made cakes , cookies and breads which are to ordr.Over the
past one year she has witnessed a sudden surge in her business during festival season due to
the growing preferences of people for hygiene and quality. Identify the related dimension of
business environment.
(a) Economic dimension
(b) Social dimension
(c) Political dimension
(d)Technological dimension
32 Aayush joins a e- commerce company as a delivery executive. The Area Team Leader Shekar is
very happy with his performance. However after a few months due to some family problems
Aayush becomes irregular to work and is not able to meet the work related deadlines. As a
result Shekhar is not able to realize his team targets. Under such a situation which of the
following statement will hold true?
(a) Shekhar can absolve himself of his accountability to the extend of work assigned to
Aayush.
(b) Shakhar cannot absolve himself of his accountability to the extend of work assigned to
Aayush
(c) Shekhar can partly absolve himself of his accountability to the extend of work assigned
to Aayush
(d)None of the above.
33 Durantee Ltd is a company dealing in skin care products. Considering that direct marketing is a
powerful tool to create demand for a firm’s products, it has been decided to deploy a team of
50 salesman over next one month. Identify the element of promotion mix being adopted by the
company.
(a) Advertising
(b) Sales promotion
34 Match the concept of marketing in column I with their respective definition in column II.
Column I. Column II
(a) Product concept. (i)relates to maintaining high quality of the product.
(b) Selling Concept. (ii)relates to satisfying customer needs
Page 149 of 168

Term-1
(c) Marketing Concept. (iii)relates to aggressively persuading buyers to
Purchase the product
(a) i,ii,iii
(b) ii,i,iii
(c) iii,ii,i
(d) i,iii,ii
35 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 exit for a long time unless it is accompanied
by prosperity for the employees and vice versa”.
(a)Science, not rule of thumb
(b)Co-operation, not individualism
(c)Harmony, not discord
(d)All of the above
36 In order to get feedback about it’s recently launched immunity boosting ayurvedic medicine,
Atulya limited conducted an online survey using a questionnaire to gather customer views and
opinions. Identify the marketing function being used by Atulya Limited.
(a) Standardisation
(b) Product Designing
(c) Customer support service
(d) Gathering and analyzing market information.
37 Assertion (A) personnel should be selected and appointed after due and rigorous procedure
Reason (R) the principle of stability of personnel says that employee turnover should be
minimised to maintain organisational efficiency
find the correct option
(a)both A and R are true and 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 true but R is false
(d)A is false but R is true
38 It may be difficult to know the extent of the relative impact of the social economic political
technological or legal factors on change in demand of a product in the market.identify the
related feature of business environment.
(a) Inter- relatedness
(b) Dynamic
(c) Complexity
(d)Relativity
39 Management has to see that tasks are completed and goals are achieved with the least amount
of resources at a minimum cost. Identify the two related concepts of management.
(a) Coordination and efficiency
(b) Efficiency and effectiveness
(c) Planning and effectiveness
40 Assertion ( A)management is not meet the exact criteria of a profession however it is have
some of the features of profession.
Reason (R)T he entry in the management profession is restricted through acquiring a degree of
MBA from any institute but there is no professional association to regulate the managers
(a)Both A and R are true and 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 true but R is false
(d)A is false but R is true
Page 150 of 168

Term-1
41 This approach is applicable in the cases of unsought goods like life insurance, vacuum cleaner ,
fire fighting equipments including fire extinguisher. These companies are seen having a strong
network of sales force. This concept is applicable for the firms having over capacity in which
their goal is to sell what they produce than what the customer really wants.
Identify the marketing concept being referred to in the above paragraph.
(a) Product concept
(c) Selling Concept
(d) Marketing Concept.
42 'Yamuna Ki Bhujia’ has developed a strong distribution network in India and abroad by setting
up retail outlets and reaching out to the customer through Internet selling. Identify the
decision related to the element of marketing mix being discussed above.
(a)Storing and assorting products in order to create time utility
(b)Regarding the channels or using intermediaries.
(c)Both a and b
(d)One regarding branding Packaging and labelling.
43 Organising helps in creating a hierarchical order thereby enabling the fixation of responsibility
and specification of the extent of authority to be exercised by an employee. Identify the
relevant point of importance of organising.
(a) It brings clarity in working relationships
(b) Ensures optimum utilization of resources
(c) Provides benefits of specialisation
(d) Effective administration.
44 In order to improve upon its competitive edge, khushboo Limited has change the packaging of
its hair care products. They are now available in a consumer friendly design , which has a
nozzle attached to the lid so that at the time of usage the consumer doesn’t need to open the
cap of the bottle. Name the marketing function being explained in the given lines.
(a) Product Designing and development
(b) Customer support service
(c) Promotion
(d)Physical distribution.
45 Assertion(A);Both the workers and management both honour their commitments without any
prejudice towards one another.
Reason(R):The principles of “Espirit De Corps” says that management should promote a team
spirit of unity and harmony among employees.
Find the correct answer
(a)Both A and R are true in the correct explanation of A
(c)A is true but R is false
(d)A is false but R is true.
46 Which of the following statements is not true with reference to planning?
(a) Planning is a pre requisite for controlling
(b) Planning does not lead to rigidity
(c) Planning enables a manager to look ahead and anticipate changes
(d) Planning facilities coordination among departments and individuals in the organisation.
47 Heena is planning to set up a small manufacturing unit for manufacturing eco friendly
packaging material. She has decided to market her products through the conventional channel
of distribution, which involves wholesalers and retailers. Identify the channel of distribution
being adopted by the company.
Page 151 of 168

Term-1
(d)Three level channel.
48 Identify the correct sequence of steps involved in the planning process.
(a) Evaluating alternative courses, identifying alternative course of actions, Setting
objectives, Developing premises.
(b) Setting objectives, Identifying alternative course of actions, Evaluating alternative
course , Developing premises
(c) Setting objectives, developing premises Identifying alternative course of actions,
Evaluating alternative courses
(d)Setting objectives, Developing premises, identifying alternative courses of actions,
Evaluating alternative courses.
SECTION-C
Read the following text and answer question number49-52on the basis of
the same.
Ajanta limited is a company dealing in Wellness products one of the prime reason for its
success lies in the abilities of its managers to formulate objectives and strategies effectively
their objectives are clearly stated and the employees are aware of what the organization has
to do and what they must do to achieve those goals this facilitates coordination between
departments and individuals in the organization the general manager Mr Rishabh emphasizes
that this function of management seeks to bridge the gap between where we are and where
we want to go however at the same time he shares that there have been such instances during
the lifetime of the business when despite the best efforts of Management the desired results
could not be achieved
49 Identify the function of management being described in above lines
(a)Organising
(b)directing
(c)planning
(d)controlling
50 Identify the related point of importance of the concerned function being described in the
above lines.
(a) It reduces overlapping and wasteful activities
(b) It is a mental exercise
(c) It provides direction
(d) It reduces the risks of uncertainty.
51 Identify the related feature of the concerned function being described in the above lines.
(a) It is futuristic
(b) It is pervasive
(c) It establishes standards for controlling
52 Identify the related limitations of the concerned function being described in the above line.
(a) It leads to rigidity
(b) It may not work in a dynamic environment
(c) It does not guarantee success
(d) It reduces creativity.
53 Jolly Goods Ltd is a well known entertainment company in Bangalore. The main divisions of
the company includes television , print and films. Each unit has a divisional manager
responsible for performance and who has authority over the unit. All it’s 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
Page 152 of 168
Term-1
all levels.
Identify the type of organisational structure being followed by the company?
(a) Divisional Structure
(b) Functional Structure
(c) Network Structure
(d) Matrix Structure.
54 Which of the following may not be a reason for the company to adopt this type of structure as
identified in question 53?
(a) Promotes product specialisation
(b) Helps in fixation of responsibility in cases of poor performance of the
(c) Leads to economies of scale and their lowers cost
(d) Promotes flexibility and initiative.
55 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 management in the structure
(c) Both a and b
56 Keeping in view the policy of the Jolly Ltd is it likely to have ……………. Number of levels in
management.
(a) More
(b) Less
(c) Difficult to define
57 Ecofriend Limited has decided to launch solar jackets, which will have an inbuilt solar charger
as well. In order to make its product competitive, the company has decided to offer it for sale
within the range of Rs 1500 to Rs 4000. Identify the related function of marketing being
mentioned in the given case.
(a)Packaging and labeling
(b)Branding
(c)Pricing
(d)Promotion
58 According to WHO, 39% of adults are overweight. Over 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.
59 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) Descipline
(b) Equity
(d)Order
60 The Uttarakhand government has developed surveillance network using latest 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 illegal mining.
Page 153 of 168

Term-1
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.
Answer key-Sample Paper 4

Q. No. Answer Q.No. Answer Q.No. Answer Q.No. Answer
1 A 16 B 31 B 46 B
2 C 17 B 32 B 47 B
3 A 18 B 33 C 48 C
4 B 19 C 34 D 49 C
5 B 20 A 35 C 50 C
6 B 21 D 36 B 51 A
7 B 22 D 37 A 52 C
8 C 23 D 38 C 53 A
9 B 24 A 39 B 54 C
10 B 25 D 40 A 55 C
11 D 26 B 41 C 56 A
12 B 27 C 42 B 57 C
13 B 28 D 43 A 58 A
14 C 29 D 44 A 59 C
15 C 30 C 45 B 60 C
Page 154 of 168

Term-1
Blue Print - Sample Paper 5
Unit wise Section (B)- Section TOTAL

S. Name of the Marks Section Case (C) MARKS
No Chapter Allocation (A) Studies/Cas Case UNIT
OTQ’s/ eProblems/ Studies/ WISE
MCQ’s Assertion- Case
Reasoning Proble
ms
Nature and
Management
Principles of 16 20
2 3 3 2
Management
Business
3 3 2 1
Environment
4 Planning 4 5 1
14 17
5 Organizing 4 2 6
Marketing
6 10 7 5 2 11
Management
Total Questions (Section-wise) 24 24 12 48
Marks
Questions to be attempted 20 20 10 40
(Section-wise) Marks
Page 155 of 168

Term-1
KENDRIYA VIDYALAYA REGIONAL OFFICE - JAIPUR
Sample Question Paper - 5 (2021-22)
(Term-1)
Subject: Business Studies
5. All questions carry equal marks.
Section – A
1 “The effect of management is noticeable in an organization where targets are met according
to plans, employees are happy and satisfied”. Which characteristic of management is
highlighted in the above statement?
(a)Group activity
(b) Dynamic function
(c) Intangible force
(d) Continuous process
2 Which of the following is not a benefit of planning?

(a) Planning reduces overlapping and wasteful activities.
(b) Planning is a mental exercise.
(c) Planning provides directions.
(d) Planning reduces the risks of uncertainty.
3 What can be marketed?

(a) Any physical object with a definite shape
(b) Any physical object which creates value to customers
(c) Any physical object that has a selling price
(d) Any physical object that can be tested.
4 Policy formulation is the function of:
(a) top-level managers
(b) middle-level managers
(c) operational management
(d) all of these
5 ‘Keshav keeps machines, materials, tools, etc., ready for operations by concerned workers.’
Whose work is described by this sentence under functional foremanship?
(a) Instruction Card Clerk
(b) Repair Boss
(c) Gang Boss
(d) Route Clerk
6 Price of a product can be fixed by considering:
(a) Press Relations
(b) Mobility of a sales person
(c) Marketing Methods used
(d) Consumer Attention
Page 156 of 168

Term-1
7 Kotak Mahindra believes in harnessing the potentials of the individuals working in their
company by doing so, the company wants to achieve ______.
(a) Social objective
(b) Personnel objective
(c) Organizational objective
(d) Economic objective
8 A bottle of hair oil is an example of-
(a) Primary packaging
(b) Secondary Packaging
(d) Sales promotion
9 ‘Himalaya Ltd.’, is engaged in manufacturing of washing machines. The target of the
organization is to manufacture 500 washing machines a day. There is an occupational
specialization in the organization which promotes efficiency of employees. There is no
duplication of efforts in such type of organization structure.
Identify the type of organization structure described above.
(a) Divisional Organization
(b) Functional Organization
(c) Informal Organization
10 Mr. Shyam Sagar is working as the manager of ‘Sagar Foods Ltd.’. The general goal of
establishing
his company was to become the leader of ‘Food Industry’. Mr Sagar determined the activities
and plans for the realization of the general goal. In the plans themselves he determined the
specific goals also. He knew it very well that the planning done by him was of no significance
if he failed to contribute to the realization of pre-determined organizational objectives. This
was the very reason that he did everything with full alertness.
Identify the feature of planning described in the above discussion.
(a) Planning focuses on achieving objectives.
(b) Planning is a primary function of management.
(c) Planning is pervasive.
11 Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the company is to
manufacture 100 buckets a day. To achieve this, the efforts of all departments are
coordinated and interlinked and authority responsibility relationship is established among
various job positions. There is clarity on who is to report to whom.
Name the function of management discussed above.
(a) Organizing
(b) Planning
(c) Staffing
(d) Directing
12 Generally, it is thought that planning is related to the planning cycle. It means that a plan is
framed, it is implemented and it is followed by another plan and so on.
The above statement is related to a feature of planning, identify it.
(a) Planning is continuous.
(b) Planning is futuristic.
(c) Planning involves decision making.
(d) Planning is pervasive
13 The term used to indicate different features or quality of the product is –
(a) Branding
(b) Standardization
Page 157 of 168

Term-1
(c) Simplification
(d) Grading
14 Business environment is the sum total of all things external to business firms and, as such, is
aggregative in nature.
Which feature of business environment is highlighted by this statement.
(b) Dynamic nature
(c) Inter-relatedness
15 Providing information required by law is the main function of -
(a) Branding
(b) Packaging
(c) Labelling
(d) Sales promotion
16 ‘Chandra Chemicals Ltd.’ is a newly established company of its industry. The goals of the
company have been very well defined. The employees know what the organization aims at
doing and what they should do for the realization of the goal. The company did the planning
in such a way that all the departments and employees are able to work in coordination. This
is the very result of successful planning that the company is moving forward on the path of
success.
On the basis of the event stated above tell why planning is important.
(a) Planning provides direction.
(b) Planning reduces the risk of uncertainty.
(c) Planning reduces overlapping and wasteful activities.
(d) Planning promotes innovative ideas
17 Sports events and press conferences are part of:
(a) sales promotion
(b) advertising
(c) public relations
(d) personal selling
18 The attitude of the government officials towards business may have either positive or
negative impact upon business.
Which factor of general environment of business is highlighted by this statement?
(b) Political environment
(d) Legal environment
19 ‘If this principle is violated, authority is undermined, discipline in jeopardy, order disturbed
and stability threatened.’ Identify the principle of management
(a) Discipline
(b) Unity of Direction
(c) Order
(d) Unity of Command
20 In order to successfully realize the objectives of an organization, first of all it is ensured
which activities will have to be performed. In the list of activities, all the activities, both big
and small, are included. But it is not possible to set up separate departments for all the
activities. Some similar activities are put together in the same department. In this way some
necessary departments are set up. The reason for doing so is to exercise control over
unnecessary administrative expenses.
Identify the concept of management under which similar activities are put together and
departments are set up.
Page 158 of 168

Term-1
(a) Departmentalization
(b) Delegation
(c) Decentralization
(d) Centralization
21 Link with customers is an advantage of this tool of promotion
(a) advertisement
(b) personal selling
(c) public relations
(d) sales promotion
22 Miss Aarika Goyal is working as the C.E.O. in a company. She lays a special emphasis on the
fact that the company continues to always have sweet relations with its customers. Besides,
to have a close eye on the business environment she considers as the secret of any business.
Recently, she noticed that the government was preparing a policy to invite the foreign
companies. The government planned to give them several concessions. Miss Goyal saw
through the government intention and started preparing herself for it.
Identify the point of ‘importance of business environment’ from the incident stated above?
(a) It helps the firm in identifying the threats and early warning signals.
(b) It enables the firm in identifying opportunities and getting the first mover
advantage.
(c) It helps in tapping useful resources.
(d) It helps in coping with rapid changes
23 In which situation the divisional structure happens to be appropriate?
(a) Where the number of major products is more than one
(b) Where the size of the organization is quite large
(c) Both (a) and (b)
(d) Where primarily only one product is sold
24 A company made research the wastages and eliminated superfluous varieties during the
process of production. Which technique of scientific management is applied here?
(a) Standardization
(b) Simplification
(c) Method Study
(d) Functional Foremanship
Section – B
25 In the end of year 2019, there started a Pandemic by the name of Corona spreading in the
world. In the year 2020, it took the whole world in its fold. In India, also its effect was seen.
Due to the lockdown, continuing for months together, India’s economy got ruined. For the
improvement of economy, the government took a number of steps. One of the major steps
was to reduce the interest rate heavily on long-term loan. Due to the heavy reduction in the
interest rate, some people started constructing houses and some of them started buying the
vehicles like cars, etc. In both these sectors one noticed a great increase in demand. As a
result, the economy, which was getting ruined, got some help to come up. What do you learn
from the above event about the important point of general business environment related to
the reduction in interest rate?
(b) Social Environment
(c) Technological Environment
(d) Political Environment
26 Prem Kamboj is working as the top level manager in a business organization. He has been
given the job of preparing the plans for the whole company. Mr Kamboj is an expert in
making a correct forecast. At first, he looks for the different options to complete every job,
and then on the basis of their evaluation selects the most suitable option. In this way, by
Page 159 of 168

Term-1
taking correct decision and beating his competitors, he is moving forward.
To which particular point of the ‘importance of planning’ is the above event related?
(a) Planning provides direction.
(b) Planning promotes innovative ideas.
(c) Planning establishes standards for controlling.
(d) Planning facilitates decision making.
27 Advertising similar products with same claim results in:
(a) creating confidence in customers
(b) making the customer materialistic
(c) creating confusion in the minds of the customers
(d) making the customer happy
28 Increase life expectancy of people and increased awareness for healthcare have increased
the demand for many health products and services like diet coke, fat-free cooking oil, and
health resorts.
Which feature of business environment is highlighted by the above statement.
(b) Dynamic nature
(c) Inter-relatedness
29 Jyoti Ltd. decided to give more stress on the following: to use environment-friendly methods
of production, to provide employment opportunities to the disadvantaged section of the
society and to make available basic amenities like schools and creches to the employees.
Identify the objective of management discussed above.
(a) Organizational objective
(b) Social objective
(c) Personal objective
30 Match the following terms with their advantages-
1 Helps in product protection a Branding
2 Helps in product designing b Labelling
3 Helps in identifying the product c Product Development
4 Helps in providing information to the customer d Packaging
(a) 1-d,2-b,3-a,4-c
(b) 1-d,2-c,3-b,4-a
(c) 1-a,2-b,3-c,4-d
(d) 1-d,2-c,3-a,4-b
31 Suhasini plans her winter collection in the month of June itself. She has to then ensure that
there is adequate workforce and continuously monitor whether production is proceeding
according to plans. Her marketing department also has to be briefed in time to prepare their
promotional and advertising campaigns.
Identify the characteristic of coordination to which the above case is related.
(a) Coordination is an all-pervasive function
(b) Coordination is a deliberate function
(c) Coordination is a continuous process
(d) Coordination ensures unity of action
32 (I) Delegation of authority is inevitable and decentralization is voluntary.
(II) Scope of delegation of authority is limited and the scope of decentralization is broad.
Both the above statements are:
(a) True
(b) False
Page 160 of 168

Term-1
(c) Statement (I) is True and Statement (II) is False
(d) Statement (I) is False and Statement (II) is True
33 CEOs of Uber and Zomato decided to look after the financial needs of the employees during
the ill effects of COVID 19 as they believed they are the people who helped them create their
business. The decision of retention of employees relates to which of the following principle of
management?
(a) Esprit de corps
(b) Stability of tenure of personnel
(c) Discipline
(d) Remuneration of employees
34 Shaukeen Ahmed is working as a leading employee at the low-level management in ‘Balaji
Udyog Ltd.’ According to one plan, he has to prepare 100 units of high quality of one item in a
day, and every unit should not cost more than ™500. When the work actually started, it was
learnt that the desired goods could be prepared within a day, but due to the sudden inflation
in the raw material, every unit was to cost ™550. Now Mr. Shaukeen is in a fix what to do and
what not to do.
Identify the ‘limitation of planning’ in the event given above.
(a) Planning leads to rigidity.
(b) Planning may not work in a dynamic environment.
(c) Planning reduces creativity.
(d) Planning involves huge costs.
35 A few years ago, there were only 500 students studying in ‘Your Public school’. At that time
20 male and female teachers were teaching. The Principal, Mrs Radhika Sharma could control
the school very easily, without any special efforts. Now the number of students in the school
has reached the figure of about 2,500. Proportionately, the number of teachers also has
reached 100. The number of people being so large, the difference in the background, caste,
religion, interests and attitudes being there is quite natural. Now, exercising control over the
school for the principal is likely to become difficult. She will have to ensure that everybody
should work for the realization of the general objectives. But their individual objectives can
become a hurdle in the realization of the school’s general objectives. Hence, to maintain the
welfare of school, a harmonious adjustment of the objectives of both of them is essential.
Which point of the importance of coordination has been mentioned in the paragraph given
above?
(a) Functional differentiation
(b) Growth in size
(c) Specialization
36 Mrs. Madhvi Bhire is working as a manager in ‘Taarik and Company’. She is involved in a
problem related to a particular product. She is unable to decide whether she should produce
that product in her own company or she should buy it from the market. She studied both the
options deeply with the help of specialists. In order to maintain the company’s impression on
the minds of the customers, she decided to produce the product in the company itself. She is
hopeful of the complete success of this decision.
Identify the stage of the ‘planning process’ on which Mrs. Madhvi reached the final decision.
(a) Evaluating alternative courses
(b) Selecting an alternative
(c) Implementing the plan
(d) Follow-up action
Page 161 of 168

Term-1
37 The managing director of Shobhna Pvt. Ltd. Ms. Anvi Goyal’s view is that “proper
organizational techniques help in the accomplishment of work and promote both the
efficiency of operations and the effectiveness of results.”
Identify that the view of Ms. Anvi Goyal is related to which function of management?
(a) Planning
(b) Organizing
(c) Directing
(d) Controlling
38 _________ concept is based on those companies who believe in this philosophy that quality of
goods or services of good standard can easily attract customers.
(a) Marketing concept
(c) Product concept
(d) Selling concept
39 ‘In order to be successful an organization must change its goals according to the needs of the
environment.’ Which characteristic of management is highlighted in the statement?
(a) Management is dynamic
(b) Management is goal-oriented process
(c) Management is group activity
(d) Management is all pervasive
40 _____________ is the skilful and personal application of existing knowledge to achieve desired
results.
(a) Science
(b) Art
(c) Profession
(d) Management
41 Mr. Ram is the C.E.O. in ‘Ram Lakhan General Pvt. Ltd.’ He is the head of the team making
plans for the company also. He gave a number of suggestions to the team out of which the
two main suggestions were: First, Mr. Ram said that they had to face a lot of problem in
getting the main raw material used in the company, but in the next year it was possible that
they could get it easily. Secondly, in the second coming year the rate of bank interest was
most likely to increase, which would affect the company’s costs. He laid emphasis on this
matter that both of his remarks should be kept in view while preparing the plans.
Clarify to which stage of the planning process the above event is related.
(c) Identifying alternative courses of action
(d) Evaluating alternative courses
42 Which contemporary techniques of management focuses on reduction of seven wastes of
production?
(a) Six Sigma
(b) Operation Research
(c) Lean Manufacturing
(d) Reengineering
43 Match the following elements of Product Mix along with its meaning
a. Brand 1. Not utter able
b. Brand Name 2. Legally protected
Page 162 of 168

Term-1
c. Brand Mark 3. utterable
d. Trade mark 4. A combination of style, symbol design
(a) a-4, b-1, c-3, d-2

(b) a-4, b-2, c-1, d-3
(c) a-4, b-3, c-1, d-2
(d) a-4, b-2 c-3 d-1
44 The management of Roshan Pvt. Ltd. helps the staff members adapt to environmental
changes so that the organization is able to maintain its competitive edge.
It is one of the reasons that have made management so important. Identify it.
(a) Management helps in achieving group goals
(b) Management increases efficiency
(c) Management creates a dynamic organization
(d) Management helps in achieving personal objectives
45 All other managerial functions are performed within the framework of the plans drawn.
Identify the related feature of planning.
(a) Planning focuses on achieving objectives.
(b) Planning is pervasive.
(c) Planning is futuristic.
(d) Planning is primary function of management.
46 Same charger of mobiles can be used for different models of a particular brand. This is an
example of which of the following techniques of scientific management?
(a) Standardization
(b) Simplification
(c) Method Study
(d) Functional Foremanship
47 The term marketing refers to _______

(a) Advertising, Sales Promotion, Publicity and Public Relational activities
(b) A new product needs ideas, Developments, concepts and improvements.
(c) Sales Planning, Strategy and Implementation
(d) A philosophy that stresses customer value and satisfaction.
48 Planning is a ……………………………..
(a) Useless function.
(b) One time Process.
(c) Mental Exercise.
(d) Obsolete Concept.
Section – C
“In every organization, managers are assigned lot of work and manager alone cannot
perform all the work. He divides the work among different individuals working under him
according to their qualification and get the work done from them. The manager begins with
sharing of his responsibilities with his subordinates. He deliberately passes some of his
responsibilities to his subordinates. After passing the responsibilities the manager also
shares some of his authority, i.e., power to make decision with his subordinates so that the
responsibilities can be carried on properly. To make sure that his subordinates perform all
Page 163 of 168

Term-1
the work effectively and efficiently in the expected manner the manager creates
accountability.”
49 Name the concept discussed in the above para.
(a) Delegation
(b) Decentralization
(c) Organizing
(d) Planning
50 Responsibility refers to:

(a) Answerable for non-completion of task
(b) power to make decisions
(c) obligations to do a work
51 Authority refers to:

(a) Power to take decisions independently
(b) obligation to do a task
(c) answerable for non-completion of task
Pawan, Navin and Sachin have decided to start a business of manufacturing toys. They
identified the following main activities which they have to perform:
(i) Purchase of raw material
(ii) Purchase of machinery
(iii) Production of toys
(iv) Arrangement of finance
(v) Sale of toys
(vi) Identifying the areas where they can sell their toys
(vii) Selection of employees
In order to facilitate the work, they thought that four managers should be appointed to look
after.
(a) Production, (b) Finance, (c) Marketing,(d) Personnel
52 Identify the function of management involved in above mentioned para.
(a) Planning
(b) Organizing
(c) Staffing
(d) Directing
53 State the first step of the process of that function.

(a) In order to facilitate the work, they thought that four managers should be appointed.
(b) They identified the main activities.
(c) Both (a) and (b)
54 The steps of process of that function, which is not followed in above para is :
(a) Identification of activities
(b) Establishing reporting relations
(c) Grouping of activities or departmentalization
Page 164 of 168

Term-1
55 ‘Balaji Store’, which is located in the center of the city is a big shop of the commodities of
daily use. The owner of this shop Mr. Naresh Aggarwal, has very good relations with his
customers, suppliers and competitors. He knows it that if his customers are dissatisfied with
him, its negative impact will be there only on him and not on the other firms. Therefore, he
takes full care of their requirements. Similarly, Mr. Aggarwal also knows that if there is any
change in the customs as well as in the technology, its impact will be there not only on him
but also on all the firms of his industry. No firm has control over such changes, even then Mr
Aggarwal remains on guards against them. The above event is dependent on one of the
‘features of business environment’. Recognize this feature.
(a) Dynamic Nature
(b) Inter-relatedness
(c) Totality of External Forces
(d) Specific and General Forces
56 Within 2 years of it’s inception, Bhavishya 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
(c) Public relation
(d) Sales promotion
57 Marketing is called a ____________process because it involves interaction of buyers and sellers.
(a) Economic
(b) Social
(c) Legal
(d) Political
58 Miss Sita Rani Chopra is the General Manager in ‘Sita Sales Ltd.’ The company has 56 stores
in the whole of India, through which the company makes its good reach to the customers.
The company’s goods have a good hold in the market. In order to avail of this situation, Miss
Chopra had decided to increase the number of stores to 300. The information of this decision
has been communicated to all the departments; namely, finance, purchase, sales, production,
personnel, etc.
Identify the stage of ‘planning process’ which is being completed by Miss Chopra.
(c) Identifying alternative courses of action
(d) Evaluating alternative courses
59 Match techniques of scientific management with the suitable statements:

Techniques Statements
1. Standardization A. One best way of doing of job
2. Method Study B. To establish interchangeability of manufactured parts and
products.
3. Fatigue Study C. Separation of planning and execution
4. Functional Foremanship D. To determine the amount and frequency of rest intervals
(a) 1-B, 2-D, 3-C, 4-A
(b) 1-B, 2-A, 3-D, 4-C
(c) 1-B, 2-D, 3-A, 4-C
(d) 1-B, 2-A, 3-D, 4-C
Page 165 of 168

Term-1
60 Violation of principle of ‘Esprit de Corps’ leads to-
(a) minimize labour turnover
(b) minimize sales turnover
(c) loss of coordination
(d) disorder
ANSWER KEY
Q.NO. ANSWER Q.NO. ANSWER
1 (c) 31 (a)
2 (b) 32 (a)
3 (b) 33 (d)
4 (a) 34 (a)
5 (c) 35 (b)
6 (c) 36 (b)
7 (b) 37 (b)
8 (a) 38 (c)
9 (b) 39 (a)
10 (a) 40 (b)
11 (a) 41 (b)
12 (a) 42 (c)
13 (d) 43 (c)
14 (d) 44 (c)
15 (c) 45 (d)
16 (a) 46 (a)
17 (c) 47 (d)
18 (b) 48 (c)
19 (d) 49 (a)
20 (a) 50 (c)
21 (b) 51 (a)
22 (a) 52 (b)
23 (c) 53 (b)
24 (b) 54 (b)
25 (a) 55 (d)
26 (d) 56 (c)
27 (c) 57 (b)
28 (c) 58 (a)
29 (b) 59 (b)
30 (d) 60 (c)
Page 166 of 168

Term-1
NOTES
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
Page 167 of 168

B.ST - STUDY MATERIAL KVS 2021-22 Term 1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

B.ST - STUDY MATERIAL KVS 2021-22 Term 1

Uploaded by

Copyright:

Available Formats

KENDRIYA VIDYALAYA SANGATHAN

STUDENT SUPPORT MATERIAL TERM-I

S. No. Unit Topic Page No.

1 Syllabus for Term-1 (2021-22) 3-3

SAMPLE PAPER Q.P Ans

Paper-2 118 127

Paper-3 128 143

Paper-4 144 154

Paper-5 155 166

Management is an art of getting things done with and through others.

(1) Organizational objectives:

COORDINATION (The Essence of Management):

l. Coordination integrates group efforts: It integrates diverse business activities into

MULTIPLE CHOICE QUESTIONS

1. Effectiveness is relates a task

5. Identify the basic characteristic of management involoved in the statement – ‘The

6. Which of the following is not a characteristic of science

7. Professionals need to be associated with respective professional bodies. There are

efforts quality output is maintained, wastage of material is minimized and safety

32. Which of the following is not a part of importance of management-“Management helps

34. Why management is considered a multi-faceted concept?

35. To which level of management do managers of first line belongs?

39. The words cooperation and coordination are:

41. Ashoka handloom Industries is a company specially manufactures bedcovers/bed-

43. Authority-responsibility relationship binds individuals as superiors and subordinates

44. Which of the following is not an organizational objective

ASSERTION- REASONING BASED QUESTIONS

59. Assertion (A): Management is a universal activity.

60. Assertion (A): Management emphasizes on effectiveness of work.

61. Assertion(A):Management principles are developed through observation and

64. Assertion (A): Profit is only main objective of every management.

65. Assertion(A): Satisfaction of personnel objectives is very important in an

66. Assertion (A): Management is an art completely.

67. Assertion (A): Management is on the path of becoming a profession.

68. Assertion (A): Management helps in achieving organisational objectives only.

71. Assertion (A): Survival is the primary organisational objective of management.

72. Assertion (A): Planning precedes all functions of management.

organising, staffing, directing and controlling.

73. Assertion (A) : Cooperation in absence of coordination leads to waste of efforts

Environment, this group immediately discusses responsibility properly , this group

83. At which level of management Vikas is working in the company?

84. Which nature of management is mentioned above?

11. b 12 c 13. a 14. b 15. a

16. c 17. a 18. c 19. a 20. d

21. c 22. a 23. b 24. d 25. d

26. c 27. a 28. a 29. a 30. a

31. d 32. d 33. d 34. a 35. a

36. a 37. b 38. a 39. c 40. c

41. c 42. a 43. b 44. d 45. b

46. c 47. a 48. b 49. b 50. b

51. a 52. d 53. b 54. c 55. d

56. c 57. a 58. c 59. b 60. d

61. b 62. a 63. a 64. a 65. c

66. d 67. c 68. a 69. a 70. a

71. c 72. d 73. c 74. b 75. b

76. c 77. c 78. b 79. a 80. c

81. b 82. d 83. b 84. c 85. b

86. a 87. b 88. b 89. c

Derivation of principles of management:-

Experimentation:- The guidelines tested in different organizations with different

Nature/ Features/ Characteristics of Principles of Management:-

1. Universally applicable:- The principles of management can be applied to all

Significance of Principles of Management:-