Class xii

Business studies
Nature & significance of
management

REASON-BASED, EVALUATION & HOTS

Q. 1. Mr. Shyam Khanna is responsible for framing plans and policies of M/S Ever Green
Industries. At which managerial level, he is working. Also discuss his main functions.
Ans. Top Level. Discuss Main Functions of Top Level Management.

Q. 2. "A business needs to add to its prospects in the long run".

Which organisational objective is highlighted in the statement? Mention two objectives
under this category.
Ans. The organisational objective highlighted is 'Growth'. Two other organisational
objectives are: (i) Survival (ii) Profit.

Q. 3. McDonalds offers 'Aloo Tikki Burger' to attract Indian customers, despite being a
multinational food joint. Identify and discuss the characteristic of management
highlighted in the given case.
OR
With introduction of per second call plan by a Telecom Co. , most of the other cellular
companies also started offering per second plan, in order to survive and maintain their
market share. Discuss the feature of management highlighted in the given case.
Ans. Discuss 'Management is a Dynamic Function'.

Q. 4. Mukesh has limited authority and responsibility and interacts with the actual work
force. At what level does he work in the organisation?
Ans. Mukesh is working at the Operational Level.

Q. 5. "Management is open to all and any person can be appointed as manager." Why.
Ans. Any person can be appointed as manager because unlike profession, there is no
restricted entry in case of management.

Q. 6. Dinesh is a Superintendent in Care India Group Pvt. Ltd. and Harish is working as
Plant Superintendent in the same company. Name the managerial levels at which
Dinesh and Harish are working.
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Ans. Dinesh is working at Operational Level and Harish at Middle Level.

Q. 7, "Effect of management can always be noticed in every successful and unsuccessful

organisation." Identify and discuss the feature of management depicted in the given
statement.
Ans. Discuss 'Management is an Intangible Force'.

Q. 8. IA the first year of operation, the revenues generated by Max Industries from sale
of its products are just sufficient to cover the cost of production.
i) Which organisational objective is met in the given case?
ii) What are the two other organisational objectives, which the company is yet to
achieve?
Ans. (i) Survival: (ii) Profit and Growth.

Q. 9. "Through e-Chaupal, ITC aims to change the quality of life and the entire outlook
of Indian farmers." Which Objective is being highlighted by this initiative of ITC?
Ans. Social Objective.

Q. 10. An organisation consists Of diverse individuals With different needs.' Discuss the
management feature highlighted in the given statement.
Ans. Discuss "Management is a group activity'.

Q.11. The five functions of management (planning, organising, staffing, directing and
controlling) are not needed in schools, hospitals, sports club, etc. as they are not run on
commercial basis. Identify the feature of management ignored in the given case?
OR
Management is required in all kinds of organisations, whether economic, social or
political. Which characteristic of management is highlighted in the statement?
Ans. Management is all Pervasive.

Q. 12. Suhani, the General Manager of Fabmart, performs the managerial functions of
planning, organising, staffing, directing and controlling as an ongoing process. Which
management feature is highlighted by this?
Ans. Management is a continuous Process.

Q. 13, 'Management is the systematised body of knowledge that explains certain general
truths.' Explain.
Ans. Discuss Management as a Science'.
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Q. 14. Dheeraj is working as Operations Manager' in Tifco Ltd, Name the managerial
level at which he is working. State any four functions he will perform as 'Operations
Manager' in this company. {CBSE 2008}
OR
Rajat is working as 'Regional Manager' in Tifco Ltd. Name the level at which he is
working. State any tour functions he will perform as Regional Manager in this company.
(CBSE, Foreign 2008)
Ans. Middle level. Discuss Main Functions of Middle level management.

Q. 15. 'Success of a manager depends on the manner in which he practices the

conceptual knowledge of management in combination with his own skills.' What nature
of management is indicated in the statement?
OR
"Every manager has his own unique way of managing things and people." What nature
of management is highlighted in the statement?
OR
"Management is skilful and personal application of existing knowledge to achieve
desired results." Explain.
Ans. Discuss 'Management as an Art'.

Q. 16. 'Both Science and Art should exist together in every management function:
Explain this with the help of an example.
Ans. The given statement is correct. Science and Art are not mutually exclusive, i.e. they
are not in contrast to each other. Rather, they are complementary to each other, i.e.
both are needed in every management function.
For example, excellent theoretical knowledge does not make a doctor an excellent
physician. He has to apply this knowledge expertly in preventing and controlling
diseases So, both knowledge (i.e. science) and application of knowledge (i.e. art) are
required to become an efficient manager.

Q. 17. "Management helps to implement new changes in the organisation," Which

importance of management is referred in the statement?
Ans. Management creates a dynamic organisation.

Q. 18. "A manager is continuously engaged in maintaining an orderly arrangement of

his group efforts so that their actions move in the same direction and common purpose
of the company can be achieved." Which process is referred here? Discuss the
importance of this process in management.
OR

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Through this process, a manager synchronises the activities of different departments.'
Identify and explain the importance of the process highlighted in the given statement,
Ans. Coordination is referred in the given case. Discuss 'importance of Coordination'.

Q. 19. Mr. Tanvir is responsible for assigning work to employees and representing their
grievances to Mr. Deepak (Tanvir's Boss). Identify the managerial levels at which Tanvir
and Deepak are working.
Ans. Tanvir works at the Operational Level and Deepak at the Middle Level

Q. 20. "In an organisation, the objective of marketing department is to increase sales by

10% by offering discounts. However, the finance department is reluctant to offer
discount as it means loss of revenue." One Of the importance of coordination help to
resolve this conflict. Identify and explain it.
Ans. Discuss Functional Differentiation' given under the heading Importance of
Coordination.

Q. 21. Hero Ltd.'s target is to produce 10,000 shirts per month at a cost of 150 per shirt.
The Production Manager could achieve this target at a cost of 160 per shirt. Do you
think the Production Manager is 'effective'? Give reasons in support of your answer.
{CBSE India 2010}
Ans. The Production Manager is effective because he has achieved the target. However,
he is not efficient as he achieved the target by incurring higher costs.

Q. 22. Match the 'Functions of Management' given under 'A' with the suitable
statements under ‘B’
(A) (B)
(i) Organising a. Determining in advance what is to
be done.
(ii) Directing b. Aims to ensure that right people
with right qualifications are available
at the right places.
(iii) Planning c. Monitoring organisational
performance for achieving
organisational goals.
(iv) Controlling d. Involves leading, influencing and
motivating employees.
(v) Staffing e. Grouping of the required tasks into
manageable departments.
Ans. (i) e; (ii) d; (iii) a; (iv) c; (v) b.
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Q. 23. Identify the 'Nature of Management' highlighted in each of the following
individual cases:
i. Management Principles have been evolved over a period of time based on
repeated experimentation and observation.
ii. Every manager has his own unique way of managing things and people.
iii. Certain management associations, like AIMA, have formulated ethical codes for
managers, but there is no legal support for it.
iv. Mangers improve their managerial skills with regular application of management
principles.
v. There is no restriction on any person being appointed as manager:
vi. A lot of literature is available in various areas of management which the manager
has to specialise in.
Ans. Management as a Science: (i); Management as an Art: (ii), (iv), (vi); Management as
a Profession: (iii), (v).

Q. 24. Match the 'Characteristics of Management' given under 'A' with the suitable
statements under 'B':
(A) (B)
(i) Management is a. All the management functions are simultaneously
Multidimensional performed by managers on continuous basis.
(ii) Management is b. Management helps people to realise their individual as
Goal-Oriented well as organisational goals.
(iii) Management is a c. Activities involved in managing an enterprise are common
Dynamic Function to all organisations.
(iv) Management is a d. Management involves management of work, people and
Continuous Process operations.
(v) Management is e. Goals are the basic reason for existence of an organisation.
all Pervasive
(vi) Management is a f. Management has to adapt itself to the changing
Group Activity environment,
Ans. (i) d; (ii) e; (iii) f; (iv) a; (v) c; (vi) b.

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CASE STUDIES
Q. 1. Beta Autos aims to produce and sell cars in 2020. To achieve this objective, the
production department strives for timely production and sales department takes all
possible steps to sell them. Due to combined efforts of all the departments, the company
is able to achieve its target. Which significance of management is highlighted in the
given statement? Mention two other points of importance of management.
Ans.
(i) Management helps in achieving group goals;
(ii) (a) Management increases efficiency; (b) Management creates a dynamic
organisation.

Q. 2. Mr. Nitin Singhania's father has a good business of Iron and Steel. He wants to go to
USA for his M.B.A., but his father wants that he should join the business. On the basis of
emerging trends, do you think that Mr. Singhania should send his son to USA? Give any
three reasons in support of your answer. {CBSE, Delhi Compt. 2005}
Ans. Yes, Mr. Singhania should send his son to U.S.A as there is growing need for
professionalism in business. Moreover, management is fast moving in the direction of
becoming a profession. Discuss Features of Profession Vs Management'.

Q. 3. A2Z International (leading shoes manufacturers) requires fewer labour hours and
inputs to manufacture a pair of shoes as compared to its competitors. However, the
company always fails to achieve its target production. Whether the A2Z International is
effective and efficient in its working? Can the company be successful in the long run?
Ans. A2Z International is efficient as it is able to produce shoes at lesser cost (by using
fewer labour hours and inputs). However, the company is not effective as it is not able
to achieve its target production. No, the company cannot succeed by being efficient
only. It must be effective as well as efficient to be successful in the long run.

Q. 4. Smart Industries is able to achieve the target production of 5,000 units within the
prescribed period. However, to achieve the target on time, additional 40,000 were paid
as overtime wages to employees. Do you think Smart Industries is effective and efficient
in its working?
Ans. Smart Industries is effective as the target is achieved. However, it is not efficient as
target is achieved at a higher cost.

Q. 5. Sachin determines the overall objectives and strategies for the organisation. He
also interacts with business environment to analyse its implications. Name the
managerial level at which Sachin is working. State any four of his basic functions.
Ans. Top Level. Discuss Main Functions of Top level management'.

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Q. 6. In C Ltd., the purchase department purchased 10 tonnes of raw material for the
production department. However, the production department needed just 7 tonnes.
Due to this reason, goods were over produced and were not accepted by Sales
department. As a result, some goods remained unsold. Which aspect of management is
lacking?
Ans. 'Coordination' is lacking among various departments.

Q. 7. XYZ Ltd. is able to achieve its target sales within the prescribed time as employees
are happy and there is orderliness and coordination in the work environment. Discuss
the characteristic of management depicted here?
Ans. Discuss Management is an Intangible Force'.

Q. 8. XYZ Group of companies decided to donate 2% of its sales to 'Child Rights and You
(CRY)' for improving the condition of children in India. This initiative by the company
was highly appreciated by the public and their sales increased by 10%. Identify the
objective depicted in the given case.
Ans. Social Objective.

Q. 9. Ramanand, the chairperson of Shah Foundation (Non-Profit Organisation),

believes that the objectives of the foundation can be achieved without a proper
management system. Which characteristic of management is overlooked in the given
case?
Ans. Management is all Pervasive.

Q. 10. Aman, Ahmad and Ally are partners in a firm engaged in the distribution of dairy
products in Maharashtra state. Aman is a holder of Senior Secondary School Certificate
from Central Board of Secondary Education with Business Studies as one of his elective
subjects. Ahmad had done his post-graduation in History and Ally in dairy farming. One
day, there was a serious discussion between Ahmad and Ally regarding the nature of
management, Ahmad argued that management was a profession. Whereas, Ally argued
against it saying that the legal and medical profession are the only professions because
they fulfil all the conditions of profession. Aman on the basis of his knowledge of
business studies explained the nature of management as a profession to Ahmad and
Ally.
Explain, how Aman would have satisfied both Ahmad and Ally?
Ans. Aman would have satisfied both Ahmed and Ally by explaining the following
features of management as a profession:
Well-defined body of knowledge: All professions are based on a well-defined body of
knowledge that can be acquired through instructions. Management too is based on a
systematic body of knowledge comprising well-defined principles. This feature of
profession is present in management.
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(ii) Restricted entry: The entry to the above stated profession is restricted through a
prescribed qualification. But there is no restriction on anyone being appointed as a
manager in any business enterprise. So, presently this feature of profession is not
present in management.
(iii) Professional association: Legal and medical professions are affiliated to a
professional association like bar council and medical council which regulates entry,
grants certificate of practice and formulates and enforces a code of conduct. There are
several associations of practising managers in India, like the AIMA that has laid down a
code of conduct to regulate the activities of their members. There is, however, no
compulsion for managers to be members of such an association. So, presently this
feature of profession is not present in management.
(iv)Ethical code of conduct: Legal and medical professions are bound by a code of
conduct which guides the behaviour of its members. AIMA has devised a code of
conduct for Indian managers but there is no statutory backing for this code So,
presently this feature of profession is not present in management.
(v)Service motive: The motive of legal and medical profession is to serve their client's
interests by rendering dedicated and committed service. The basic purpose of
management is to help the organisation achieve its goals by providing good quality
products at reasonable prices, thereby serving the society is being increasingly
recognised. So, presently this feature of profession is not fully present in management.
The above discussion shows that management does not satisfy all the criteria of a
profession. Through the above discussion, Aman would have been able to satisfy both
Ahmed and Ally by making them understand that Management is a profession but not a
full-fledged or a true profession.

Q. 11. Kamal, Khan and Devid are partners in a firm engaged in the distribution of dairy
products in Madhya Pradesh. Kamal is a holder of Senior Secondary School Certificate
from Central Board of Secondary Education with Business Studies as one of his elective
subjects. Khan had done his post-graduation in Hindi literature and Devid in Dairy
Farming. One day, there was a serious discussion between Khan and Devid regarding
the nature of 'Management as a Science'. Khan argued that Management was not a
science, whereas, Devid was of the opinion that Management was a science. Kamal
intervened and corrected both Khan and Devid about the nature of Management as a
Science with the help of his knowledge of Business Studies. Explain, how Kamal would
have been able to satisfy both Khan and Devid. {CBSE 2015}
Ans. Kamal would have been able to satisfy both Khan and Devid by explaining the
following features of management as a science:
Systematised body of knowledge: Like science, management is a systematic body of
knowledge with its own theories and principles that have developed over a period of
time. So, this feature of science is present in management.
Principles based on observation and experimentation: Like science, management
principles are derived through observation and repeated experimentation. So, this
feature of science is present in management. However, since management deals with
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human beings, the outcome of these experiments is not capable of being accurately
predicted.
Universal validity: Principles of management like principles of pure science provide
managers with certain standardised techniques that can be used in different situations,
since they have to be modified according to a given situation, their application and use
is not universal. So, this feature of science is not fully present in management.
Through the above discussion, Kamal would have been able to satisfy both Khan and
Devid by making them understand that management is a science, but not an exact
science.

Q. 12. In Surya Foods Ltd. the production department has been producing bread much
more than the bread required by the sales department. This practise of over production
continued for 2 months. Due to this reason, goods with older manufacturing date were
not accepted by the retailers. As a result, there was lot of wastage. Which aspect of
management is lacking in the case?
Ans. Coordination' between Production Department and Sales Department.

Q. 13. Keeping in line with the CBSE Curriculum, the students of Class Xll Commerce
Stream of ABC School were instructed to prepare a project on Business Studies and
submit it on the first working day after the summer holidays. Identify whether the
performance of the following three students is effective and efficient.
Prachi did extensive research for her project but failed to submit the project on the due
date.
Gunjan submitted her project on the due date but her project was prepared without any
research and efforts. Moreover, her project was incomplete.
Megha prepared an excellent project after a deep research and also submitted the
project on the due date.
Ans.
 Prachi is efficient as she did extensive research for the project. However, she is
not effective as she has failed to submit the project on the due date.
 Gunjan is effective as she submitted her project on the due date. However, she is
not efficient as she has submitted incomplete project which was prepared
without any research.
 Megha is both effective (as she submitted the project on due date) and efficient
(as she did deep research for the project).

Q. 14. Mega Ltd. was manufacturing water-heaters. In the first year of its operations,
the revenue earned by the company was just sufficient to meet its costs, To increase the
revenue, the company analysed the reasons of less revenues. After analysis the
company decided

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To reduce the labour cost by shifting the manufacturing unit to a backward area where
labour was available at a very low rate.
To start manufacturing solar water-heaters and reduce the production of electric
water-heaters slowly,
This will not only help in covering the risks, but also help in meeting other objectives
too.
Identify and explain the objectives of management discussed above.
State any two values which the company wanted to communicate to the society
{CBSE 2014}

Ans. (i) The objectives of management referred to are:

Organisational Objectives: These refer to the utilisation of human and material
resources considering the interest of all stakeholders. The main organisational
objectives are survival, profit and growth.
Social objectives: These are the objectives, which are desired to be achieved for the
benefit of the society They involve creation of benefit for various constituents of the
society (ii) Values which the company wanted to communicate to the society are:
Rural Development
Environment Sustainability

Q. 15. Ashutosh Goenka was working in 'Axe Ltd.', a company manufacturing air
purifier. He found that the profits had started declining from the last six months. Profit
has an implication for the survival of the firm, so he analysed the business environment
to find out the reasons, for this decline.
Identify the level of management at which Ashutosh Goenka was working.
State three other functions being performed by Ashutosh Goenka. {CBSE 2017}
Ans.
(a) Top Level.
(b) Three functions of the top level management:
1. To co-ordinate the activities of different departments.
2. To formulate overall organisational goals and strategies for their achievement.
3. To be responsible for all the activities of the business and for its impact on the
society.

Q. 16. Mukesh is a salesman in a company engaged in manufacturing of Water

Purifiers. He has been given a target of selling 70 Water Purifiers in a month and he has
been empowered to offer a maximum of 12% discount on MRP to his customers. On the
last working day of the month, he offered 18% discount to his customers to meet the

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sales target. Is Mukesh effective and efficient in his work? Give reason in support of
your answer.
Ans. Mukesh is effective in his work as he has been able to achieve his monthly sales
target. However, he is not efficient as he achieved the target by incurring higher costs

(i.e. discount).

Q. 17. Amar, Akbar and Anthony are working in a Pharmaceutical Company. There is a
vast difference in the nature of functions performed by them:
Amar has to analyse the business environment and its implications for the survival of
the firm.
Akbar's job is to ensure that their department has the necessary personnel.
Anthony's job is to ensure safe and proper working environment to workers.
On the basis of functions performed by the three personnel, identify the level of
management at which they are working.
Ans. Amar is working at the Top Level Management, Akbar at Middle Level Management
and Anthony at Operational or Supervisory Level Management.

Q. 18. Shiva Computers Ltd. is a leading company in Computer Technology and IT

services. The CEO of the company attributes the success of the Company to its
managerial team spirit, which have helped to handle rapid changes in technologies and
to transform threats into opportunities. Like any other business enterprise, profits are
important for survival and growth of Shiva Computers Ltd. The management of the
company believes that a satisfied employee creates a satisfied customer, who in turn
creates profits that leads to satisfied shareholders.
The company has a strong sense of social responsibility: It has set up many educational
institutions in the field of management, engineering and computer education in which
half of the students are girls.
On the basis of the given information about Shiva Computers Ltd., answer the following:
Identify and explain the objectives of the company discussed in the above para. Also
quote the lines for the identified objectives.
Identify any two values which the company is trying to communicate to the society.
{CBSE 2016}

Ans. Organisational objectives

'Like any other business enterprise profits are important for survival and growth of
Shiva Computers Ltd.'
Organisational Objectives refer to the utilisation of human and material resources
considering the interest of all stakeholders.
Social objectives
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'It has set up many educational institutions in the field of management, engineering and
computer education in which half of the students are girls.'
Social Objectives refer to consistently creating economic value for various constituents
of the society.

Values which the company is trying to communicate to the society are: (Any two)
(i) Women Empowerment (ii) Good work culture.
(iii) Fulfilling social responsibility/Concern for the society

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