Bcoc 132n

MEENAKSHI SHARMA SANKHYAN
WHATSAPP 9816311521/8278759905
Disclaimer/Special Note: These are just the sample of the

Answers/Solutions to some of the Questions given in the Assignments.
MEENAKSHI STUDY PLATFORM Page 1

WHATSAPP 9816311521/8278759905
These Sample Answers/Solutions are prepared by Private

Teacher/Tutors/Authors for the help and guidance of the student to get
an idea of how he/she can answer the Questions given the
Assignments. We do not claim 100% accuracy of these sample answers
as these are based on the knowledge and capability of Private
Teacher/Tutor. Sample answers may be seen as the Guide/Help for the
reference to prepare the answers of the Questions given in the
assignment. As these solutions and answers are prepared by the private
Teacher/Tutor so the chances of error or mistake cannot be denied.
Any Omission or Error is highly regretted though every care has been
taken while preparing these Sample Answers/ Solutions. Please consult
your own Teacher/Tutor before you prepare a Particular Answer and
for up-to-date and exact information, data and solution. Student
should must read and refer the official study material provided by the
university.
Q.1 What is technological innovation? Explain the various types of

innovation.
Ans: Technological innovation is an extended concept of innovation. While

innovation is a rather well-defined concept, it has a broad meaning to many
people, and especially numerous understanding in the academic and
business world.
Innovation refers to adding extra steps of developing new services and

products in the marketplace or in the public that fulfill unaddressed needs or
solve problems that were not in the past. Technological Innovation however
focuses on the technological aspects of a product or service rather than
covering the entire organization business model. It is important to clarify
that Innovation is not only driven by technology.
Technological innovation is the process where an organization (or a group of

people working outside a structured organization) embarks on a journey
where the importance of technology as a source of innovation has been
WHATSAPP 9816311521/8278759905
identified as a for increased market competitiveness new innovation-

questions The wording "technological innovation" is preferred to
"technology innovation". "Technology innovation" gives a sense of working
on technology for the sake of technology. "Technological innovation" better
reflects the business consideration of improving business value by working
on the product or services' technological aspects. Moreover, in a vast
majority of products and services, there is not one unique technology at the
heart of the system. The combination, integration, and interaction of
different make the product or service successful.
TYPES OF INNOVATION:
INCREMENTAL INNOVATION
Incremental innovation is a succession of very small

upgrades or improvements that a company makes to its products. The
company makes the small improvements at regular intervals.
The term may also apply to services, methods, or processes. Innovative

companies carry out many small improvements over time to maintain brand
loyalty. They may also do it to hold onto market share. In other words, they
want consumers either to buy their new upgrades or keep their existing
products.
Customers are more likely to hold onto an existing product if there is an

interesting software upgrade, for example.
Incremental innovation is a strategy that helps companies maintain or

improve their competitive position over time.
Incremental innovation is common among high technology companies. In

the hi-tech consumer market, people are always keen on new products
features.
Disruptive innovation

WHATSAPP 9816311521/8278759905
Disruptive innovation refers to the innovation that transforms expensive or

highly sophisticated products or services—previously accessible to a high-
end or more-skilled segment of consumers—to those that are more
affordable and accessible to a broader population. This transformation
disrupts the market by displacing long-standing, established competitors.
Architectural Innovation
Architectural innovation refers to the innovation of an architecture of any

product that changes or modifies the way various components of the systems
link or relate to each other. Architectural innovation is a concept that was
introduced a little over 30 years ago. However, innovation has been the
driving force behind the production of consumer goods and services for
hundreds of years. Innovation experts typically separate innovation into two
categories – incremental innovation and disruptive innovation.
Radical Innovation
Radical innovation is a transformative business model that seeks to

completely demolish and replace an existing industry or create a whole new
industry. It takes an existing system, design or invention and turns it into
something brand new. It may change the parts of the system, the processes
of the system or both.
Q.2 Explain the features of an ideal form of business organisation.

Which form can be considered to be an ideal in all respects?
ANS: 1] Ease of Formation
The ideal situation would be very easy formation of the chosen form of
organization. The legal formalities, paperwork etc are very limited. And the
cost and time involved should also be minimal.
2] Raising Capital/Finances

WHATSAPP 9816311521/8278759905
Every business needs to raise capital at the beginning. So the form of

organization you choose must consider the amount of capital you need to
raise.
If the capital needed is huge, then your chosen ideal form of organization
must provide security and assurance to the investors. They will also want
transparency and return on their investment.
On the other hand if the capital needed is reasonable then other factors
should be considered. Like the ownership of the business must not be
unnecessarily dilute. And there must be scope for future development and
expansion requiring further financing.
3] Nature of Liability
Liability of the parties involved in the business can be limited or unlimited.

In terms of risk, an ideal form of organization will have limited liability. So
the liability of the owners is only limited to their contribution of the capital.
Their personal assets cannot be attached in case of the business going
bankrupt.
On the other hand some forms of organization have unlimited liability. And
the owners are liable even beyond their contribution to the company. So
their personal assets and wealth can be in danger. This is not an ideal
situation.
4] Scope of Control
In an ideal form of organization, the control will be with the owners of the
firm. The management and ownership of a business must go hand in hand. If
the owners cannot take independent decisions then the business will suffer.
5] Continuity and Stability
Stability and continuity is essential for the success of any business. So the
chosen form of organization must provide both. Also this will allow the

WHATSAPP 9816311521/8278759905
owners to plan for the future and carry out their long term plans without
interruption or disturbance,
6] Flexibility
Every business functions in a very complex and dynamic business

environment. So it becomes essential that they can be flexible in their
operations to adapt and succeed in this changing environment. So an ideal
form of organization will provide this flexibility.
7] Secrecy
Some businesses require secrecy about their records and processes. Other
businesses will not suffer if there is transparency. So accordingly the owners
must chose the form of organization that suits them best.
8] Lawful Business
This is a given. The choice of business must be legal. There can be no illegal
activities or transactions and the form of organization you chose should
safeguard this.
form of business organisation can be considered to be an ideal in all

respects:
Company form of organization
The company form of organization has helped concentration of economic

power in a few hands. Some persons become directors in a number of
companies and try to formulate policies which promote their own interests.
The shares of a number of companies are purchased to create subsidiary
companies.
1. Accumulation of Large Resources:

WHATSAPP 9816311521/8278759905
The main drawback of the sole trade and partnership concerns has been the
scarcity of resources. The resources of a sole trader and of partners being
limited, these enterprises have always suffered for want of funds.
2. Limited Liability:
The liability of members in a company form of organisation is limited to the

nominal value of the shares they have acquired.
3. Continuity of Existence:
When a company is incorporated, it becomes a separate legal entity. It is an

entity with perpetual succession. The members of a company may go on
changing from time to time but that does not affect the continuity of a
company.
Disadvantages of Company Form of Organisation:

The company form of organisation suffers from the following drawbacks:
1. Difficulty of Formation:
Promotion of a company is not an easy task. A number of stages are involved in
company promotion. The suitability of a particular type of business is to be decided first.
A number of persons should be ready to associate for getting a company incorporated.
2. Separation of Ownership and Management:

The ownership and management of public company is in different hands. The owners
i.e., shareholders play an insignificant role in the working of the company. On the other
hand, control is in the hands of those who have no stakes in the company. The
management may indulge in speculative business activities.
3. Evils of Factory System:

The company form of organisation leads to large-scale production. The evils of factory
system like insanitation, air pollution, congestion of cities are attributed to joint stock
companies. Joint stock companies facilitate formation of business combinations which
ultimately leads to the monopolistic control and exploitation of consumers.

WHATSAPP 9816311521/8278759905
Q.3 What do you mean by span of control? Discuss factors affecting

span of control.
ANS: span of control:
What is the Span of Control?
Span of Control can be defined as the total number of direct subordinates

that a manager can control or manage. The number of subordinates
managed by a manager varies depending on the complexity of the work.
For example, a manager can manage 4-6 subordinates when the nature of
work is complex, whereas, the number can go up to 15-20 subordinates for
repetitive or fixed work.
Meaning and Explanation
The term “Span of Control” is popularly used in business management and

human resource management. Because this term is related to the
management and controlling of employees, the meaning of the word is the
total number of subordinates that a manager or supervisor can manage.
factors affecting span of control:
1. The Ability of Officers
The very first and most important factor in determining the span of control
is the ability of officers who have to manage.
If they are very efficient and capable. They can control a large number of
subordinates on the contrary.
If the officers are less efficient they would not be able to control that much
number of subordinates.

WHATSAPP 9816311521/8278759905
2. Availability of time for supervision
The second factor which determines the span of control is the availability of
time with the managers of higher cadre for supervision.
If they have less time for supervision, they would not be able to control a
large number of subordinates.
3. Nature of work
The span of management is affected by the nature of work also.
If the work is of a simple and routine nature, managers can control a large
number of persons.
On the contrary, If the work is more complicated, Managers cannot have

effective control over a small number of employees only.
4. Plans for the Enterprise
If the plans of the enterprise are clear and stable, the managers feel it easy to
control the activities of their subordinates.
On the contrary, If the plans of the enterprise are not stable, it becomes very
difficult for the managers to control the activities of a large number of
subordinates.
5. Ability and efficiency of subordinates
A very important factor affecting the span of management is the ability,

efficiency, and willingness of subordinates.
If the subordinates are able and efficient and they are willing to coordinate
with their higher officers, Managers can control a large number of
subordinates.

WHATSAPP 9816311521/8278759905
6. Techniques of control
The span of control depends upon the techniques of control also.
If the techniques of control effective the managers can control a large

number of subordinates.
Q.4 What is the meaning of lease financing? Explain its advantages

and limitations.
ANS: Lease financing is one of the important sources of medium- and long-
term financing where the owner of an asset gives another person, the right to
use that asset against periodical payments. The owner of the asset is known
as lessor and the user is called lessee.
The periodical payment made by the lessee to the lessor is known as lease
rental. Under lease financing, lessee is given the right to use the asset but the
ownership lies with the lessor and at the end of the lease contract, the asset
is returned to the lessor or an option is given to the lessee either to purchase
the asset or to renew the lease agreement.
Advantages:
Lease financing has following advantages
a. To Lessor:
The advantages of lease financing from the point of view of lessor are
summarized below
Assured Regular Income:
Lessor gets lease rental by leasing an asset during the period of lease which is
an assured and regular income.
Preservation of Ownership:

WHATSAPP 9816311521/8278759905
In case of finance lease, the lessor transfers all the risk and rewards
incidental to ownership to the lessee without the transfer of ownership of
asset hence the ownership lies with the lessor.
Benefit of Tax:
As ownership lies with the lessor, tax benefit is enjoyed by the lessor by way
of depreciation in respect of leased asset.
High Profitability:
The business of leasing is highly profitable since the rate of return based on
lease rental, is much higher than the interest payable on financing the asset.
High Potentiality of Growth:
The demand for leasing is steadily increasing because it is one of the cost
efficient forms of financing. Economic growth can be maintained even
during the period of depression. Thus, the growth potentiality of leasing is
much higher as compared to other forms of business.
Recovery of Investment:
In case of finance lease, the lessor can recover the total investment through
lease rentals.
b. To Lessee:
The advantages of lease financing from the point of view of lessee are
discussed below:
Use of Capital Goods:
A business will not have to spend a lot of money for acquiring an asset but it
can use an asset by paying small monthly or yearly rentals.
Tax Benefits:

WHATSAPP 9816311521/8278759905
A company is able to enjoy the tax advantage on lease payments as lease

payments can be deducted as a business expense.
Cheaper:
Leasing is a source of financing which is cheaper than almost all other

sources of financing.
Technical Assistance:
Lessee gets some sort of technical support from the lessor in respect of
leased asset.
Inflation Friendly:
Leasing is inflation friendly, the lessee has to pay fixed amount of rentals
each year even if the cost of the asset goes up.
Ownership:
After the expiry of primary period, lessor offers the lessee to purchase the
assets— by paying a very small sum of money.
ii. Disadvantages:
Lease financing suffers from the following disadvantages
a. To Lessor:
Lessor suffers from certain limitations which are discussed below:
Unprofitable in Case of Inflation:
Lessor gets fixed amount of lease rental every year and they cannot increase
this even if the cost of asset goes up.
Double Taxation:
Sales tax may be charged twice:

WHATSAPP 9816311521/8278759905
First at the time of purchase of asset and second at the time of leasing the
asset.
Greater Chance of Damage of Asset:
As ownership is not transferred, the lessee uses the asset carelessly and there
is a great chance that asset cannot be useable after the expiry of primary
period of lease.
b. To Lessee:
The disadvantages of lease financing from lessee’s point of view are given
below:
Compulsion:
Finance lease is non-cancellable and even if a company does not want to use
the asset, lessee is required to pay the lease rentals.
Ownership:
The lessee will not become the owner of the asset at the end of lease
agreement unless he decides to purchase it.
Costly:
Lease financing is more costly than other sources of financing because lessee
has to pay lease rental as well as expenses incidental to the ownership of the
asset.
Understatement of Asset:
As lessee is not the owner of the asset, such an asset cannot be shown in the
balance sheet which leads to understatement of lessee’s asset.

WHATSAPP 9816311521/8278759905
Q.5 What is wealth maximization? Why is wealth maximisation

preferred over profit maximisation.
ANS: Wealth maximization is a modern approach to financial management.

Maximization of profit used to be the main aim of a business and financial
management till the concept of wealth maximization came into being. It is a
superior goal compared to profit maximization as it takes broader arena into
consideration. Wealth or Value of a business is defined as the market price
of the capital invested by shareholders.
wealth maximisation preferred over profit maximization:
There are three correct answers to this question, which are 1. Profits include
estimates, in addition to cash flows, 2. Profits ignore the time value of
money, and 4, Profit maximization disregards financial risk. Financial
management has many components to it. Wealth maximization and profit
maximization are two of the most important parts of it.
This is because they are required for the assessment of the business and to
ensure the business continues to perform well. While they are both
important to financial management, wealth maximization is more
important. Profit maximization only increases the capacity of earning, while
wealth maximization increases the stock market value.
What is Wealth Maximization?
The ability of a company to increase the value of its stock for all the
stakeholders is referred to as Wealth Maximization. It is a long-term goal
and involves multiple external factors like sales, products, services, market
share, etc. It assumes the risk and recognizes the time value of money given
the business environment of the operating entity. It is mainly concerned
with the long-term growth of the company and hence is concerned more
about fetching the maximum chunk of the market share to attain a
leadership position.

WHATSAPP 9816311521/8278759905
What is Profit Maximization?
The process of increasing the profit earning capability of the company is

referred to as Profit Maximization. It is mainly a short-term goal and is
primarily restricted to the accounting analysis of the financial year. It ignores
the risk and avoids the time value of money. It is primarily concerned as to
how the company will survive and grow in the existing competitive business
environment.
Wealth Maximization vs. Profit Maximization Infographics
#1 – Wealth Maximization
• Wealth Maximization is the ability of the company to increase the

value for the stakeholders of the company, mainly through an increase in the
market price of the company’s share over some time. The value depends on
several tangible and intangible factors like sales, quality of products or
services, etc.
• It is mainly achieved throughout the long-term as it requires the

company to attain a leadership position, which in turn translates to a larger
market share and higher share price, ultimately benefiting all the
stakeholders of the company.
• To be more specific, the universally accepted goal of a business entity

has been to increase the wealth for the shareholders of the company as they
are the actual owners of the company who have invested their capital, given
the risk inherent in the business of the company with expectations of high
returns.
#2 – Profit Maximization
• Profit Maximization is the ability of the company to operate efficiently

to produce maximum output with limited input or to produce the same
output using much lesser input. So, it becomes the most crucial goal of the

WHATSAPP 9816311521/8278759905
company to survive and grow in the current cut-throat competitive

landscape of the business environment.
• Given the nature of this form of financial management, companies

mainly have a short-term perspective when it comes to earning profits, and
that is very much limited to the current financial year.
• If we get into the details, profit is actually what remains out of the total
revenue after paying for all the expenses and taxes for the financial year.
Now to increase the profit, companies can either try to increase their
revenue or try to minimize their cost structure. It may need some analysis of
the input-output levels to diagnose the operating efficiency of the company
to identify the key improvement areas where processes could be tweaked or
changed in their entirety to earn larger profits.
Comparative Table
Basis Wealth Maximization Profit Maximization
Definition It is defined as the management of financial resources aimed at

increasing the value of the stakeholders of the company. It is defined as
the management of financial resources aimed at increasing the profit of the
company.
Focus Focuses on increasing the value of the stakeholders of the company in

the long term. Focuses on increasing the profit of the company in the
short term.
Risk It considers the risks and uncertainty inherent in the business model
of the company. It does not consider the risks and uncertainty inherent in
the business model of the company.
Usage It helps in achieving a larger value of a company’s worth, which

may reflect in the increased market share of the company. It helps in
achieving efficiency in the company’s day-to-day operations to make the
business profitable.
WHATSAPP 9816311521/8278759905
Conclusion
Profit is the basic building block of a company to accrue capital in the

shareholder’s equity. Profit maximization helps the company in surviving
against all the odds of the business and requires some short-term perspective
to achieve the same. Though in the short term, the company can ignore the
risk factor, it can not do the same in the long-term as shareholders have
invested their money in the company with expectations of getting high
returns on their investment.
Wealth Maximization takes into account the interest concerning

shareholders, creditors or lenders, employees, and other stakeholders.
Hence, it ensures building up reserves for future growth and expansion,
maintaining the market price of the company’s share, and recognizes the
value of regular dividends. So, a company can take any number of decisions
for maximizing profit, but when it comes to decisions concerning
shareholders, then Wealth Maximization is the way to go.
Q.6 “A manager can be more effective if he is a good leader.”

Comment.
ANS:
Managers have to guide and lead their subordinates towards the

achievement of group goals. Therefore, a manager can be more effective if he
is a good leader. He does not depend only on his positional power or formal
authority to secure group performance but exercises leadership influence for
the purpose. As a leader he influences the conduct and behaviour of the
members of the work team in the interest of the organisation as well as the
individual subordinates and the group as a whole. But leadership and
management are not the same thing. Management involves planning,
organising, coordinating and controlling operations in achieving various
organisational goals. Leadership is the process which influences the people
WHATSAPP 9816311521/8278759905
and inspires them to willingly accomplish the organisational objectives.

Thus, a manager is more than a leader. On the other hand, a leader need not
necessarily be a manager. For instance, in an informal group, the leader may
influence the conduct of his fellow members but he may not be a manager.
His leadership position is due to the acceptance of his role by his followers.
But, the manager, acting as a leader, has powers delegated to him by his
superiors. His leadership is an accompaniment of his position as a manager
having an organised group of subordinates under his authority. Thus,
managerial leadership has the following characteristics:
i) It is a continuous process whereby the manager influences, guides and

directs the behaviours of subordinates.
ii) The manager-leader is able to influence his subordinates behaviour at

work due to the quality of his own behaviour as leader.
iii) The purpose of managerial leadership is to get willing cooperation of the

work group in the achievement of specified goals.
iv) The success of a manager as leader depends on the acceptance of his

leadership by the subordinates. v) Managerial leadership requires that while
group goals are pursued, individual goals are also achieved.
Q.7 Distinguish between equity shares and preference shares.
ANS:
BASIS FOR
EQUITY SHARES PREFERENCE SHARES
COMPARISON
Meaning Equity shares are Preference shares are

the ordinary the shares that carry
shares of the preferential rights on

WHATSAPP 9816311521/8278759905
BASIS FOR
COMPARISON
company the matters of payment

representing the of dividend and
part ownership of repayment of capital.
the shareholder in
the company.
Payment of The dividend is Priority in payment of

dividend paid after the dividend over equity
payment of all shareholders.
liabilities.
Repayment of In the event of In the event of winding

capital winding up of the up of the company,
company, equity preference shares are
shares are repaid repaid before equity
at the end. shares.
Rate of Fluctuating Fixed

dividend
Redemption No Yes
Voting rights Equity shares Normally, preference

carry voting shares do not carry
rights. voting rights. However,
in special
circumstances, they get

WHATSAPP 9816311521/8278759905
BASIS FOR
COMPARISON
voting rights.
Convertibility Equity shares can Preference shares can

never be be converted into
converted. equity shares.
Arrears of Equity Preference shareholders

Dividend shareholders have generally get the
no rights to get arrears of dividend
arrears of the along with the present
dividend for the year's dividend, if not
previous years. paid in the last previous
year, except in the case
of non-cumulative
preference shares.
Q.8 Write a short note on job enrichment.
ANS: Job enrichment is a technique adopted by management to motivate the

employees and to provide job satisfaction to them. Job enrichment technique
is also referred to as vertical job expansion or job enhancement technique.
Job enrichment technique is not the same as job enlargement technique.
Because in job enrichment employees are provided additional work along
with enhanced authority and control.
Job enrichment techniques are used by management to deal with the

problem of decreased motivation and excitement of employees at the
workplace. Companies spend thousands of dollars for the training of their

WHATSAPP 9816311521/8278759905
employees to teach them to do their jobs and to provide them with all the
skills required to do the job efficiently.
However, the return on investment becomes null or very low when

employees don’t do their job with excitement or leave their jobs. A well-
trained employee leaving the job is a big loss for a company and there are
very few upper-level or well-trained employees who leave their jobs because
of lower money reasons but they leave their jobs because of boredom or less
challenging jobs. They find their jobs uninteresting or unchallenging and
look for jobs that challenge their skills.
Job enrichment is one of the most effective techniques used by management

to break the monotony of jobs for employees. Using this technique, you not
only get additional work done by employees but also prepare them for
higher-level jobs. It is an excellent way to train your employees by not
spending a single penny.
In job enrichment techniques, employees are not assigned arbitrary job

tasks. Job tasks that are related to one another are grouped and assigned to
one employee. The job responsibilities of employees are increased in the
vertical direction.
For example, employees get to make decisions that are formally taken by top
management and get to control employees which are formally controlled by
top management. In this way, not only the responsibilities of top
management are shared but employees also learn new skills. Job enrichment
helps in establishing effective communication between employees and
management.
The concept of job enrichment was introduced by an American psychologist

named Frederick Herzberg in 1968. The concept of job enrichment is derived
from his “Motivator hygiene” theory, where he mentioned that the job
attitude is formed from two independent factors i.e. job satisfaction and job
dissatisfaction

WHATSAPP 9816311521/8278759905
Q.9 “None of the four forms of business organisations has all the
features of an ideal form of organisation.” Comment.
ANS:
Sole Proprietorship
The simplest and most common form of business ownership, sole

proprietorship is a business owned and run by someone for their own
benefit. The business’ existence is entirely dependent on the owner’s
decisions, so when the owner dies, so does the business.
Advantages of sole proprietorship:
All profits are subject to the owner
There is very little regulation for proprietorships
Owners have total flexibility when running the business
Very few requirements for starting—often only a business license
Disadvantages:
Owner is 100% liable for business debts
Equity is limited to the owner’s personal resources
Ownership of proprietorship is difficult to transfer
No distinction between personal and business income
Partnership

WHATSAPP 9816311521/8278759905
These come in two types: general and limited. In general partnerships, both
owners invest their money, property, labor, etc. to the business and are both
100% liable for business debts. In other words, even if you invest a little into
a general partnership, you are still potentially responsible for all its debt.
General partnerships do not require a formal agreement—partnerships can
be verbal or even implied between the two business owners.
Limited partnerships require a formal agreement between the partners. They

must also file a certificate of partnership with the state. Limited partnerships
allow partners to limit their own liability for business debts according to
their portion of ownership or investment.
Advantages of partnerships:
Shared resources provides more capital for the business
Each partner shares the total profits of the company
Similar flexibility and simple design of a proprietorship
Inexpensive to establish a business partnership, formal or informal
Disadvantages:
Each partner is 100% responsible for debts and losses
Selling the business is difficult—requires finding new partner
Partnership ends when any partner decides to end it
Corporation
Corporations are, for tax purposes, separate entities and are considered a
legal person. This means, among other things, that the profits generated by a
corporation are taxed as the “personal income” of the company. Then, any

WHATSAPP 9816311521/8278759905
income distributed to the shareholders as dividends or profits are taxed

again as the personal income of the owners.
Advantages of a corporation:
Limits liability of the owner to debts or losses
Profits and losses belong to the corporation
Can be transferred to new owners fairly easily
Personal assets cannot be seized to pay for business debts
Disadvantages:
Corporate operations are costly
Establishing a corporation is costly
Start a corporate business requires complex paperwork
With some exceptions, corporate income is taxed twice
Limited Liability Company (LLC)
Similar to a limited partnership, an LLC provides owners with limited

liability while providing some of the income advantages of a partnership.
Essentially, the advantages of partnerships and corporations are combined in
an LLC, mitigating some of the disadvantages of each.
Advantages of an LLC:
Limits liability to the company owners for debts or losses
The profits of the LLC are shared by the owners without double-taxation

WHATSAPP 9816311521/8278759905
Disadvantages:
Ownership is limited by certain state laws
Agreements must be comprehensive and complex
Beginning an LLC has high costs due to legal and filing fees
Q.10 Enumerate the principal characteristics of managerial leadership.
ANS: Managers have to guide and lead their subordinates towards the
achievement of group goals. Therefore, a manager can be more effective if he
is a good leader. He does not depend only on his positional power or formal
authority to secure group performance but exercises leadership influence for
the purpose. As a leader he influences the conduct and behaviour of the
members of the work team in the interest of the organisation as well as the
individual subordinates and the group as a whole. But leadership and
management are not the same thing. Management involves planning,
organising, coordinating and controlling operations in achieving various
organisational goals. Leadership is the process which influences the people
and inspires them to willingly accomplish the organisational objectives.
Thus, a manager is more than a leader. On the other hand, a leader need not
necessarily be a manager. For instance, in an informal group, the leader may
influence the conduct of his fellow members but he may not be a manager.
His leadership position is due to the acceptance of his role by his followers.
But, the manager, acting as a leader, has powers delegated to him by his
superiors. His leadership is an accompaniment of his position as a manager
having an organised group of subordinates under his authority. Thus,
managerial leadership has the following characteristics:
i) It is a continuous process whereby the manager influences, guides and

directs the behaviours of subordinates.

WHATSAPP 9816311521/8278759905
ii) The manager-leader is able to influence his subordinates behaviour at

work due to the quality of his own behaviour as leader.
iii) The purpose of managerial leadership is to get willing cooperation of the

work group in the achievement of specified goals
. iv) The success of a manager as leader depends on the acceptance of his

leadership by the subordinates.
v) Managerial leadership requires that while group goals are pursued,

individual goals are also achieved.
Q.11 What are the most common barriers to effective communication?
ANS: Language barriers
The language barrier is one of the main barriers to effective communication,

as language is the most widely used communication tool between humans.
And the fact that every region or country has its own different language is
one of the barriers to effective communication
It is estimated that the dialect of each of the two regions changes within a
few kilometers, even in the same workplace the employees possess different
language skills and as a result, the communication channels that bifurcate
across the organization are affected.
Psychological barriers
Many psychological problems stand in the way of effective communication,

for example, many people are afraid of standing on stage or speaking in front
of the audience, which may cause them to have speech disorders in addition
to phobias, depression, and other symptoms. It is very difficult to avoid such

WHATSAPP 9816311521/8278759905
circumstances at times, so psychological barriers are among the most

important obstacles to effective communication.
Emotional barriers
A person's emotional intelligence often determines the ease and

effectiveness of the communication process. An emotionally mature person
is often able to communicate effectively with others, while people who let
their emotions take over often face many difficulties.
An ideal combination of emotions and facts results in effective

communication, while feelings of anger and frustration can affect a person's
decision-making abilities and thus limit the effectiveness of their
communication.
Physical barriers
A physical barrier is an environmental and natural condition that acts as a

barrier in the communication process and can lead to distraction resulting in
inattention or completely altering the message, causing miscommunication.
If the physical barriers are reduced or removed, the communication process

becomes effective as there are less distortion and interference.
The major environmental/physical barriers include organizational

environment or interior workspace design problems, technological
problems, work overload, information duplication, and noise.
For example, the physical separation of employees within a large office

combined with poor communication equipment may create severe barriers
to effective communication. When messages are sent, physical barriers like
walls, doors, distance, etc. do not let the communication become effective.

WHATSAPP 9816311521/8278759905
Some physical barriers are easy to alter whereas, some may prove
challenging in the effective communication process.
Other Barriers to Communication
Organizational Structure Barriers: There are some institutions that rely on a

weak organizational structure or do not have a specific organizational
structure within the organization, also the multiplicity of administrative
levels within the organization leads to the difficulty of defining the powers
and the difficulty of defining the goal, which leads to difficult
communication.
Ethical Barriers to Communication: Ethical barriers occur when individuals

working in an organization find it difficult to express their opposition, even
though their organization is behaving in ways that they consider unethical.
Physiological barriers to communication: Physiological barriers may result

from the performance characteristics and limitations of the human body and
the human mind.
Cultural barriers to communication: Cultural barriers often arise where

individuals in one social group have developed different norms, values, or
behaviors to individuals related to another group.
Socio-religious barriers: Other barriers are social and religious barriers. In a

patriarchal society, a woman or a transgender may encounter many
difficulties and barriers during communication.
Moral barriers: These barriers may relate to the time of writing the message,
the goal of it, or the method of communication that took place during its
expression, for example, the goal of writing the message may be unclear or
its perception of the sender differs from the sender to the future. Also, the
communication process took place at an inappropriate time, or it took place
at a specific time that cannot be changed.
WHATSAPP 9816311521/8278759905
Q.12 Distinguish between outsourcing and off shoring.
ANS:
BASIS FOR
OUTSOURCING OFFSHORING
COMPARISON
Meaning Outsourcing is the Offshoring refers

assignment of to the relocation of
business peripheral business processes
operations to an in a different
external organization. country.
What it Shifting operations to Shifting activities

implies? third party. or offices.
Objective Focus on core Lower labor cost

business activities
Function Non-employees Employees of the

performed by organization
Location Within or outside the Outside the

country. country.
The major differences between outsourcing and offshoring are explained

below:
Outsourcing refers to the transfer of non-core business activities to another

organization who got specialization in that work. Offshoring refers to the
moving of the company’s business to any other country, where the cost of
running such business is lower than the home country.

WHATSAPP 9816311521/8278759905
Outsourcing involves shifting business operations to external parties.

Conversely, Offshoring involves shifting of activities and offices.
The objective of outsourcing business activities is to focus on the core

activities of the company. On the other hand, offshoring is performed to
minimize the cost.
Outsourcing is performed by non-employees, but Offshoring is performed by

employees of the business entity.
Outsourcing may be performed within or outside the country. Although, in

offshoring, the shifting of business to another country is a must.
Conclusion
Using outsourcing and even offshoring activities for a call center is in vogue
since last decade. When the outsourcing of any business operation, at a place
other than the business’s origin, can be termed as offshoring. The business
organization can decide itself that how they want to use these practices, i.e.
singly or in combination. Sometimes, offshoring can also be termed as a
subset of outsourcing.
Q.13 Distinguish between marketing concept and societal concept.
ANS: “Marketing concept starts with the company’s target customers and
their needs and wants. The company integrates and co-ordinates all the
activities that will affect customer satisfaction. The company achieves profit
through creating and maintaining customer satisfaction. In essence, the
marketing concept is consumers’ needs and wants-orientation backed by
integrated marketing effort aimed at generating customer satisfaction as the
key to satisfying organisational goals” observes Philip Kotler.

WHATSAPP 9816311521/8278759905
Marketing concept accepts the consumer as the king. It is different from

selling concept because it starts with the customer needs and wants,
integrates marketing functions, and offers consumer satisfaction at a profit
whereas selling concept is concerned only with the sales volume and the
company’s needs.
Unfortunately, there are not nary companies in the advanced countries such
as U.S.A. which have adopted marketing concept. Only a handful of than
such as Procter and Gamble, IBM, Gillette, Kodak, GEC, and few other have
adopted marketing concept in true sense.
Most companies have not reached ‘full marketing maturity stage’. As Kotler
says, ‘most companies do not grasp or embrace the marketing concept until
driven to it by circumstance’.
The marketing concept, thus, needs a central place or position in the

business firm if customers needs and wants have to be correctly understood
and satisfied. It needs to influence and control over other departments of a
firm if the customers have to be satisfied.
This satisfaction is possible to be delivered if the other departments such as

production, finance, personnel, and R&D perform their functions in constant
collaboration and rapport with the marketing department.
It will be seen that though the customer or consumer is at the center of the
circle, he is satisfied by the marketing concept which is assisted by other four
functions of management whereas selling concept means that the consumer
is zero.
Societal marketing concept goes beyond the marketing concept because it is

concerned with the long-term benefits of the consumers and the well-being
of society. It involves the control of pollution, inflation, shortages and
neglect of social services.

WHATSAPP 9816311521/8278759905
The societal marketing concept calls upon the marketers to balance three
considerations in setting their marketing policies namely:
1. Company profits,
2. Consumer satisfaction, and
3. Society interests.
In India, societal marketing concept has hardly been grasped by the

marketing/manufacturing companies. Golden Tobacco Company indulges in
manufacturing and aggressive advertising of harmful cigarettes, yet it speaks
of its having good management. Even same magazines such as Business
India or Business World give good images of such companies. But the truth
is that it does not fit into the societal marketing concept.
Societal marketing concept is a basic necessity in India. This requires veil

qualified and competent professionals in the marketing department.
Q.14 Write a short note on employee engagement.
ANS: Employee engagement is a workplace approach resulting in the right

conditions for all members of an organisation to give of their best each day,
committed to their organisation’s goals and values, motivated to contribute
to organisational success, with an enhanced sense of their own well-being.
Employee engagement is based on trust, integrity, two way commitment and
communication between an organisation and its members. It is an approach
that increases the chances of business success, contributing to organisational
and individual performance, productivity and well-being. It can be
measured. It varies from poor to great. It can be nurtured and dramatically
increased; it can be lost and thrown away. Employee engagement is getting
up in the morning thinking, “Great, I’m going to work. I know what I’m
going to do today. I’ve got some great ideas about how to do it really well.
I’m looking forward to seeing the team and helping them work well today”.
WHATSAPP 9816311521/8278759905
Employee engagement is about understanding one’s role in an organisation,

and being sighted and energised on where it fits in the organisation’s
purpose and objectives.
Employee engagement is about having a clear understanding of how an

organisation is fulfilling its purpose and objectives, how it is changing to
fulfil those better, and being given a voice in its journey to offer ideas and
express views that are taken account of as decisions are made.
Employee engagement is about being included fully as a member of the

team, focussed on clear goals, trusted and empowered, receiving regular and
constructive feedback, supported in developing new skills, thanked and
recognised for achievement.
Engaged organisations have strong and authentic values, with clear evidence
of trust and fairness based on mutual respect, where two-way promises and
commitments – between employers and employees – are understood and
fulfilled.
Employee engagement cannot be achieved by a mechanistic approach which

tries to extract discretionary effort by manipulating employees’ commitment
and emotions. Employees see through such attempts very quickly and can
become cynical and disillusioned.

Bcoc 132n

Uploaded by

Document Information

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

Bcoc 132n

Uploaded by

Copyright:

Available Formats

MEENAKSHI SHARMA SANKHYAN

Disclaimer/Special Note: These are just the sample of the

MEENAKSHI STUDY PLATFORM Page 1

These Sample Answers/Solutions are prepared by Private

Q.1 What is technological innovation? Explain the various types of

Ans: Technological innovation is an extended concept of innovation. While

Innovation refers to adding extra steps of developing new services and

Technological innovation is the process where an organization (or a group of

identified as a for increased market competitiveness new innovation-

Incremental innovation is a succession of very small

The term may also apply to services, methods, or processes. Innovative

Customers are more likely to hold onto an existing product if there is an

Incremental innovation is a strategy that helps companies maintain or

Incremental innovation is common among high technology companies. In

MEENAKSHI STUDY PLATFORM Page 3

Disruptive innovation refers to the innovation that transforms expensive or

Architectural innovation refers to the innovation of an architecture of any

Radical innovation is a transformative business model that seeks to

Q.2 Explain the features of an ideal form of business organisation.

ANS: 1] Ease of Formation

MEENAKSHI STUDY PLATFORM Page 4

Every business needs to raise capital at the beginning. So the form of

Liability of the parties involved in the business can be limited or unlimited.

5] Continuity and Stability

MEENAKSHI STUDY PLATFORM Page 5

Every business functions in a very complex and dynamic business

form of business organisation can be considered to be an ideal in all

Company form of organization

The company form of organization has helped concentration of economic

1. Accumulation of Large Resources:

MEENAKSHI STUDY PLATFORM Page 6

The liability of members in a company form of organisation is limited to the

When a company is incorporated, it becomes a separate legal entity. It is an

Disadvantages of Company Form of Organisation:

2. Separation of Ownership and Management:

3. Evils of Factory System:

MEENAKSHI STUDY PLATFORM Page 7

Q.3 What do you mean by span of control? Discuss factors affecting

ANS: span of control:

What is the Span of Control?

Span of Control can be defined as the total number of direct subordinates

Meaning and Explanation

The term “Span of Control” is popularly used in business management and

factors affecting span of control:

1. The Ability of Officers

MEENAKSHI STUDY PLATFORM Page 8

2. Availability of time for supervision

The span of management is affected by the nature of work also.

On the contrary, If the work is more complicated, Managers cannot have

4. Plans for the Enterprise

5. Ability and efficiency of subordinates

A very important factor affecting the span of management is the ability,

MEENAKSHI STUDY PLATFORM Page 9

The span of control depends upon the techniques of control also.

If the techniques of control effective the managers can control a large

Q.4 What is the meaning of lease financing? Explain its advantages

Lease financing has following advantages

Assured Regular Income:

MEENAKSHI STUDY PLATFORM Page 10

High Potentiality of Growth:

Use of Capital Goods:

MEENAKSHI STUDY PLATFORM Page 11

A company is able to enjoy the tax advantage on lease payments as lease

Leasing is a source of financing which is cheaper than almost all other