Directing Class 12 Important Questions and Answers Business Studies Chapter 7

We have given these Business Studies Class 12 Important Questions Chapter 7 Directing to solve different types of questions in the exam. Go through these Planning Class 12 Important Questions and Answers & Previous Year Questions to score good marks in the board examination.

Important Questions of Directing Class 12 Business Studies Chapter 7

Question 1.
State two characteristics of ‘Directing’. (All India 2019)
Answer:
Characteristics of directing are:

  • It takes place at every level.
  • It is a continuous process.

Question 2.
Kamal is working as a gang boss in the assembly unit of ‘Sokia Ltd.’, a laptop manufacturing company. He supervises the work of ten trained workers who perform the various activities related to the assembly of the laptops. One day when he was supervision the work of his workers, he told Ashok, a worker that his work could be improved. Ashok interpreted the comments of Kamal as that his work was not good.
Identify the type of barrier to effective communication in this case. (All India 2019)
Answer:
The type of barrier highlighted here is psychological barrier.

Question 3.
Give the meaning of ‘Supervision’ as an element of directing. (All India 2017)
Answer:
As an element of directing supervision means instructing, guiding and monitoring the subordinates to ensure that they perform their jobs in accordance with the plans and instructions.

Question 4.
Give the meaning of “Motivation’ as an element of directing. (Delhi 2017)
Answer:
Motivation is the process of stimulating people to act voluntarily to accomplish desired goals.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 5.
Explain in one sentence how directing initiates action in management. (Compartment 2014; Delhi 2011)
Or
How does directing initiate action? State. (Comportment 2014)
Or
Explain in one sentence how direction is an executive function of management. (All India 2011)
Answer:
Directing initiates action by ordering employees to attain the desired goals of an organisation.

Question 6.
Give any two examples of employee recognition as a non-financial incentive. (Delhi [c] 2014)
Answer:
Two examples of employee recognition are:

  • Installing awards or certificate for best performance.
  • Displaying on the notice board or in company newsletter about the achievement of employee.

Question 7.
Give any two characteristics of organisational climate that influence the behaviour of individuals and act as a non-financial incentive. (All India 2014)
Answer:
Characteristics of organisational climate are:

  • Reward orientation.
  • Individual autonomy.

Question 8.
List any two non-financial incentives. (Comportment 2014)
Answer:
Non-financial incentives include:

  • Status
  • Career advancement

Question 9.
Why is motivation called a complex process? (Comportment 2014; Delhi 2013)
Answer:
Motivation is a complex process as individuals are heterogeneous in their expectations, perceptions and reactions. Different people
have to be motivated differently as any one type of motivation cannot have a uniform effect on all the members.

Question 10.
What is meant by decoding as an element of communication? All Indio 2014
Answer:
Decoding is the process of converting encoded symbols of the sender.

Question 11.
What is meant by feedback in the concept of communication? (Foreign 2014)
Answer:
The action of the receiver, which reciprocates to the sender of the message, that he has understood the message in its true sense is called feedback.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 12.
What is meant by encoding as an element of communication? (Delhi 2014)
Answer:
The sender translates the message into words, symbols, gestures or other symbols, which he feels, will make the receiver understand the message. This is known as encoding of message.

Question 13.
At which level of management directing takes place? (Delhi 2013)
Answer:
Directing takes place at all levels of management, wherever superior-subordinate relationship exists.

Question 14.
Define directing as a function of management. (Comportment 2013)
Answer:
Directing is the process of instructing, guiding and inspiring people in the organisation to achieve its objectives.

Question 15.
What is meant by motivation? (All India 2013)
Answer:
Motivation is the process of stimulating people to act voluntarily to accomplish desired goals.

Question 16.
Give the meaning of ‘Autocratic’ style of ‘leadership’. (Comportment 2013)
Answer:
Under this style, all decision-making power is vested in the leader and he exercises complete control over his subordinates.

Question 17.
What is meant by ‘Democratic style’ of leadership? (Comportment 2013; All India 2013)
Answer:
A democratic leader provides freedom of thinking. He listens to the suggestions, grievances and opinions of the subordinates.

Question 18.
Define supervision. (Comportment 2013; All India 2012)
Answer:
Supervision means instructing, guiding and monitoring the subordinates to ensure that they perform their jobs in accordance with the plans and instructions.

Question 19.
Name the term used in management for influencing people to strive willingly for group objectives. (All India 2012)
Answer:
Leadership influences people to strive willingly for group objectives.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 20.
Define formal communication. (Delhi 2012)
Answer:
Formal communication refers to the official communication which takes place through the chain of command.

Question 21.
What is meant by informal communication? (Delhi 2012)
Answer:
Informal communication is the communication that takes place without following the formal lines of communication.

Question 22.
Define communication. (All India 2012)
Answer:
Communication is the process of exchange of ideas and views among two or more persons to create common understanding.

According to Newman, Summer and Warren, “Communication is an exchange of facts, ideas, opinions or emotions between two or more persons.”

Question 23.
Name the term used in management which stimulates people to take up work voluntarily. (All India 2011)
Answer:
‘Motivation’ stimulates people to take up work voluntarily.

Question 24.
Explain ‘Career advancement opportunity’ and ‘Job security” as non-financial incentive. (All India 2019)
Answer:
Career advantage opportunity:
Most of the employees want to explore ‘n their career. An organisation can motivate its employees by providing them opportunities for in-service training and promotion. In other words, if the employees arc provided the opportunity for their advancement and growth and to develop their potentiality, they feel very much satisfied and become more committed towards the organisation goals.

Job security:
Job security Generally, workers prefer security of job. It is an assurance by the cmployer that the worker will continuc in the employment. It eliminates uncertainty about the earnings and job and have a positive impact on the efficiency.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 25.
Explain ‘Job enrichment’ and ‘Employee participation’ as non-financial incentives. How do they motivate employees? (Delhi 2019)
Answer:
Job enrichment Assignment of challenging:
Jobs is a significant non-financial incentive. Assignment of challenging work to subordinates provide opportunities for maximum development and helps them to reach upto the point of seif-realisation.

Participation In management’s decisions The active participation of workers and their representatives in decision-making helps in securing cooperation and commitment of workers towards organisational goals.

Question 26.
Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people working under her. She encouraged them to set their own objectives and take decisions. She respects their opinions and supports them, so that they can perform their duties and accomplish organisational objectives. To manage and exercise effective control she uses forces within the group.
As an intelligent manager, at times, she also makes use of positive aspects of informal communication. This way, she is able to unify diverse interests and ensure that targets are met.
(a) There are many theories and styles of influencing people’s behaviour. Identify the style used by Sandhya which is based on the use of authority.

(b) State two positive aspects of the communication discussed above, which Sandhya is using as an intelligent manager. (CBSE 2018 )
Answer:
(a) The style of leadership used by Sandhya is ‘Democratic leadership’.
A democratic leader takes decisions after consultation and encourages the participation of subordinates. This leadership style is more common and popular, as it ensures achievement of goals, when they are set with the acceptance of the subordinates themselves.

A democratic leader provides freedom of thinking and listens to suggestions, grievances and opinions of the subordinates. This improves the attitude of the employees towards their jobs and the organisation, thereby increasing their morale.

This style is of mutual benefit which allows subordinates to become part of team and help leaders (seniors) to make better decisions.
As shown in the figure, the leader involves subordinates in decision-making.
Directing Class 12 Important Questions and Answers Business Studies Chapter 7 -1

(b) Two positive effects of informal communication are:

  • Prescribed lines of communication are not followed. Thus, it facilitates quick feedback and spreads information faster.
  • It provides a sense of belongingness and gives due respect to social and psychological needs.

Question 27.
Lakhan, an expert in the area of Financial Management, sent an email to his subordinate Thomas about a new project for a client in France. Though, the mail was in English, a language known to Thomas, he was not able to understand the actual meaning of many words used in the mail. He was also not a specialist in the field of Financial Management. Not only this some portions of the mail were translated from French to English in such a manner that many mistakes crept in, causing different meaning to the message.
(a) Identify two specific barriers to communication in Lakhan’s email.
(b) State any two measures which can be taken by Lakhan to overcome the barriers identified in part (a) above to improve in future, the effectiveness of his Communication-Compartment 2018
Answer:
(a) Two barriers to communication in Lakhan’s e-mail were:

  • Technical Jargon
  • Faulty translations

(b) Measures to overcome these barriers are:

  • Be aware of languages, tone and content of message.
  • Communicate according to the needs of receiver.

Question 28.
Explain briefly any three semantic barriers to communication. (All India 2017)
Or
Explain any five semantic barriers to communication. (Comportment 2015)
Or
Describe any four semantic barriers of communication. (Delhi 2011, 2011)
Answer:
Three semantic barriers to communication are as follow: (any three)
(i) Badly expressed message Sometimes due to lack of vocabulary, manager may use wrong words, omission of needed words, etc. Due to this, the manager may fail to convey the desired meaning to this subordinates.

(ii) Words with different meanings Sometimes a word may have different meanings, Receiver may understand the other meaning, e.g. price, prize, principle, principal right, write, etc.

(iii) Faulty translations Sometimes the workers do not understand the language which is used by manager. Some workers get it translated. If the translator is not efficient, he may make mistakes in translation. Due to wrong translation, there may be transfer of wrong message.

(iv) Unclarified assumptions Sometimes, the worker may misinterpret the assumptions, e.g. boss may instruct the subordinate to take care of goods. He may mean that take care of quality of good whereas, workers may understand that he is instructing to keep the goods safely.

(v) Technical Jargon Specialists often use technical language, which common man does not understand who are not specialists in the concerned field. Patients often do not understand many words used by doctors.

Question 29.
Explain briefly any three organisational barriers to communication. (All India 2017; Foreign 2014)
Or
Describe any four organisational barriers of effective communication. (All India 2011)
Answer:
The three organisational barriers to communication are: (any three)
(i) Organisational policy If organisational policy does not support free flow of information, it may result in barriers, e.g. in centralised organisation, most of the information remains at top level only. People at lower level may not be able to communicate freely in centralised organisation.

(ii) Status Sometimes, the people working at higher level do not believe in the information supplied by lower level employees as they are apprehensive about their ability.

(iii) Rules and regulations Rigid rules and regulations may also create barriers as following rules may lead to red tapism, delay of action and delay in free flow of communication.

(iv) Complex organisation When the information passes through various levels then it can lead to screening or filtering of information at different levels, e.g. while giving the feedback, the subordinates filter all their negative points and highlight only their positive side.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 30.
Explain briefly any three personal barriers to communication. (All India 2017; Foreign 2014)
Or
Explain the organisational barriers to communication. (Comportment 2015)
Or
Explain any four personal barriers of effective communication. (All India 2011)
Answer:
The three personal barriers to communication are: (any three)
(i) Lack of confidence of superior in his subordinates If superiors have no confidence and trust in their subordinates, then they pay no attention to their advice, opinion or suggestions.

(ii) Lack of incentives If there is no incentive for communicating new ideas, then subordinates may not take initiatives to give suggestions, e.g. if there is not reward given for giving some good suggestion, then employees will take no initiative to give good suggestions.

(iii) Fear of authority Some superiors may modify feedback going from lower-level employees. This may be done especially if the feedback is a complaint directed against the superior. The dishonest superior may block complains reaching to senior management in order to prevent challenge to his authority. In order words, sometimes superiors conceal and hide information if they have fear of losing their authority over the subordinates.

(iv) Unwillingness to communicate The personal characteristic of an individual also influences the free flow of communication. Sometimes, the superiors may not be prepared to communicate with the subordinates. These superiors may have selfish intentions and may prevent any negative information that threatens their reputation.

Question 31.
Explain briefly any three functions performed by a supervisor. (Delhi 2017)
Or
Explain any three functions performed by a supervisor that are vital to any organisation. (All India 2014)
Answer:
The three functions performed by a supervisor are as follows: (any three)
(i) Acts as a link between workers and management Supervisor conveys management policies and ideas to the workers on one hand and workers’ problem to the management on the other. He plays a crucial role of avoiding misunderstanding and conflicts between management and workers.
Directing Class 12 Important Questions and Answers Business Studies Chapter 7 -2
(ii) Maintains group unity Supervisor directly overlooks the workers and this is a key link in maintaining harmony and unity among workers by sorting out their internal differences.

(iii) Ensures performance of work He takes the responsibility for task achievement according to the targets and motivates his workers effectively.

Question 32.
Explain any three points that highlight the importance of directing function of management. (Delhi 2017)
Or
How directing helps in efficient and effective functioning of the organisation? Explain by giving any three points. (Delhi 2014)
Answer:
There are some points that highlight the importance of directing function of management (any three):
(i) Initiates action: Directing helps to initiate action by people in the organisation towards the attainment of desired objectives, e.g. If a supervisor guides his subordinates and clarifies their doubts in performing a task, it will help workers to achieve work targets given to them.

(ii) Integrates employees efforts: Directing integrates employees efforts in the organisation in such a way that every individual effort contributes to the attainment of organisational objectives. Thus, it ensures that the individuals work for organisational goals.

(iii) Improves efficiency: Directing guides employees to fully realise their potential and capabilities by motivating and providing effective leadership. A good leader can always identify the potential of his employees and motivate them to extract work upto their potential.

(iv) Brings balance and stability in the organisation: Effective directing helps to bring stability and balance in the organisation since, it fosters cooperation and commitment among the people and helps to achieve balance among various group activities and the departments.

(v) Facilitates changes: Changes in an organisation are usually resisted by employees. Through effective direction, a manager can explain the purpose and benefit of such changes to the employees.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 33.
Explain briefly any three measures to overcome the communication barriers. (Delhi 2017)
Or
The organisations which are keen on developing.effective communication, should adopt suitable measures to overcome the barriers to communication and improve communication effectiveness. Suggest and explain any such five measures. (Comportment 2015)
Or
Explain any five points of importance of directing function of management. (Comportment 2015)
Or
Barriers to effective communication exist in all organisations to a greater or lesser degree. State any six measures to overcome these barriers. (Delhi 2013)
Or
Effective communication should adopt suitable measures to overcome the barriers of communication. ‘Explain any four such measures. (All India 2013)
Answer:
The three measures to overcome the communication barriers are: (any three)
1. Be aware of languages, tone and content of message Language, tone and content of message should be so adjusted according to the situation that it is easily understood by the receiver and stimulates them.

2. Convey things of help and value to listeners To get good response from the subordinates, it should be ensured that the message relates to their interests.

3. Ensure feedback For success of communication, response of the listeners should be encouraged by the manager.

4. Communicate for present as well as future For communication to be successful, managers should incorporate existing commitments as well as future goals of the organisation.

5. Follow-up communication Sometimes it is difficult to implement instructions in its totality by the subordinates. To overcome this, regular follow-up should be done by managers.

6. Be a good listener Lot of problems can be solved due to attentive listening quality of the manager.

Question 34.
Mr Shubhendu Bose is the owner of ‘Bikmac Enterprises’ carrying on the business of manufacturing various kinds of biscuits. There was a lot of discontentment in the organisation and the targets were not being met. He asked his son, Naval, who had recently completed his MBA, to find out the reason. Naval found that all decision-making of the enterprise were in the hands of his father. His father didn’t believe in his employees.

As a result both the employer and the employees were not able to understand each others messages in the same sense. Thus, the employees were not happy and targets were not met.
(i) Identify any two communication barriers because of which Bikmac Enterprises was not able to achieve its target.
(ii) State one more barrier each of the types identified in (i) above. (Delhi 2016)
Answer:
(i) Two communication barriers because of which Bikmac Enterprises was not able to achieve its target are:

  • Organisational barrier in the form of Organisational policy, as it is indicated that it was the policy of the company that all decisions were taken by Mr Shubhendu Bose.
  • Psychological barrier in the form of ‘Distrust’, as it is indicated that Mr Bose did not trust his employees.

(ii) Organisational barrier-complexity in organisation structure. Psychological barrier-premature evaluation.

Question 35.
Mr Fernandes is the owner of Unibie Enterprises, carrying on the business of manufacturing electrical appliances. There is a lot of discontentment in the organisation and targets are not being met. He asked his son, Michel, who has recently completed his MBA, to find out the reason.
Michel found that all decision-making of the enterprise were in the hands of his father. Moreover, his father did not have confidence in the competency of the employees. Thus, the employees were not happy.
(i) Identify any two communication barriers because of which ‘Unibie Enterprise’ was not able to achieve its target.
(ii) State one more barrier each of the types identified in part (i) above. (All India 2016)
Answer:
(i) The two communication barriers because of which Unibie Enterprises was not able to achieve its target, were:
(a) Organisational barrier In the form of ‘Organisational Policy’, as it is indicated that it was the policy of the company that all the decisions were taken by Mr Fernandes.
(b) Personal barrier In the form of ‘Lack of confidence of superior on his subordinates’, as it is indicated that Mr Fernandes did not have confidence in the competency of his employees’.

(ii) Organisational barrier: Complexity in organisation structure.
Personal barrier: Fear of challenge to authority.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 36.
Pramod was a supervisor at ‘Annapurna Aata’ factory. The factory was producing 200 quintals of aata every day. His job was to make sure that the work goes on smoothly and there was no interruption in production. He was a good leader who would give orders only after consulting his subordinates and work out the policies with the acceptance of the group.
Identify and describe the leadership style being adopted by Pramod. (Delhi 2015)
Answer:
Promod is a Democratic leader Under this style, leader consults his subordinates in decision-making process and works out policies with the acceptance of the group. He encourages them to give suggestions in setting goals and implementing decisions. It is group centered leadership.

e.g. Mr Ratan realised that due to the absence of Mr Manan, the targets will not be met, so he discusses with his staff about meeting the deadline. Every body decided to do overtime and completed the task. Here Mr Ratan is behaving as a democratic leader.

Question 37.
Jaideep recently joined as the Managing Director of ‘Tivori Ltd’, an apparel designing company. He observed that the company had a number of experienced fashion designers on its payroll. They regularly offered useful suggestions which were neither appreciated nor rewarded by the company. Instead the company outsourced its services to some renowned fashion designers and paid them a good compensation for their services. Because of this, the employees felt disheartened and stopped giving useful suggestions.
(i) Identify the communication barrier discussed above.
(ii) State the category of this communication barrier.
(iii) Explain any other communication barrier of the same category. (All India 2015)
Answer:
(i) Lack of proper incentives.
(ii) Personal barrier to communication.
(iii) Fear of challenge to the authority If a superior perceives that a particular communication may adversely affect his/her authority, he/she may with held or suppress such communication.

Question 38.
Neeraj, a sales representative of ‘Omida Ltd’ has changed seven jobs in the last one year. He is a hard working person but is not able to finalise deals with the customers due to his inadequate vocabulary and omission of needed words. Sometimes, he uses wrong words because of which intended meaning is not conveyed.
All this created a misunderstanding between him and his clients.
(i) Identify the communication barrier discussed above.
(ii) State the category of this communication harrier.
(iii) Explain any other communication barrier of the same category. (Delhi 2015)
Answer:
(i) Badly expressed message.
(ii) Semantic barrier of communication.
(iii) Another type of semantic barriers is:

Faulty translations When the translator is not proficient in both the languages involved in translations, the meaning of the message may get distorted.

Question 39.
Huma is working in a company on a permanent basis. As per the job agreement, she had to work for 8 hours a day and was free to work overtime. Huma worked overtime, due to which she fell ill and had to take leave from her work. No one showed concern and enquired about her health.
She realised that she was fulfilling only some of her needs while some other needs still remained to be fulfilled.
(i) By quoting the lines from the above para, identify the needs of Huma which she is able to fulfill.
(ii) Also explain two other needs of Huma followed by the above needs, which still remained to be satisfied. (All India 2014)
Answer:
(i) ‘No one showed concern and enquired about her health’. The quoted line depicts that her affiliation/belongingness needs are not fulfilled.

(ii) The two other needs which still remain to be satisfied according to Maslows’ Need Hierarchy Theory are:

  • Esteem needs These include fulfilment of needs such as self-respect, autonomy, status, recognition and attention.
  • Self-actualisation needs It is the highest level of need in the need hierarchy theory. These needs include growth, self-fulfillment and achievement of goals.

Question 40.
Kavya is working in a company on permanent basis. As per the job agreement, she had to work for 8 hours a day and was free to work overtime. Kavya worked overtime. But even after working for long hours and putting in her best efforts, no recognition was given to her by her boss. Due to overtime, she fell ill and had to take leave from her work. No one showed concern and enquired about her health. She realised that she was fulfilling only some of her needs while some other needs still remained to be fulfilled.
(i) Identify and explain the needs of Kavya discussed in the above para, by quoting the fines.
(ii) Also explain two other needs of Kavya followed by the above needs, which still remained to be satisfied. (Foreign 2014)
Answer:
(i) ‘No one showed concern and enquired about her health’. The quoted line depicts that her affiliation/belongingness needs are not fulfilled.

(ii) The two other needs which still remain to be satisfied according to Maslows’ Need Hierarchy Theory are:
(a) Esteem needs These include fulfilment of needs such as self-respect, autonomy, status, recognition and attention.
(b) Self-actualisation needs It is the highest level of need in the need hierarchy theory. These needs include growth, self-fulfillment and achievement of goals.

Question 41.
Explain any three assumptions of Maslow’s Need Hierarchy Theory. (All India 2012)
Answer:
Assumptions of Maslow’s Need Hierarchy Theory are:

  • People’s behaviour is affected by their needs.
  • There are many needs of people and their order or priority can be made.
  • Motivation ends with the satisfaction of needs.

After that, the next higher need serves as a motivator.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 42.
Explain any three qualities of a good leader. Delhi 2012: All Indio 2011
Answer:
Qualities of a good leader are as follows:

  1. Knowledge A good leader should have required knowledge and competence. Only such person can instruct subordinates correctly and influence them.
  2. Initiative A leader should have courage and ability to take initiative. He should not wait for opportunities to come to his way, rather he should grab the opportunities and use it to the advantage of organisation.
  3. Integrity A leader should possess high level of integrity and honesty. He should be a role model to others regarding the ethics and values.

Question 43.
What is meant by non-financial incentives? List any two non-financial incentives. (Delhi 2010)
Answer:
Non-mdhetary or non-financial incentives are those incentives which do not involve monetary benefits. These incentives are based on factors which gives a feeling of satisfaction of doing or accomplishing something worth-while to the workers.

The two non-financial incentives are:
(i) Participation in management decisions: The active participation of workers and their representatives in decision-making helps in securing cooperation and commitment of workers towards organisational goals.

(ii) Job security: Generally, workers prefer security of job. It is an assurance by the employer that the worker will continue in the employment.

Question 44.
What is meant by financial incentives? State any two financial incentives. (All India 2011)
Answer:
Financial incentives refer to incentives which are in direct monetary form and serves to motivate people for better performance.

Two financial incentives are:

  • Pay and allowances Salary is the basic monetary incentive for every employee. It includes basic pay, dearness allowances and other allowances.
  • Productivity linked wage incentives Some incentives plans link wages with productivity . of an individual or that of the group to motivate him/them to produce more.

Question 45.
Explain the concept of motivation and leadership. (All India 2011; Delhi 2011)
Answer:
Motivation It is the process of stimulating people to act or to accomplish desired goals. It is an internal feeling. According to Berelson and Steiner, ‘Motivation is an inner state that energises, activates and that directs or channels behaviour towards goals’.

Motivation is something that motivates a person into action and continues him in the course of action enthusiastically. It determines the behaviour of a person to a great extent. Leadership It is the process of influencing the behaviour of other people so that they work willingly for the attainment of goals in a given situation. According to Koontz and O’Donnell, ‘Leadership is an art or process of influencing people so that they will strive willingly and enthusiastically towards the achievement of group goals’. Leadership is a psychological process of influencing followers or subordinates and providing guidance to them.

Question 46.
Kunal joined as a shop level manager in the Production department of a textile company in the year 2005. Because of his good work, he became the Deputy Production Manager of he company in the year 2010. He had status and prestige and was well-respected by all in the company. On 1st March, 2019, he was promoted as the General Manager of the company. Kunal was very happy on his promotion as now he had become what he was capable of becoming. As a good manager, Kunal decided to motivate his subordinates, after understanding the Need Hierarchy theory which is based on various assumptions. He realised that people’s behaviour is based on their needs and the manager can influence the behaviour of his employees by satisfying their needs.
(a) One of the assumptions of Need Hierarchy theory is stated in the above paragraph. State the other three assumptions of this theory.
(b) State the needs of Kunal which are 3. being satisfied through promotion. (All Indio 2019)
Answer:
(a) Other assumptions of Maslow’s Need Hierarchy Theory is:

  • People’s needs are hierarchical in order. They start from basic physiological needs and reach to high level needs.
  • A satisfied need can no longer motivate a person, only next higher level need can motivate a person.
  • A person moves to the next higher level need only when the lower level need is satisfied.

(b) Since, he has got prestige, respect and recognition through the promotion, h is esteem needs are getting fulfilled.

Question 47.
Ram Murthy, the CEO of ‘Goodcare Hospitals’, a leading chain of hosiptals, decided to reward the good work of the doctors of his organisation. For this he instituted two running trophies. A ‘Healthcare Achievers Trophy’ to acknowledge and appreciate the tireless efforts of the doctors who rendered selfless services to the patients and another ‘Beti Bachao Trophy’ to recognise the outstanding work done by the doctors in saving the girl child.

The CEO also wanted to improve the health services in rural areas all over the country. He decided that all doctors must work in rural areas for atleast six months. He also decided that the paramedical staff should be employed locally.
(a) Identify the incentive provided by ‘Goodcare Hospitals’ to its doctors through running trophies.
(b) Which need of the doctors will be satisfied through the incentive identified in part (a) (State? CBSE 2018)
Answer:
(a) The incentive provided by ‘Goodcare Hospitals’ is ‘Employee Recognition Prpgramme’ which is a non-financial incentive to motivate the employees.
(b) Social and esteem needs are satisfied by using the incentive.

Question 48.
‘AS Environs Ltd’ is dealing in Environment-Consultancy. To get the business, the team leader and his team used to travel to different states to give presentation to their clients. As per the policy of the company, the team leader used to travel by air whereas his team travelled by road/train. It was not only time consuming, but also at times forced the female team members to travel alone.
As a result, the subordinates were not acting in a desired manner to achieve organisational goals. The CEO of the company came to know about it. He called the team leader, discussed the matter with him and decided to change the travel policy of the company. It was decided that in future all the members including the leader would travel together and usefully utilise the travelling time in discussion about the presentation to be given to the clients. This made a positive impact and every member of the team started acting in a manner as desired by the team leader.
State the features of the element of the function of management used by the CEO. (All India 2016)

Or

Alfa Ltd was dealing in renewable energy. To get the business, the team leader and his team used to travel to different states to give presentation to their clients. As per the policy of the company, the leader used to travel by air, whereas his team travelled by road/train. It was not only time consuming but also at time forced female team members to travel alone.

As a result, the subordinates were not acting in a desired manner to achieve organisational goals. The CEO came to know about it. He called the team leader, discussed the matter with him and decided to change the travel policy of the company. It was decided that all the members including the leader would travel together in future and would usefully utilise the travelling time in discussion with the subordinates about presentation to be given to the clients. This made a positive impact and every member of the team started acting in a manner as desired by the team leader.
State the features of the element of the function of management used by the CEO. (Delhi 2016)
Answer:
The function of management being performed by the CEO is ‘Direction’ and the element of ‘Direction’ used by him is ‘Motivation’.
Motivation means incitement or inducement to act or move. In the context of an organisation, it means the process of making subordinates to act in a desired manner to achieve certain organisational goals. (1)

The distinct features of motivation are (any three):
(i) Motivation is a phychological: phenomenon It is a personal and internal feeling like an urge, drives, desires and aspirations of human being, which influence human behaviour.
(ii) Goal directed behaviour Motivation inspires an employee to achieve goals. Thus, it encourages goal directed behaviour.
(iii) Motivation may be positive or negative Positive motivation means inspiring people to work better by providing incentives and negative motivation means forcing people to work by threatening or punishment.
(iv) Motivation is a complex process As the individuals are heterogeneous in their expectations, perceptions and reactions.

Question 49.
Smita had been working as an assistant manager with ‘Johnson Enterprises’ for the last ten years. She was very popular amongst her colleagues because of her commitment and dedication towards the work. When the manager senior to her retired, all her colleagues thought that now Smita would be promoted. But to everyone’s surprise, the vacant post was filled by an outsider, Mrs Rita. Smita felt demoralised and her performance started declining. She would abstain herself often and could not meet her targets.

Mrs Rita was a good leader, who would not only instruct her subordinates but would also guide and inspire them. She noticed Smita’s behaviour and felt that her performance could be improved. She started involving Smita in decision-making issues related to the organisation and made her a part of high level joint-management committee. Smita was now punctual in office and her performance started improving.
(i) Identify the function of management being performed by Rita.
(ii) Name the element of the above function of management which helped Rita to improve Smita’s behaviour.
(iii) State any three features of the element identified in (ii) above. Delhi 2015
Or
Anjali had been working with ‘Tata Enterprises’ for the last ten years. She was famous for her dedication towards the work. When the Manager senior to her retired, all her colleagues thought that now Anjali would be promoted. But to everyone’s surprise the vacant post was filled by an outsider “Ms Monika’. Anjali felt demoralised and her performance started declining. She would absent herself often and could not meet her targets.

Miss Monika was a good leader who would not only instruct her subordinates, but also guide and inspire them. She noticed Anjali’s behaviour and felt that her performance could be improved.

She started involving Anjali in decision-making issues related to the organisation and made her a part of a high-level joint management committee. Anjali was now punctual to office and her performance started improving.
(i) Identify the function of management being performed by Monika.
(ii) Name the element of the above function of management which helped Monika to improve Anjali’s behaviour.
(iii) State any three features of the element identified in (ii) above. (All India 2015)
Answer:
(i) Directing
(ii) Motivation Mrs Rita used non-finandal incentives to motivate Smita to improve her performance.

(iii) Three features of motivation are:

  1. Motivation is a psychological phenomenon It is a personal and internal feeling like an urge, drives, desires and aspirations of human being, which influence human behaviour.
  2. Goal directed behaviour Motivation Ans. inspires an employee to achieve goals. Thus, it encourages goal directed behaviour.
  3. Motivation may be positive or negative Positive motivation means inspiring people to work better by providing incentives and negative motivation means forcing people to work by threatening or punishment.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 50.
Neha was a regional sales manager in ‘Good Look Garments Ltd. ‘for ten years. On the retirement of the marketing manager Neha applied for the same post as she was extremely ambitious and had dedicated all her energies to obtain the post of marketing manager. However, the top management of the company decided to fill this post by selecting a better person from outside the company.
Because of this Neha was heart-broken and her performance declined.
When the new marketing manager joined, one of her major problems was how to motivate and inspire Neha to her former level of performance?
Suggest any three non-financial incentives that the new marketing manager may use to motivate Neha. (Comportment 2015)
Or
Sultan was a Regional Manager in ‘Homely Products Ltd. ‘for the last eight years. On the retirement of the Marketing Manager, Sultan applied for the same post because he was extremely ambitious and had dedicated all his energies to obtain the post of marketing manager. However, the top management Am. decided to fill the position by selecting a better person from outside the company.

Because of this Sultan was heart-broken and his performance declined.
When the new Marketing Manager joined, one of her major problems was how to motivate and inspire Sultan to his former level of performance.
Suggest any three non-financial benefits that the new marketing manager may use to motivate Sultan. (Comportment 2015)
Answer:
Various types of non-financial incentives are as follows: (any three)
(i) Job security:
Generally, workers prefer security of job. It is an assurance by the employer that the worker will continue in the employment. It eliminates uncertainty about the earnings and job and have a positive impact on the efficiency.

(ii) Participation in management’s decisions:
The active participation of workers and their representatives in decision-making helps in securing cooperation and commitment of workers towards organisational goals.

(iii) Employee recognition:
It is one of the most important motivator. It helps in improving the attitudes of employees and at the same time, motivates them to put in their best efforts. Efficiency and innovations of the workers should be recognised and praised. Recognition can be given by appreciating the work, installing awards and certificates, display of achievements on the notice board, etc.

(iv) Job enrichment:
Assignment of challenging Jobs is a significant non-finandal incentive. Assignment of challenging work to subordinates provide opportunities for maximum development and helps them to reach upto the point of self-realisation.

(v) Status:
In the organisation context, status means ranking of positions in the organisation. The status of a person is reflected in his authority, responsibility, pre-requisites and recognition. Psychological, social and esteem needs of an individual are satisfied by status.

Question 51.
Define motivation. How does it improve efficiency and facilitate the accomplishment of organisational goals? (Delhi 2012)
Answer:
It is the process of stimulating people to act voluntarily to accomplish desired goals.
In other words, motivation refers to the way a person is enthused at work to intensify his willingness and use his potential for the achievement of organisational objectives. It is through motivation that managers attempt to . inspire the employees to work for the organisation.
According to William G Scott, “Motivation means a process of stimulating people to action to accomplish desired goals”.

Motivation improves efficiency The level of performance of employees depends not only on individual abilities but also his willingness to achieve at high level of performance. Motivation induces employees to work better and to use their full potential. Thus, motivation helps in increasing productivity and overall efficiency.

Motivation facilitates the accomplishment of organisational goals Management can achieve the goals effectively by motivating the subordinates. The motivated employees contribute to the fulfilment of the assigned tasks with their best efforts. In the existence of an effective system of motivation, the worker cooperate voluntarily with the management towards the accomplishment of organisational goals.

Question 52.
Mukesh is working under his superior Neeraj. He always communicates useful and suggestions to his superior regardin reduction of cost improvement in the product, etc. Neeraj implement his suggestion and has always found favourable results, but he never appreciates Rakesh for his suggastions. Now Rakesh decides not to communicate any suggestion or idea to Neeraj.
Identify the factor which acts as a communication barrier. Explain three other factors of the same group of communication barriers. (Compartment 2012)
Answer:
Lack of proper incentive under the head personal harpers of communication is being discussed here.

The three personal barriers to communication are: (any three)
(i) Lack of confidence of superior: In his subordinates If superiors have no confidence and trust in their subordinates, then they pay no attention to their advice, opinion or suggestions.

(ii) Lack of Incentives:
If there is no incentive for communicating new ideas, then subordinates may not take initiatives to give suggestions, e.g. if there is not reward given for giving some good suggestion, then employees will take no initiative to give good suggestions.

(iii) Fear of authority:
Some superiors may modify feedback going from lower-level mployees. This may be done especially if the feedback is a complaint directed against the superior. The dishonest superior may block complains reaching to senior management in order to prevent challenge to his authority. In order words, sometimes superiors conceal and hide information if they have fear of losing their authority over the subordinates.

(iv) Unwillingness to communicate:
The personal characteristic of an individual also influences the free flow of communication. Sometimes, the superiors may not be prepared to communicate with the subordinates. These superiors may have selfish intentions and may prevent any negative information that threatens their reputation.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 53.
Ankur is working as a production manager in an organisation. His subordinate Saurabh discussed with him a method of production which will reduce the cost of production. But due to some domestic problems and Ankur’s mind being pre-occupied he is not in a position to understand the message. Saurabh got disappointed by this.
Identify the factor which acts as a communication barrier. Explain three other factors of the same group of communication barriers. (Compartment 2012)
Answer:
Psychological factor: Psychological barrier acts as a communication barrier here.
Three other psychological barriers to communication are:
(i) Premature evaluation Communication is likely to fail, if the receiver evaluates the meaning of message before the sender completes the message. Such premature evaluation may occur due to pre-conceived notions or prejudices against the communicator.

(ii) Lack of attention When the receiver’s mind is pre-occupied, he fails to understand what is being said. e.g. A worker explains some problems to his supervisor. The supervisor is pre-occupied with a telephone call and does not grasp the message.

(iii) Loss by transmission and poor retention When communication passes through various levels, it may result in loss by transmission. Sometimes, poor retention of people due to lack of interest and attention leads to miscommunication.

Question 54.
Explain any four non-financial incentives. (All India 2011)
Answer:
To satisfy the social and psychological needs, non-monetary incentives are needed.
For non-financial incentives

Various types of non-financial incentives are as follows: (any three)
(i) Job security Generally, workers prefer security of job. It is an assurance by the employer that the worker will continue in the employment. It eliminates uncertainty about the earnings and job and have a positive impact on the efficiency.

(ii) Participation In management’s dedsions The active participation of workers and their representatives in decision-making helps in seewing cooperation and commitment of workers towards organisatlonal goals.

(iv) Employee recognition It is one of the most important motivator. ti helps in improving the attitudes of employees and at the sanie Lime. motivates them to put in their best efforts. efficiency and innovations of the workers should be recognised and praised. Recognition can be given by appreciating the work. installing awards and certificates. display of achievements on the notice board. etc.

(iv) Job enrichment Assignment of challenging Jobs is a significant non-financial incentive. Assignment of challenging work to subordinates provide opportunities for maximum development and helps them to reach upto the point of sdf-reajisatjoa

(v) Status In the organisation context, status means ranking of positions In the organisation. The status of a person Is reflected in his authority, responsibility pre-requisites and recognition. Psychological social and esteem needs of an individual arc satisfied by status.

Question 55.
Explain the meaning and any three characteristics of directing. (All India 2010)
Answer:
Directing refers to the process of instructing, guiding, counselling, motivating and leading people in the organisation through effective communication, so that their efforts result in achievement of organisational objectives.

Characteristics of directing are as follows:
(i) Initiating process It involves giving orders and instructions to the employees and thereby decisions are converted into actions.
(ii) Pervasive function The directing function is performed by all managers at all levels to achieve the organisational goals, (in) A continuous process It is an activity that takes place throughout the life of an organisation, irrespective of people occupying managerial position.

Question 56.
Ayasha Ltd assured their employees that inspite of recession, no worker will be retrenched from the job.
(i) Name and explain the type of incentive offered to the employees.
(ii) Explain one more incentive of the same category. (Delhi 2010)
Answer:
(i) Job security Ayasha Ltd offered non-fmandal incentive i.e. ‘job security’.
It refers to the stability about future income and work so that the employees do not feel worried on these aspects and work with great zeal. Workers may not prefer jobs with higher wages or salaries which do not carry security.

(ii) Employee recognition programmes The other incentive of this category is employee recognition. When the services of an employee is recognised, he feels morally upgraded and his confidence level goes high. He prepares himself to take new challenges.

Recognition can be given by:
(a) Congratulating the employee for good performance.
(b) Displaying the achievement of an employer on a notice board or company newsletter.
(c) Installing awards or certificates for best performance etc.
(d) Distributing moments and complimen- taries like T-shirts etc.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 57.
Blue Birds Ltd offers to its employees to issue shares at a price which is less than the market price.
(i) Name and explain the type of incentive offered to the employees.
(ii) Explain one more incentive of the same category. All Indio 2010
Answer:
(i) Co-partnership By offering its employees issue of shares at a price less than the market price, Blue Birds Ltd offered ‘co-partnership’ which is a financial incentive. The company did so, to motivate its employees so that they work with great zeal. All types of such incentives are measured in monetary terms. By offering such incentives, the company motivates its people to improve their performance. These incentives may be provided on individual or group basis.

(ii) Bonus It is an incentive offered over and above wages/salary to the employees. Monetary benefits have only limited utility in increasing the motivation of employees. After the basic needs have been met, the role of money in motivating the employees is generally decreased.

Question 58.
Communication plays a key role in the directing function of management. Do you agree? Give any four reasons in support of your answer. (All India 2010)
Answer:
Yes, communication plays a key role in the directing function of management.
The communication is an important element of directing because of the following points:
(i) Acts as a basis of coordination and cooperation Communication acts as a basis of coordination. It provides coordination among departments, activities and persons in the organisation. Such coordination is provided for explaining about organisational goals, the mode of their achievement and inter- relationships between different individuals, etc.

(ii) Increases managerial efficiency The employees must know clearly about their responsibilities and authority, who will report to whom, what part of total job they are expected to perform and what are their decision-making powers. This leads to smooth flow of communication.

(Hi) Helps in smooth working of an enterprise All interactions in an organisation and smooth working of an enterprise is possible only when there is no communication gap. Right from establishing of enterprise till its survival, communication is essential.

(iv) Promotes cooperation and industrial peace Efficient operation is the aim of all prudent management. It may be possible only when there is industrial peace in the factory and mutual cooperation between management and workers. The two way communication promotes cooperation and mutual understanding between the management and workers.

Question 59.
Pratap Singh is the Chief Executive Officer of Nissar Enterprises. It is an automobile parts manufacturing company. The enterprise has a functional structure, in which jobs of similar nature have been grouped together as Production, Finance, Marketing and Human Resource. Nissar Enterprises has its manufacturing unit at Manesar. The factory has been plagued with many problems for a long time which was in the knowledge of the Production Manager, Varun Sharma. The workers had internal differences. Time and again, there were misunderstandings between the management and the workers. Keeping the problems in mind, Varun Sharma appointed, Siyaram Singh who had 14 years of experience of working with the actual workforce and passing on instructions of the middle management to the workers.

Siyaram Singh met Varun Sharma to understand what the management wanted?
Thereafter, he met the workers and conveyed the ideas of management to them. He also promised the workers to convey their problems to the management. In this way, he cleared the misunderstanding between the management and the workers.
He also sorted out internal differences and was able to unite the workers within a month of his joining. His work was . acknowledged by management and he was given a certificate of good performance alongwith 10% increase in salary.
(i) Siyaram Singh performed some of the functions which are required to be performed at the position he is working at. State any five other functions Siyaram Singh is expected to perform.
(ii) Name the incentives provided to Siyaram Singh. (Delhi 2019)
Answer:
(i) Apart from acting as a link between f management and workers, functions required to be performed by Siyaram Sharma (Supervisor) are:
(a) Providing guidance and leadership: The supervisor leads the workers of his department. He fixes production targets for them and provides them the necessary guidance for doing the work assigned to them. He provides on-the-job training to the workers working under him.

(b) Motivation: The supervisor motivates his subordinates by providing financial and non-financial incentives. He inspires them for higher quality and productivity.

(c) Preserving records The supervisor keeps records of output and other related aspects of each employee. He sends the necessary information to the top management.

(d) Controlling output: The supervisor controls the performance of the workers by comparing their performance with the standards. He also takes necessary action to ensure that production is done according to the predetermined standards.

(e) Liaison between management and workers: The supervisor is an important link between the management and the workers. He explains management policies to the workers and also passes on the management’s instructions to the workers. He has a close contact with the workers and tries to understand their problems. He brings worker’s problems to the notice of the top management.

(f) Grievance handling: A supervisor is in direct touch with the workers, so he can handle their grievances effectively. He should maintain good relations with the workers so that the workers come to him if they have any grievance. When a grievance is reported, he should try to remove it. But, if he can not redress the grievance, he should report it to the upper level management.

(ii) Incentives given to Siyaram Singh are:

  • Employee recognition
  • Pay and allowances

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 60.
Explain the concept of leadership and its various styles. (Compartment 2015)
Answer:
Following are the types of leadership styles:
(i) Autocratic/Authoritative leadership:
Under this style, all decision-making power is vested in the leader and he exercises complete control over his subordinates. The leader determines the policies without consulting them and assign task to them without giving them any freedom. It is like ‘bossing people around’. It is a boss centered leadership, and is also called directive style of leadership. e.g. Mr Ratan, the GM of Addi Industries delegates the work to his staff Ms Ritu, Mr Saurabh, Mr Manan, according to his discretion. Here Mr Ratan is behaving as an autocratic leader.
Directing Class 12 Important Questions and Answers Business Studies Chapter 7 -3

(ii) Democratic/Participative leadership Under this style, leader consults his subordinates in decision-making process and works out policies with the acceptance of the group. He encourages them to give suggestions in setting goals and implementing decisions. It is group centered leadership.

e.g. Mr Ratan realised that due to the absence of Mr Manan, the targets will not be met, so he discusses with his staff about meeting the deadline. Every body decided to do overtime and complete the task. Here Mr Ratan is behaving as a democratic leader.
Directing Class 12 Important Questions and Answers Business Studies Chapter 7 -4

(iii) Laissez-faire/Free-rein leadership Under this style, the leader gives full freedom to the subordinates in setting goals. Such a leader avoids use of power. The leader does not interfere in the activities of the subordinates. Group members work themselves as per their own choice and competence. It is called subordinate centered leadership.
Directing Class 12 Important Questions and Answers Business Studies Chapter 7 -5
e.g. The staff plans to organise a party in the honour of Mr Manan as he got promoted. Mr Ratan asks the other members of the staff to fix the venue and menu for the occasion. Here, Mr Ratan is behaving as a free-rein leader.

NOTE: A leader may use all the styles over a period of time. However, one style tends to predominate the normal way of using power.

Question 61.
Explain how directing helps in effective and efficient functioning of the organisation. (Comportment 2014)
Or
Directing is the heart of the management process. Do you agree? Give any four reasons in support of your answer. (Delhi (C) 2010)
Or
What is meant by directing as a function of management? Describe any four points of its importance. (Delhi 2012)
Or
‘Every action in the organisation is initiated through directing’. Explain any four points of importance of directing in the light of this statement. (All India 2012)
Answer:
Directing refers to the process of instructing, guiding, counselling, motivating and leading people in the organisation through effective communication so that their efforts result in achievement of organisational objectives. The scope of directing is very wide. It consists of all those activities by which a manager influences the behaviour of his subordinates to secure desired performance from them.

Question 61.
‘The function and performance of the supervisor are vital to an organisation because he is directly related with the workers whereas, other managers have no direct touch with bottom level workers’.
In the light of this statement, explain any four functions of a supervisor. (Compartment 2014)
Or
‘The supervisor performs a very important role in an organisation by performing multiple functions’. State any six such functions. (Delhi 2013)
Or
Give the meaning of supervision as an element of directing and any four points that explain its role. (Delhi 2012)
Or
Explain the role of supervision as an element of directing function of management. (Delhi 2011)
Or
Role of a supervisor is vital to any organisation as he performs multiple functions’.
Or
Explain any four functions of a supervisor. (Compartment 2013)
Answer:
Supervision means instructing, guiding and monitoring the subordinates to ensure that they perform their jobs in accordance with the plans and instructions. It means overseeing what is being done by subordinates and giving instructions to ensure proper utilisation of resources and achievement of work targets. Supervisor is a person, who is primarily an incharge of a section and employees, or is responsible for both the quantity and quality of production.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 62.
Explain the following non-financial incentives:
(i) Status
(ii) Organisation climate
(iii) Career advancement opportunities (All India 2013)
Answer:
Non-financial incentives are used to motivate employees to improve their performance. These incentives are not measured in terms of money, rather they provide psychological and emotional satisfaction.
(i) Status In business terms, status means ranking of positions in the organisation. The authority, responsibility, rewards,
recognition, perquisites and prestige of job indicate the status given to a person holding a managerial position. It satisfies psychological, social and esteem needs of an individual.

(ii) Organisation climate Organisational climate refers to the sum total of characteristics like individual autonomy, reward orientation, consideration to employees, risk-taking, etc. A positive climate serves as an incentive to improve performance. Supportive relationships, knowledge of work done, healthy competition for superior performance, etc are all motivating factors.

(iii) Career advancement opportunity Most of the employees want to explore in their career. An organisation can motivate its employees by providing them opportunities for in-service training and promotion. In other words, if the employees are provided the opportunity for their advancement and growth and to develop their potentiality, they feel very much satisfied and become more committed towards the organisation goals.

Question 63.
Give the meaning of ‘motivation’ and state any four features of motivation. (Comportment 2012)
Answer:
Meaning of motivation Motivation means incitement or inducement to act or move. In the context of an organisation, it means the process of making subordinates to act in a desired manner to achieve certain organisational goals. It is the act of inspiring employees to work hard to achieve the desired goals of the organisation.

Motivation means a process of stimulating people to action to accomplish desired goals. – William G Scout

The salient features of motivation are:
(i) Motivation is a psychological phenomenon It is a personal and internal feeling like an urge, drives, desires and aspirations of human being, which influence human behaviour.
(ii) Goal directed behaviour Motivation inspires an employee to achieve goals. Thus, it encourages goal directed behaviour.
(iii) Motivation may be positive or negative Positive motivation means inspiring people to work better by providing incentives and negative motivation means forcing people to work by threatening or punishment.
(iv) Motivation is a complex process, as the individuals are heterogeneous in their expectations, perceptions and reactions.

Question 64.
What is meant by leadership? Describes any four qualities of a good leader. (All India 2012; Compartment 2012)
Or
A leader who has only good physical features and required knowledge and competence cannot inspire others to work. Then what else is required by a leader to be successful? Explain by giving any six points. (All India 2010; Delhi (C) 2010)
Answer:
Leadership is an attempt aimed at influencing people directly towards the attainment of given goals. Leadership may also be defined as an art or process of influencing people so that they will strive willingly and enthusiastically towards the achievement of group goals. In the words of Louis A Allen, ‘A leader is one who guides and directs other people. A leader gives the efforts of his followers a direction and purpose by influencing their behaviour’.

Qualities of a good leader are (any four):
(i) Integrity and honesty A leader must possess high level of integrity and honesty. He must follow ethics and values, then only he can expect his subordinates to be ethical and honest.

(ii) Initiative A leader must take initiative to grab the opportunities. He must have courage and initiative to take bold decisions. He must take risk for the advantage of organisation.

(iii) Decisiveness Leader should be quick in managing the work. Once he is convinced about a fact, he should be firm and should not change his opinion frequently.

(iv) Self-confidence and sense of responsibility A leader must be confident, then only he will be able to tackle any situation successfully. Only a confident leader can create confidence in his subordinates. A leader must have the sense of responsibility for achievement of goals or target of his group members.

(v) Social skills A leader must be friendly with his subordinates. He must provide supportive environment to subordinates so that they do not hesitate to discuss their problems. He must understand people and try to maintain good relations with them.

(vi) Motivational skills Leader should be an effective motivator. He should understand the needs of people and motivate them by satisfying their needs.

Question 65.
Leadership is a key factor in making any organisation successful. Do you agree with this statement? Give any four reasons in support of your answer. (All India 2010)
Answer:
Yes, I agree with this statement. Leadership is required in the organisation because of the following reasons:
(i) Effective direction An organisation comes into existence with certain objectives. To attain the objectives, the activities of the organisation must be directed. Direction of the activities is effected through leadership. In short, effective leadership directs the activities of an organisation towards the attainment of the specified organisational goals.

(ii) Source of motivation Effective leadership motivates the subordinates to contribute their energies for the benefit of the organisation.

(iii) Provide confidence Leadership creates confidence in the subordinates by giving them proper guidance and advice.

(iv) High morale Good leadership increases the morale of the employees which in turn, contributes to higher productivity.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 66.
Managerial functions cannot be carried out without an efficient system of communication. Do you agree with this statement? Give any five reasons in support of your answer. (Delhi 2010)
Answer:
Communication may be defined as a process of exchanging ideas and information between two or more persons to create mutual understanding.
Importance of communication are as follows:
(i) Acts as a basis of coordination Communication acts as a basis of coordination. It provides coordination among departments, activities and persons in the organisation. Such coordination is provided for explaining about organisational goals, the ‘ mode to their achievement and inter-relationships between different individuals, etc.

(ii) Acts as a basis of decision-making The decisions made in an organisation depends largely on the amount and quality of information available. On the basis of communication of relevant information, one can take right decisions.

(iii) Increases managerial efficiency The employees must know clearly about their responsibilities and authority, who will report to whom, what part of total job they are expected to perform and what are their decision-making powers. This leads to smooth flow of communication.

(iv) Helps in the process of motivation and morale Motivation and morale of employees largely depend upon the effectiveness of communication. Sharing of information with employees helps management to secure their willing cooperation.

(v) Effective leadership Communication is the basis of leadership. By developing the skills of communication, a manager can be a real leader of his subordinates. A good system of communication brings them in close contact with each other and removes misunderstandings.

Question 67.
“Motivation plays an important role in the success of management’. Explain any four points of importance in the light of the statement. (Delhi 2010)
Answer:
Importance of motivation are as follows:
(i) Changes negative attitude to positive attitude Sometimes, workers have indifferent or negative attitude towards work. Motivation helps to build a positive attitude towards work through suitable rewards, positive encouragement and praise for good work.

(ii) Improves efficiency Motivation influences the level of performance of employees which depends not only on individual abilities but also on their willingness to achieve a higher level of performance. Motivation infuses willingness to work. In this way, it bridges the gap between the ability to work and willingness to work.

(iii) Helps to introduce changes smoothly Whenever some changes are brought in the organisation, employees resist change. However, with proper motivation, employees can be convinced that the proposed changes will bring additional rewards to the employees. This will help them to readily accept the changes.

(iv) Creates supportive work environment Organisation offers various rewards to their employees to satisfy their diverse needs. They offer monetary rewards, promotional opportunities, recognition for efficient work and involvement of employees in decision-making. These bring satisfaction among employees. Such satisfaction leads to cordial relationship between the employer and employee.

Multiple Choice Questions

Question 1.
Direction flows ………………. in the hierarchy.
(a) downward
(b) upward
(c) diagonal
(d) horizontal
Answer:
(a) downward

Hint:
Directing is initiated at the top level and flows to the bottom, which means that it flows downward in the hierarchy.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 2.
Which one of the following is not a leadership style?
(a) Boss centered leadership
(b) Group centered leadership
(c) Subordinate centered leadership
(d) Organisation centered leadership
Answer:
(d) Organisation centered leadership

Question 3.
Grapevine is which type of communication?
(a) Formal communication
(b) Informal communication
(c) Lateral communication
(d) Barrier to communication
Answer:
(b) Informal communication

Hint:
Grapevine is defined as the network of informal communication which can spread in any direction irrespective of the official channels in the organisation structure.

Question 4
Leadership is an essential element of
(a) directing
(b) controlling
(c) staffing
(d) organising
Answer:
(a) directing

Hint:
Leadership is an essential element of directing as it helps in influencing the behaviour of others for the accomplishment of goals.

Question 5.
Formal communication may be classified as
(a) vertical
(b) horizontal
(c) Both (a) and (b)
(d) parallel
Answer:
(c) Both (a) and (b)

Hint:
Formal communication flows through official channels designed in the organisation chart. Vertical communication flows upwards or downwards through formal channels. Horizontal communication takes place between one division and another.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 6.
Hunger, thirst, shelter, sleep are some of the examples of
(a) basic physiological needs
(b) safety needs
(c) social needs
(d) esteem needs
Answer:
(a) basic physiological needs

Question 7.
…………… represents formal communication with one another freely and quickly.
(a) Inverted V network
(b) Wheel network
(c) Free flow network
(d) Circular network .
Answer:
(c) Free flow network

Question 8.
A democratic leader ……………..
(a) provides freedom of thinking
(b) listen to suggestions and opinions of subordinates
(c) delegates authority
(d) All of the above
Answer:
(d) All of the above

Hint:
A democratic leader provides freedom of thinking and delegates authority to participate in decision-making. Apart from it, democratic leader listens to suggestions, grievances and opinions of the subordinates.

Question 9.
Which of the following is/are disadvantage of free-rein leadership style?
(a) Subordinates do not get the support of leader
(b) Subordinates move in different directions
(c) There is a lack of guidance to subordinates
(d) All of the above
Answer:
(d) All of the above

Hint:
The free-rein leader avoids use of power and gives freedom to subordinates. The negative point with this leadership style is that the subordinates move in different directions as there is no guidance to subordinates. They do not get the support of leader.

Question 10.
Match the following.

List I List II
I. Supervision (i) The manager shares information with subordinates
II. Motivation (ii) The manager assures that workers needs will be taken care of
III. Communication (iii) The manager attempts to influence his subordinates
IV. Leadership (iv) The manager oversees the workers activities Codes

Codes

I II II IV
(a) (iv) (ii) (i) (iii)
(b) (i) (ii) (iii) (iv)
(c) (ii) (i) (iv) (iii)
(d) (iv) (i) (ii) (iii)

Answer:
(a) (iv) (ii) (i) (iii)

Question 11.
It takes place throughout the life of the organisation irrespective of people occupying managerial positions. Mention the characteristic of directing highlighted here.
(a) Pervasiveness
(b) Complex process
(c) Initiates action
(d) Flows from top to bottom
Answer:
(a) Pervasiveness

Hint:
Every manager from top to bottom performs the function of directing. Directing exists at every level, location and operates throughout an organisation. That’s why, directing is a pervasive function of management.

Directing Class 12 Important Questions and Answers Business Studies Chapter 7

Question 12.
Mr John always involves employees in decision-making, delegates authority and gathers input from employees, but makes the final decision himself. Which leadership style he is using?
(a) Autocratic
(b) Democratic
(c) Free-rein
(d) None of the above
Answer:
(b) Democratic

Hint:
Democratic leadership, also known as participative leadership, is a type of leadership style in which members of the group take a more participative role in the decision-making process. But final decision is taken by the leader himself.

Question 13.
A film director is about to start a film on social issues. For this, he guides the artists about how they should act in the film and inspires them to perform better. Which function of management is performed here?
(a) Organising
(b) Controlling
(c) Coordinating
(d) Directing
Answer:
(d) Directing

Hint:
Directing, as a function of management, means giving instructions and guiding people in doing work. Directing is done to achieve some pre-determined objectives. In above instance, film director guides the artists about how to perform and inspires them to perform better to achieve his pre-determined objective.

Question 14.
“A manager must continuously guide and inspire people and supervise his subordinates, so that the organisational goals are achieved. This function continues throughout the life time of an organisation. If directing stops, an organisation ceases to work and grow.” This statement describes which feature of directing?
(a) Pervasiveness
(b) Continuous process
(c) Hierarchy
(d) None of the above
Answer:
(b) Continuous process

Hint:
Directing is a continuous process which goes on throughout the life of an organisation. Managers and employees may come or go, but directing goes on in order to achieve organisation’s goals on time. Directing is performed by every manager at every level and it is a never ending process.

Question 15.
Match the following.

List I List II
I. Element of directing (i) Pervasiveness
II. Importance of directing (ii) Harmony of objectives
III. Principle of directing (iii) introduce changes
IV. Feature of directing (iv) Communication

Codes

I II II IV
(a) (i) (ii) (iii) (iv)
(b) (ii) (iii) (iv) (i)
(c) (iv) (iii) (i) (ii)
(d) (iv) (iii) (ii) (i)

Answer:
(d) (iv) (iii) (ii) (i)

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

We have given these Business Studies Class 12 Important Questions Chapter 5 Organising to solve different types of questions in the exam. Go through these Planning Class 12 Important Questions and Answers & Previous Year Questions to score good marks in the board examination.

Important Questions of Organising Class 12 Business Studies Chapter 5

Question 1.
Differentiate between ‘Authority’ and “Responsibility’ on the basis of ‘Flow’. (All India 2019)
Answer:
Difference between authority and responsibility is:

Basis Authority Responsibility
Flow It flows downward from superior to subordinate. It flows upward from subordinate to superior.

Question 2.
Distinguish between Responsibility’ and ‘Accountability’ on the basis of “Meaning.’ (All India 2019)
Answer:
Difference between responsibility and accountability is:

Basis Responsibility Accountability
Flow It means the obligation to perform the assigned task. It means being answerable for the final outcome.

Question 3.
Differentiate between ‘Formal and Informal Organisations’ on the basis of ‘Flow of communication’. (All India 2019,2017)
Answer:
Difference between formal and informal organisations is:

Basis Formal Organisation Informal Organisation
Flow of communication Scalar chain is followed. Communication is free and independent, therefore grapevine generally.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 4.
Differentiate between ‘Delegation’ and “Decentralisation’ on the basis of ‘freedom of action’. (All India 2019)
Answer:
Difference between delegation and decentralisation is:

Basis Delegation Decentralisation
Freedom of action Less freedom as there is supervision involved. High level of freedom and autonomous decision-making.

Question 5.
What is meant by ‘Functional Structure’ of an organisation? (India 20l9: Comportment 2018)
Answer:
An organisation structure in which departments are created on the basis of different functions performed in the organisation is called a functional structure.

Question 6.
What is meant by ‘Accountability’? (All India 2019)
Answer:
Accountability means being answerable for final outcome. It is the obligation to carry out responsibility and exercise authority.

Question 7.
Differentiate between ‘Authority’ and ‘Responsibility on the basis of ‘Origin’. (All India 2019)
Answer:
Difference between authority and responsibility is:

Basis Authority Responsibility
Origin It originates from job position in the scalar chain. It arises from delegated authority.

Question 8.
Distinguish between ‘Responsibility’ and ‘Accountability on the basis of ‘Delegation’. (All India 2019)
Answer:
Difference between formal and informal organisation is:

Basis Responsibility Accountability
Delegation It cannot be delegated entirely. It cannot be delegated at all.

Question 9.
Give the meaning of ‘decentralisation’. (All India 2018, 2016; Foreign 2016)
Answer:
Decentralisation refers to the systematic effort to delegate to the lowest level, all authority except which can be exercised at the central point.

Question 10.
Zamon Ltd. is manufacturer of electronics goods based in Pune. On one hand, it deals in items like books, music instrumets, videotapes etc. and on the other hand, it deals in laptops and mobile phones.

The company had a functional structure with separate heads for production, marketing and finance. All the functional heads were looking after the products, hut at times their activities overlapped. This led to problems related to coordination and inter departmental
conficts. To facilitate specialisation Ramit, the CEO of the company decided to group hooks, music instruments, videotapes etc. under “Media’ and laptops and mobile phones under ‘consumer electronics’. While doing so Ramit has performed a step in the process of one of the functions of management. Identify the step. (Compartment 2018)
Answer:
The step performed by the CEO is departmentalisation (second step of organising function of management.)

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 11.
Differentiate between ‘Formal’ and ‘Informal’ organisation on the basis of ‘Origin’. (Delhi 2017)
Answer:
‘Formal’ organisation arises as a result of company rules and policies and ‘informal’ organisation arises as a result of social interaction.

Question 12.
Enumerate any two basis of departmentation in an organisation. (All India 2016: Foreign 2016)
Answer:
Two basis of departmentation in an organisation are:
(i) Territories (north, south, east, west, etc)
(ii) Products (appliances, clothes, cosmetics, etc).

Question 13.
Name the type of ‘Organisational structure’ which promotes efficiency in utilisation of manpower. (Delhi 2016)
Answer:
‘Functional Organisational Structure’ promotes efficiency in utilisation of manpower.

Question 14.
Name the organisational structure which helps in increasing managerial and operational efficiency. (Foreign 2016)
Answer:
Functional organisational structure

Question 15.
Give the meaning of “Responsibility’ as an element of delegation. (Delhi 2016; All India 2014; Comportment 2013)
Answer:
It is the obligation of a subordinate to perform the assigned duties properly.

Question 16.
Give the meaning of authority as an element of delegation. (All India, Delhi, Foreign 2016; Comportment 2013)
Answer:
Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position. As an element of delegation, it should be delegated in such a manner that a subordinate cannot escape from his/her accountability.

Question 17.
Give the meaning of accountability as an element of delegation. (Delhi 2016)
Answer:
Accountability means being answerable for the final outcome. It cannot be delegated and flows upwards, i.e. a subordinate will be accountable to his superior for the satifactory performance of job.

Question 18.
Alliance Ltd. is engaged in manufacturing plastic bukets. The objective of the company is to manufacture 100 buckets a day. To achieve this, the efforts of all department are coordinated and interlinked and authority-responsibility relationship is established among various job positions. There is clarity on who is to report to whom, identify the function of management discussed above. (Delhi 2015)
Or
To make the annual function of the school successful, the Principal of the school divided all the activities into task groups each dealing with a specific area like rehearsals, decoration, stage management, refreshments etc. Each group was placed under the overall supervision of a senior teacher. Identify the function of management Performed by the Principal in doing so. (Compartment 2015)
Answer:
Organising

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 19.
‘Himalaya Ltd’, is engaged in manufacturing of washing machines. The target of the organisation is to manufacture 500 washing machines a day. There is an occupational specialisation in the organisation which promotes efficiency of employees. There is no duplication of efforts in such type of organisation structure. Identify the type of organisation structure described above. All (India 2015)
Answer:
Functional organisational structure

Question 20.
What is meant by ‘divisional structure’ of an organisation? State its any two advantages. (Delhi 2015)
Answer:
Under the divisional structure, an organisation is divided into different divisions or units on the basis of products or geographical area.

Advantages of divisional structure are as follows:

  • Product specialisation helps in the development of varied skills.
  • It promotes flexibility and initiative.

Question 21.
State the limitation of informal organisation. (All India 2015)
Answer:
Informal organisation does not form any definite structure for smooth working of the organisation.

Question 22.
Define ‘Formal Organisation’. (Delhi 2015)
Or
What is meant by formal organisation? (Comportment 2014)
Answer:
Formal organisation refers to the organisational structure which is designed by the management to accomplish a particular task. It specifies the boundaries of authority and responsibility for the achievement of organisational goals.

Question 23.
Define ‘Organising’ as a function of management. (All India (C) 2014,2013)
Answer:
Organising is the function of management, which coordinates the physical, financial and human resources and establishes productive relations among them for achievement of specific goals.

Question 24.
Distinguish between functional structure and divisional structure on the basis of formation. (Comportment 2014)
Answer:
Functional structure is formed on the basis of functions, whereas divisional structure is formed on the basis of various product lines, which is further supported by functions.

Question 25.
Define organisation as a structure. (Foreign 2014)
Answer:
An 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.

Question 26.
State the suitability of functional structure of organising. (Comportment 2014)
Answer:
Functional structure is most suitable when the size of the organisation is large, has diversified activities and operations requires a high degree of specialisation.

Question 27.
State any one advantage of formal organisation. (Delhi 2014)
Answer:
Formal organisation results in systematic and smooth functioning of an organisation.

Question 28.
Identify the type of suitable organisation structure for a large scale organisation having diversified activities requiring high degree of specialisation in operations. (All India 2013)
Answer:
Functional organisational structure

Question 29.
State any one feature of informal organisation. (Comportment 2013)
Answer:
In this organisation, there are no written rules and procedures to govern inter-relationship. But there are group norms which have to be observed.

Question 30.
Distinguish between ‘Formal and Informal organisation’ on the basis of the following:
(a) Origin
(b) Authority
(c) Leadership (All India 2019)
Answer:
Differences between formal and informal organisation are:

Basis Formal Organisation Informal Organisation
Origin It originates as a result of company’s rules and policies. It originates as a result of interaction among people at work.
Authority It arises by virtue of position in management. It arises out of personal qualities of individuals.
Leadership Managers are leaders. Leaders are chosen by group.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 31.
Distinguish between ‘Functional and Divisional structure’ on the basis of the following points:
(a) Coordination
(b) Managerial development
(c) Cost (All Indin 2019)
Answer:
Differences between functional and divisional structures are:

Basis Functional Structure Divisional Structure
Coordination Difficult for a multiproduct company. Easy, because all functions related to a particular product are integrated in one department.
Managerial development It does not help in managerial development as functional manager lacks autonomy. It helps in managerial development, as they have autonomy and knowledge of varied aspects of a product.
Cost It is economical as there is no duplication. It is costlier, as there is duplication of resources.

Question 32.
Differentiate between ‘Formal and Informal organisation’ on the basis of:
(i) Origin
(ii) Authority
(iii) Flow of communication (CBSE 2018)
Answer:
Differences between formal and informal organisation are:

Basis Formal Organisation Informal Organisation
Origin It is deliberately designed by the top management. It originates from within the formal organisation due to interaction among employees.
Authority Authority flows through scalar chain from top to bottom. There are no standard lines/chain for flow of authority.
Flow of communication Communication takes Place throught the scalar chain. Communication is free and independent.

Question 33.
State any three limitations of ‘Divisional structure’ of an organisation. (Delhi 2015)
Ans.
The limitations of divisional structure of an organisation are as follows:

1. Such a structure involves heavy financial costs due to the duplication of supporting functional units for the divisions. It also requires adequate number of capable managers to take charge of their respective divisions.

2. All the divisions work as autonomous units. Divisional heads may gain power and ignore organisational interests.

3. Conflict may arise between different divisions on allocation of funds and other resources.

Question 34.
A company has been registered under the Companies Act with an authorised share capital of ₹20,000 crore. Its registered office is situated in Delhi and manufacturing unit in a backward district of Rajasthan. Its marketing department is situated in Bhopal. The company is manufacturing Fast Moving Consumer Goods (FMCG).
(i) Suggest with the help of a diagram a suitable organisation structure for the company.
(ii) State any three advantages of this organisation structure. (Comportment 2015; Delhi 2015)
Or
A company has been registered under the Companies Act with an authorised share capital of ₹400 crore. Its registered office is situated in Mumbai and manufacturing unit in a backward district of Karnataka. Its marketing department is situated in Hyderabad. The company is manufacturing consumer goods. (All India 2018)
(i) With the help of a diagram suggest a suitable organisation structure for the company.
(ii) State any three limitations of this organisation structure.
Answer:
(i) Functional structure is suitable for this company. The company’s organisation may be in the form as shown below.
Organising Class 12 Important Questions and Answers Business Studies Chapter 5 -1
(ii) The advantages of functional organisational structure are: (any three)

  • A functional structure provides occupational specialisation, since, emphasis is placed on specific functions.
  • It promotes control and coordination within a department because of similarity in the task being performed.
  • It increases managerial and operational , efficiency and this results in higher profit.
  • It makes training of employees easier as it focuses on a limited range of skills.
  • It ensures the performance of all activities necessary for achieving organisational objectives. Due attention can also be given to different functions.

The limitations of functional organisational structure are: (any three)
1. Specialists working in different departments may not be able to see the perspective of the organisation as a whole, e.g. the production department may get involved in producing a quality product without regard to the fact it might not sell at a high price. As a result, it becomes difficult to achieve the objectives of the organisation.

2. It becomes difficult to hold a particular department responsible for any problem, e.g. when sales are declining, who is responsible? It is difficult to determine whether the marketing department or the production department is responsible for not producing a quality product.

3. Functional heads do not obtain experience required for top management positions. Specialised skills and narrow perspective may lead to inflexibility.

4. Conflict often arises when the interests of two or more departments are not compatible.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 35.
What is meant by ‘Informal organisation’? State its any two advantages. (All India 2015)
Or
Give the meaning of ‘Informal organistion’. State its any three advantages. (Delhi 2019)
Answer:
Informal organisation is an aggregate of inter-personal relationships without any conscious purpose but which may contribute to joint results. It emerges on its own in a natural manner within the formal organisation.

Various advantages of informal organisation are: (any two)

  • It leads to faster spread of information as well as quick feedback.
  • It fulfills the social needs of the members.
  • It contributes towards fulfillment of organisational objectives by compensating for inadequacies in the formal organisation.

Question 36.
State any three limitations of informal organisation. (Compartment 2015)
Answer:
The limitations of informal organisation are as follows: (any three)

  • According to a survey, 70% of information spread through informal organisational structure are rumors and can mislead the employees.
  • It does not form any definite structure for smooth working of an organisation.
  • It opposes the policies and changes of management.
  • It gives importance to individual interest as compared to orgnisational interest.

Question 37.
What is meant by ‘Formal Organisation’? State its any two advantages. (All India 2015)
Or
Give the meaning of ‘formal organisation’ State it’s any three advantages.
Or
State any four advantages of formal organisation. (Delhi 2010)
Answer:
Formal organisation is a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability, that lays emphasis on work to be done rather than interpersonal relationships.

The advantages of formal organisation are as follows: (any two)

  1. It makes fixation of responsibility clear and easier. It clarifies who has to report to whom.
  2. There is no confusion regarding work to be done by each individual and reduces ambiguity in performance of tasks.
  3. It helps in avoiding duplication of effort.
  4. Unity of command is maintained through an established chain of command.
  5. It provides stability to the organisation.

Question 38.
State any three features of informal organisation. (All India 2015, 2013)
Or
State any four features of informal organisations. (Delhi 2013)
Answer:
Features of an informal organisation are as follows: (any three)
(i) Based on formal organisation This is based on formal organisation where people also have informal relations. It means first of all formal organisation is established and then informal organisation is created out of it.

(ii) No written rules and procedures In this organisation, there are no written rules and procedures to govern inter-relationship. But there are group norms which have to be observed.

(iii) Independent channels of communication In this organisation, relations among different people are not defined because a person at the lowest rank can have direct contact with the person at the highest level.

(iv) Not deliberately created It is not deliberately created. It emerges out of mutual relationship and tastes.

(v) No place on organisation chart It has no place on the properly prepared organisation chart. Moreover, there is no information about it even in the organisation manual.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 39.
Samir Gupta started a telecommunication company, “Domra Ltd’ to manufacture economical mobile phones for the Indian rural market with 15 employees. The company did very well in 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. Samir Gupta, who was earlier taking all decisions for the company had to selectively disperse the authority. He believed that subordinates are competent, capable and resourceful and can assume responsibility for effective implementation of their decisions.
This paid-off and the company was not only able to increase its production but also expanded its product range.
(i) Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.
(ii) Also explain any three points of importance of this concept. (Delhi 2015)
Answer:
(i) The concept used by Samir Gupta is Decentralisation, which refer to a systematic effort to delegate to the lowest level all authority, except which be exercised at the central point.

(ii) Decentralisation is important due to the following reasons: (any three)
1. Greater motivation: Decentralisation improves the morale and motivation of subordinates which is reflected in better work performance.

2. Develops initiative among subordinates: Decentralisation helps to promote self-reliance and confidence amongst the subordinates. This is because when lower managerial levels are given freedom to take their own decisions, they learn to depend on their own judgement. It helps to promote initiative and creativity among them.

3. Develops managerial talent for the future: As a result of decentralisation, employees get more opportunities to develop new skills. It makes them better future managers.

4. Quick decision-making: Decentralisation in an organisation, provides more freedom to lower level managers to take their own decisions. There is no need to get approval from higher level. It helps in quick and better decision-making.

5. Facilitates growth and expansion: Decentralisation facilitates organisational growth through expansion and diversification. Top executives are not burdened by the administrative problems and complexities. So, they are able to plan expansion and diversification.

Question 40.
It helps a manager to extend his area of operations as without it, his activities would be restricted to only what he himself can do. Identify the activity referred to, in the above statement and state its elements. (All India 2015)
Answer:
The activity referred here is delegation.
Elements of delegation are:

  • Authority
  • Responsibility
  • Accountability

Question 41.
State any five points which highlight the importance of delegation of authority. (Delhi 2018; All India 2015)
Or
Explain by giving any three reasons why delegation is important in an organisation. (Delhi 2010; All India 2010)
Answer:
The points highlighting the importance of delegation of authority are: (any five)
(i) Effective management: By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters.

(ii) Employee development:
As a result of delegation, employees get more opportunities to utilise their talent. It also alows them to develop those skills which will enable them to perform complex tasks and assume those ‘ responsibilities which will improve their career prospects.

(iii) Facilitating growth: Delegation helps in the expansion of an organisation by providing a ready work force to take up leading positions in new ventures.

(iv) Basis of management hierarchy: Delegation of authority establishes healthy superior subordinate relationships, which are the basis of hierarchy of management. It is the degree and flow of authority which determines ‘who is to report to whom’.

(v) Reduces the burden of superior executive: The delegation of authority means sharing of work and authority with others. A manager can assign a part of his responsibility and grant authority to his subordinates. This reduces his work load and helps superiors in concentrating on the work which is more important.

(vi) Motivation: It gives job satisfaction to subordinates. It motivates them to render their willing cooperation for achieving the organisational goals. It leads them to higher performance and makes them more responsible.

Question 42.
Decentralisation is a key element in effective organising. Explain with the help of any four reasons. (All India 2014)
Or
Explain by giving any three reasons why decentralisation is important in an organisation. (All India 2010; Delhi 2010)
Answer:
Decentralisation refers to the systematic effort to delegate to the lowest level, all authority except which can be exercised at the central point.

Decentralisation is important due to the following reasons: (any three)
(a) Greater motivation: Decentralisation improves the morale and motivation of subordinates which is reflected in better work performance.

(b) Develops initiative among subordinates: Decentralisation helps to promote self-reliance and confidence amongst the subordinates. This is because when lower managerial levels are given freedom to take their own decisions, they learn to depend on their own judgement. It helps to promote initiative and creativity among them.

(c) Develops managerial talent for the future: As a result of decentralisation, employees get more opportunities to develop new skills. It makes them better future managers.

(d) Quick decision-making: Decentralisation in an organisation, provides more freedom to lower level managers to take their own decisions. There is no need to get approval from higher level. It helps in quick and better decision-making.

(e) Facilitates growth and expansion: Decentralisation facilitates organisational growth through expansion and diversification. Top executives are not burdened by the administrative problems and complexities. So, they are able to plan expansion and diversification.

Question 43.
What is meant by ‘Functional structure’? State its any two advantages? (All India 2013)
Answer:
Functional structure Under functional structure, an organisation is divided into different departments or units on the basis of major functions performed. All departments report to a coordinating head.

The advantages of functional organisational structure are: (any three)

  1. A functional structure provides occupational specialisation, since, emphasis is placed on specific functions.
  2. It promotes control and coordination within a department because of similarity in the task being performed.
  3. It increases managerial and operational , efficiency and this results in higher profit.
  4. It makes training of employees easier as it focuses on a limited range of skills.
  5. It ensures the performance of all activities necessary for achieving organisational objectives. Due attention can also be given to different functions.

Question 44.
Explain when and why the need is felt for having a framework, within which managerial and operating tasks are performed to accomplish desired goals. Name this framework also. (Delhi 2010; All India 2010)
Answer:
It is an organisational structure.
Need of organisational structure is felt in the following cases: (any two)

  • It is required when an organisation grows in size or leads to complexity.
  • It is required when an organisation is new and is required after planning but before staffing.
  • It is required as it leads to effective administration, expansion, growth and better utilisation of resources, etc.

Question 45.
Explain by giving any three reasons why organising is considered as an important function of management. (Delhi 2010)
Or
State any four points of importance of organising as a function of management. (Delhi 2019: All India 2012)
Or
‘Organisation is the harmonious adjustment of specialised parts for the accomplishment of some common purpose or purposes.’ In the fight of this statement, explain any four points of importance of organising. (All India 2011; Delhi 2011)
Or
With the help of any four points, explain the crucial role of ‘organising’ function in an enterprise. (All India 2014)
Answer:
The following points highlight the crucial role that organising plays in any business enterprise (any three):
(i) Clarity in working relationship: The establishment of working relationships clarifies the lines of communication and specifies, ‘who will report to whom’. This removes ambiguity in transfer of information and instructions.

(ii) Effective administration:
Organising provides a clear description of jobs and related duties. This helps to avoid confusion and duplication. Clarity in working relationships enables proper execution of work. Management of an enterprise thereby becomes easy and this brings effectiveness in administration.

(iii) Expansion and growth:
Organising helps in the growth and diversification of an enterprise by enabling it to deviate from existing norms and taking up new challenges and also by facilitating its efficient management.

(iv) Benefits of specialisation:
Organising leads to a systematic allocation of jobs amongst the work force. This reduces the work load as well as enhances productivity because of the specific workers performing a specific job on regular basis. By doing a job on regular basis, a worker gets experience in that area and leads to specialisation.

(v) Development of personnel:
Delegation of authority allows the managers to reduce their work load and to pay attention to more important and strategic issues and to develop new methods and ways of performing job where their potential can be exploited in more useful manner. Delegation develops in subordinates the ability to deal effectively with challenges and realise their full potential for more creative work.

(vi) Optimum utilisation of resources:
Organising leads to the proper usage of all material, financial and human resources. The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. Avoidance of duplication of work helps in preventing confusion and minimising the wastage of resources and efforts.
Organising Class 12 Important Questions and Answers Business Studies Chapter 5 -2

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 46.
Voltage fluctuations have been common and quite high in India. They harm our electrical appliances like televisions, refrigerators and air conditioners, often leaving them in a permanently damaged condition. N-Guard Company decided to manufacture stabilisers for North India where the voltage fluctuation ranges from 220V to 230V. Once the demand for North India was taken care of, they decided to launch stabilisers of varying voltages from 90 V – 260 V for meeting the requirements of voltage fluctuations in other regions of India also. Three engineers were appointed for South, West and East regions of India, as the voltage was different in all the three regions. Though all the engineers were appointed to manufacture stabilisers but the product differed from region to region.
(a) Identify the organisational structure of N-Guard Company.
(b) State any two advantages and two limitations of the structure identified in the above para. (Delhi 2019)
Answer:
(a) Company has opted divisional structure.
(b) Advantages of Functional Structure:

  • It promotes control and coordination within a department.
  • It is the most logical, time proven form of organisation structure.
  • It leads to minimal duplication of effort, which results in economies of scale and this lowers cost.
  • It ensures that different functions get due attention.

Disadvantages of Functional Structure:

  • It becomes difficult to hold a particular department responsible for any problem.
  • It may lead to inflexibility as people with same skills and knowledge may develop a narrow perspective.
  • A functional structure places less emphasis on overall enterprise objectives than the objectives pursued by a functional head.

Divisional Structure:
Under the divisional structure, an organisation is divided into different divisions or units on the basis of products or geographical area.

Advantages of Divisional Structure:

  • Decisions are taken much faster in divisional structure.
  • It facilitates expansion and growth as new divisions can be added without interrupting the existing operations.
  • It leads to spedalisation of physical facilities and human talent.

Disadvantages of Divisional Structure:

  • There is a duplication of physical facilities and functions.
  • It suffers from under utillisation of plant capacity
  • Conifict may arise between different divisions on allocation of funds and other resources.

Question 47.
Organising involves a series of steps that need to be taken in order to achieve the desired goal. Explain these steps. (Delhi 2019)
Or
Give the meaning of ‘organising’. State the steps in the process of organising. (All India 2015)
Or
State the steps in the organising process. (Delhi 2013)
Or
Describe briefly the steps in the process of organising. (All India 2012; Delhi 2012)
Or
‘Organising is the process of defining and grouping the activities of the enterprise and establishing the authority relationship among them.’ In the fight of this statement, explain the steps in the process of organising. (All India 2011)
Answer:
Organising is the function of management, which coordinates the physical, financial and human resources and establishes productive relations among them for achievement of specific goals. Various steps involved in the organising process may be described as follows:
Organising Class 12 Important Questions and Answers Business Studies Chapter 5 -1
(i) Identification and division of work:
The organising function begins with the division of total work into smaller units. Each unit of total work is called a job. The division of work into smaller jobs leads to specialisation because jobs are assigned to different individuals according to their qualifications and capabilities. The division of work and assignment of jobs leads to systematic working.

(ii) Grouping the jobs and departmentalisation: After division of work, related and similar jobs are grouped together and put under one department.

This can be done in the following two ways:
(a) Functional departmentation Under this method, jobs related to common functions are grouped under one department.
(b) Divisional departmentation Under this method, jobs related to one product are grouped under one department.

(iii) Assignment of duties:
After dividing the organisation into specialised departments, each individual working in different /departments is assigned a duty, matching to his skill and qualifications. We can say, the work is assigned to those who are best fitted to perform it well.

(iv) Establishing reporting relationship:
Merely allocating the work is not enough. Each individual should also know from whom he has to take orders and to whom he is accountable. The establishment of such clear relationships helps to create a hierarchical structure and helps in coordination amongst various departments.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 48.
What is meant by ‘Decentralisation’? State any three points that highlight the importance of decentralisation. (Delhi 2019)
Or
If we delegate the authority we multiply it by two. If we decentralise it, we multiply it by many. In the light of this statement explain any four points of importance of decentralisation. (Delhi 2011)
Answer:
Decentralisation is important due to the following reasons: (any three)
(a) Greater motivation: Decentralisation improves the morale and motivation of subordinates which is reflected in better work performance.

(b) Develops Initiative among subordinates: Decentralisation helps to promote self-reliance and confidence amongst the subordinates. This is because when lower managerial levels are given freedom to take their own decisions, they learn to depend on their own judgement. It helps to promote initiative and creativity among them.

(c) Develops managerial talent for the future: As a result of decentrailsation, employees get more opportunities to develop new skills. It makes them better future managers.

(d) Quick dedsion-making: Decentralisation in an organisation, provides more freedom to lower level managers to take their own decisions. There is no need to get approval from higher level. It helps in quick and better decision-making.

(e) Facilitates growth and expansion: Decentralisation facilitates organisational growth through expansion and diversification. Top executives are not burdened by the administrative problems and complexities. So, they are able to plan expansion and diversification.

Question 49.
Aradhana and Gandharv are heads of two different departments in ‘Yumco Ltd’. They are efficient managers and are able to motivate the employees of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasise on objectives of the enterprise has hindered the interaction between the departments that Aradhana and Gandharv are heading.

Often there are interdepartmental conflicts and they have become incompatible. This has proved to the harmful in the fulfilment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of “Yumco Ltd.’ has hired a consultant, Rashmi, to resolve the problem after studying the situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure “Yumco Ltd.’ has adopted.

From the above information, identify the organisational structure adopted by “Yumco Ltd.’ and state any three advantages of the structure so identified. (CBSE 2018)
Answer:
The organisational structure adopted by Yumco Ltd. is functional organisational structure.
Functional organisational structure has the following advantages:

  • It leads to occupational specialisation, since emphasise is placed on specific functions and repeated performance leading to efficient functioning.
  • It leads to minimal duplication of efforts, which results in economies of scale and lower costs.
  • It makes training of employees easier as the focus is only on a limited range of skills.

Question 50.
Distinguish between ‘Delegation’ and ‘Decentralisation’ on basis of
(i) Freedom of action
(ii) Status
(iii) Purpose. (Compartment 2018)
Or
Distinguish between ‘Delegation and Decentralisation’ on the basis of purpose, scope, status and nature. (Delhi 2013)
Answer:
Differences between delegation and decentralisation are as follows:

Basis Delegation Decentralisation
Purpose To lessen the burden of the manager. To increase the role of the subordinates in the organisation by giving them more autonomy.
Scope It has narrow scope as it is limited to superior and his immediate subordinate. It has wider scope as it implies extension of delegation to the lowest level of management.
Status It is a process followed to share tasks It is the result of the policy decision of top management.
Nature Delegation is a compulsory act because no individual can perform all the tasks on his own. Decentralisation is an optional policy decision. It is done at the discretion of the top there is more freedom of action.
Freedom of action There is less freedom of action. Decentralisation

Question 51.
AVM Ltd. set-up its electric appliances manufacturing factory in a backward area of Himachal Pradesh where subsidies are provided by the government and labour is available at cheaper rates. AVM Ltd. was able to produce its products at low cost thereby generating enough profits in the first year itself. It was because of the fact that the limits of authority and responsibility of the employees were clearly defined and the activities of various departments were coordinated and integrated. The Production Manager of the company also came to know about the abailability of rawmaterials at cheaper rates from a vendor. For this, he wrote a letter to the Managing Director of the company for getting sanction. But, because of procedural delays in getting this sanction and procuring funds from the Finance Manager, the order could not be placed.
(a) Identify the type of organisation, that led to procedural delays and because of which the company could not get the advantage of procuring raw material at cheaper rates.
(b) State an advantage of the type of organisation identified in (a) above other than those discussed in the above case. (Comportment 2018 Modified)
Answer:
(a) It is the formal organisation that led to such procedural delays.
(b) Such type of organisations are generally stable and have less of duplication of work.

Question 52.
Give the meaning of ‘Divisional structure’ of organising. State its any four advantages. (All Indio 2015)
Or
What is meant by divisional structure of organisation? State its any three advantages. (Delhi 2012)
Or
What is meant by divisional structure of an organisation? For which type of business is this structure most suitable? State any four advantages of this form of organisational structure. (All India 2011)
Answer:
Divisional structure Under the divisional structure, an organisation is divided into different divisions or units on the basis of products or geographical area. Each division is a self-contained, semi-autonomous business unit. Each unit has a divisional manager responsible for performance and who has authority over the unit. There are certain matters, which are determined at the apex level only, viz goal determination and policy formation.

It is suitable for those enterprises where:

  • A large variety of products are manufactured.
  • An organisation grows and needs more employees and more departments.

Advantages of divisional structure are as follows: (any four)

  1. Product specialisation helps in the development of varied skills.
  2. It helps in the fixation of responsibility as divisional heads are accountable for profits, revenues and costs related to their departments.
  3. It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision-making.
  4. It facilitates expansion and growth as a new division can be added without interrupting the existing operations.
  5. All the activities related to one type of product are grouped under one division, which brings integration
    and coordination in the activities.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 53.
Distinguish between formal and informal organisation on the basis of meaning, origin, authority and flow of communication. (Delhi 2013)
Or
Differentiate between formal and informal organisation on the basis of the following.
(i) Meaning
(ii) Origin
(iii) Authority
(iv) Behaviour
(v) Flow of communication
(vi) Nature (All India 2014; Comportment 2014)
Answer:
Differences between formal and informal organisations are: (any four)

Basis Formal Organisation Informal Organisation
Meaning Structure of authority relationships created by the management. Network of social relationships arising out of interaction among employees.
Origin Arises as a result of company rules and policies. Arises as a result of social interaction.
Authority Arises by virtue of position in management. Arises out of personal qualities.
Flow of communication Communication takes place through scalar chain. Flow of communication has no pattern and can take place in any direction.
Behaviour It is directed by rules. There is no set behaviour pattern.
Nature Rigid Flexible

Question 54.
Authority and responsibility are two important elements in delegation of authority. Explain the two. (All India 2011)
Answer:
An organisational structure cannot be condeved without authority and responsibility. These are two important elements in delegation of authority: Authority It refers to the right of an individual to command his subordinates and to take action within the scope of his position. According to Henri Fayol, ‘Authority is the right to give orders and the power to exad obedience. Authority gives holder the power to enforce orders or dedsions. It can be delegated. It always flows downwards, i.e. vertically from superiors to subordinates’. Responsibility It is the obligation of a subordinate to properly perform the assigned duties. It arises from a superior-subordinate relationship. According to Davis Filley, ‘Responsibility is the obligation of the individual to perform assigned duties to the best of his abilities under the direction of his executive’.

Question 55.
Explain any two advantages and any two disadvantages of informal organisation. (All India 2011,2010; Delhi 2010)
Answer:
Informal organisation advantages of informal organisation are: (any two)

  • It leads to faster spread of information as well as quick feedback.
  • It fullills the social needs of the members.
  • It contributes towards fulfillment of organisational objectives by compensating for inadequacies in the formal organisation.

Disadvantages of informal organisation are as follows: (any three)

  • According to a survey, 70% of information spread through informal organisational structure are rumours and can mislead the employees.
  • It does not form any definite structure for smooth working of an organisation.
  • It opposes the policies and changes of management.
  • It gives importance to individual interest as compared to orgnisational interest.

Question 56.
Explain
(i) Benefits of specialisation and
(ii) Development of personnel as
importance of organising. (Foreign 2011)
Answer:
(i) Benefits of specialisation:
Organising leads to a systematic allocation of jobs amongst the work force. This reduces the work load as well as enhances productivity because of the specific workers performing a specific job on regular basis. By doing a job on regular basis, a worker gets experience in that area and leads to specialisation.

(ii) Development of personnel:
Delegation of authority allows the managers to reduce then- work load and to pay attention to more important and strategic issues and to develop new methods and ways of performing job, where their potential can be exploited in more useful manner. Delegation develops in subordinates the ability to deal effectively with challenges and realise their full potential for more creative work.

Question 57.
State any two advantages and two disadvantages of formal organisation. (Delhi 2010)
Answer:
Formal organisation is a system of well-defined jobs, each bearing a defmite measure of authority, responsibility and accountability, that lays emphasis on work to be done rather than interpersonal relationships.

The advantages of formal organisation are as follows: (any two)

  • It makes fixation of responsibility clear and easier. It darifies who has to report to whom.
  • There is no confusion regarding work to be done by each individual and reduces ambiguity in performance of tasks.
  • It helps in avoiding duplication of effort.
  • Unity of command is maintained through an established chain of command.
  • It provides stability to the organisation.

Disadvantages of formal organisation are:

  • While following formal chain of communication, actions get delayed in formal structure.
  • It does not give importance to psychological and social needs of employees.
  • It may create rigidity due to prescribed policies and rules.

Question 58.
Explain
(i) Adaptation to change and
(ii) Effective administration as importance of organising. (All India 2010; Delhi (C) 2010)
Answer:
(i) Adaptation to change:
The process of organising allows a business enterprise to accommodate changes in the business environment. It allows the organisation structure to be suitably modified and the inter-relationships amongst various managerial levels to pave the way for a smooth transition.

(ii) Effective administration:
Organising provides a dear description of jobs and related duties. This helps to avoid confusion and duplication. Clarity in working relationships enables proper execution of work. Management of an enterprise thereby becomes easy and this brings effectiveness in administration.

Question 59.
Explain
(i) Expansion and growth and
(ii) Optimum utilisation of resources as importance of organising. Delhi tci 2010
Answer:
(i) Expansion and growth:
Organising helps in the growth and diversification of an enterprise by enabling it to deviate from existing norms and taking up new challenges. In other words, sound organisation helps in taking the various activities under control and increases the capacity of the enterprise to undertake more activities.

(ii) Optimum utilisation of resources:
Organising leads to the proper usage of all material, financial and human resources. The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. Avoidance of duplication of work helps in preventing confusion and minimising the wastage of resources and efforts.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 60.
A steel manufacturing company has the following main jobs
(i) Manufacturing
(ii) Finance
(iii) Marketing
(iv) Personnel
(v) Research and development
Which type of organisational structure will you choose for this type of a company and why? State any four advantages of this organisational structure. (Delhi (C) 2010)
Answer:
I would suggest the functional organisational structure as all these major functions could be performed well under separate departments.

The advantages of functional organisational structure are:
1. A functional structure provides occupational specialisation, since, empha sis is placed on specific functions.
2. It promotes control and coordination within a department because of similarity in the task being performed.
3. it increases managerial and operational efficiency and this results in higher profit.
4. It makes training of employees easier as it focuses on a limited range of skills.
5. It ensures the performance of all activities necessary for achieving organisational objectives. Due attention can also be given to different functions.

Question 61.
‘E-Solutions Ltd.’ started its operations in the year 2000. At the time of its inception, the company had only ten employees with two departments, a Production department and an Administration department. The products supplied and the services provided by the company started gaining popularity over the years. The management had faith in the abilities of the employees and thus they allowed them freedom of action. The management recognised that the decision-makers at different levels of the organisation need to be given more autonomy. They took a policy decision that there will be less control of superiors over subordinates. This increased the role of the subordinates in the organisation and now they were in a position to take numerous as well as important decisions. As a result, its business has diversified into many areas. Presently, it has its operations throughout the country with seven branches overseas. Its organisation structure has now changed into divisional structure and ten 10,000 people are working with the company.
(a) Identify the concept of management which helped the company to diversity into many areas and branches abroad.
(b) Explain five points of importance of the concept identified in (a) above. (All Indio 2019)
Answer:
(a) Concept of management which helped the company to diversify into many areas and branches abroad is ‘Decentralisation’.
(b) Decentralisation is important due to the following reasons:

(a) Greater motivation:
Decentralisation improves the morale and motivation of subordinates which is reflected in better work performance.

(b) Develops Initiative among subordinates:
Decentralisation helps to promote self-reliance and confidence amongest the subordinates. This is because when lower managerial levels are given freedom to take their own decisions, they learn to depend on their own judgement. It helps to promote initiative and creativity among them.

(c) Develops managerial talent for the future: As a result of decentrailsation, employees get more opportunities to develop new skills. It makes them better future managers.

(d) Quick dedsion-making: Decentralisation in an organisation, provides more freedom to lower level managers to take their own decisions. There is no need to get approval from higher level. It helps in quick and better decision-making.

(e) Facilitates growth and expansion: Decentralisation facilitates organisational growth through expansion and diversification. Top executives are not burdened by the administrative problems and complexities. So, they are able to plan expansion and diversification.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 62.
Explain the steps in the process of organising. (Compartment 2014)
Or
‘Organising involves a series of steps in order to achieve the desired goals’. Explain these steps? (Delhi 2014)
Or
Give the meaning of ‘organising’ as a function of management. Explain the steps in the process of organising. (Compartment 2013)
Answer:
‘Organising is a 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’.

Organising can be defined as a process that initiates implementation of plans by assigning jobs and working relationships and effectively deploying the resources for the attainment of identified and desired results or goals.

Steps in the process of organising:
Organising is the function of management, which coordinates the physical, financial and human resources and establishes productive relations among them for achievement of specific goals. Various steps involved in the organising process may be described as follows:
Organising Class 12 Important Questions and Answers Business Studies Chapter 5 -2
(i) Identification and division of work:
The organising function begins with the division of total work into smaller units. Each unit of total work is called a job. The division of work into smaller jobs leads to specialisation because jobs are assigned to different individuals according to their qualifications and capabilities. The division of work and assignment of jobs leads to systematic working.

(ii) Grouping the jobs and departmentalisation: After division of work, related and similar jobs are grouped together and put under one department.

This can be done in the following two ways:
(a) Functional departmentation Under this method, jobs related to common functions are grouped under one department.
(b) Divisional departmentation Under this method, jobs related to one product are grouped under one department.

(iii) Assignment of duties:
After dividing the organisation into specialised departments, each individual working in different /departments is assigned a duty, matching to his skill and qualifications. We can say, the work is assigned to those who are best fitted to perform it well.

(iv) Establishing reporting relationship:
Merely allocating the work is not enough. Each individual should also know from whom he has to take orders and to whom he is accountable. The establishment of such clear relationships helps to create a hierarchical structure and helps in coordination amongst various departments.

Question 63.
With the help of any four points explain the importance of ‘Decentralisation’ in an organisation. (Delhi 2014)
Or
‘Decentralisation is an important philosphy that implies selective dispersal of authority’. In the light of this statement explain any four points of importance of decentralisation, (Comportment 2014)
Or
What is meant by decentralisation? State any five points of importance of decentralisation. (Delhi 2012)
Ans.
Decentralisation means distribution of decision-making authority at various levels in the organisation. According to Louis A Allen,
‘Decentralisation refers to the systematic effort to delegate to the lowest level, all authority except that which can be exercised at the central point’.

Decentralisation is important due to the following reasons:
(a) Greater motivation: Decentralisation improves the morale and motivation of subordinates which is reflected in better work performance.

(b) Develops Initiative among subordinates: Decentralisation helps to promote self-reliance and confidence amongst the subordinates. This is because when lower managerial levels are given freedom to take their own decisions, they learn to depend on their own judgement. It helps to promote initiative and creativity among them.

(c) Develops managerial talent for the future: As a result of decentrailsation, employees get more opportunities to develop new skills. It makes them better future managers.

(d) Quick dedsion-making: Decentralisation in an organisation, provides more freedom to lower level managers to take their own decisions. There is no need to get approval from higher level. It helps in quick and better decision-making.

(e) Facilitates growth and expansion: Decentralisation facilitates organisational growth through expansion and diversification. Top executives are not burdened by the administrative problems and complexities. So, they are able to plan expansion and diversification.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 64.
Besides effective management and employee development delegation helps the organisation in different ways. Explain any four such ways. (Compartment 2014)
Or
What is meant by delegation of authority? Explain any four points of importance of delegation of authority. (Delhi; All India 2014)
Or
‘Delegation is a key element in effective organising’. Explain with the help of four reasons. (All India 2011)
Or
‘Effective Delegation leads to certain benefits in an organisation.’ Explain any three such benefits. (Compartment 2012)
Or
With the help of any four points, explain the importance of ‘delegation’ in an organisation. (Delhi 2014)
Or
Delegation is a key element in effective organising. How? State by giving any six reasons. (All India 2010)
Answer:
Delegation is a key element in effective organising. The delegation of authority is essential for the existence of an organisation. It helps in the efficient functioning of the organisation.

According to Theo Haimann, “Delegation of authority merely means the granting of authority to subordinates to operate within the prescribed limits”. Delegation ensures that the subordinates perform tasks on behalf of manager thereby, reducing his workload.

Benefits of effective delegation:1
The points highlighting the importance of delegation of authoriLy are: (any five)
(i) Effective management By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters.

(ii) Employee development As a result of delegation, employees get more opportunities to utiiise their talent. It also alows them to develop those skills which will enable them to perform complex tasks and assume those ‘responsibilities which will improve their career prospects.

(iii) Facilitating growth Delegation helps in the expansion of an organisation by providing a ready work force to take up leading positions in new ventures.

(iv) Basis of management hierarchy Delegation of authority establishes healthy superior subordinate relationships, which are the basis of hierarchy of management. It is the degree and flow of authority which determines ‘who is to report to whom’.

Question 65.
Give the meaning of ‘informal organisation’ and state any five features of it. (All India 2013; Delhi 2012)
Answer:
Informal organisation is an aggregate of inter-personal relationships without any conscious purpose but which may contribute to joint results. It emerges on its own in a natural manner within the formal organisation.

Features of informal organisation:
(i) Based on formal organisation This is based on formal organisation where people also have informal relations. It means first of all formal organisation is established and then informal organisation is created out of it.

(ii) No written rules and procedures In this organisation, there are no written rutes and procedures to govern inter-relationship. But there are group norms which have to be observed.

(iii) Independent channels of communication In this organisation, relations among different people are not defined because a person at the lowest rank can have direct contact with the person at the highest level.

(iv) Not deliberately created It is not deliberately created. It emerges out of mutual relationship and tastes.

(v) No place on organisation chart k has no place on the properly prepared organisation chart. Moreover, there is no information about it even in the organisation manual.

Question 66.
Differentiate between functional and divisional structure of organising on the basis of the following?
(i) Meaning
(ii) Formation
(iii) Specialisation
(iv) Responsibility
(v) Managerial development
(vi) Cost involved (Foreign 2014)
Or
Differentiate between functional and divisional structure of organising on any six bases. (Compartment 2013)
Answer:
Differences between functional and divisional structure are:

Basis Functional Structure Divisional Structure
Meaning Grouping of jobs of similar nature under functions and organising these functions as department creates functional structure. Organisations with diversified activities organise their structure with separate business units or divisions, which is known as divisional structure.
Formation It is formed on the basis of functions performed in the organisation. It is formed on the basis of product lines, supported by functions.
Specialisation It leads to functional specialisation. It leads to product specialisation.
Responsibility It is difficult to fix responsibility on a department. It is easy to fix responsibility for performance.
Managerial Less scope of managerial development as High degree of managerial development with
development specialised functions are performed. ease, due to autonomy and performance of multiple functions.
Cost involved It is economical as there is no duplication. It is costly as there is duplication of work and resources.

Question 67.
Give the meaning of essential elements of ‘Delegation’. (All Indio 2013)
Or
‘Delegation is the entrustment of responsibility and authority to another and the creation of accountability for performance’. In the light of this statement, identify and explain the essential elements of delegation. (All India 2012; Delhi 2010)
Answer:
Delegation means granting of authority to subordinates to operate within the prescribed limits.
Elements of delegation are:
(i) Authority: It refers to the right of an individual to command his subordinates and to take action within the scope of his position.
(a) Authority is needed to discharge a given responsibility to the subordinates.
(b) It flows from top to bottom of the scalar chain.
(c) The superior has authority over the subordinates. It is highest at the top management. However, it reduces as we move downward in the corporate hierarchy.

(ii) Responsibility: It is the obligation of a subordinate to properly perform the assigned duties.
(a) Responsibility arises from a superior-subordinate relationship because the subordinate is bound to perform the duty assigned to him by his superior.
(b) Responsibility flows upwards, i.e. from bottom to top. A subordinate will always be responsible to his superior.

(iii) Accountability:
(a) Accountability implies ‘being answerable for the fined outcome of the assigned task’.
(b) Accountability flows upwards, i.e. a subordinate will be accountable to his superior for satisfactory performance of the assigned work.

Question 68.
What is meant by formal organisation? Explain any five features of formal organisation. (All India 2012; Delhi 2010)
Answer:
Formal organisation is an official setup. It clearly spells out what exactly is the role of each job and position in an organisation.
Features of formal organisation are as follows:
(i) Defined inter-relationship: It is a sort of arrangement which clearly defines mutual relationship. Everybody knows their authority and responsibilities. This clearly shows who will be reporting to whom.

(ii) Based on rules and procedures: It is important to observe all the pre-determined rules and procedures in the formal organisation. The objectives laid down under planning are thus achieved.

(iii) Based on division of work: The chief basis of formal organisation is the division of work. It is thus that connects the efforts of different departments with each other.

(iv) Deliberately created: It is deliberately created in order to achieve the objectives of the organisation in an easy manner.

(v) It is more stable: Changes cannot be introduced because of the needs of individuals and their wishes. Therefore, it is more stable.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 69.
What is meant by informal organisation? State any three advantages and any two disadvantages of this form of organisation. (All India 2012; 2011)
Answer:
Informal organisation is an aggregate of inter-personal relationships without any conscious purpose but which may contribute to joint results. According to Keith Davis, ‘Informal organisation is the network of personal and social relationships not established or required by formal organisation but arising spontaneously as people associate with one another.

(ii) Three advantages of informal organisation:
Informal organisation is an aggregate of inter-personal relationships without any conscious purpose but which may contribute to joint results. It emerges on its own in a natural manner within the formal organisanon.
Various advantages of informal organisation are:

  • It leads to faster spread of information as well as quick feedback.
  • It fulfills the social needs of the members.
  • It contributes towards fulfillment of organisational objectives by compensating for Inadequacies in the formal organisation.

(iii) Two disadvantages of informal organisation:
The limitations of informal organisation are as follows: (any three)

  • According to a survey, 70% of information spread through informal organisa tional structure are rumours and can mislead the employees.
  • It does not form any definite structure for smooth working of an organisation.
  • It opposes the policies and changes of management.
  • It gives importance to individual interest as compared to orgnisational interest.

Question 70.
What is meant by divisional structure of an organisation? For which type of business enterprises is this structure most suitable? State any four advantages of this form of organisational structure. (All India 2011)
Answer:
For details of divisional structure of an organisation,
Divisional structure Under the divisional structure, an organisation is divided into different divisions or units on the basis of products or geographical area. Each division is a self-contained, semi-autonomous business unit. Each unit has a divisional manager responsible for performance and who has authority over the unit. There are certain matters, which are determined at the apex level only, viz goal determination and policy formation.

It is suitable for those enterprises where:

  • A large variety of products are manufactured.
  • An organisation grows and needs more employees and more departments.

Advantages of divisional structure are as follows: (any four)

  • Product specialisation helps in the development of varied skills.
  • It helps in the fixation of responsibility as divisional heads are accountable for profits, revenues and costs related to their departments.
  • It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision-making.
  • It facilitates expansion and growth as a new division can be added without interrupting the existing operations.
  • All the activities related to one type of product are grouped under one division, which brings integration and coordination in the activities.

Question 71.
What is meant by functional structure of organising? Explain its any two advantages and any two limitations. (Delhi (C) 2011)
Answer:
Functional structure of organisation (Meaning and advantages)
Functional structure Under functional structure, an organisation is divided different departments or units on the basis of major functions performed. All departments report to a coordinating head.

Advantages of functional structure:
The advantages of functional organisational structure are: (any three)

  1. A functional structure provides occupational spedalisation, since, emphasis is placed on specific functions.
  2. It promotes control and coordination within a department because of similarity in the task being performed.
  3. It increases managerial and operational efficiency and this results in higher profit.
  4. It makes training of employees easier as it focuses on a limited range of skills.
  5. It ensures the performance of ail activities necessary for achieving organisatlonal objectives. Due attention can also be given to different functions.

Limitations of functional structure:
The limitations of functional organisational structure are:
(î) Specialists working in different departments may not be able to see the perspective of the organisation as a whole, e.g. the production department may get involved in producing a quality product without regard to the fact it might not sell at a high price. As a result, it becomes difficult to achieve the objectives of the organisation.

(ii) It becomes difficult to hold a particular department responsible for any problem, e.g. when sales are declining, who is responsible? It is difficult to determine whether the marketing department or the production department is responsible for not producing a quality product.

(iii) Functional heads do not obtain experience required for top management positions. Spedalised skills and narrow perspective may lead to inflexibility.

(iv) Conflict often arises when the interests of two or more departments are not compatible.

Question 72.
What is meant by divisional structure of organising? Explain its any two advantages and any two limitations. (Delhi (C) 2011)
Answer:
Divisional structure of organisation (Meaning and advantages):
Divisional structure Under the divisional structure, an organisation is divided into different divisions or units on the basis of products or geographical area. Each division is a self-contained, semi-autonomous business unit. Each unit has a divisional manager responsible for performance and who has authority over the unit. There are certain matters, which are determined at the apex level only, viz goal determination and policy formation.

It is suitable for those enterprises where:

  • A large variety of products are manufactured.
  • An organisation grows and needs more employees and more departments.

Advantages of divisional structure are as follows:

  • Product specialisation helps in the development of varied skills.
  • It helps in the fixation of responsibility as divisional heads are accountable for profits, revenues and costs related to their departments.
  • It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision-making.
  • It facilitates expansion and growth as a new division can be added without interrupting the existing operations.
  • All the activities related to one type of product are grouped under one division, which brings integration and coordination in the activities.

The limitations of divisional structure of an organisation are as follows

  • Such a structure involves heavy financial costs due to the duplication of supporting functional units for the divisions, It also requires adequate number of capable managers to take charge of their respective divisions.
  • All the divisions work as autonomous units. Divisional heads may gain power and ignore organisational interests.
  • Conflict may arise between different divisions on allocation of funds and other resources.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 73.
Shreyskar runs a locks manufacturing factory. He wants to expand his business. For expansion, he contemplates to enter into the manufacturing of locks for cars as an ancillary company. By doing this, his company will be able to provide many products to car manufacturers. Which type of organisational structure will he choose for his factory and why? State any five advantages of this organisational structure. (All india 2010)
Answer:
Divisional structure will be chosen for this factory because factory is producing more than one type of products.

Advantages of divisional structure are as follows:

  • Product specialisation helps in the development of varied skills.
  • It helps in the fixation of responsibility as divisional heads are accountable for profits, revenues and costs related to their departments.
  • It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision-making.
  • It facilitates expansion and growth as a new division can be added without interrupting the existing operations.
  • All the activities related to one type of product are grouped under one division, which brings integration and coordination in the activities.

Multiple Choice Questions

Question 1.
Organising is a …………… of management.
(a) rule
(b) task
(c) function
(d) policy
Answer:
(c) function

Question 2.
What is dividing the whole concern into independent units and departments called?
(a) Decentralisation
(b) Departmentation
(c) Division
(d) Functionalisation
Answer:
(b) Departmentation

Hint:
Departmentation is the foundation of organisation structure. Departmentation means division of work into smaller units and their re-grouping into bigger units (departments) on the basis of similarity of features.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 3.
A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the manager should …………… authority.
(a) leave
(b) delegate
(c) decentralise
(d) rise
Answer:
(b) delegate

Hint:
Delegation of authority means division of authority and powers downwards to the subordinate. Delegation is about entrusting someone else to do part of your job.

Question 4.
According to Allen, ‘Centralisation’ is the systematic and consistent reservation of …………… at central points in the organisation.
(a) purpose
(b) responsibility
(c) aims
(d) authority
Answer:
(d) authority

Question 5.
Meeting in a cafeteria and drama group in an company are example of …………… organisation.
(a) formal
(b) informal
(c) divisional
(d) matrix
Answer:
(b) informal

Hint:
Under informal organisation, through frequent interaction and communication, people tend to form? social friendly groups to satisfy their social needs. Examples-meeting in a cafeteria, drama group and cricket teams of organisational personnel.

Question 6.
In an organisation, the Functional head and Marketing Director directs the subordinates throughout the organisation in his particular area. This means that subordinates receive orders from several specialists or managers working above them. This style of working is followed in which organisation?
(a) Divisional organisation
(b) Functional organisation
(c) Staff organisation
(d) Matrix organisation
Answer:
(b) Functional organisation

Hint:
Functional organisation has been divided to put the specialists in the top position throughout the enterprise.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 7.
Delegation of authority in a way gives enough room and space to the subordinates to flourish their abilities and skill. How?
(a) Subordinates get a feeling of importance
(b) Subordinates get motivated to work
(c) Breaks the monotony of the subordinates
(d) All of the above
Answer:
(d) All of the above

Hint:
Delegation is the assignment of any responsibility or authority to another person (normally from a manager to a subordinate) to carry out specific activities, such as starting on proper tires during a wet race. It is one of the core concepts of management leadership.

Question 8.
“Organisation is the harmonious adjustment of specialised parts of the accomplishment of some common purpose or purposes.” What does this statement imply?
(a) It implies the features of organisation
(b) It implies the importance of organisation like specialisation, adaptation to change etc.
(c) It refers to the process of organisation which includes assignment of duties
(d) None of the above
Answer:
(b) It implies the importance of organisation like specialisation, adaptation to change etc.

Hint:
Organising is the process of defining and grouping activities and establishing authority relationships among them. The above statement gives us the importance of organisation which states clarity in relationships, specialisation and such others.

Question 9.
There is a board meeting going on for the Perfect Solutions Ltd. Two of the top level managers, Mr. Kunal and Mr. Rahul are of a different view when it comes to the kind of working structure of the organisation. Mr. Kunal says that the organisation deals in variety of products, the growth prospects of the organisation are high and that it wants to expand to different territories. Which structure is he fighting for?
(a) Divisional structure
(b) Functional structure
(c) Matrix structure
(d) Line structure
Answer:
(a) Divisional structure

Hint:
The divisional structure or product structure consists of self-contained divisions. A division is a collection of functions which produce a product. It also utilises a plan to compete and operate as a separate business or profit centre.

Organising Class 12 Important Questions and Answers Business Studies Chapter 5

Question 10.
Which of the following is an ideal situation?
(a) Authority < Responsibility
(b) Authority > Responsibility
(c) Authority = Responsibility
(d) None of the above
Answer:
(c) Authority = Responsibility

Hint:
The authority can be delegated to a subordinate for the purpose of ease in doing work. The authority is granted to the juniors in a prescribed limit. Even though the task is being handled by the lower level, the ultimate accountability remains of the superior who has delegated the authority. Thus, responsibility is also vested in him.

Question 11.
What is the optimum ratio for an organisation to work effectively and efficiently?
(a) Complete centralisation
(b) Mix of centralisation and decentralisation
(c) Complete decentralisation
(d) Both independent in the same organisation
Answer:
(b) Mix of centralisation and decentralisation

Hint:
Every organisation must have a blend of centralisation and decentralisation. As an organisation grows, there is a tendency to move towards decentralisation. At the same time, decisions need to be centralised in priority and key result areas.

Question 12.
Which of the following is not an advantage of a functional organisation?
(a) Accountability
(b) Clarity
(c) Flexibility
(d) Specialisation
Answer:
(c) Flexibility

Question 13.
In centralised organisations, the decision-making authority is retained by the ……………
(a) top level management
(b) middle level management
(c) lower level management
(d) external stakeholders
Answer:
(a) top level management

Question 14.
…………… is the obligation to perform the assigned task.
(a) Authority
(b) Responsibility
(c) Accountability
(d) Permissibility
Answer:
(b) Responsibility

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

We have given these Business Studies Class 12 Important Questions Chapter 2 Principles of Management to solve different types of questions in the exam. Go through these Principles of Management Class 12 Important Questions and Answers & Previous Year Questions to score good marks in the board examination.

Important Questions of Principles of Management Class 12 Business Studies Chapter 2

Question 1.
Appliances India Ltd. is engaged in a manufacturing and distribution of home appliances since 1987. It has a good name in the market as the company is producing good quality appliances. It has separate departments for manufacturing, finance, sales, maintenance services and technical services to achieve specialisation.
Since, the areas of operations of the company have increased and customers have become more demanding, the company decided to modify the existing principle of management to meet the changing requirements of the environment.
State the general principle of management which the company wants to modify to meet the changing requirements. (Delhi 2019)
Answer:
The company wants to modify the principle of ‘Division of Work’.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 2.
State the role of ‘speed boss’ in functional foremanship. (Foreign 2016; Delhi 2016)
Answer:
Speed boss is responsible for maintaining speed of production, investigating causes of delay and removing it.

Question 3.
State the role of ‘gang boss’ in functional foremanship. (All India 2016; Delhi 2016; Foreign 2016)
Answer:
Gang boss is responsible for keeping machines and tools ready for work.

Question 4.
State the role of ‘inspector’ in ‘functional foremanship’. (All India 2016: Delhi 2016; Foreign 2016)
Answer:
The inspector is responsible for maintaining quality of work.

Question 5.
State the role of ‘route clerk’ in functional foremanship. (All India 2016)
Answer:
Route-clerk is responsible for specifying the route of production.

Question 6.
What is determined by fatigue study? (Foreign 2014)
Or
State the objective of fatigue study. (All India 2010; Foreign 2010)
Answer:
The objective of fatigue study is to maintain the efficiency level of workers by determining the amount and frequency of rest intervals in completing a task.

Question 7.
What is the objective of ‘method study’ as a technique of scientific management? (Delhi 2014)
Answer:
The main objective of method study is to find out the best way of doing the job.

Question 8.
State the objective of time study. (All India 2014,2010; Delhi 2010)
Or
What is determined by time study? (All India 2014; Foreign 2010)
Answer:
The main objective of time study is to determine the standard time required to perform a job.

Question 9.
‘Accurate cause and effect relationship cannot be established by principles of management.’ Why? (Compartment 2013)
Answer:
Since management principles are applicable on human resource of a concern, and human behaviour is unpredictable, accurate cause and effect cannot be established by them.

Question 10.
Why do principles of management try to establish the relationship between cause and effect? State. (Comportment 2013)
Answer:
Establishing cause and effect relationship through management principles helps manager, to solve day-to-day problems easily and effectively.

Question 11.
What is meant by ‘principles of management’? (All India 2013 2009, Delhi 2011)
Answer:
Principles of management are general guidelines, which can be used for conduct in work places under certain situations. It also helps manager to take and implement thoughtful decisions.

Question 12.
Ayesha, a manager, decided that there will be separate departments for finance, marketing, production and sales in her company. By doing so she is following a principle of management. Name the principle. (Compartment 2013)
Answer:
Division of work

Question 13.
Shreya, a manager feels that employees should get enough time to adapt to a new environment to show results. By doing so she is following a principle of management. Name the principle. (Comportment 2013)
Answer:
Stability of personnel

Question 14.
Name the following principles of management:
(a) that prevents dual subordination and
(b) that prevents overlapping of working of two divisions. (Compartment 2012)
Answer:
(a) Unity of command
(b) Unity of direction

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 15.
Distinguish between the principles of ‘unity of command’ and ‘unity of direction’ on the basis of implications. (Comportment 2012)
Answer:
Difference between unity of command and unity of direction on the basis of implications is stated below:
Unity of command It affects individual employee.
Unity of direction It affects the entire organisation.

Question 16.
Define ‘scientific management’. (Comportment 2012)
Or
What is meant by scientific management? (Foreign 2011)
Answer:
Scientific management In words of Taylor, scientific management means knowing exactly what you want men to do and seeing that they do in the best and the cheapest way.

Question 17.
State why ‘principles of management’ are called contingent. (All India (C) 2012)
Or
What is meant by the statement ‘principles of management are contingent’? (All India 2011,2010; Foreign 2011)
Or
Give any one reason why principles of management are called “contingent”. (Delhi 2010; Foreign 2010)
Or
Why is it said that ‘principles of management are contingent’? (Foreign 2011)
Answer:
The application of principles of management is contingent as it depends upon the prevailing situation at a particular point of time.

Question 18.
What is meant by ‘universal applicability of principles of management’? (Delhi 2011)
Answer:
‘Universal applicability of principles of management’ means that the principles of management are intended to apply to all types of organisations at all places.

Question 19.
State any one reason why principles of management are important? (All India 2011)
Answer:
Principles of management are important as they help managers in taking thoughtful and scientific decisions.

Question 20.
What is meant by the statement ‘principles of management are flexible’? (Delhi 2011)
Or
Give any one reason why principles of management are not rigid prescriptions? (All India 2010; Delhi 2010)
Answer:
Principles of management are flexible, which means that they are not rigid, and can be modified by the manager as per the situation.

Question 21.
What is meant by Fayol’s principle of ‘esprit de corps’? (Delhi 2011)
Answer:
Fayol’s principle of ‘esprit de corps’ suggests that management should promote team spirit of unity and harmony among the employees.

Question 22.
State any one principle of scientific management. (Delhi 2011)
Answer:
Science, not rule of thumb It advocates that there is only one best method to maximise efficiency and this method should substitute rule of thumb throughout the organisation.

Question 23.
Name the principle of scientific management which emphasises on study and analysis of methods rather than estimation.
Or
Name the principle of scientific management which suggests the introduction of scientific investigation and analysis. (Delhi (C) 2011)
Answer:
Science, not rule of thumb.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 24.
Give any one reason why principles of management do not provide readymade solution to all managerial problems. (All India 2010; Delhi 2010; Foreign 2010)
Answer:
Principles of management do not provide readymade solution to all managerial problems because principles provide general guidelines to managers whereas real business situations are extremely complex and not based on theoretical knowledge.

Question 25.
Which principle of management implies that there should be ‘one head and one plan for a group of activities having the same objective? (All India 2010)
Answer:
Principle of unity of direction implies that there should be ‘one head and one plan’ for a group of activities having the same objective.

Question 26.
Which principle of management states that an employee should receive orders from one superior only? (Delhi (C) 2010)
Answer:
Unity of command states that an employee should receive orders from one superior only.

Question 27.
State the objective of motion study. (All India 2010; Delhi 2010; Foreign 2010)
Answer:
The objective of motion study is to eliminate unnecessary and wasteful motions so that it takes less time to complete the job efficiently.

Question 28.
Which technique of Taylor differentiates between an efficient worker and an inefficient worker? (All India 2010)
Answer:
Differential piece wage system differentiates between an efficient worker and an inefficient worker.

Question 29.
Which revolution involves a change in the attitude of workers and management towards one another, from competition to cooperation? (Delhi (C) 2010)
Answer:
Mental revolution involves a change in the attitude of workers and management towards one another, from competition to cooperation.

Question 30.
Explain briefly ‘unity of direction’ and ‘order’ as principles of general management. (All India 2017)
Answer:
‘Unity of direction’ and ‘order’ as principles of general management are discussed below:
(i) Unity of direction ‘One unit and one plan for the group of activities having the same objective is the essence of this principle. It implies that there should be one head and one plan for a group of activities having the same objective. It means that the efforts of members of the organisation should be directed towards the achievement of a common goal. It was forwarded by Fayol.

(ii) Order According to Fayol, ‘People and material must be in suitable place at appropriate time for maximum efficiency’. This principle states that there should be a place for everything and everyone in an organisation and that thing or person should be found at its alloted place. This will lead to increased productivity and efficiency.

Question 31.
Explain briefly ‘initiative’ and ‘esprit de corps’ as principles of general management. (All India 2017)
Answer:
‘Initiative’ and ‘esprit de corps’ as principles of general management are discussed below:
(i) Initiative It means freedom to think of new ideas and execute them. The principle of initiative implies that the managers of an organisation should encourage their subordinates to take initiative and think of new ideas or policies that are beneficial for the organisation and execute them. By ‘encouraging initiative, the management can motivate employees to work better and harder.

(ii) Esprit de corps This principle states that union is strength. It refers to team spirit, i.e. harmony in the work group and mutual understanding among the workers. A group of workers working collectively in harmony and with mutual cooperation leads to the achievement of goals efficiently. Unity among the personnel can be accomplished through proper communication and coordination.

Question 32.
Explain briefly ‘remuneration of employees’ and ‘scalar chain’ as principles of general management. (All India 2017)
Answer:
Remuneration of employees According to Fayol, the quantum and methods of remuneration payable to employees should be fair and reasonable. It should be satisfactory to both employers and employees, which gives them a reasonable standard of living and should be within the paying capacity of the company.

Scalar chain According to Fayol, scalar chain refers to the chain of authority and communication that runs from top to bottom and should be followed by managers and their subordinates.
Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2 Img 1

The above figure illustrates the scalar chain. If D and O wants to communicate, the message should usually move up through C, B, A, M, N and then O. Communication through this process takes time.

Question 33.
Explain ‘unity of command’ and ‘equity’ as principles of general management. (Delhi 2017)
Answer:
Unity of command According to this principle, one subordinate should receive orders from one superior only at a given point of time. The principle is necessary to avoid confusion and conflict. Equity The principle of equity implies a sense of fairness and justice to all workers working in an organisation. Observance of equity alone would make workers loyal and devoted to the organisation. Equity does not mean equal salary to a peon and supervisor.

But equity means application of same disciplinary rules, leave rules, etc irrespective of their grade, position and gender, language, religion or nationality, etc.

Question 34.
Explain briefly ‘discipline’ and ‘scalar chain’ as principles of general management. (Delhi 2017)
Answer:
Discipline According to Fayol, discipline is obedience, application and outward mark of respect. It is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.

Scalar chain It is the chain of superiors ranking from the top to the lowest ranks. The principle of scalar chain suggests that there should be a clear line of authority from top to bottom linking managers at all levels. The scalar chain serves as the chain of command and also as the chain of communication. Under the chain of command, orders and instructions, issued at higher levels, flow through intermediate managers before reaching the lower levels.

Question 35.
Explain ‘order’ and ‘initiative’ as principles of general management. (Delhi 2017)
Answer:
Order: According to Fayol, ‘People and material must be in suitable place at appropriate time for maximum efficiency’. This principle states that there should be a place for everything and everyone in an organisation and that thing or person should be found at its alloted place. This will lead to increased productivity and efficiency.

Initiative: According to Fayol, ‘Initiative means taking the first step with self motivation, it is thinking out and executing the plan’. It is one of the traits of an intelligent person. Initiative should be encouraged because employees get satisfaction when they are allowed to take initiative. But it does not mean going against the established practices of the company for the sake of being different.

Question 36.
Name and explain the principle of management according to which a manager should replace T with ‘We’ in all his’conversation with workers? (Delhi 2013)
Answer:
Esprit de corps: It is the principle of management, according to which a manager should replace ‘I’ with ‘We’ in all his conversation with workers. Literally speaking, the phrase ‘esprit de corps’ means the spirit of loyalty and devotion which unites the members of the group.

According to Fayol, management should promote a team spirit of unity and harmony among employees. A manager should replace T with ‘We’ in all his conversations with workers to foster team spirit. This will give rise to a spirit of mutual trust and belongingness among team members.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 37.
Explain ‘harmony, not discord’ as a principle of scientific management? (Delhi 2013)
Answer:
According to this principle, there should be complete harmony between the management and the workers working in an organisation. To support this, Taylor advocated a complete ‘mental revolution’, i.e. change in the attitude of both workers and management towards one another, from competition to cooperation. Both should realise the importance of each other.

Question 38.
Explain ‘cooperation, not individualism’ as a principle of scientific management? (Delhi 2013)
Answer:
‘Cooperation, not individualism’ is a principle of scientific management which states that there should be complete cooperation between the workers and management in an oganisation instead of individualism and competition. In the absence of constant and willing cooperation between the two sides, maximum prosperity for both the parties cannot be achieved.

Question 39.
Explain how principles of management:
(i) provide useful insight into reality and
(ii) help in thoughtful decision-making (Delhi 2012)
Answer:
(i) Provide useful insight into reality The principles of management provide useful insight into real world situations. Managers may apply these principles to fulfil their tasks and responsibilities. These principles guide the managers in taking and implementing thoughtful decisions.

(ii) Thoughtful decision-making These principles help in enhancing knowledge, ability and understanding of managerial situations and circumstances. They must be timely, realistic and subject to measurement and evaluation. They emphasise logic rather than blind faith and are free from bias and prejudice.

Question 40.
Explain how principles of management:
(i) help in optimum utilisation of resources and effective administration, and
(ii) help the managers in meeting changing environment requirements. (All India 2012)
Answer:
(i) Principles of management help in optimum utilisation of resources by equipping managers to foresee the cause and effect relationship of their decisions and actions, as such the wastage associated with a trial and error approach can be overcome.
Principles of management help in effective administration by limiting the boundaries of management discretion so that their decisions may be free from personal prejudice and bias.

(ii) Principles of management help the managers in meeting changing environment requirements because they can be modified according to the changes taking place in the environment, e.g. the principle of division of work has now been extended to the entire business. Therefore, companies are focusing on their competency and outsourcing non-core business.

Question 41.
Explain how principles of management:
(i) help the managers in taking scientific decisions, and
(ii) provide the managers with useful insights into real world situations. (All India 2012)
Answer:
(i) Scientific decisions The knowledge of management principles enables managers to learn the cause and effect relationship between variables operating in the organisation. They are able to develop a scientific and objective approach towards problem solving and decision-making.

(ii) Provide the manager with useful insight into reality Management principles act as guidelines for the managers. These principles improve knowledge, ability and understanding of managers under various managerial situations. The effects of these principles help the managers to learn from their mistakes.

Question 42.
Name and explain the technique of scientific management which helps in establishing interchangeability of manufactured parts and products. (All India 2010: Delhi 2010)
Answer:
Standardisation is the process of setting standards for every business activity process, raw materials, time, product and machinery.
Taylor advocated the standardisation of tools, and equipment, cost system and several other items.
The objectives of standardisation are:

  • To reduce a given line or product to fixed types.
  • To establish interchangeability of manufactured parts and products.
  • To establish quality standards.
  • To establish performance standards of men and machines.

Question 43.
Name and explain the principle of management which requires judicious application of penalties by the management. (All India 2010; Delhi 2010)
Answer:
Discipline According to Fayol, discipline is obedience, application and outward mark of respect. It is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 44.
Name and explain the principle of management in which workers should be encouraged to develop and carry out their plans for improvement in the organisation. (Delhi (C) 2010)
Answer:
Initiative According to Fayol, ‘Initiative means taking the first step with self motivation, it is thinking out and executing the plan’. It is one of the traits of an intelligent person. Initiative should be encouraged because employees get satisfaction when they are allowed to take initiative. But it does not mean going against the established practices of the company for the sake of being different.

Question 45.
State any four or five features of principles of management. (All India 2019,2015; Delhi 2019,2015: Compartment 2012)
Or
Explain any five characteristics which reflect the nature of principles of management. (Delhi (C) 2010)
Answer:
Management principles are broad and general guidelines for decision-making and behaviour. Following features highlight the characteristics of management principles:
(i) Universal application Management principles are applied in every situation where the objectives are attained through group efforts. All social, economic, political or ‘ religious organisations apply management principles for their successful operations. Every organisation must make the best possible use of its available resources by the application of management principles alongwith managerial functions such as planning, organising, staffing, directing and controlling.

(ii) Flexibility: The principles of management are not rigid prescriptions, which have to be followed absolutely. They are flexible and can be modified by the manager when the situation so demands. They give the manager enough discretion to do so.

(iii) General statements: Management principles are concerned with human behaviour which cannot be tested under laboratory conditions. Human behaviour cannot be predicted accurately. Therefore, management principles are not as exact as the principles of physical science.

(iv) Influencing human behaviour Human element is an essential factor of production. It activates and extracts work from other factors also. Each person is different from other as regards to his ability, knowledge, skills, social status, attitudes and ideologies. Management is concerned with the integration of individual efforts.

(v) Cause and effect relationship Management principles also form a cause and effect relationship. It indicates the consequences of certain actions or inactions in the business, e.g. if wages are paid on piece rate system, the quantity of work will increase but the quality will suffer. The principle of unity of command will avoid confusion, duplication and overlapping of work.

Question 46.
State any four points which highlight the importance of principles of management. (All India 2019, 2015)
Or
What is meant by principles of management? State any three points of their importance. (Delhi 2015)
Or
Explain how principles of management:
(i) help in optimum utilisation of resources and effective administration and
(ii) help in the thoughtful decision-making. (Foreign 2012)
Answer:
Management principles are essential for the successful running of business organisation. These principles are guidelines to management. They highlight the areas where the management should pay immediate attention. These principles simplify the process of management, increase the overall efficiency of management and help in the achievement of objectives.

The significance of management principles can be summarised as follows:
(i) Provide the manager with useful insight into reality Management principles act as guidelines for the managers. These principles improve knowledge, ability and understanding of managers under various managerial situations. The effects of these principles help the managers to learn from their mistakes.

(ii) Optimum utilisation of resources Several principles of management aim at optimum utilisation of all types of resources for the attainment of organisational goals, e.g. principles of division of work, discipline, unity of direction, order, etc facilitate better utilisation of human efforts and physical resources.

(iii) Scientific decisions The knowledge of management principles enables managers to learn the cause and effect relationship between variables operating in the organisation. They are able to develop a scientific and objective approach towards problem solving and decision-making.

(iv) Meeting changing environment requirements Every businessman has to cope up with the changes that are taking place in the business environment. Management principles train the managers to implement the changes in right direction and at right level in the organisation.

(v) Fulfilling social responsibility A manager is able to achieve efficiency and economy in the activities of his enterprise by applying management principles. These principles are aimed at maximising profits without loss of social value. In other words, management principles seek to ensure that the resources of the society are utilised fully and good quality products at fair prices are made available to society.

Question 47.
Explain the following techniques of scientific management.
(a) Fatigue study
(b) Differential piece wage system (Delhi 2019)
Answer:
(a) Fatigue study Fatigue in work is natural. When the worker is given continuous work, he will get tired and lose speed and efficiency. He needs rest after working for a few hours. Scientific management studies the nature of work to determine the standard time for finishing the job and to find out when the workers need rest. The nature, time and period of rest are pre-determined. Necessary changes should also be made in the working methods and conditions to reduce fatigue.

(b) Taylor wanted to differentiate between efficient and inefficient workers. Under this system of wage payment, wages are paid on the basis of work done. According to him, higher rates were given to the workers who are producing standard products or more and lower rates were given to those who are producing less. e.g.
Standard output = 100 units/day
Wage rate 1 = ₹ 10/unit for standard output (100 units) or more
Wage rate 2 = ₹ 7/unit for below standard output
Worker 1 = Output 99 units
Wages = 99 × 7 = ₹ 693
Worker 2 = Output 101 units
Wages = 101 × 10 = ₹ 1010
Thus, a difference of ₹ 317 (1,010 – 693), for different of 2 units is enough to motivate the inefficient work for more output.

Question 48.
Explain the following principles of scientific management:
(a) Harmony, not discord
(b) Development of each and every person to his or her greatest efficiency and prosperity. (Delhi 2019)
Answer:
(a) Taylor believed ‘management should share the gains with workers’. This has been emphasised by the principle of ‘harmony, not discord’, which also emphasised on mental revolution.

Harmony, not discord The interests of the employers and employees should be fully harmonised so as to create a good relationship. Taylor emphasised that there should be complete harmony between the management and workers. This requires a transformation in the thinking of both, which can be achieved through mental revolution.

Management should share the gains of the company with the workers. At the same time, workers should work and embrace changes. Taylor beleived in, that prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice-versa.

In the same way, Fayol’s principle of ‘remuneration of employees’ suggested that the employees compensation should depend on the earning capacity of the company and should give them a reasonable standard of living. Remuneration of employees According to Fayol, the quantum and methods of remuneration payable to employees should be fair and reasonable. It should be satisfactory to both employers and employees. Thus, we can say that Taylor’s and Fayol’s principles are mutually complementary.

(b) Development of each and every person to his/her greatest efficiency and prosperity Industrial efficiency depends upon the efficiency of workers and worker’s efficiency depends upon proper training and their proper selection. Taylor suggested that due care should be taken while selecting the employees and after selection, they must be given job according to their physical, mental and intellectual capabilities. Employees must be sent for training from time to time to update their knowledge. This will ensure greatest efficiency and prosperity for both workers and management.

Question 49.
Deewan Ltd. is a multinational consulting company with its headquarters at Washington D.C. It hires young people from different countries of the world.
It is a company in which people dream to work because of its work environment, pay and growth prospectus. The company has a culture of open communication and people of various nationalities work together in a discrimination free environment. The behaviour of managers of Deewan Ltd. emphasises kindliness and justice which ensures loyality and devotion of workers.
It also promotes mutual trust and belongingness among team members. In this way, management of Deewan Ltd. is able to achieve its objectives by promoting teamwork. By doing so managers of Deewan Ltd. are following some principles of management. Identify and explain any two such principles. (Comportment 2018)
Answer:
The principles followed are:

  • Initiative
  • Esprit de corps

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 50.
Sanket, after completing his entrepreneurship course from U.S.A. returned to India and started a coffee shop ‘Fioma Coffee’ in a famous mall in Mumbai. The speciality of the coffee shop was the special aroma of coffee and a wide variety of flavours to choose from. Somehow, the business was neither profitable nor pupular. Sanket was keen to find out the reason. He appointed Riya, an MBA from a reputed management institute as a manager to find out the causes of the business not doing well. Riya, took a feedback from the clients and found out that though they loved the special unique aroma of coffee but were not happy with the long waiting time being taken to process the order. She analysed and found out that there were many unnecessary obstructions which could be eliminated. She fixed a standard time for processing order. She also realised that there were many flavours whose demand was not enough. So, she also decided to discontinue the sale of such flavours. As a result, within a short period Riya was able to attract the customers. Identify and explain any two techniques of scientific management used by Riya to solve the problem. (All India 2017; Delhi 2017)
Answer:
The two techniques of scientific management used by Riya are:
(i) Time study It refers to determine the standard time required to complete a particular activity. The standard time is determined on the basis of average time taken to complete the work. This study is conducted with the help of a stop watch. The main objective of this study is to get the estimated figure of labour cost to determine the number of required workers and to decide the suitable incentive plan.

(ii) Simplification It helps in eliminating unnecessary diversity of products and thus, results in saving cost. It aims at eliminating superfluous varieties, sizes and dimensions. It leads to reduction in wastage of inventories, fuller utilisation of equipment and increased turnover.

Question 51.
Principles of Taylor and Fayol are mutually complementary. One believed that management should not close its ears to constructive suggestions made by the employees while the other suggested that a good company should have an employee suggestion system, whereby suggestions which result in substantial time or cost reduction should be rewarded.
Identify and explain the principles of Taylor and Fayol referred in the above para. (Delhi 2014)
Answer:
Cooperation and individualism Management should not close its ears to constructive suggestions made by the employees, is related with the principle of Taylor, i.e. ‘cooperation not individualism’. This principle is an extension of principle of harmony. Competition should be replaced by cooperation. Management and workers both should realise that they need each other. For this, management should entertain the constructive suggestions of employees and at the same time, workers should also cooperate with management.

Initiative Another principle is related with Fayol, i.e. ‘initiative’ in which he suggested that employees at all levels should take initiatives or actions without any force or boundations. This will help to motivate them and they will work hard for the betterment of the organisation. He stressed that a good company should have an employee suggestion system where by initiatives/ suggestions which result in substantial cost/time reduction should be awarded.

Question 52.
Principles of Taylor and Fayol are mutually complementary. One believed that the management should share the gains with the workers, while the other suggested that employees compensation should depend on the earning capacity of the company and should give them a reasonable standard of living.
Identify and explain the principles of Fayol and Taylor referred to in the above para. (All India 2014)
Answer:
Taylor believed ‘management should share the gains with workers’. This has been emphasised by the principle of ‘harmony, not discord’, which also emphasised on mental revolution.

Harmony, not discord The interests of the employers and employees should be fully harmonised so as to create a good relationship. Taylor emphasised that there should be complete harmony between the management and workers. This requires a transformation in the thinking of both, which can be achieved through mental revolution.

Management should share the gains of the company with the workers. At the same time, workers should work and embrace changes. Taylor beleived in, that prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice-versa.

In the same way, Fayol’s principle of ‘remuneration of employees’ suggested that the employees compensation should depend on the earning capacity of the company and should give them a reasonable standard of living. Remuneration of employees According to Fayol, the quantum and methods of remuneration payable to employees should be fair and reasonable. It should be satisfactory to both employers and employees. Thus, we can say that Taylor’s and Fayol’s principles are mutually complementary.

Question 53.
Principles of Taylor and Fayol are mutually complementary. One believed that the management should scientifically select the person and the work assigned should suit his/her physical and intellectual capabilities, while the other suggested that the work can be performed more efficiently if divided into specialised tasks. Identify and explain the principles of Fayol and Taylor referred to in the above para. (Foreign 2014)
Answer:
The principle of Fayol referred to in the above para is division of work. Division of work Every employee should be assigned only one type of work. It means that total work is divided into small tasks/jobs and a trained specialist performs each job. The objective of division of labour derive the benefits from the principle of specialisation which can be applied to all work.

For example, publishing of a book involves several operations like computer typing of text material, proof reading, printing, binding, etc. All the operations are performed by different people who are experts in their respective field.

The principle of Taylor referred to in the above para is development of each and every person to his/her greatest efficiency and prosperity. Development of each and every person to his/her greatest efficiency and prosperity Industrial efficiency depends upon the efficiency of workers and worker’s efficiency depends upon proper training and their proper selection. Taylor suggested that due care should he taken while selecting the employees and after selecti on, they must be given job according to their physical, mental and intellectual capabilities. Employees must be sent for training from time to time to update their knowledge. This will ensure greatest efficiency and prosperity for both workers and management.

Question 54.
Explain ‘harmony not discord’ as a principle and ‘fatigue study’ as a technique of scientific management. (Comportment 2013)
Answer:
Taylor believed ‘management should share the gains with workers’. This has been emphasised by the principle of ‘harmony, not discord’, which also emphasised on mental revolution.

Harmony, not discord The interests of the employers and employees should be fully harmonised so as to create a good relationship. Taylor emphasised that there should be complete harmony between the management and workers. This requires a transformation in the thinking of both, which can be achieved through mental revolution.

Management should share the gains of the company with the workers. At the same time, workers should work and embrace changes. Taylor beleived in, that prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice-versa.

In the same way, Fayol’s principle of ‘remuneration of employees’ suggested that the employees compensation should depend on the earning capacity of the company and should give them a reasonable standard of living. Remuneration of employees According to Fayol, the quantum and methods of remuneration payable to employees should be fair and reasonable. It should be satisfactory to both employers and employees. Thus, we can say that Taylor’s and Fayol’s principles are mutually complementary.

Fatigue study:
Fatigue in work is natural. When the worker is given continuous work, he will get tired and lose speed and efficiency. He needs rest after working for a few hours. Scientific management studies the nature of work to determine the standard time for finishing the job and to find out when the workers need rest. The nature, time and period of rest are pre-determined. Necessary changes should also be made in the working methods and conditions to reduce fatigue.

Question 55.
Explain ‘science, not rule of thumb’ as a principle and ‘time-study’ as a technique of scientific management. (compartment 2013)
Answer:
Science, not rule of thumb:
Taylor has emphasised that in scientific management, organised knowledge should be applied, which will replace the rule of thumb. Scientific investigations should be used for taking managerial decisions instead of making the decisions on opinions, intuitions, estimates, prejudices, likes and dislikes, etc. Under scientific management, decisions are made on the basis of facts developed by the application of scientific methods.

Time study:
Time study It refers to determine the standard time required to complete a particular activity. The standard time is determined on the basis of average time taken to complete the work. This study is conducted with the help of a stop watch. The main objective of this study is to get the estimated figure of labour cost, to determine the number of required workers and to decide the suitable incentive plan.

Question 56.
Explain the technique of scientific management, i.e. the extension of principle of division of work and specialisation. (Delhi 2012)
Or
Explain the technique of scientific management which separates the planning and execution work. (Foreign 2012)
Answer:
Functional foremanship It is an extension of the principles of division of work and specialisation. The term, functional foremanship means separation of planning from execution. Each worker is supervised by various specialists. For this, Taylor suggested that under the factory manager, there is a planning incharge and a production incharge. The main function of the planning incharge is to plan all aspects of a job to be performed.

Under planning incharge, following four personnel are appointed:

  • Route clerk
  • Instmction card clerk
  • Time and cost clerk
  • Disciplinarian

Under production incharge, following four personnel are appointed who are concerned with the execution of the plans:

  • Gang boss
  • Speed boss
  • Repair boss
  • Inspector

Question 57.
Explain that technique of scientific management which is the strongest motivator for a worker to reach standard performance. (All India 2012)
Answer:
Differential piece wage system is the strongest motivator for a worker to reach standard performance. It is a method of wage payment in which efficient and inefficient workers are paid at different rates. In this method, increase in efficiency is co-related with an increase in the wage rate. That is why, an efficient worker gets more wages, whereas, an inefficient worker gets less.

Workers are paid on the basis of number of units produced. If a worker produces more than a certain number of units (standard output), he gets higher wage per piece/units, on his total output. If he produces below the standard number, he gets lower rate per piece. Because of different rates of wage for different sets of workers, this is known as differential piece rate plan.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 58.
Explain the technique of ‘simplification and standardisation of work’ given by Taylor. (Compartment 2012)
Answer:
Simplification means eliminating superfluous sizes, varieties and dimensions. Its aim is to:

  • eliminate unnecessary diversity of products and thereby reduce costs.
  • help in achieving economy in the use of required machines and tools.

Standardisation of work is the technique of scientific management, which helps in establishing interchangeability of manufactured parts and products. It is the process of setting standards for every business activity, process, raw materials, time, machinery and methods to achieve efficiency. Standardisation of product implies that the size, design, quality, shape, etc of the product should meet the requirements and tastes of consumers.

The objectives of standardisation are:

  • To maintain quality standards.
  • To set up performance standards for men.
  • To provide interchangeability of manufacture and products.
  • To achieve target production.

Question 59.
Explain with the help of an example ‘differential piece wage system’ given by Taylor. (Compartment 2012)
Answer:
Taylor wanted to differentiate between efficient and inefficient workers. Under this system of wage payment, wages are paid on the basis of work done. According to him, higher rates were given to the workers who are producing standard products or more and lower rates were given to those who are producing less. e.g.
Standard output = 100 units/day
Wage rate 1 = ₹ 10/unit for standard output (100 units) or more
Wage rate 2 = ₹ 7/unit for below standard output
Worker 1 = Output 99 units
Wages = 99 × 7 = ₹ 693
Worker 2 = Output 101 units
Wages = 101 × 10 = ₹ 1010
Thus, a difference of ₹ 317 (1,010 – 693), for different of 2 units is enough to motivate the inefficient work for more output.

Question 60.
Explain the following techniques of scientific management: (Compartment 2012)
(i) Time study
(ii) Motion study
Or
Explain the techniques of ‘method study’ and ‘motion study’ given by Taylor. (Comportment 2012)
Answer:
The ultimate aim of scientific management is to maximise production at the minimum cost.

Scientific management is introduced through the techniques of work study, standardisation, simplification, functional foremanship etc. Following are the five techniques of scientific management:
(i) Time study: It refers to determine the standard time required to complete a particular activity. The standard time is determined on the basis of average time taken to complete the work. This study is conducted with the help of a stop watch. The main objective of this study is to get the estimated figure of labour cost, to determine the number of required workers and to decide the suitable incentive plan.

(ii) Motion study: This is the analysis of physical movements in doing a work. Every work involves various forms of human movements such as lifting, holding, turning, etc. Under motion study, each movement is analysed to find out easier ways of doing the work and eliminate useless motions.
Following steps are involved in motion study:

  • Selection of efficient workers.
  • Analysis of the motions involved in a work.
  • Finding the minimum time involved in doing a work.
  • Keeping record of the best moves and unnecessary/unproductive actions.

(iii) Method study: It refers to identifying the most suitable way to do a particular activity. To conduct this study, process chart and operation research techniques are used. The main objective of this study is to minimise the cost of production and maximise the quality and level of consumer satisfaction.

(iv) Fatigue study: Fatigue in work is natural. When the worker is given continuous work, he will get tired and lose speed and efficiency. He needs rest after working for a few hours. Scientific management studies the nature of work to determine the standard time for finishing the job and to find out when the workers need rest. The nature, time and period of rest are pre-determined. Necessary changes should also be made in the working methods and conditions to reduce fatigue.

(v) Functional foremanship: Taylor suggested functional foremanship for better supervision of workers. Under functional foremanship, there are specialist foremen for each job. He classified specialist foremen into two departments, namely planning and production departments. Both the departments have eight foremen in all.
The names and functions of these foremen are as follows:
(a) Planning Department:
Route clerk Determining the process of production and the route through which the raw materials will pass.
Instruction card clerk Laying down instructions according to which the workers are required to, perform work.
Time and cost clerk Setting the time table for doing a job as per the pre-determined route and time schedule. He specifies the material and labour cost with respect to each operation.
Disciplinarian Maintaining proper discipline in the factory.

(b) Production Department
Gang boss Arranging machines, materials, tools, workers, etc for the job.
Speed boss Maintaining the planned speed of . production, investigating the causes for delay and remove them.
Repair boss Maintenance of the machines and equipments, proper arrangements for their oiling, greasing, cleaning and repair, preventing misuse of machines, etc.
Inspectors Seeing that the work confirms to the standard of quality laid down by the planning department.

Question 61.
Explain any two techniques of Taylor’s scientific management. (All India 2011; Delhi 2011)
Answer:
Two techniques of Taylor’s scientific management are as follows:
(i) Functional foremanship:
It is an extension of the principles of division of work and specialisation. The term, functional foremanship means separation of planning from execution. Each worker is supervised by various specialists. For this, Taylor suggested that under the factory manager, there is a planning incharge and a production incharge. The main function of the planning incharge is to plan all aspects of a job to be performed.

Under planning incharge, following four personnel are appointed:

  • Route clerk
  • Instmction card clerk
  • Time and cost clerk
  • Disciplinarian

Under production incharge, following four personnel are appointed who are concerned with the execution of the plans:

  • Gang boss
  • Speed boss
  • Repair boss
  • Inspector

(ii) Standardisation and simplification:
Standardisation refers to the process of setting standards for every business activity. It can be standardisation of process, raw material, time, product, machinery, methods or working conditions. These standards are the benchmarks which must be adhered during production. Simplification aims at eliminating unnecessary varieties, sizes and dimensions of products. It results in saving of cost of labour, machines and tools.

Question 62.
Explain the concept of ‘functional foremanship’ and ‘mental revolution’ in scientific management as enunciated hy ‘Taylor’. (Delhi (C) 2011)
Answer:
Fuiictional foremanship:
Two techniques of Taylor’s scientific management are as follows:
(i) Functional foremanship:
It is an extension of the principles of division of work and specialisation. The term, functional foremanship means separation of planning from execution. Each worker is supervised by various specialists. For this, Taylor suggested that under the factory manager, there is a planning incharge and a production incharge. The main function of the planning incharge is to plan all aspects of a job to be performed.

Under planning incharge, following four personnel are appointed:

  • Route clerk
  • Instmction card clerk
  • Time and cost clerk
  • Disciplinarian

Under production incharge, following four personnel are appointed who are concerned with the execution of the plans:

  • Gang boss
  • Speed boss
  • Repair boss
  • Inspector

Mental revolution Mental refers to mind and revolution refers to radical change. Therefore, mental revolution refers to a change of mind. According to Taylor, scientific management, in its essence, involves a complete mental revolution on the part of both sides of industry, viz workers and management.

No scheme of scientific management could be a success, unless and until both these groups fully cooperate with each other through developing and maintaining best friendly relations. This requires a mental revolution on the part of management and workers by giving up an attitude of hostility and enmity towards each other.

Question 63.
Explain any two principles of Taylor’s scientific management. (Foreign 2011; Delhi 2011)
Or
Explain any three principles of scientific management. (All India 2019)
Answer:
Principles of scientific management are as follows (any two):
(i) Science, not rule of thumb Taylor has emphasised that in scientific management, organised knowledge should be applied, which will replace the rule of thumb. Scientific investigations should be used for taking managerial decisions instead of making the decisions on opinions, intuitions, estimates, prejudices, likes and dislikes, etc. Under scientific management, decisions are made on the basis of facts developed by the application of scientific methods.

(ii) Harmony, not discord (Conflict) There should be harmony between the management and the workers. This requires change of mental attitudes of the workers and the management towards each other. Taylor called it mental revolution.

Management should share gains of the company with workers. They should create suitable working conditions and resolve all problems scientifically. Menial revolution on the part of workers require that they should be disciplined, loyal and sincere in fulfilling the tasks assigned to them. Instead of fighting for dividing surplus or profit, the management and workers should cooperate to increase it.

(iii) Cooperation, not individualism There should be cooperation between workers and management. It is only through cooperation with workmen, the managers can ensure that work is carried out according to plans. Cooperation is based on mutual faith so managers should develop understanding with workers to secure the cooperation.

(iv) Development of each and every person to his/her greatest efficiency and prosperity Industrial efficiency depends upon the efficiency of workers and worker’s efficiency depends upon proper training and their proper selection. Taylor suggested that due care should be taken while selecting the employees and after selection, they must be given job according to their physical, mental and intellectual capabilities. Employees must be sent for training from time to time to update their knowledge. This will ensure greatest efficiency and prosperity for both workers and management.

(v) Maximum output in place of restricted output The aim of both management and the workers should be to maximise output. This should be done by both parties in their own self interest. For management, increased production means more profits and lower cost of production. For workers, increased output may offer attractive wages. In this way, self interest implies both management and the workers to achieve maximum output. Maximum output will also be in the interest of the society.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 64.
Explain Fayol’s principles of ‘equity’ and ‘order’ with examples. (All India 2011; Foreign 2011)
Answer:
(i) Equity The principle of equity implies a sense of fairness and justice to all workers working in an organisation. Observance of equity alone would make workers loyal and devoted to the organisation. Equity does not mean equal salary to a peon and supervisor.

But equity means application of same disciplinary rules, leave rules, etc irrespective of their grade, position and gender, language, religion or nationality, etc. For example, the rules for granting medical leave to an employee should be same irrespective of their position, grade or gender.

(ii) Order According to Fayol, ‘People and material must be in suitable place at appropriate time for maximum efficiency’. This principle states that there should be a place for everything and everyone in an organisation and that thing or person should be found at its alloted place. This will lead to increased productivity and efficiency.
For example, raw material should be available at the place prescribed for it.

Question 65.
Explain the following principles of Fayol with the help of one example for each
(i) Discipline
(ii) Unity of command (Delhi (C) 2011)
Answer:
(i) Discipline Discipline is obedience, application and outward mark of respect. It means obedience to the rules of the organisation on the part of both superiors and subordinates. Discipline is necessary for the smooth running of the organisation. According to Fayol, ‘Discipline requires good superiors at all levels, clear and fair agreement and judicious application of penalties’. Discipline does not mean only rules and regulations but it also means development of commitment on the part of employees towards organisation as well as towards each other.

For example, in XYZ Ltd, management and labour union have entered into an agreement whereby workers have agreed to revive the business out of loss. In return, management would raise the wages of workers. Here ‘discipline’ means the workers and management both will honour their commitments.

(ii) Unity of command A subordinate should receive orders from one superior only at a given point of time. According to this principle, one subordinate should receive orders from one superior only at a given point of time. The principle is necessary to avoid confusion and conflict. i
For example, if a subordinate receives orders from more than one superior in an organisation he will not be able to carryout multiple orders in a proper manner and thus, would be unable to satisfy his superiors. The subordinate would be in a confused state, as to whose orders should be followed. The principle of unity of command has been shown in the following diagram
Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2 Img 2

Question 66.
Explain Fayol’s principles of ‘Scalar chain’ and ‘Discipline’ with the help of examples. (Foreign 2011)
Answer:
(i) Scalar chain It is the chain of superiors ranking from the top to the lowest ranks. The principle of scalar chain suggests that there should be a clear line of authority from top to bottom linking managers at all levels. The scalar chain serves as the chain of command and also as the chain of communication. Under the chain of command, orders and instructions, issued at higher levels, flow through intermediate managers before reaching the lower levels. The chain should not be violated in normal course of formal comipunication. However, in emergency, communication can take place between two people working at the same level but in different departments, through gang plank.

(ii) Discipline Discipline is obedience, application and outward mark of respect. It means obedience to the rules of the organisation on the part of both superiors and subordinates. Discipline is necessary for the smooth running of the organisation. According to Fayol, ‘Discipline requires good superiors at all levels, clear and fair agreement and judicious application of penalties’. Discipline does not mean only rules and regulations but it also means development of commitment on the part of employees towards organisation as well as towards each other.

Question 67.
Explain the following principles of Fayol with the help of one example of each.
(i) Division of work
(ii) Unity of direction (All India 2011; Delhi (C) 2011)
Answer:
(i) Division of work Every employee should be assigned only one type of work. It means that total work is divided into small tasks/jobs and a trained specialist performs each job. The objective of division of labour derive the benefits from the principle of specialisation which can be applied to all work.
For example, publishing of a book involves several operations like computer typing of text material, proof reading, printing, binding, etc. All the operations are performed by different people who are experts in their respective field.

(ii) Unity of direction ‘One unit and one plan’ for the group of activities having the same objective. This principle implies that there should be one head and one plan for a group of activities having the same objective. It means that the efforts of members of the organisation should be directed towards the achievement of a common goal. For example, the mission of a company is to provide quality products at an affordable prices to the customers. This should serve as a direction for all the departments, namely, purchasing, financing, quality control and marketing.

Question 68.
Explain the following principles of Fayol with the help of one example for each.
(i) Scalar chain
(ii) Stability of tenure of personnel (All India 2011)
Answer:
(i) Scalar chain It is the chain of superiors ranking from the top to the lowest ranks. The principle of scalar chain suggests that there should be a clear line of authority from top to bottom linking managers at all levels. The scalar chain serves as the chain of command and also as the chain of communication. Under the chain of command, orders and instructions, issued at higher levels, flow through intermediate managers before reaching the lower levels. The chain should not be violated in normal course of formal communication.
Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2 Img 3

However, in emergency, communication can take place between two people working at the same level but in different departments, through gang plank. For example, if in XYZ Ltd, E wants to communicate with R. He will have to follow the path in chain like first he delivers information to D, then D to C, B, A, M, N, O and at last E transfers the message to R. But in case of emergency, E can directly contact with R according to the concept of gang plank.

(ii) Stability of tenure of personnel According to this principle, there should be a reasonable security of jobs. Labour turnover should be minimised to maintain organisational efficiency. Personnel should be selected and appointed after due and rigorous procedure.

But once selected, they should be kept at their post/position for a minimum fixed tenure. They should be given reasonable time to show results. Any adhodsm in this regard will create unstability/insecurity among employees. They would tend to leave the organisation. Under this situation, recruitment, selection and training cost will be high.

eg. If Amav is hired for the post of executive in a company, then, according to this principle, he should be kept on the same position for a fixed tenure say for 1 year, so that he can show results.

Question 69.
(i) Name and explain the principle of management in which workers should be encouraged to develop and carry out their plans for improvements in the organisation.
(ii) Name and explain the technique of scientific management which is an extension of the principle of division of work and specialisation. (Foreign 2010)
Answer:
(i) Principle of initiative According to Fayol, ‘Initiative means taking the first step with self motivation, it is thinking out and executing the plan’. It is one of the traits of an intelligent person. Initiative should be encouraged because employees get satisfaction when they are allowed to take initiative. But it does not mean going against the established practices of the company for the sake of being different.

(ii) Functional foremanship Taylor suggested functional foremanship for better supervision of workers. Under functional foremanship, there are specialist foremen for each job. He classified specialist foremen into two departments, namely planning and production departments. Both the departments have eight foremen in all The names and functions of these foremen are as follows:
(a) Planning Department:
Route clerk Determining the process of production and the route through which the raw materials will pass.
Instruction card clerk Laying down instructions according to which the workers are required to perform work.
Time and cost clerk Setting the time table for doing a job as per the pre-determined route and time schedule. He specifies the material and labour cost with respect to each operation. Disciplinarian Maintaining proper discipline in the factory.

(b) Production Department:
Gang boss Arranging machines, materials, tools, workers, etc for the job.
Speed boss Maintaining the planned speed of production, investigating the causes for delay and remove them.
Repair boss Maintenance of the machines and equipments, proper arrangements for their oiling, greasing, cleaning and repair, preventing misuse of machines, etc.
Inspectors Seeing that the work confirms to the standard of quality laid down by the planning department.

Question 70.
Explain following techniques of scientific management.
(a) Time study
(b) Motion study
(c) Function foremanship (All India 2019; Delhi 2019)
Answer:
(a) Time study: It refers to determine the standard time required to complete a particular activity. The standard time is determined on the basis of average time taken to complete the work. This study is conducted with the help of a stop watch. The main objective of this study is to get the estimated figure of labour cost, to determine the number of required workers and to decide the suitable incentive plan.

(b) Motion study: This is the analysis of physical movements in doing a work. Every work involves various forms of human movements such as lifting, holding, turning, etc. Under motion study, each movement is analysed to find out easier ways of doing the work and eliminate useless motions.
Following steps are involved in motion study:

  • Selection of efficient workers.
  • Analysis of the motions involved in a work.
  • Finding the minimum time involved in doing a work.
  • Keeping record of the best moves and unnecessary/unproductive actions.

(c) Functional foremanship Taylor suggested functional foremanship for better supervision of workers. Under functional foremanship, there are specialist foremen for each job. He classified specialist foremen into two departments, namely planning and production departments. Both the departments have eight foremen in all The names and functions of these foremen are as follows:
(a) Planning Department:
Route clerk Determining the process of production and the route through which the raw materials will pass.
Instruction card clerk Laying down instructions according to which the workers are required to perform work.
Time and cost clerk Setting the time table for doing a job as per the pre-determined route and time schedule. He specifies the material and labour cost with respect to each operation. Disciplinarian Maintaining proper discipline in the factory.

(b) Production Department:
Gang boss Arranging machines, materials, tools, workers, etc for the job.
Speed boss Maintaining the planned speed of production, investigating the causes for delay and remove them.
Repair boss Maintenance of the machines and equipments, proper arrangements for their oiling, greasing, cleaning and repair, preventing misuse of machines, etc.
Inspectors Seeing that the work confirms to the standard of quality laid down by the planning department.

Question 71.
Explain following principles of general management.
(a) Division of work
(b) Authority and responsibility
(c) Discipline (All India 2019)
Answer:
(a) Division of work Every employee should be assigned only one type of work. It means that total work is divided into small tasks/jobs and a trained specialist performs each job. The objective of division of labour derive the benefits from the principle of specialisation which can be applied to all work.
For example, publishing of a book involves several operations like computer typing of text material, proof reading, printing, binding, etc. All the operations are performed by different people who are experts in their respective field.

(b) Authority and responsibility Authority means the right to give orders and obtain obedience. On the other hand, responsibility means obligation to complete the assigned task on time. According to Fayol, there must be a balance between authority and responsibility. Excess of authority without matching responsibility may result in misuse of authority, whereas excess responsibility without adequate authority may lead to failure of organisational goals.

(c) Discipline: Discipline is obedience, application and outward mark of respect. It means obedience to the rules of the organisation on the part of both superiors and subordinates. Discipline is necessary for the smooth running of the organisation. According to Fayol, ‘Discipline requires good superiors at all levels, clear and fair agreement and judicious application of penalties’. Discipline does not mean only rules and regulations but it also means development of commitment on the part of employees towards organisation as well as towards each other.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 72.
Explain the following principles of general management.
(a) Unity of command
(b) Subordination of individual interest to general interest
(c) Stability of personnel (All India 2019)
Answer:
(a) Unity of command A subordinate should receive orders from one superior only at a given point of time. According to this principle, one subordinate should receive orders from one superior only at a given point of time. The principle is necessary to avoid confusion and conflict.
For example, if a subordinate receives orders from more than one superior in an organisation he will not be able to carryout multiple orders in a proper manner and thus, would be unable to satisfy his superiors. The subordinate would be in a confused state, as to whose orders should be followed. The principle of unity of command has been shown in the following diagram
Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2 Img 4

(b) Subordination of individual interest to general interest The interest of an organisation is to achieve its goals. These goals are achieved after integrating the efforts of different individuals who are working in the organisation to satisfy their own personal needs. Sometimes, an individual starts giving priority to his own interest.
Thus, the interests of various stakeholders, i.e. owners, shareholders, creditors, financers and the society cannot be sacrificed for one individual.

(c) Stability of tenure of personnel According to this principle, there should be a reasonable security of jobs. Labour turnover should be minimised to maintain organisational efficiency. Personnel should be selected and appointed after due and rigorous procedure.

But once selected, they should be kept at their post/position for a minimum fixed tenure. They should be given reasonable time to show results. Any adhodsm in this regard will create unstability/insecurity among employees. They would tend to leave the organisation. Under this situation, recruitment, selection and training cost will be high.

eg. If Amav is hired for the post of executive in a company, then, according to this principle, he should be kept on the same position for a fixed tenure say for 1 year, so that he can show results.

Question 73.
Explain the following techniques of scientific management.
(a) Method study
(b) Fatigue study
(c) Differential piece wage system (All India 2019)
Answer:
(a) Method study It refers to identifying the most suitable way to do a particular activity. To conduct this study, process chart and operation research techniques are used. The main objective of this study is to minimise the cost of production and maximise the quality and level of consumer satisfaction.

(b) Fatigue study Fatigue in work is natural. When the worker is given continuous work, he will get tired and lose speed and efficiency. He needs rest after working for a few hours. Scientific management studies the nature of work to determine the standard time for finishing the job and to find out when the workers need rest. The nature, time and period of rest are pre-determined. Necessary changes should also be made in the working methods and conditions to reduce fatigue.

(c) Taylor wanted to differentiate between efficient and inefficient workers. Under this system of wage payment, wages are paid on the basis of work done. According to him, higher rates were given to the workers who are producing standard products or more and lower rates were given to those who are producing less. e.g.
Standard output = 100 units/day
Wage rate 1 = ₹ 10/unit for standard output (100 units) or more
Wage rate 2 = ₹ 7/unit for below standard output
Worker 1 = Output 99 units
Wages = 99 × 7 = ₹ 693
Worker 2 = Output 101 units
Wages = 101 × 10 = ₹ 1010
Thus, a difference of ₹ 317 (1,010 – 693), for different of 2 units is enough to motivate the inefficient work for more output.

Question 74.
Explain following principles of general management.
(a) Scalar chain
(b) Equity
(c) Initiative (All India 2019)
Answer:
(a) Scalar chain It is the chain of superiors ranking from the top to the lowest ranks. The principle of scalar chain suggests that there should be a clear line of authority from top to bottom linking managers at all levels. The scalar chain serves as the chain of command and also as the chain of communication. Under the chain of command, orders and instructions, issued at higher levels, flow through intermediate managers before reaching the lower levels. The chain should not be violated in normal course of formal communication.
Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2 Img 5

However, in emergency, communication can take place between two people working at the same level but in different departments, through gang plank. For example, if in XYZ Ltd, E wants to communicate with R. He will have to follow the path in chain like first he delivers information to D, then D to C, B, A, M, N, O and at last E transfers the message to R. But in case of emergency, E can directly contact with R according to the concept of gang plank.

(b) Equity: The principle of equity implies a sense of fairness and justice to all workers working in an organisation. Observance of equity alone would make workers loyal and devoted to the organisation. Equity does not mean equal salary to a peon and supervisor.
But equity means application of same disciplinary rules, leave rules, etc irrespective of their grade, position and gender, language, religion or nationality, etc.
For example, the rules for granting medical leave to an employee should be same irrespective of their position, grade or gender.

(c) Initiative According to Fayol, ‘Initiative means taking the first step with self motivation, it is thinking out and executing the plan’. It is one of the traits of an intelligent person. Initiative should be encouraged because employees get satisfaction when they are allowed to take initiative. But it does not mean going against the established practices of the company for the sake of being different.

Question 75.
Karan Nath took over ‘D’ North Motor Company’ from his ailing father three months ago. In the past, the company was not performing well. Karan was determined to improve the company’s performance. He observed that the methods of production as well as selection of employees in the company were not scientific.
He believed that there was only one best method to maximise efficiency. He also felt that once the method is developed, the workers of the company should be trained to learn that ‘best method’.
He asked the Production Manager to develop the best method and carry out the necessary training. The Production Manager developed this method using several parameters right from deciding the sequence of operations, place for men, machines and raw materials till the delivery of the product to the customers. This method was implemented throughout the organisation. It helped in increasing the output, improving the quality and reducing the cost and wastage.
Identify and explain the principles and the technique of scientific management followed hy the Production Manager in the above case.CBSE 2018
Answer:
The principles of scientific management followed in the above case are :
(i) Science, not rule of thumb According to Taylor, each job should be performed in an organisation as per the scientific approach, as there is always one best method to maximise efficiency. This method can be developed through study and analysis. Selecting ‘one best method’ for activities can result in saving time, effort, money and resources.

(ii) Development of each and every person to his/her greatest efficiency According to this principle, ‘Each person should be scientifically selected and then assigned work as per their specialisation and in any case, if training is required, then impart training to them as efficient employees would produce more and earn more’. Worker training is essential to learn the ‘best method’ developed as per the scientific approach. This would ensure greatest efficiency for both, workers and the organisation.

The techniques of scientific management followed in this case are:
(i) Standardisation It is the process of setting standards for every business activity, process, raw materials, time, machinery and methods, to achieve efficiency. Standardisation of product implies that the size, design, quality, shape etc of the product should meet the requirements and tastes of consumers. Simplification means eliminating superfluous sizes, varieties and dimensions.
Its aim is to:

  • Eliminate unnecessary diversity of products and thereby reduce costs.
  • Help in achieving economy in the use of required machines and tools.

(ii) Method study This technique of scientific management is conducted to find out the ‘one best method or way’ of performing a particular task. The objective of this study is to minimise the cost of production and maximise the quality and satisfaction of the customer.

Question 76.
Explain any four characteristics of ‘principles of management.’ (Delhi 2016)
Or
Explain any four points that highlight the nature of principles of management. (Delhi 2016; Foreign 2016)
Or
Describe the nature of principles of management with the help of any four points. (All India 2016)
Answer:
Following points characterise the nature of management principles:
(i) Universal applicability These principles are universal and can be applied in all types of organisations whether it is profit making or non-profit making, small or large, private or government and manufacturing or service sector. They are equally applicable in a school, government office, military organisation, etc. They are also applicable to a limited company with separate departments like production, finance, marketing, etc.

(ii) General guidelines Management principles are general guidelines, as they cannot be applied blindly in all the situations. They do not provide readymade strait jacket solutions to all managerial problems, but only give the solution of a given problem.

(iii) Formed by practice and experimentation: The principles of management are developed after deep and thorough research work. Proper observations and experiments are conducted under different conditions by leaders and scholars of management thoughts to develop them. Thus, they contribute to development of management both as a science and an art. These are also evaluated on the basis of experience of managers.

(iv) Flexible The management principles are dynamic and not static or rigid prescriptions, which are to be followed absolutely. They are flexible in nature and can be modified by the manager as per the given situation.

Question 77.
Explain any four points which highlight . the importance of principles of management. (All India 2016; Foreign 2016)
Answer:
Four points which highlight the importance of principles of management are:
(i) To provide managers with useful insights into reality Principles help managers to improve their knowledge and understanding of managerial situations. These principles enable managers to learn from past mistakes and conserve time by solving recurring problems quickly. Hence, we can say, these principles provide managers an insight of real world situations.

(ii) Optimum utilisation of resources and effective administration We are aware of the fact that resources are limited in nature. Optimum utilisation of resources emphasise that resources should be utilised in such a manner that it should give maximum benefit with minimum cost. It also increases the efficiency of management, as through these principles managers adopt a systematic and logical approach to overcome the problems and discard hit and trial approaches.

(iii) Scientific decision Management principles help in thoughtful decision- making because they are based on logic rather than blind faith. Such decisions are free from bias and prejudice. These principles develop scientific approach as they give a realistic and subjective measurement for evaluation.

(iv) Meeting changing environment requirements Modem business environment is complex and ever-changing. In order to be successful, organisations have to adapt to these changes. Principles are dynamic in nature. They are flexible and frequently adapt to changes, which are favourable and profitable for the business.

Question 78.
With the help of a diagram explain ‘Functional Foremanship’ as a technique of scientific management. (Delhi 2015)
Answer:
Functional foremanship Taylor suggested functional foremanship for better supervision of workers. Under functional foremanship, there are specialist foremen for each job. He classified specialist foremen into two departments, namely planning and production departments. Both the departments have four foremen in all.

The names and functions of these foremen are as follows:
(i) Planning Department: Route clerk Determining the process of production and the route through which the raw materials will pass.

Instruction card clerk Laying down instructions according to which the workers are required to perform work.
Time and cost clerk Setting the time table for doing a job as per the pre-determined route and time schedule. He specifies the material and labour cost with respect to each operation.
Disciplinarian Maintaining proper discipline in the factory.

(ii) Production Department:
Gang boss Arranging machines, materials, tools, workers etc for the job.
Speed boss Maintaining the planned speed of production, investigating the causes for delay and remove them.
Repair boss Maintenance of the machines and equipments, proper arrangements for their oiling, greasing, cleaning and repair, preventing misuse of machines, etc.
Inspectors Seeing that the work confirms to the standard of quality laid down by the planning department.
Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2 Img 6

Question 79.
Explain the following techniques of scientific management (Delhi 2015)
(i) Differential piece wage system
(ii) Motion study
Answer:
(i) Differential piece wage system Differential piece wage system is the strongest motivator for a worker to reach standard performance. It is a method of wage payment in which efficient and inefficient workers are paid at different rates. In this method, increase in efficiency is co-related with an increase in the wage rate.

That is why, an efficient worker gets more wages, whereas, an inefficient worker gets less. Workers are paid on the basis of number of units produced. If a worker produces more than a certain number of units (standard output), he gets higher wage per piece/ units, on his total output. If he produces below the standard number, he gets lower rate per piece. Because of different rates of wage for different sets of workers, this is known as differential piece rate plan.

(ii) Motion study This is the analysis of physical movements in doing a work. Every work involves various forms of human movements such as lifting, holding, turning, etc. Under motion study, each movement is analysed to find out easier ways of doing the work and eliminate useless motions.
Following steps are involved in motion study:
(a) Selection of efficient workers.
(b) Analysis of the motions involved in a work.
(c) Finding the minimum time involved in doing a work.
(d) Keeping record of the best moves and unnecessary/unproductive actions.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 80.
Explain the following techniques of scientific management: (Delhi 2015)
(ii) Time study
(ii) Simplification of work
Answer:
(i) Time study It determines the standard time taken to perform a well-defined job. Time measuring devices were used to conduct this study. This type of study is helpful in deciding the time required to perform a job. It also helps in determining a fair day’s work for the workman and it also facilitates in determining incentive schemes and labour costs.

(ii) Simplification of work It means ehminating superfluous sizes, varieties and dimensions in a product. Its aim is to:

  • Eliminate unnecessary diversity of products and thereby reduce costs.
  • Helps in achieving economy in the use of required machines and tools.

Question 81.
Explain the following principles of management.
(i) Subordination of individual interest to general interest
(ii) Development of each and every person to his or her greatest efficiency (All India 2015)
Answer:
(i) Subordination of individual interest to general interest The interest of an organisation is to achieve its goals. These goals are achieved after integrating the efforts of different individuals who are working in the organisation to satisfy their own personal needs. Sometimes, an individual starts giving priority to his own interest.
Thus, the interests of various stakeholders, i.e. owners, shareholders, creditors, financers and the society cannot be sacrificed for one individual.

(ii) Development of each and every individual to his or her greatest efficiency According to this principle, ‘Each person should be scientifically selected and then assigned work as per their specialisation and in any case, if training is required, then impart training to them as efficient employees would produce more and earn more’.

If training is required, then impart training to thym as efficient employees would produce more and earn more’. Worker training is essential to learn the ‘best method’ developed as per the scientific approach. This would ensure greatest efficiency for both, workers and the organisation.

Multiple Choice Questions

Question 1.
Principles of management are not
(a) absolute
(b) flexible
(c) universal
(d) behavioural
Answer:
(a) absolute

Question 2.
Which of the following is not the principle of management given by Taylor?
(a) Cooperation, not individualism
(b) Science, not rule of thumb
(c) Harmony, not discord
(d) Functional foremanship
Answer:
(d) Functional foremanship

Question 3.
WTiat is the objective of functional foremanship?
(a) Improve quality of supervision of workers
(b) Improve quality of work
(c) Improve quality of production
(d) None of the above
Answer:
(a) Improve quality of supervision of workers

Hint:
The primary objective of functional foremanship is to improve the quality of supervision of workers. According to Taylor, a single worker or supervisor cannot be expected to be an expert in all aspects.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 4.
How are principles of management formed?
(a) By experience of customers
(b) By propagation of social scientists
(c) By experience of managers
(d) By scientists, in a laboratory
Answer:
(c) By experience of managers

Question 5.
Which of the following statements best describe the principle of division of work?
(a) Resources should be divided among jobs
(b) Labour should be divided
(c) Work should be divided into small tasks
(d) It leads to specialisation
Answer:
(c) Work should be divided into small tasks

Hint:
According to Fayol, if work is divided into small tasks and assigned to trained specialists, then it will help in taking the advantage of specialisation.

Question 6.
According to which principle, powers and duties should go hand in hand?
(a) Coordination
(b) Unity of direction
(c) Authority and responsibility
(d) Discipline
Answer:
(c) Authority and responsibility

Hint:
According to Fayol, there must be a balance between authority and responsibility. Excess of authority without matching responsibility may result in misuse of authority, whereas excess responsibility without adequate authority may lead to failure of organisational goals. Therefore, authority and responsibility should go hand in hand.

Question 7.
Under work study technique of scientific management, involves change in the attitude of workers and management. Both should realise the importance of the other and should cooperate with each other.
(a) functional foremanship
(b) standardisation and simplification of work
(c) mental revolution
(d) None of the above
Answer:
(c) mental revolution

Hint:
Mental revolution involves change in the attitude of workers and management. Both should aim to increase the size of surplus. Managers should share their gains with workers, while workers should contribute to increase profits. This attitude will bring prosperity to both, the company as well as the workers.

Question 8.
What is the main objective of simplification in scientific management?
(a) To determine the productive moments
(b) To determine the unproductive moments
(c) To determine the best possible way or method to perform a task
(d) To eliminate unnecessary diversity of products
Answer:
(d) To eliminate unnecessary diversity of products

Hint:
The main objective of simplification in scientific management is to eliminate unnecessary diversity of products. It results in saving cost of labour, machines and tools. It helps in achieving economy in the use of required machines and tools.

Question 9.
FW Taylor focuses on
(a) increasing productivity
(b) increasing profit
(c) minimising productivity
(d) minimising growth
Answer:
(a) increasing productivity

Question 10.
Gang plank is introduced in which principle?
(a) Authority and responsibility
(b) Initiative
(c) Scalar chain
(d) Coordination
Answer:
(c) Scalar chain

Question 11.
“He/she keeps machines, materials, tools etc ready for operations by concerned workers”. Whose work is described by this sentence under functional foremanship?
(a) Instruction and clerk
(b) Repair boss
(c) Gang boss
(d) Route clerk
Answer:
(c) Gang boss

Hint:
Gang boss keeps machines, materials, tools etc ready for operations by concerned workers, i.e. he is responsible for keeping machines and tools Hint
ready for work.

Question 12.
The principles of management is significant because of
(a) initiative
(b) adaptation to changing technology
(c) optimum utilisation of resources
(d) increase in efficiency
Answer:
(d) increase in efficiency

Hint:
The principles of management helps in increasing efficiency in production as the principles lay down the general guidelines so that a manager can take valuable decisions or appropriate steps to accomplish desired goals.

Principles of Management Class 12 Important Questions and Answers Business Studies Chapter 2

Question 13.
This technique of scientific management has an objective to find out how long person can perform the standard task without any adverse effects. Which technique is discussed here?
(a) Work study technique
(b) Motion study technique
(c) Fatigue study technique
(d) Differential piece wage system
Answer:
(c) Fatigue study technique

Question 14.
Which of the following statement is incorrect?
(a) The aim of both Taylor and Fayol is to maximise the efficiency and achieve the aims
(b) Taylor and Fayol both advocated on division of work and responsibility
(c) Both Taylor and Fayol have contributed immensely to the knowledge of management
(d) None of the above
Answer:
(d) None of the above

Hint:
None of the above statements are incorrect as Taylor and Fayol, both focused on maintaining good industrial relations. They give solutions to managerial problems. They presented a systematic study on management. Both of them develop their ideas, thoughts and principles after a thorough analysis and experimentation.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

We have given these Business Studies Class 12 Important Questions Chapter 6 Staffing to solve different types of questions in the exam. Go through these Staffing Class 12 Important Questions and Answers & Previous Year Questions to score good marks in the board examination.

Important Questions of Staffing Class 12 Business Studies Chapter 6

Question 1.
Define ‘Workforce Analysis’. (Delhi 2019)
Answer:
Workforce analysis is the concept which will help the human resource manager to find out the number and type of personal available.

Question 2.
Define ‘Selection’ (Delhi 2019)
Answer:
The process of choosing the test of suitable candidates from among the pool of job candidates is called selection.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 3.
Biru Nandan, Chairman of Lalit group of companies founded ‘Biru University’ for undergraduate and postgraduate courses in diverse disciplines. The Information Technology department of the Lalit Power Ltd., had few vacancies related to Cyber Security. The Human Resource Department of the company decided
to recruit fresh engineering graduates from ‘Biru University’ for the same. Identify the type of source of recruitment. (Delhi 2019)
Answer:
The company has used ‘External Source of Recruitment (Campus recruitment)’.

Question 4.
Why is aptitude test conducted in the process of selection? (All India 2017)
Answer:
In the process of selection, aptitude test is conducted to measure the potential of an individual to learn new skills.

Question 5.
Bhagwati Enterprises is a company engaged in the marketing of air-conditioners of a famous brand. The company has a functional structure with four main functions; purchases, sales, finance and staffing. As the demand for the product grew, the company decided to recruit more employees.
Identify the concept which will help the Human Resource Manager to find out the number and type of personnel available so that he could decide and recruit the required number of persons for each department. (All India 2017)
Answer:
‘Work force analysis’ is the concept which will help the Human Resource Manager to find out the number and type of personnel available.

Question 6.
Why is ‘employment interview’ conducted in the process of selection? (Delhi 2017)
Answer:
The ’employment interview’ is conducted in the process of selection to judge the personality of the candidate, his way of talking, his conduct and temperament, presence of mind and maturity, etc.

Question 7.
Alpha Enterprises is a company manufacturing water geysers. The company has a functional structure with four main functions production, marketing, finance and human resource. As the demand for the product grew, the company decided to hire more employees.
Identify the concept which will help the Human Resource Manager in deciding the actual number of persons required in each department. (Delhi 2017)
Answer:
‘Work load analysis’ is the concept which will help human resource manager in deciding the actual number of persons required in each department.

Question 8.
How does staffing improve job satisfaction and morale of employees? State. (Comportment 2014, 2013)
Answer:
Staffing helps in improving job satisfaction and morale of the employees by employing right people at right job, train them and developing their abilities, evaluating their performance and promoting them.

Question 9.
How is staffing a continuous process? State. (Comportment 2014)
Answer:
Staffing function is described as filling and keeping filled the positions in the organisation. Staffing is a continuous process because new jobs may be created and some of the existing employees may leave the organisation.

Question 10.
Recruitment is one of the specialised activities performed by Human Resource Management. Mention any two other specialised activities of Human Resoure Management. (Delhi 2014)
Or
‘Providing for social security welfare of employees’ is one of the specialised activities performed by Human Resource Management. Mention any two other specialised activities of Human Resource Management. (All India 2014)
Or
‘Maintaining labour relations and union management relations’ is one of the specialised activities performed by Human Resource Management. Mention any two other specialised activities of Human Resource Management. (Foreign 2014)
Answer:
Two other specialised activities of Human Resource Management are:

  • Handling grievances
  • Training and development of employees

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 11.
How are employees motivated to improve their performance when the organisation uses internal sources of recruitment? State. (All India 2014)
Answer:
A promotion at a higher level may lead to chain of promotions at lower levels in an organisation. This motivates the employees to improve their performance through learning and practice.

Question 12.
Why employees become lethargic when the organisation uses internal sources of recruitment? State. (Delhi 2014; Foreign 2014)
Answer:
The spirit of competition among the employees may be hampered as they are likely to expect automatic promotion because of seniority. Thus they are least interested in work and become lethargic.

Question 13.
State how staffing ensures ‘continuous survival and growth of enterprise’. (All India 2013)
Answer:
Proper staffing ensures continuous survival and growth pf an enterprise through succession planning for managers.

Question 14.
Define recruitment. (Delhi 2013)
Answer:
According to Yoder, “Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force”.

Question 15.
Name and state the ‘on-the-job method of training’ that is used to give training to the electricians. (All India 2013)
Answer:
Apprenticeship programme It is an on-the-job training method. Under this, a master worker as a trainer is appointed, who guides the workers regarding the skill of job. Electricians are required to undergo such training.

Question 16.
Give the meaning of ‘orientation’ as a step in the process of staffing. (Delhi 2012)
Answer:
Orientation refers to introduction of new employees to the existing ones in the organisation and familiarising them with the rules and policies of the organisation.

Question 17.
What is meant by‘estimating manpower requirement’ as a step in the process of staffing? (Delhi 2012)
Answer:
‘Estimating manpower requirement’ means finding out the number and types of persons or employees needed by the organisation in the near future.

Question 18.
What is meant by ‘development’ of employees in the process of staffing? (Compartment 2012)
Answer:
Opportunities designed to help in the growth of individuals in all respects are referred to as development.
It denotes the process by which the employees acquire skills and competence to do their present job and increase their capabilities for handling higher jobs in the future.

Question 19.
Give the meaning of ‘performance appraisal’ in the process of staffing. (Compartment 2012)
Answer:
It means evaluating an employee’s current or past performance against the pre-determined standards.

Question 20.
Give the meaning of ‘placement’ as a step in the process of staffing. (All India 2012)
Answer:
Placement refers to the employees occupying the position or post for which the person has been selected.

Question 21.
Give the meaning of ‘compensation’ as a step in the process of staffing. (All India 2012: Compartment 2012)
Answer:
Compensation refers to all forms of pay or rewards offered to employees. It may be in the form of direct financial payments like wages, salaries, incentives, commission and bonus or may be in the form of indirect payments like employer paid insurance and vacations, etc.

Question 22.
State the meaning of ‘training’. (Comportment 2012)
Answer:
It is the systematic development of knowledge, skills and attitudes required by an individual to perform adequately a given task or job.

Question 23.
What is meant by selection of employees? (All India 2011)
Answer:
Selection is the process of identifying and choosing the best person out of a number of prospective candidates for a job.

Question 24.
State the meaning of the term recruitment in one sentence. (Delhi [C) 2011: All india 2010)
Answer:
Recruitment refers to the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 25.
What is meant by staffing? (Delhi (C) 2010)
Answer:
Staffing has been described as the managerial function of filling and keeping filled the positions in the organisation structure. In other words, staffing is that part of the process of management which is concerned with obtaining, utilising and maintaining a satisfactory work force.

Question 26.
How does staffing help to ensure optimum utilisation of human resources? (Delhi 2010)
Answer:
Staffing helps in ensuring optimum utilisation of human resources by putting right person on the right job. It prevents under-utilisation of personnel and high labour cost. At the same time, it avoids disruption of work by indicating the shortage of personnel.

Question 27.
Give one limitation of internal sources of recruitment. (Delhi 2010; All India 2010)
Answer:
The spirit of competition among the employees may be hampered.

Question 28.
Give one advantage of external sources of recruitment. (Delhi 2010: All india 2010)
Answer:
Through external sources of recruitment, the management can attract more qualified and trained people to apply for vacant jobs in the organisation.

Question 29.
Name the method of training in which trainees learn on the equipments they will be using. (Delhi 2010; All India 2010)
Answer:
In vestibule training, employees learn their jobs on the equipment they will be using and actual work environments are created in a classroom, which is away from the actual work floor.

Question 30.
Name the method of training in which the trainees work directly with a senior manager and the manager takes full responsibility of the trainees. (Delhi 2010: All India 2010)
Answer:
Coaching

Question 31.
Name the method of training in which the trainee learns under the guidance of a master worker. (Delhi 2010; All India 2010)
Answer:
Apprenticeship training

Question 32.
How does staffing help to ensure higher performance of employees? (All India 2010)
Answer:
Staffing finds the right person for the right job. It ensures higher performance at the employees as work is assigned according to their capabilities and at the same time, organisational objectives are achieved in the most efficient and effective manner.

Question 33.
Explain “Vestibule Training’and ‘Apprenticeship Programme’ as methods of training. (All India 2019)
Answer:
Vestibule training:
In vestibule training, employees learn their jobs on the equipment they will be using and actual work environments are created in a classroom, which is away from the actual work floor.

Apprenticeship programme :
Apprenticeship programme It is an on-the-job training method. Under this, a master worker as a trainer is appointed, who guides the workers regarding the skill of job. Electricians are required to undergo such training.

Question 34.
State the steps in selection procedure, after the ‘employment interview’ but before the job offer. (CBSE 2018)
Answer:
Steps in selection procedure after employment interview’ but before ‘job offer’ are as follows:
Reference and background checks: Many employers request names, addresses and telephone numbers of references for the purpose of verifying information and gaining
additional information of an applicant. These references can be teachers, friends, previous employers, relatives etc, who can give additional information about the candidate.

Selection decision: The final solution decision has to be made from the candidates, who pass the tests, interviews and reference checks. The views of the concerned manager will be generally considered in the final selection, because he is responsible for the performance of the new employee.

Medical examination: After the selection decision and before the job offer, the candidate is required to undergo a medical fitness test. The job offer is given to the candidate, only if the candidate is physically and mentally fit for the job.

Question 35.
Atul-The Assistant Manager, Vikas-the Marketing’Head and Leena-The Human Resource Manager of TVIontac Enterprises Ltd.’ decided to leave the company.
The Chief Executive Officer of the company called the Human Resource Manager, Leena and requested her to fill up the vacancies before leaving the organisation. Leena suggested that her subordinate Miss Rama Wadhwa is very competent and trustworthy, if she could he moved up in the hierarchy, she would do the needful. The Chief Executive Officer agreed for the same. Miss Rama Wadhwa contacted ‘Smith Recruiters’ who advertised for the post of marketing head for ‘Montac Enterprises Ltd’. They were able to recruit a suitable candidate for the company. Atul’s vacancy was filled up by screening the database of unsolicited applications lying in the office.
(i) Name the internal/external sources of recruitment used by “Montac Enterprises Ltd.’ to fill up the above stated vacancies.
(ii) Also state any one merit of each of the above identified source of recruitment. (All India 2016)
Or
Ashish, the Marketing Head Kaman, the Assistant Manager and Resource Manager of ‘Senor Enterprises Ltd’.
decided to leave the company. The Chief Executive Officer of the company called Jyoti, the Human Resource Manager and requested her to fill up the vacancies before leaving the organisation. Informing that her subordinate Miss Alka Pandit was very competent and trustworthy, Jyoti suggested that if she could be moved up in the hierarchy, she would do the needful. The Chief Executive Officer agreed for the same. Miss Alka Pandit contacted ‘Keith Recruiters’ who advertised for the post of marketing head for ‘Senor Enterprises Ltd’. They were able to recruit a suitable candidate for the company.
Raman’s vacancy was filled up by screening the database of unsolicited applications lying in the office.
(i) Name the intemal/external sources of recruitment used by ‘Senor Enterprises Ltd. to fill up the above stated vacancies.
(ii) Also state any one merit of each of the above identified source of recruitment. (Delhi 2016)
Or
Vinod-The Human Resource Manager, Umesh-The Assistant Manager and Ashok-the Marketing Head of Hitashi Enterprises Ltd decided to leave the company.
The Chief Executive officer of the company called the Human Resource Manager, Vinod and requested him to fill-up the vacancies before leaving the organisation. Vinod suggested that his subordinate Rajesh is very competent and trustworthy. If he could be moved up in the hierarchy, he would do the needful. The Chief Executive Officer agreed for the same. Rajesh contacted ‘Zenith Recruiters’ who advertised for the post of marketing head for ‘Hitashi Enterprises Ltd’. They were able to recruit a suitable candidate for the company. Umesh’s vacancy was filled-up by screening the database of unsolicited applications lying in the office.
(i) Name the internal/external sources of recruitment used by ‘Hitashi Enterprises Ltd.’ to fill-up the above stated vacancies.
(ii) Also, state any one merit of each of the above identified source of recruitment. Foreign 2016
Answer:
(i) The intemal/extemal sources of recruitment used by ‘Montac Enterprises Ltd’ to fill up the above stated vacancies are:

  • Promotion It is an internal source of recruitment in which an employee is shifted to a higher post. Leena’s vacancy was filled by using this source.
  • Placement agencies and management consultants It is an external source of recruitment. These agencies provide a nationwide service in matching personnel demand and supply. Vikas’s vacancy was filled by using this source.
  • Casual callers It is again an external source of recruitment through which the organisation keep a database of unsolicited applicants in their files. Atul’s vacancy was filled by using this source.

(ii) One merit each of Promotion: It helps to increase the motivation and satisfaction of employees.
Placement agencies and management consultants They help organisations to recruit technical, professional and managerial personnel easily.
Casual callers It is in inexpensive method of recruitment.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 36.
Name and define the process that helps in finding possible candidates for a job or a function. (Compartment 2015)
Answer:
Recruitment is the process that helps in finding possible candidates for a job.
According to Yoder, “Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers, to facilitate effective selection of an efficient working force”.

Question 37.
Name and define the process in which candidates are eliminated at every stage and a few move on to the next stage till the right type of candidate is found. (Compartment 2015)
Or
Name and define the process that helps in choosing the best person out of a number of prospective candidates for a job. (Compartment 2015)
Answer:
Selection is the process of identifying and choosing the best person out of a number of prospective candidates for a job.
It is done in the third step, in which a prospective candidate is chosen from the pool of candidates. It ensures that the organisation gets the best among the available and it also enhances the morale of the selected candidate.

Question 38.
Why is training important for the employees? State any three reasons. (Compartment 2014; All India 2012; Delhi 2012)
Or
State any three reasons why training is beneficial for employees of an organisation. (Foreign 2014)
Answer:
Employees should be provided training to help them increase their knowledge and skills. The employees training in an organisation is necessary due to the following reasons:

  • Systematic learning Training is systematic learning, always better than hit and trial method, which leads to reduction of wastage of efforts and money.
  • Increase in productivity A trained worker is more efficient in his work. He has better knowledge, skills and speed for his job. This leads to increased output which is profitable for the enterprise.
  • Fewer accidents Trained employees are proficient in handling machinery and equipment. Thus, less prone to accidents.

Question 39.
Give the meaning of placement, orientation and training in the process of staffing. (Delhi 2012)
Answer:
Placement refers to the employees occupying the position or post for which the person has been selected.
Orientation refers to introduction of new employees to the existing employees of the organisation and familiarising them with the rules and policies of the organisation.
Training refers to the systematic development of knowledge, skills and attitude required by an individual to perform efficiently a given task/job.

Question 40.
Why is training important for an organisation? State any three reasons. (Delhi 2012; All India 2012)
Answer:
Training is important for an organisation because of the following reasons:

  • Training of the workers leads to increase in productivity and reduction of wastages.
  • It reduces absenteeism and labour turnover as trained workers become more confident and thus, they become regular and stick to their job and place.
  • It is required to teach technology and work methods to employees.

Question 41.
Define training and development. (Delhi 2012; All India 2012)
Answer:
Training It refers to the process by which aptitudes, skills and abilities of employees to perform specific jobs are improved. According to Michael Armstrong, “Training is the systematic development of knowledge, skills and attitudes required by an individual to perform adequately a given task or job”.

Development It involves growth of an employee in all respects. It denotes the process by which the employees acquire skills and competence to do their present job and increase their capabilities for handling higher jobs in the future. Development is a continuous process of building competencies of employees and thus facilitating overall development of employees.

Question 42.
Why is staffing considered as an important function of management in all types of organisations? State any three reasons. (Delhi 2011; All India 2011)
Answer:
Staffing is considered as an important function of management because of the following reasons:

  • It helps in discovering and obtaining competent personnel for various jobs.
  • It results in improved performance by putting right person on the right job.
  • It ensures the continuous survival and growth of an enterprise through the succession planning by managers.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 43.
Staffing as a part of Human Resource Management includes many specialised activities. Explain any three such activities. (All India 2011)
Answer:
Three such activities are as follows:

  • Recruitment, i.e. search for qualified people.
  • Analysing jobs, collecting information about jobs to prepare job description.
  • Handling grievances and complaints.

Question 44.
External sources of recruitment are considered better than internal sources. Give any three reasons in support of this statement. (All India 2011)
Answer:
External sources of recruitment are considered better than internal sources because of the following reasons:

  • Qualified personnel People outside the organisation may have required qualification, training and skills available with them which may serve the organisation.
  • Fresh talent The entry of fresh talent into the organisation is encouraged. New employees bring new ideas to the organisation.
  • Wider choice When vacancies are advertised, there are chances of receiving large number of applications. Therefore, it offers a wide choice to the management.

Question 45.
Nisha Sethi was working as a Human Resource Manager in a famous consultancy firm, KLI Global Services. Her job included preparing job descriptions, recruitment, developing compensation and incentive plans and facilitating employee learning. They had entered into alliances with institutes to ensure continuous learning of their employees. With the jobs becoming more and more complex, KLI Global Services invested large amount of money in marking the employees learn the skills necessary to complete the jobs.
State by giving any five points, how this investment is likely to benefit the organisation? (Delhi 2019)
Answer:
The company has invested in training of employees.
Benefits of training:

  • Systematic learning Training is systematic learning, always better than hit and trial method, which leads to reduction of wastage of efforts and money.
  • Increase in productivity A trained worker is more efficient in his work. He has better knowledge, skills and speed for his job. This leads to increased output which is profitable for the enterprise.
  • Fewer accidents Trained employees are proficient in handling machinery and equipment. Thus, less prone to accidents.

Question 46.
After passing his secondary school examination, David left the school at the age of 15 years and started getting training under his father. His father, a renowned electrician, had worked for many companies. He everyday started accompanying his father on work and watched him carefully while working. David was a good learner and learnt the techniques of work quickly. Now his father started passing on the tricks of the trade to David. With the passage of time David acquired a high level skill and became a well-known electrician at Indore. Big business-houses started calling him for electrical-wiring.
(a) Name the method of training discussed in the above para.
(b) State any three benefits which David could get on being trained. (Compartment 2018)
Answer:
(a) Training method used is’Apprenticeship training’.
(b) For benefits of training:

  • Systematic learning Training is systematic learning, always better than hit and trial method, which leads to reduction of wastage of efforts and money.
  • Increase in productivity A trained worker is more efficient in his work. He has better knowledge, skills and speed for his job. This leads to increased output which is profitable for the enterprise.
  • Fewer accidents Trained employees are proficient in handling machinery and equipment. Thus, less prone to accidents.

Question 47.
Explain briefly ‘casual callers’ and ‘labour contractors’ as external sources of recruitment. (All India 2017)
Answer:

  • Casual callers: Many business organisation keep a database of unsolicited applicants, i.e. casual callers in their files. This source of recruitment is generally resorted to by manufacturing organisations to fill up vacancies at the labour level. It is an inexpensive method of recruitment.
  • Labour contractors: They supply the required workers to the organisations especially engaged in manufacturing. They keep a dose contact with labourers. Through these contractors, workers are appointed in factories at a very short notice.

Question 48.
Explain briefly ‘transfers’ and ‘promotions’ as internal sources of recruitment. (Delhi 2017)
Answer:
Transfer: It means shifting of employees from one job position to other at the same level of authority. Only the working place is changed. Therefore, it refers to horizontal movement of the workers. Transfer does not involve any drastic change in the responsibilities and status of the employee.

Promotion: It refers to shifting of employees from one job position to the other with higher level of authority. Here, employees move in upward direction within an organisational structure. There is also an increase in compensation or salary, e.g. promotion of a derk to the post of an accountant.

Question 49.
A company manufacturers very sophisticated switch gears used in automatic cars. For this the company uses hi-tech machines. Most of the times the workers of the factory remain idle because of lack of knowledge regarding the use of these hi-tech machines. The frequent visits by the engineers and constant supervision of the foreman results into high overhead charges. Explain the way by which this problem can be overcome. Also state how this helps the employees. (Comportment 2015)
Or
Manu, a Chief Manager in a company using highly sophisticated machines and equipment, wants that every employee should be fully trained before using the machines and equipment. Suggest and describe the best method of training that Manu can use for training of the employees. (Delhi 2012)
Answer:
Vestibule method of training should be imparted in the given situation.
Vestibule training Under this method, employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. Actual work environment is created in a classroom and employees use the same materials, files and equipments. This is usually done when employees are required to handle sophisticated machinery and equipment. Vestibule training is suitable where a large number of persons are to be trained at the same time for the same kind of work. The main emphasis is on learning rather than on production.

Question 50.
Mr Naresh recently completed his MBA from one of the Indian Institutes of Management in Human Resource Management. He has been appointed as Human Resource Manager in a Truck Manufacturing Company. The company has 1,500 employees and has an expansion plan in hand that may require additional 500 persons for various types of jobs. Mr Naresh has been given the complete charge of the company’s Human Resource Department.
List out the specialised activities that Mr Naresh is supposed to perform as the Human Resource Manager of the company. (Comportment 2015)
Answer:
The duties of Human Resource Managers are:

  • Training and development of employees for efficient performance.
  • Maintaining labour relations and union management relations.
  • Handling grievances and complaints.
  • Providing for social security and welfare of employees.

Question 51.
The workers of ‘Vyam Ltd.’ are unable to work on new and hi-tech machines imported by the company to fulfil the increased demand. Therefore, the workers are seeking extra guidance from the supervisor. The supervisor is overburdened with the frequent calls of workers.
Suggest how the supervisor, by increasing the skills and knowledge of workers, can make them handle their work independently. Also state any three benefits that the workers will derive by the decision of the supervisor. (All India 2015)
Or
The workers of ‘Gargya Ltd’, are unable to work on new computerised machines imported by the company to fulfil the increased demand. Therefore, the workers are seeking extra guidance from the supervisor and the supervisor is overburdened with the frequent calls of workers.

Suggest how the supervisor, by increasing the skills and knowledge of workers, can make them handle their work independently. Also state any three benefits that the workers will derive by the decision of the supervisor. (All India 2015)
Answer:
The supervisor can increase the knowledge and skill of workers and make them work independently by providing them training. It refers to the systematic development of knowledge, skills and attitude required by workers to perform their jobs/tasks adequately.
Three benefits of training:

  • Systematic learning Training is systematic learning, always better than hit and trial method, which leads to reduction of wastage of efforts and money.
  • Increase in productivity A trained worker is more efficient in his work. He has better knowledge, skills and speed for his job. This leads to increased output which is profitable for the enterprise.
  • Fewer accidents Trained employees are proficient in handling machinery and equipment. Thus, less prone to accidents.

Question 52.
State the merits of internal sources of recruitment. (Compartment 2014)
Or
Internal sources of recruitment are better than external sources of recruitment. Explain by giving reasons in support of the statement. (Comportment 2014: Delhi 2011: All India 2011)
Or
‘Internal sources of recruitment are better than external sources’. How? Give any four reasons. (All India 2010)
Answer:
Internal sources of recruitment are better than external sources in the following respects:

  • Economical sources Internal sources are less time consuming and less expensive because the organisation and the employees are already known to each other.
  • Simplifies the process of selection Since, the employees are already known to the organisation, therefore, the process of selection and placement gets simplified.
  • Motivates employees Filling higher level jobs through promotion helps to improve the motivation and morale of employees as they know that they can be promoted to senior position in the organisation if they work harder for the organisation.
  • Sense of security Internal recruitment creates a sense of security among the staff.
  • No problem in adjustment As the organisation and the employees are familiar with each other, this leads to smooth functioning of the enterprise without any problem in adjustment on the part of the new employees or the organisation.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 53.
Why external sources of recruitment are better than internal sources? (All India 2014)
Or
External sources of recruitment are better than internal sources. How? Explain by giving any four reasons in support of your answer. (Delhi (C) 2010)
Or
State any four advantages of external sources of recruitment. (All India 2014)
Answer:
External sources of recruitment are better than internal sources because: (any four)

  • Fresh talent The entry of fresh talent into the organisation is encouraged. New employees bring new ideas to the organisation.
  • Wider choice Through external recruitment, the organisation gets wider choice.
  • Qualified personnel By using external recruitment, the management can get qualified and trained persons.
  • Latest technical knowledge Through campus placement, the organisation get employees with latest technical knowledge.
  • Competitive spirit When outsiders join the organisation, this develops a competitive spirit in existing employees of the organisation.

Question 54.
State any four limitations of using internal sources of recruitment. (Comportment 2014)
Answer:
Limitations of internal sources of recruitment are as follows:

  • No scope for fresh talent Internal sources may not be able to bring new competent fresh talent, ideas and latest technical know-how.
  • Not suitable for new organisation A new enterprise cannot use internal sources of recruitment. No organisation can fill all its vacancies from internal sources.
  • Limited choice The choice is limited as the recruitment can be made only out of the candidates available within the organisation,
  • Employees become lethargic The employees may become lethargic if they are sure of time bound promotions.

Question 55.
How is training of employees beneficial for the organisation? State by giving any four reasons. (Delhi 2014)
Or
State any four reasons why training is needed in an organisation. (Delhi 2011)
Answer:
Three benefits of training:

  • Systematic learning Training is systematic learning, always better than hit and trial method, which leads to reduction of wastage of efforts and money.
  • Increase in productivity A trained worker is more efficient in his work. He has better knowledge, skills and speed for his job. This leads to increased output which is profitable for the enterprise.
  • Fewer accidents Trained employees are proficient in handling machinery and equipment. Thus, less prone to accidents.

Question 56.
Atul is working in an organisation. After every three months, his manager transfers him from one department to another so that he may gain a broader understanding of all the departments of the organisation.
Name and explain the method of training Atul is undergoing. (All India 2012)
Answer:
Job rotation training This kind of training involves shifting the trainee from one department to another or from one job to another. This enables the trainee to gain a broader understanding of all parts of the business and how the organisation functions as a whole.

When employees are trained by this method, the organisation finds it easier at the time of promotions, replacements or transfers. This will broaden his horizon and capacity to do a variety of jobs. Rotation of an employee on different jobs should not be done frequently.

Question 57.
Define staffing as a function of management and state its importance. (Delhi (C) 2011)
Or
Explain staffing as a function of management. Also explain by giving any four reasons why proper staffing is required in an organisation. (All India 2010)
Answer:
According to Koontz and O’ Donnell, “The managerial function of staffing involves manning the organisational structure through proper and effective selection, appraisal and development of personnel to fill the roles designed into the structure”.

Staffing function of management helps in obtaining right people and putting them on the right jobs.
Proper staffing ensures the following benefits to the organisation: (any four)

  • Obtaining competent personnel In all organisations, there is a need for people to perform work. Staffing function helps in discovering and obtaining competent personnel for various jobs.
  • Higher performance Staffing finds the right person for the right job. It ensures higher performance of the employees as work is assigned according to their capabilities and at the same time, organisational objectives are achieved in the most efficient and effective manner.
  • Survival and growth By appointing efficient staff, staffing ensures the continuous survival and growth of an enterprise. An organisation grows with the sincere efforts of its employees only.
  • Optimum utilisation of human resources Through manpower planning and job analysis, we can find out the number and types of employees required in the roganisation. So, there are no chances of overmanning, shortage or under-utilisation of personnel.
  • Motivation and morale Staffing as a separate function, is needed to motivate employees for better performance, incentive plans, staff welfare and for other personnel activities. If there is a separate personnel department in the organisation, it motivates employees and develop higher morale in them.

Question 58.
Explain in brief the various steps involved in the process of staffing. (All India 2011)
Answer:
Various steps in the process of staffing are as follows:
(i) Estimating manpower requirements: It refers to finding out the number of persons or employees and type of employees needed in the organisation in near future. As both overstaffing and understaffing are undesirable, the manager tries to find out the manpower requirement by equating work load analysis to work force analysis.

  • Work load analysis Finding the number and type of employees required to perform various jobs.
  • Work force analysis Analysing existing work force already occupying the job positions.
  • Comparison The manager compares the two and find out the excess of work load over work force indicating under staffing, and thus fulfils the gap.

(ii) Recruitment: It refers to the process of inducing the people to apply for the job in the organisation. After assessing the number and type of required employees, the manager tries to get greater number of applicants for the job, so that the organisation can select better candidates.

(iii) Selection: It refers to the choosing of most suitable candidate to fill the vacant job position. Selection is done through
a process, which involves tests, interviews, etc.

(iv) Placement and orientation: In this step, employee occupies the position or is placed, for which he/she has been selected. After this, a brief presentation about the company is given and employee is introduced to his superiors, subordinates and colleagues.

(v) Training and development: In this step, training is imparted to the selected candidate, by which he/she can enhance his/her skills, knowledge and through this, one can also explore the opportunities for growth.

(vi) Performance appraisal: It refers to evaluating the performance of employees against some standards which are known to employees in advance.

(vii) Promotion and career planning: Promotions are an integral part of people’s career. It means people placed in positions of increased responsibility and it usually means more pay, responsibility and job satisfaction.

(viii) Compensation: It refers to price of the job. It includes pay, rewards and other incentives given to all the employees. It includes direct as well as indirect payments.

Question 59.
Explain any two external sources of recruitment. (All India 2011)
Answer:
Two external sources of recruitment are:

  • Casual callers It is generally followed by the factories of manufacturing organisations to fill up vacancies at the labour level. In such cases, the organisation keeps the record of casual callers and present them at the time of requirement.
  • Advertising The most common and popular method of external recruitment is advertising, e.g. for the job of an accountant, the advertisment can be given in CA journal, for lower rank it can be given in local newspapers and for higher rank it can be given in national level reputed newspapers. Advertisement may also be done through television.

Question 60.
Explain
(i) Apprenticeship and
(ii) Job rotation, as methods of training. (All India 2011)
Answer:
(i) Apprenticeship In this, trainee work under the guidance and supervision of a guide or a trainer for a prescribed amount of time. During this process of training, the apprentice is imparted both theoretical and practical training, by the expert. Some of the areas of apprenticeship training includes:

  • Building construction.
  • Skilled craft like mechanics, electricians, welders, etc.

(ii) Job rotation training: This kind of training involves shifting the trainee from one department to another or from one job to another. This enables the trainee to gain a broader understanding of all parts of the business and how the organisation functions as a whole.

When employees are trained by this method, the organisation finds it easier at the time of promotions, replacements or transfers. This will broaden his horizon and capacity to do a variety of jobs. Rotation of an employee on different jobs should not be done frequently.

Question 61.
‘Entertainment India Ltd.’ has been incorporated with the objective of entertaining people by organising festivals, programmes and other similar events depicting the rich cultural heritage of the country. The company management has renowned personalities from the field of art, literature and culture. They decided to give a platform to young budding musicians, poets and artists. The company decided its organisational structure by grouping similar jobs together. Thereafter, the heads of different departments were also appointed. Nisha, one of the heads, did an analysis of the number, type and qualification necessary for people to be appointed. The information generated in the process of writing the job description and the candidate profile was used to develop ‘Situations vacant’ advertisement. This was published in print media and flashed in electronic media. This brought in a flood of response.
Explain the other steps which Nisha has to perform to complete the process being discussed above. (AII India 2019)
Or
Explain the process of staffing. (Delhi 2010)
Answer:
The process discussed here is ‘staffing’. Other steps involved in this process are:

  • Selection
  • Placement and orientation
  • Training and development
  • Performance appraisal
  • Promotion and career planning
  • Compensation

For explanation of steps:
(i) Estimating manpower requirements: It refers to finding out the number of persons or employees and type of employees needed in the organisation in near future. As both overstaffing and understaffing are undesirable, the manager tries to find out the manpower requirement by equating work load analysis to work force analysis.

  • Work load analysis Finding the number and type of employees required to perform various jobs.
  • Work force analysis Analysing existing work force already occupying the job positions.
  • Comparison The manager compares the two and find out the excess of work load over work force indicating under staffing, and thus fulfils the gap.

(ii) Recruitment: It refers to the process of inducing the people to apply for the job in the organisation. After assessing the number and type of required employees, the manager tries to get greater number of applicants for the job, so that the organisation can select better candidates.

(iii) Selection: It refers to the choosing of most suitable candidate to fill the vacant job position. Selection is done through
a process, which involves tests, interviews, etc.

(iv) Placement and orientation In this step, employee occupies the position or is placed, for which he/she has been selected. After this, a brief presentation about the company is given and employee is introduced to his superiors, subordinates and colleagues.

(v) Training and development: In this step, training is imparted to the selected candidate, by which he/she can enhance his/her skills, knowledge and through this, one can also explore the opportunities for growth.

(vi) Performance appraisal: It refers to evaluating the performance of employees against some standards which are known to employees in advance.

(vii) Promotion and career planning; Promotions are an integral part of people’s career. It means people placed in positions of increased responsibility and it usually means more pay, responsibility and job satisfaction.

(viii) Compensation: It refers to price of the job. It includes pay, rewards and other incentives given to all the employees. It includes direct as well as indirect payments.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 62.
Moga Industries Ltd. approached a well established university in the city of Madurai to recruit qualified personnel for various technical and professional jobs. They selected Tanya, Ritu, Garima and Chetan for various vacancies in the organisation.
After the selection and placement, “Moga Industries Ltd.’ felt the need to increase the skills and abilities, and the development of positive attitude of the employees to perform their specific jobs better. The company also realised that learning new skills would improve the job performance of the employees. Hence, the company decided to take action for the same.
(i) Name the step of the staffing process regarding which the company decided to take action.
Answer:
(i) The step in staffing process discussed here is ‘Training and development’.
(a) For benefits of training:

  • Systematic learning Training is systematic learning, always better than hit and trial method, which leads to reduction of wastage of efforts and money.
  • Increase in productivity A trained worker is more efficient in his work. He has better knowledge, skills and speed for his job. This leads to increased output which is profitable for the enterprise.
  • Fewer accidents Trained employees are proficient in handling machinery and equipment. Thus, less prone to accidents.

Question 63.
There were two vacancies for the post of Assistant Manager in ‘Gyan electrics Private Ltd.’. ‘Parth’ the Human Resources Manager identified one suitable candidate ‘Vishwas’ from within the organisation and promoted him to the post of Assistant Manager. For another post, the Manager ‘Parth’ took help of a placement agency and selected ‘Saleem’. After six months, Parth observed that ‘Vishwas’s’ performance was much better than ‘Saleem’s’ performance though ‘Vishwas’ was less qualified than ‘Saleem’. Hence, ’Parth’ decided that in future he will not make any appointment with the help of an outside source.
Explain any four reasons on the basis of which ‘Parth’ would have taken the above decision. (compartment 2018)
Answer:
The reasons are the disadvantages of external source of recruitment. These are:

  • Dissatisfaction among existing staff The morale of the existing employees is reduced due to which overall working of organisation is affected.
  • Lengthy process Right from inviting application to induction training, it is a very lengthy process. Sometimes, it doesn’t reap the matching benefits.
  • Costly process This type of recruitment is a costly process. It is a setback for organisation if the productivity of new employees does not match the costs.
  • Adjustment problem New recruits take time to adjust in the organisation. This might turn to be an acute problem in a complex organisational structure.

Question 64.
Anoop Gaur started ‘Cat’s Eye’, a company for providing cyber security solutions to businesses.
Its objective is to prevent, detect, 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 Science and Technology. While working on the project he found that the volume of work made it impractical for him to handle all the work by himself. Therefore, he decided to expand the team. The company maintained a close liaison with an engineering college in the state. During a campus placement, Aarav and Pranshi were appointed to work for the new project.
He found the new employees capable, enthusiastic and trustworthy. Anoop Gaur was thus, able to focus on the objectives and with the help of Aarav and Pranshi, the project was completed on time. Not only this, Anoop Gaur was also able to extend his area of operations. On the other hand, Aarav and Pranshi also got opportunities to develop and exercise initiative.
(i) Identify and explain briefly the concept used by Anoop Gaur in the above case which helped him in focusing on the objectives.
(ii) Also, explain any four points of importance of the concept identified in part (i). (All India, Delhi 2017)
Answer:
(i) Anoop Gaur has used ‘Campus Recruitment’ as a source of external recruitment which helped him in achieving his objective. Campus recruitment The recruiters of the organisations visit various professional colleges, technical institutes to recruit fresh graduates or the people with the latest technical know how. This type of requirement is more common for engineers, computer programmers, MBAs, etc. Organisations prefer this mode because fresh graduates can be moulded according to the organisation’s requirement easily.

(ii) Importance of external source of recruitment are:

  • Fresh talent The entry of fresh talent into the organisation is encouraged. New employees bring new ideas to the organisation.
  • Wider choice As a mode of external recruitment, the organisation gets wider choice.
  • Qualified personnel By using this mode, the management can get qualified and trained persons.
  • Latest technical knowledge Through campus placement, the organisation get employees with latest technical knowledge.

Question 65.
State the importance of the internal sources of recruitment. (Compartment 2014)
Or
Define recruitment. State any five merits of internal sources of recruitment. (Comportment 2012)
Answer:
Under internal source of recruitment, the vacant job positions are filled by inducing the existing employees of the organisation. It implies shifting of the existing employees from one place/post to another place/post. This is called transfer. It also implies shifting an employee to a higher ‘ position carrying higher responsibilities, facilities, status and pay, through promotions.

Question 66.
What is meant by training? State any four benefits of training to the organisation. (Delhi 2014; Comportment 2014)
Answer:
Training is the systematic development of knowledge, skills and attitudes required by an individual to perform adequately a given task or job. The purpose of training is to achieve a change in the behaviour of those trained and to enable them to do their jobs in a better way. Training is not a ‘one step’ process, but is a continuous or never ending process.

Benefits of training are as follows:

  • Reduced learning time A trained employee takes less time in learning the job as compared to untrained employee. As a result, there is less wastage of resources and higher productivity in the organisation.
  • Better performance The performance of trained employees is always better than the performance of untrained employees. In the training programmes, their qualities and capabilities are improved and employees get some experience of working on the job before they are actually assigned the job. This improves their performance and efficiency level.
  • Attitude formation The training and development aims at moulding the employees so that they develop positive attitude for the organisation. It motivates them, to be ready to take the initiative and thus on attitude of support and cooperation exist among the employees.
  • Helps in solving operational problems While performing various activities, the organisation faces various problems such as problem of absenteeism, wastage of resources, dissatisfaction of employees, lack of team work, etc. Through training, these operational problems can be avoided or removed in the organisation.

Question 67.
What is staffing? Explain any five points of importance of this function. (Comportment 2012)
Answer:
Staffing function of management helps in obtaining right people and putting them on the right jobs. (1)
Importance of staffing:
(i) Obtaining competent personnel In all organisations, there is a need for people to perform work. Staffing function helps in discovering and obtaining competent personnel for various jobs.

(ii) Higher performance Staffing finds the right person for the right job. It ensures higher performance of the employees as work is assigned according to their capabilities and at the same time, organisational objectives are achieved in the most efficient and effective manner.

(iii) Survival and growth By appointing effident staff, staffing ensures the continuous survival and growth of an enterprise. An organisation grows with the sincere efforts of its employees only.

(iv) Optimum utilisation of human resources Through manpower planning and job analysis, we can find out the number and types of employees required in the roganisation. So, there are no chances of overmanning, shortage or under-utilisation of personnel.

(v) Motivation and morale Staffing as a separate function, is needed to motivate employees for better performance, incentive plans, staff welfare and for other personnel activities. If there is a separate personnel department in the organisation, it motivates employees and develop higher morale in them.

Question 68.
A newly appointed personnel manager is of the view that training is beneficial only for the workers and not for the organisation. Do you agree with his view? Give any four reasons in support of your answer. (All India 2010: Delhi (C) 2010)
Answer:
No, as per my opinion, manager’s viewpoint is not correct. Training is beneficial for both, viz organisation and for workers.
For reason of training is important for an organisation:

  • Systematic learning Training is systematic learning, always better than hit and trial method, which leads to reduction of wastage of efforts and money.
  • Increase in productivity A trained worker is more efficient in his work. He has better knowledge, skills and speed for his job. This leads to increased output which is profitable for the enterprise.
  • Fewer accidents Trained employees are proficient in handling machinery and equipment. Thus, less prone to accidents.

Question 69.
Explain the process of selection of employees. (Delhi 2010; All India 2010)
Answer:
Following are the main steps of selection process adopted by organisations:
(i) Preliminary screening It helps the manager to eliminate those applicants who are not suitable for the current job. Such screening helps in rejecting unfit job seekers by analysing the information supplied in the application form.

(ii) Selection tests Through various tests, ability and skill of the candidates are evaluated. These tests are divided into the following three categories:

  • Psychological tests Some selection tests are of psychological nature. Objectives of psychological tests is to examine the mental ability, interest in work, maturity, etc of the candidates.
  • Proficiency tests In this test, candidate’s ability and skill manifested in an examination are verified. Here, special attention is paid to see the correctness of the ability and skill as emphasised by the applicant.
  • Other tests Main objective of this test is to know the understanding of the candidates, his communication ability, his mental maturity, writing ability, alertness, etc.

(iii) Employment interview Having successfully cleared all the tests related to employment by the candidate, he is called for final interview. The objective is to judge the personality of the candidate, his way of talking, his conduct and temperament, his interest, presence of mind and maturity, etc.

(iv) Selection decision Applicants who clear selection tests, employment interview and reference checks are selected. Prior to taking final selection decision, the opinion of concerned manager is sought.

(v) Job offer After successfully clearing, the job offer is given to the selected candidates for job. A date is mentioned in the appointment letter, from which one has to report for the duty.

(vi) Contract of employment After the acceptance of job offer by a selected candidate, he becomes an employee of the organisation. In this phase, the appointee signs various documents. Main document among them is the attestation form in which the detailed description of the employee is provided, which he himself attests. This can be used at the time of need in future. Apart from this, a written contract of employment is framed in which the following information is provided:

  • Job title
  • Rate of remuneration
  • Working hours
  • Leave rules
  • Grievance removal procedure

Multiple Choice Questions

Question 1.
Recruitment of employees from outside the organisation is known as
(a) internal source of recruitment
(b) external source of recruitment
(c) selection
(d) staffing
Answer:
(b) external source of recruitment

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 2.
Which of the following is a web publishing source of recruitment?
(a) Monster.com
(b) PTipkart.com
(c) Snapdeal.com
(d) Amazon.in
Answer:
(a) Monster.com

Hint:
Monster.com is a website designed to provide information to both job seekers and employers. There are many websites like monster.com and naukri.com designed to provide information to both job seekers and employers.

Question 3.
Which of the following is conducted for verifying information provided by a candidate?
(a) Preliminary screening
(b) Selection tests
(c) Selection decision
(d) Reference and background check
Answer:
(d) Reference and background check

Hint:
The objective of reference and background check is to verify information provided by the candidate and to obtain additional information about him.

Question 4.
Who among the following requires medical fitness test for selection?
(a) Call centres
(b) Accountancy firms
(c) Armed forces
(d) Law firms
Answer:
(c) Armed forces

Hint:
Armed forces and police services require the candidates to undergo a medical fitness test. A candidate is selected only if he is physically and mentally fit.

Question 5.
Shifting of an employee to a higher post carrying higher salary, status and responsibility is known as
(a) transfer
(b) promotion
(c) job rotation
(d) None of the above
Answer:
(b) promotion

Question 6.
Many employers request names, addresses and telephone numbers of …………. for the purpose of verifying information and gaining additional information of a candidate.
(a) placement agency
(b) employment exchange
(c) reference
(d) labour welfare officer
Answer:
(c) reference

Question 7.
In which method, a trainee is put under the guidance of a master worker for a specified period to acquire a high level of skill?
(a) Apprenticeship programme
(b) Job rotation
(c) Coaching
(d) None of the above
Answer:
(a) Apprenticeship programme

Question 8.
Job offer is made through ………. to the selected candidate to confirm his acceptance and communicating to him the reporting date and time.
(a) contract of employment
(b) letter of appointment
(c) contract for service
(d) letter of credit
Answer:
(b) letter of appointment

Question 9.
Which of the following institution provides vestibule training?
(a) Industrial Training Institutes
(b) Indian Institute of Technology
(c) Indian Training Council
(d) Indian Training Commission
Answer:
(a) Industrial Training Institutes

Hint:
In case of industries which use sophisticated technologies, employees learn their jobs through vestibule training. Industrial Training Institutes (ITI’s) are training institutions which provides training for operating sophisticated tools and machines by creating a work environment in a classroom.

Staffing Class 12 Important Questions and Answers Business Studies Chapter 6

Question 10.
Which of the following statements is not true?
(a) Aim of education is to develop a rational mind.
(b) Fixed assets are the biggest assets of a business enterprise.
(c) Staffing ensures continuous survival and growth of an enterprise.
(d) The views of the concerned manager are generally considered in selection decision.
Answer:
(b) Fixed assets are the biggest assets of a business enterprise.

Hint:
Human resources are the biggest assets of a business entity not its fixed assets, as it is them who work on machines, solicits clients and perform various functions which makes an organisation feasible. Without quality human resources, fixed assests are useless.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

We have given these Business Studies Class 12 Important Questions Chapter 4 Planning to solve different types of questions in the exam. Go through these Planning Class 12 Important Questions and Answers & Previous Year Questions to score good marks in the board examination.

Important Questions of Planning Class 12 Business Studies Chapter 4

Question 1.
What is meant by ‘Rule’? (All India 2019)
Answer:
Rule is a specific statement that informs what is to be done and what not. They must be strictly followed and one cannot alter them.

Question 2.
Varsha Jain after completing her fashion designing course from Indian Institute of Fashion Technology planned to enter into designer clothing venture. She had to address issues like her target customers, channel of distribution to be used, pricing policy etc. Identify the type of plan that Varsha Jain needs to develop to provide direction and scope to her organisation in the long run. (Delhi 2019)
Answer:
Varsha should develop ‘Strategy’ for her business.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 3.
Saurabh decided to start a chocolates manufacturing business. He set the target of earning 10% profit on sales in the first year. As a good businessman, he was concerned about the future of the business, which was uncertain. He gathered information that the demand for chocolates
is increasing day-by-day. He used this information as the base for future planning and shared it with his team. On the basis of the gathered information, he scheduled a meeting in the following week to find innovative ways to achieve the objectives.
List the first two steps, which have been followed by Saurabh that are related to the process of one of the functions of management. (CBSE 2018)
Answer:
The function of management referred here is Planning. The first two steps of planning followed by Saurabh are:

  • Setting Objectives
  • Developing Premises

Question 4.
Give the meaning of “Method’ as a type of plan. (CBSE 2018)
Answer:
‘Method’ as a type of plan provides the prescribed ways or manner, in which a task has to be performed considering the objectives.
They are formalised and standardised ways of accomplishing repetitive and routine jobs, thus, are considered under the standing plan.
It deals with a task which may be a step of a procedure and specifies how a step is to be performed, e.g. methods of training, methods of recruitment, etc.

Question 5.
Give the meaning of ‘programme’ as a type of plan. (All India 2015; Compartment 2013)
Answer:
These are the combination of goals, policies, procedures and rules. The programmes are made to achieve specific objectives. For example, there might be a project of constructing a shopping mall.

Question 6.
Give the meaning of ‘objective’ as a type of plan. (All India 2015)
Answer:
These are defined as ends which the management seeks to achieve by its operations. The objectives are usually set by top management of the organisation and focus on broad and general issues. They define the future state of affairs which the organisation strives to realise.

Question 7.
Give the meaning of method as a type of plan. (Compartment 2015; All Indio 2014; Delhi 2014)
Answer:
Method provides the precribed ways in which work is to be performed considering the objective.

Question 8.
Define planning premises. (Delhi 2015)
Answer;
Premises refers to making assumptions regarding future. Premises are the base on which plans are made. It is a kind of forecast made, keeping in view existing plans and any past information about various policies.

Question 9.
Define planning. (Delhi 2015, Comportment 2015)
Answer:
According to Koontz and O’ Donnell “Planning is deciding in advance what to do, how to do it, when to do it and who is to do it”.

Question 10.
Give the meaning of policy as type of plan. (All India 2015; Delhi 2014)
Or
What is meant by policy as a type of plan? (Delhi 2014)
Answer:
A policy is a general statement which guides the action and decision of the subordinates in various departments. It provides the basis for interpreting strategy, which is usually stated in general terms.

Question 11.
‘Dreams can he turned into reality only when managers think in advance what to do and how to do it’. Name the function of management indicated by the statement. (Comportment 2014)
Or
‘Deciding in advance what to do and how to do is one of the basic management functions’. Give the meaning of this function. (Comportment 2014)
Answer:
Planning seeks to bridge the gap between where we are and where we want to go. It involves setting objectives and targets and formulating an action plan to achieve them.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 12.
Which type of plan has the least flexibility and why? Compartment 2014
Or
State the type of plan that does not allow any flexibility. (All India (C) 2014)
Answer:
Rules are enforced rigidly. No exception or deviations are allowed in rules. With regard to rule, the managers have no scope for discretion.

Question 13.
Name the type of plan which is in the form of general statements and channelise energies towards a particular direction. (Delhi (C) 2014, 2010)
Answer:
Policies are general statements that guide thinking or channelise energies towards a particular direction.

Question 14.
‘To see whether plans are being implemented and activities are being performed according to schedule’, is a step of planning process. Identify the step. (All India 2013)
Answer:
Follow-up action This step is concerned with carefully monitoring whether the plans are being implemented and activities are performed according to schedule or not. The managers need to carefully check that the premises are holding time in the existing conditions.

Question 15.
Name the type of plan which tells what is to be done and what is not to be done. (Compartment 2012)
Answer:
Rules are the type of plan which tells what is to be done and what is not to be done.

Question 16.
Name the type of plan which defines the parameters in which a manager may function. (Comportment 2012)
Answer:
Strategy

Question 17.
Name the type of plan which is time bound and linked with measurable outcome. (Delhi 2012)
Answer:
Objective/Budget

Question 18.
Name the type of plan which provides the broad contours of an organisation’s business. (All India 2012)
Answer:
Strategy

Question 19.
‘Planning is done for achieving the organisational goals’. Do you agree? Give one reason in support of your answer. (Delhi 2012)
Answer:
Yes, planning ensures that goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction.

Question 20.
State why planning is called primary function of management. (Comportment 2012)
Answer:
Planning is called the primary function of management because it serves as a basis for all the other functions of management and precedes them.

Question 21.
State why planning is called a pervasive function of management. (Comportment 2012; Foreign 2012)
Answer:
Planning is called a pervasive function of management because it is required at all levels and departments of all business as well as non-business organisations.

Question 22.
State how planning “leads to rigidity’? (All India 2010)
Answer:
The existence of plan puts managerial activities in a rigid framework. Programmes are carried out according to plans. Managers become more concerned with observing the rules and procedures as laid down in the plan rather than achieving the goals.

Question 23.
State how planning reduces creativity? (Delhi (C) 2010)
Answer:
Planning makes managers and workers a puppet. They are expected to follow the guidelines laid down in plAnswer: Everything is pre determined. This discourages the creative thinking and initiative on the part of people working at various levels in the organisation.

Question 24.
Name the type of plan which specifies the steps to carry out different activities in a chronological order. (All India 2010)
Answer:
Procedure lays down the routine steps on how to carry out activities. They are specified in a chronological order.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 25.
State any three points of importance of planning function of management. (All India 2019, Delhi 2017)
Or
State any three points of importance of planning. (All India 2017,2016; Delhi 2016,2012)
Answer:
The three points of importance of planning as follows: (any three)
(i) Planning provides direction By stating in advance how work is to be done, planning provides direction for action. It reduces aimless activity and makes action more meaningful.
(ii) Planning reduces the risk of uncertainty Planning is always done for future and future is uncertain. With the help of planning, possible changes in future are anticipated and various activities are planned in the best possible way.

(iii) Planning facilitates decision-making Planning is an intellectual activity. It helps the manager to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternative and select the most viable option. Thus, decision-making is inherent in planning.

(iv) Planning promotes innovative ideas Planning is the first function of management, where new ideas can take the shape of concrete plAnswer: It is the most challenging job or an activity of the management as it guides all future actions, leading to growth and prosperity of the business.

(v) Planning reduces overlapping and wasteful activities Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since, planning ensures clarity in thought and action, hence, the work is carried on smoothly without any intermptions.

Question 26.
Explain any three limitations of planning function of management. (All India 2019)
Or
State any three limitations of planning. (All India 2017,2016; Delhi 2017; Foreign 2016)
Or
How does planning lead to rigidity and reduce creativity? Explain. (Compartment 2014)
Answer:
The limitations of planning are as follows: (any three)
(i) Planning leads to rigidity In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it with change in the external environment. This kind of rigidity in plans may create difficulty.

(ii) Planning may not work in dynamic environment The environment is not static, it keeps on changing. The organisation has to constantly adapt itself to such changes. It becomes difficult to access future trends in the environment. Hence, planning cannot foresee everything and fails to work in a dynamic environment.

(iii) Planning reduces creativity Plans are usually formulated at the top level. Middle and lower level managers are expected to follow them. Therefore, much of initiative and creativity inherent in them gets lost.

(iv) Planning involves huge costs When plans are drawn up, huge costs are involved in their formulation. These may be in terms of time and money. According to Koontz and 0′ Donnell, “Expenses on planning should never exceed the estimated benefits from planning”.

(v) Planning is a time consuming process Planning is a lengthy process. It consumes a lot of time in defining objectives, collection of data, analysis of data and choice of alternatives. Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.

Question 27.
Explain how
(i) Planning reduces the risks of uncertainty; and (Compartment 2018)
(ii) Planning involves huge costs. (Comportment 2013)
Answer:
(i) Planning reduces the risks uncertainity Planning is always done for future and future is uncertain. With the help of planning, possible changes in future are anticipated and various activities are planned in the best possible way.

(ii) Planning involves huge costs Refer to ans no. 2 (iv) on page 62 and 63.

Question 28.
State any three features of planning. (All India 2017; Delhi 2017,2016)
Answer:
The three features of planning are as follows: (any three)
(i) Planning is goal-oriented Planning seeks to achieve certain objectives and all plans are linked with the goals of the organisation. Planning identifies the action that would lead to the desired results quickly and economically.

(ii) Planning is a primary function Planning serves as the basis for all other functions of management. It precedes organising, staffing, directing and controlling. All these functions are, performed within the framework of plans.

(iii) Planning is pervasive Planning is required at all levels of management as well as in all departments of the organisation. It is not only for top management, but it differs at different levels and among different departments.

(iv) Planning involves decision-making The need of planning arises because of the availability of various alternatives to achieve specified objectives. It considers or evaluates the various alternates to find out the best choice which serves the purpose. Thus, planning involves decision-making.

(v) Planning is a mental exercise Planning requires application of mind involving foresight, intelligent imagination and sound judgement. It is basically an intellectual activity of thinking rather than doing.

Question 29.
Define ‘planning’. Explain the first two steps in the process of planning. (All India 2016)
Or
Explain the first three steps in the process of ‘planning’. (Foreign 2016)
Answer:
Planning is the process of thinking before doing. It is the process of determination of a course of action to achieve the desired results.
According to Koontz and O’ Donnell, “Planning is deciding in advance what to do, how to do it, when to do it and who is to do it”.
The first three steps in the process of planning are:
(i) Setting objectives The first and foremost step is setting objective. Every organisation must have certain objectives. Objectives may be set for the entire organisation or for each department or unit within the organisation. Objectives or goals specify what the organisation wants to achieve. It could mean an increase in sales by 20% which could be an objective of the entire organisation.

(ii) Developing premises Premises refers to making assumptions regarding future. Premises are the base on which plans are made. It is a kind of forecast made, keeping in view existing plans and any past information about various policies. There should be total agreement on all these assumptions.

(iii) Identifying alternative courses of action After the setting up of objectives, the managers make a list of alternatives through which the organisation can achieve its objectives as there can be many ways to achieve the objectives and managers must know all those ways to reach these objectives.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 30.
How does planning not work in a dynamic environment and does not guarantee success? Explain. (Compartment 2014)
Answer:
(i) Planning does not work in a dynamic environment The environment is not static. It keeps on changing. The organisation has to constantly adapt itself to such changes. It becomes difficult to access future trends in the environment. Hence, planning cannot foresee everything and fail to work in dynamic environment.

(ii) Planning does not guarantee success When plans are drawn, they need to be properly implemented. Mere drawing plans does not lead to success. Also, a plan which had been successful earlier may not work out next time, since there are many factors which may change for the next planning period and make the plans ineffective.

Question 31.
Explain the following features of planning (Delhi 2013)
(i) Planning focusses on achieving objectives, and
(ii) Planning is a mental-exercise.
Answer:
(i) Planning focusses on achieving objectives Planning seeks to achieve certain objectives and all plans are linked with the goals of the organisation. Planning identifies the action that would lead to the desired results quickly and economically.

(ii) Planning is a mental exercise Refer to ans no. 4(v) on page 63.

Question 32.
Explain the following as features of planning
(i) Planning is continuous.
(ii) Planning is futuristic. (Delhi 2013)
Answer:
(i) Planning is continuous Plans are prepared for a specific period of time, may be for a month, a quarter or a year. At the end of that period, there is need for a new plan to be drawn on the basis of new requirements and future conditions.
Management can’t afford to follow rigid plans in the era of fast changes in technology, market, etc. Thus, a manager must develop or modify the plans from time to time as per the noted. Hence, planning is a continuous process.

(ii) Planning is futuristic Planning is essentially looking ahead and preparing for the future. It is based on the proverb, “look before you leap”. In other words, it is carried out to achieve some objectives in future. It is therefore, essential to anticipate or predict the future.
For example, A manufacturer prepares next year’s production plan after forecasting the demand. Therefore, it is said that planning is futuristic and involves thinking before doing.

Question 33.
Explain the following features of planning
(i) Planning involves decision-making; and
(ii) Planning is pervasive. (Delhi 2013)
Answer:
(i) Planning involves decision-making The need of planning arises because of the availability of various alternatives to achieve specified objectives. It considers or evaluates the best alternative. Decision-making is an integral part of planning. A manager is surrounded by number of alternatives. He has to pick the best depending upon requirements and resources of the enterprises.

(ii) Planning is pervasive Planning is required at all levels of management as well as in all departments of the organisation. It is not only for top management, but it differs at different levels and among different departments. The top level may be more concerned about planning for the organisation as a whole, whereas, the middle level may be more specific in departmental plans and the lower level is concerned for the implementation of the same.

Question 34.
Explain how (Compartment 2013)
(i) Planning facilitates decision-making; and
(ii) Planning may not work in a dynamic environment.
Answer:
(i) Planning facilitates decision-making Refer to ans no. 1 (iii) on page 62.

(ii) Planning does not guarantee success When plans are drawn, they need to be properly implemented. Mere drawing plans does not lead to success. Also, a plan which had been successful earlier may not work out next time, since there are many factors which may change for the next planning period and make the plans ineffective.

Question 35.
Explain how
(i) Planning provides direction for action; and
(ii) Planning leads to rigidity. (Comportment 2013)
Answer:
(i) Planning provides direction for action By stating in advance how work is to be done, planning provides direction for action. It reduces aimless activity and makes action more meaningful. It makes the employees aware of how they will have to work, by giving them necessary directions for achieving the objectives.

(ii) Planning leads to rigidity Refer to ans no.2(i) on page 62.

Question 35.
Explain ‘objectives’ as one of the types of plan. (Compartment 2013: Delhi 2013)
Answer:
It is the most important type of plan. These are defined as ends which the management seeks to achieve by its operations. The objectives are usually set by top management of the organisation and focus on broad and general issues. They define the future state of affairs which the organisation strives to I realise.

For example, An organisation may have an objective of increasing sales by 10% or earning a reasonable rate of return.

Question 36.
Explain ‘method’ as one of the types of plans. (Delhi 2013)
Answer:
These provide the prescribed ways or manner in which a task has to be performed considering the objective. It deals with a task comprising one step of a procedure and specifies how this step is to be performed.

Question 37.
Explain ‘strategy’ as one of the types of plans. (Comportment 2013: Delhi 2013)
Answer:
It refers to future decisions defining the organisation’s direction and scope in the long-run. It is a comprehensive plan for accomplishing the organisation’s objectives. The comprehensive plan includes three dimensions. Determining the long-term objectives. Adopting a particular course of action, and Allocating resources necessary to achieve the objectives.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 38.
Explain‘policy’as a type of plan. (Comportment 2013)
Answer:
These are the general guidelines which facilitate uniformity in decision-making for the attainment of objectives of the organisation. It can be defined as organisation’s general response to a particular problem or situation. Policies are made at every level because the managers at every level need to decide or predetermine the way of handling a situation and policy acts as a guide to take decisions in an unexpected situation.

For example, a school may have a policy of giving admission to the students who have secured more than 60% marks.

Question 38.
Differentiate between objective and strategy as types of plan. (All India 2011)
Answer:
The differences between objective and strategy are

Objective Strategy
These are defined as ends towards which the activities and efforts are to be directed. These are defined as comprehensive plan for accomplishing organisational objectives.
Objectives focus on broad and general issues. They are generally focussed on achieving specific objectives, specifically in light of competitors strategies.
Objectives need to be in measurable terms, e.g. increasing sales by 10%. They convert the objectives into results by adopting a particular course of action and allocating resources to achieve them.

Question 39.
Differentiate between policy and rule as types of plan. (All India 2011; Delhi 2011)
Answer:
The differences between policy and rule are

Policy Rule
Policy is a guide to decision-making. A rule is a guide to human behaviour.
It is a general statement which brings uniformity in decision-making. It is the most specific statement.
A policy is subject to interpretation. In other words, it allows discretion during decision-making. Rules are rigid in nature and there is no scope for any kind of discretion.

Question 40.
Differentiate between method and budget as types of plan. (Delhi 2011)
Answer:
The differences between method and budget as types of plan are

Method Budget
These are standardised ways or manner in which a task is performed. These are the statement of expected results expressed in numerical terms.
It is an instrument of planning only. It is an instrument for both planning and controlling.
It is a type of standing plans. It is a type of single use plans.

Question 41.
Rahul, a worker, is given a target of assembling two computers per day. Due to his habit of doing things differently, an idea struck him which would not only reduce the assembling time of computers but would also reduce the cost of production of the computers. Rahul’s supervisor instead of appreciating him, ordered him to complete the work as per the methods and techniques decided earlier, as nothing could be changed at that stage.
The above para describes one of the limitation of planning function of management. Name and explain that limitation. (All India 2011; Delhi (C) 2011)
Answer:
The para given in the question expresses the limitation of planning ‘planning reduces creativity’ which is explained as under.

Planning reduces creativity Refer to ans no. 2 (iii) on page 62 and 63.

Question 42.
What is meant by planning? List any two features of planning. (Delhi 2010)
Answer:
Planning is the process of thinking before doing. It is the process of determining a course of action to achieve the desired results. Planning bridges the gap between ‘where we are’ and ‘where we want to go’.
Two features of planning are as follows:

  • Planning is a goal-oriented function of management.
  • Planning is a continuous process.

Question 43.
Mega Ltd. holds an Annual Management Programme every year in the month of March in which the top managerial personnel formulate plans for the next year hy analysing and predicting the future to meet future events effectively.
As they are responsible for providing direction to the organisation, facts are thoroughly checked using scientific calculations. Detailed plans are prepared after discussion with professional experts. Preliminary investigations are also undertaken to find out the viability of the plan. Since, it is an intellectual activity requiring intelligent imagination and sound judgement, so it is mainly done by the top management. Usually rest of the members just implement the plAnswer: Middle level managers are neither allowed to deviate from the plans nor are they permitted to act on their own. The top management ensures that the expenses incurred in formulating the plans justify the benefits derived from them.
State any two limitations and any two features of planning discussed above. (Delhi 2019)
Answer:
Features of planning highlighted are: (any two)

  • Planning is a mental exercise.
  • Planning is futuristic.
  • Planning is continuous.

Limitations of planning highlighted are (any two)

  • Planning leads to rigidity.
  • Planning reduces creativity.
  • Planning involves huge cost.

Question 44.
In 2015, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother’s dream of converting their 25-apre ancestral land into a fertile farm. For this, he set out specific goals along with the activities to be performed to achieve the goals.
Every activity was a challenge since he was clueless about farming. He learnt every activity from filling the land to sowing the seeds.To aid farmers, he launched his own company ‘Innovative Agriculture Solutions Pvt. Ltd’.

It was difficult initially as no one trusted an urban youth telling farmers about farming. But when everything was discussed in detail the farmers started taking interest. He wanted to ensure that the future events meet effectively the best interests of the company. Through sales forecasting, he prepared an annual plan for production and sales.

He also found that the farmers grew only paddy, which was an activity of 3-4 months and the land remained idle for the rest 8-9 months of the year. He not only identified but evaluated various alternatives through which the farms could be utilised for the remaining months of the year. Through correct foresight and logical and systematic thinking based on analysis of all facts, all alternatives were examined and evaluated. He presented a plan to the farmers, where after harvesting paddy, vegetables could be grown.
The above case highlights the features of one of the functions of management. By quoting lines from the above identify and explain these features. (CBSE 2018)
Answer:
Planning is the function of management referred in this case.
(i) ‘For this, he set …………. this goals’.
This line indicates the following feature of planning
Planning focuses on achieving objectives: Every organisation has a set of goals to be achieved. Planning involves setting goals and determining the most economical and viable course of action to achieve the predetermined goals. Thus, planning is purposeful.

(ii) ‘He not only ………….. the year’.
This line indicates the following feature of planning
Planning involves decision-making: Planning is essentially the process of choosing among various alternatives. So, in order to make an effective choice, examination and evaluation of each alternative is necessary. Thus, it is concerned with decision-making.

(iii) ‘Through correct ………….. evaluated’.
This line indicates the following feature of planning
Planning is a mental exercise: It is a mental exercise as it requires creativity, imagination and higher thinking skills with sound judgement. It is an intellectual activity of thinking rather than doing. It requires logical and systematic thinking rather than guess work or wishful thinking.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 45.
Vardan Patel started the business of preparation and supplying sweets through home delivery at a production cum show-room ‘Express Sweets’ at Ahmedabad.
He made a plan forecasting the sales of different types of sweets in various localities of Ahmedabad for each month of the year to earn a profit of 20% on capital employed.
He set a sales target of 20,00,000 in the current year with a 10% increase every year.
He then set the criteria for selecting suppliers from whom he would make purchases of raw material. The planning paid off and the business was able to achieve its targets. (Comportment 2018)
(a) Identify any two types of plans by quoting the lines from the above.
(b) Also give the meaning of the types of plans identified in part (a) above.
Answer:
(a) Types of plans are:

  • Objective He made a ………….. capital employed.
  • Budget He set …………… every year.
  • Method He then set …………… raw material.

(b) Objective Refer to ans no. 6 on page 60.
Budget Refer to text on page 60.
Method Refer to ans no. 7 on page 61.

Question 46.
Give the meaning of ‘strategy’ and ‘rule’ as types of plans. (All India 2017)
Answer:
The meaning of ‘strategy’ and ‘rule’ as types of plans are given below:
(i) Strategy A strategy is a comprehensive plan to achieve the organisational objectives.
The dimensions of strategy are:

  • Determining long-term objective.
  • Adopting a particular course of action.
  • Allocating resources for achieving the objectives.
  • Strategy is formulated after scanning the business environment.

(ii) Rules These are specific statements that inform what is to be done. They do not allow any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. Rules generally refer to the administrative area of the procedure. They serve as guides and do not leave any scope for discretion.

Question 47.
Give the meaning of ‘objectives’ and ‘procedure’ as types of plans. (All India 2017)
Answer:
Objectives: These are defined as end results which the management seeks to achieve by its operations. They are set by the top management of the organisation and are measurable. Different departments and units may have their own objectives. There must be a time limit for achievement of objectives.

Procedure: It is a stipulated sequence of a course of action for handling activities. They are specified in chronological order, e.g. there may be a procedure for requesting supplies for production. Procedures are designed to execute policies and achieve objectives.
For example, procedure may be for purchase of raw material, selection of employees, redressal of grievances, etc.

Question 48.
Give the meaning of ‘objectives’ and ‘budget’ as types of plans. (Delhi 2017)
Answer:
Objectives It is the most important type of plan. These are defined as ends which the management seeks to achieve by its operations. The objectives are usually set by top management of the organisation and focus on broad and general issues. They define the future state of affairs which the organisation strives to realise.
For example, an organisation may have an objective of increasing sales by 10% or earning a reasonable rate of return.

Budget: It is a statement of expected results expressed in numerical terms. It is a projection designed to define the anticipated costs and results in numerical terms of a single project. Thus, it comes under the single use plan. Since, budgets are prepared in numerical terms,’it becomes easier to compare them with the actual performance. Thus, it is considered as a control device, prepared during the planning process.

Question 49.
Give the meaning of ‘procedure’ and ‘rule’ as types of plans. (Delhi 2017)
Answer:
Procedure: It is a stipulated sequence of a course of action for handling activities. They are specified in chronological order, e.g. there may be a procedure for requesting supplies for production. Procedures are designed to execute policies and achieve objectives.
For example, procedure may be for purchase of raw material, selection of employees, redressal of grievances, etc.

Rules: These are specific statements that inform what is to be done. They do not allow any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. Rifles generally refer to the administrative area of the procedure. They serve as guides and do not leave any scope for discretion.

Question 50.
Give the meaning of ‘policy’ and ‘strategy’ as types of plans. (Delhi 2017)
Answer:
Policy: These are the general guidelines which facilitate uniformity in decision-making for the attainment of objectives of the organisation. It can be defined as organisation’s general response to a particular problem or situation. Policies are made at every level because the managers at every level need to decide or predetermine the way of handling a situation and policy acts as a guide to take decisions in an unexpected situation.

Strategy A strategy is a comprehensive plan to achieve the organisational objectives.
The dimensions of strategy are

  • Determining long-term objective.
  • Adopting a particular course of action.
  • Allocating resources for achieving the objectives.
  • Strategy is formulated after scanning the business environment.

Question 51.
Two years ago Mayank obtained degree in food technology. For some time he worked in a company manufacturing bread and biscuits. He was not happy in the company and decided to have his own bread and biscuits manufacturing unit. For this he decided the objectives and the targets and formulated action plan to achieve the same. One of his objective was to earn 50% profit on the amount invested in the first year. It was decided that raw materials like flour, sugar, salt, etc will be purchased on two months’ credit. He also decided to follow the steps required for marketing the products through his own outlets. He appointed Harsh as a Production Manager who decided the exact manner in which the production activities are to be carried out. Harsh also prepared a statement showing the requirement of workers in the factory throughout the year. Mayank informed Harsh about his sales target for different products, areawise for the forth coming quarter.
While working on the production table a penalty of 150 per day was announced for not wearing the helmet, gloves and apron by the workers.
Quoting fines from the above para identify and explain the different types of plans discussed. (All India 2016)
Or
Two years ago Madhu completed her degree in food technology. She worked for sometime in a company manufacturing chutneys, pickles and murabbas. She was not happy in the company and decided to have her own organic food processing unit for the same. She set the objectives and the targets and formulated action plan to achieve the same.
One of her objective was to earn 10% profit on the amount invested in the first year. It was decided that raw materials like fruits, vegetables, spices, etc. will be purchased on three months’ credit form farmers cultivating organic crops only. She also decided to follow the steps required for marketing of the products through her own outlets. She appointed Mohan as a production Manager who decides the exact manner in which the production activities are to be carried out. Mohan also prepared a statement showing the number of workers that will be required in the factory throughout the year. Madhu informed Mohan about her sales target for different products, areawise for the forthcoming quarter.
While working on the production table a penalty of 100 per day for not wearing the caps, gloves and apron was announced.
Quoting lines from the above para identify and explain the different types of plans discussed. Delhi 2016
Answer:
The different types of plans discussed in the above para as follows:
(i) Strategy It is a comprehensive plan and helps to define the organisations scope and direction in the long ran.
Lines from the above para, indicative of this type of plan are:
“For this he decided ………….. to achieve the same.”

(ii) Objective It refers to the desired future positions that an organisation seeks to reach.
Lines from the above para, indicative of this type of plan are:
“One of his objective ……………. in the first year.”

(iii) Policy It is a general statement that defines the boundaries within which decisions are made.
Lines from the above para, indicative of this type of plan are:
“It was decided ……………. on two months credit.”

(iv) Procedure It describes the exact manner in which certain activity is to be performed.
Lines from the above para, indicative of this type of plan are:
“He also decided to follow ……………. his own outlets.”

(v) Method It provides the prescribed manner in which a task has to be performed, considering the objectives.
Lines from the para indicative of this plan are:
“He appointed Harsh …………… carried out.”

(vi) Programme It is a concrete action plan indicating how, when and by whom work is to be done.
Lines from the above para indicative of this plan are:
“Harsh also prepared a ……………… the year.”

(vii) Budget It is a statement of expected results expressed in numerical terms.
Lines from the above para indicative of this plan are:
“Mayank informed Harsh …………… forth coming quarter.”

(viii) Rules These are specific statements that inform what is to be done, lines which are indicative of this type of plan are:
“While working on the production ………….. by the workers.”

Question 52.
It is deciding in advance what to do and how to do? It is one of the basic managerial functions. It requires that 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.
In spite of this, the function of management referred above has a number of limitations. Explain any two such limitations. (Comportment 2015)
Answer:
The function mentioned above is ‘planning’. Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action for the future, attempting to achieve a consistent and coordinated structure of operations aimed at the desired results.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 53.
Define ‘planning’. State any four points of importance of planning. (All India 2014; Delhi 2014)
Or
‘Planning is an important function of management’. State any four reasons in favour of the statement. (All India 2011; Delhi 2011)
Or
Describe any two points of importance of planning. (All India 2011)
Or
In addition to providing directions and reducing the risk of uncertainty, planning helps managers in the many other ways. Explain any four such ways. (Delhi (C) 2014)
Or
Explain any five points of importance of planning for a large business enterprise. (Delhi 2014. All India 2013: Comportment 2012)
Answer:
Planning: It is deciding in advance what is to be done. When a manager plans, he projects a course of action for the future, attempting to achieve a consistent and coordinated structure of operations aimed at the desired results.

Question 54.
After the following logical steps in the process of planning, explain the steps required to complete the process:
(i) Setting objectives
(ii) Developing premises, and
(iii) Identifying alternative courses of action. (Comportment 2014)
Answer:
The first step in the process of planning is setting objectives. After that, development of premises is done. Then various alternatives are identified. After this, the following steps are followed to complete the process of planning:
(i) Evaluating alternative courses After making the list of various alternatives alongwith the assumptions supporting them, the manager starts evaluating each and every alternative and note down the positive and negative aspects of each alternative. After this the manager starts eliminating the negative aspects and the one with maximum positive aspects is selected as the best alternative.

(ii) Selecting an alternative This is the real point of decision-making. The best plan has to be adopted and implemented. The ideal plan, of course, would be the most feasible, profitable and with least negative consequences. After preparing the main plan, the organisation has to make a number of small plans to support the main plan.

(iii) Implementing the plan This is the step where other managerial functions also come into the picture. This step is concerned with putting the plan into action, i.e. doing what is required, e.g. if there is a plan to increase production then more labour and more machinery will be required. This step would involve organising labour and purchase of machinery.

(iv) Follow-up action To see whether plans are being implemented and activities are performed according to schedule, is also a part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved properly.

Question 55.
‘Process of planning involves certain logical steps.’ Explain the first four steps of this process. (Compartment 2014)
Answer:
Steps involved in the process of planning are as follows:
(i) Setting objectives: The first and foremost step is setting objective. Every organisation must have certain objectives. Objectives may be set for the entire organisation or for each department or unit with in the organisation. Objectives or goals specify what the organisation wants to achieve. It could mean an increase in sales by 20% which could be an objective of the entire organisation.

(ii) Developing premises Premises refers to making assumptions regarding future. Premises are the base on which plans are made. It is a kind of forecast, made keeping in view existing plans and any past information about various policies. There should be total agreement on all these assumptions.

(iii) Identifying alternative courses of action After the setting up of objectives, the managers make a list of alternatives through which the organisation can achieve its objectives as there can be many ways to achieve the objectives and managers must know all those ways to reach these objectives.

(iv) Evaluating alternative courses After making the list of various alternatives alongwith the assumptions supporting them, the manager starts evaluating each and every alternative and note down the positive and negative aspects of each alternative. After this ,the manager starts eliminating the negative aspects and the one with maximum positive aspects is selected as best alternative.

(v) Selecting an alternative This is the real point of decision-making. The best plan has to be adopted and implemented. The ideal plan, of course, would be the most feasible, profitable and with least negative consequences. After preparing the main plan, the organisation has to make number of small plans to support the main plan.

(vi) Implementing the plan This is the step where other managerial functions also come into the picture. This step is concerned with putting the plan into action, i.e. doing what is required, e.g. if there is a plan to increase production then more labour and more machinery will be required. This step would also involve organising labour and purchase of machinery.

(vii) Follow-up action To see whether plans are being implemented and activities are performed according to schedule, is also part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved properly.

Question 56.
Explain ‘policy’ and ‘procedure’ as types of plan. (All India 2011,2010; Delhi 2010)
Answer:
Policy: These are the general guidelines which facilitate uniformity in decision-making for the attainment of objectives of the organisation. It can be defined as organisation’s general response to a particular problem or situation. Policies are made at every level because the managers at every level need to decide or predetermine the way of handling a situation and policy acts as a guide to take decisions in an unexpected situation.
For example, a school may have a policy of giving admission to the students who have secured more than 60% marks.

Procedure: It is a stipulated sequence of a course of action for handling activities. They are specified in chronological order, e.g. there may be a procedure for requesting supplies for production. Procedures are designed to execute policies and achieve objectives.
For example, procedure may be for purchase of raw material, selection of employees, redressal of grievances, etc.

Question 57.
Explain ‘methods’ and ‘rules’ as types of plan. (All India 2010: Delhi 2010)
Answer:
Methods: These provide the prescribed ways or manner in which a task has to be performed considering the objective. It deals with a task comprising one step of a procedure and specifies how this step is to be performed. The method may vary from task to task. Selection of proper method saves time, money and effort and therefore, increases efficiency.
For example, for the valuation of stock, the organisation must decide in advance which method has to be adopted (LIFO or FIFO), so that everyone must follow the same.

Rules: These are specific statements that inform what is to be done. They do not allow any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. Rules generally refer to the administrative area of the procedure. They serve as guides and do not leave any scope for discretion.
For example, no smoking in the organisation.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 58.
Explain ‘objectives’ and ‘strategy’ as types of plan. (All India 2010; Delhi (C) 2010)
Answer:
(i) Objectives These are defined as end results which the management seeks to achieve by its operations.
The main features of objectives are

  • They are set by the top management of the organisation.
  • Different departments and units may have their own objectives.
  • They are measurable.
  • There must be a time limit for achievement of objectives.
  • They must be achievable or feasible.
    For example, increase in sales by 10% or decrease in rejections by 2%.

(ii) Strategy Refer to ans no. 8 on page 69.

Multiple Choice Questions

Question 1.
Which function of management is considered as the base for all other functions?
(a) Planning
(b) Organising
(c) Staffing
(d) Controlling
Answer:
(a) Planning

Hint:
Planning is concerned with both ends and means, i.e. what is to be done and how it is to be done. Thus, it is considered as the base for all other functions of management.

Question 2.
McDonald’s company does not give its franchise to other company. Which type of plan is it?
(a) Method
(b) Policy
(c) Programme
(d) Strategy
Answer:
(b) Policy

Hint:
It is the policy of McDonald’s that it does not offer franchise to other company. Policy is a general statement that defines the boundaries within which decisions are made, as it answers to recurring problems of similar nature.

Question 3.
Planning enables a manager to look ahead and anticipate changes. Identify, which benefit of planning is highlighted here?
(a) Planning reduces the risk of uncertainty
(b) Planning provides direction
(c) Planning promotes innovative ideas
(d) None of the above
Answer:
(a) Planning reduces the risk of uncertainty

Hint:
It is an activity, which enables a manager to look ahead and anticipate changes. By deciding in advance, planning shows the way to deal with the changes and uncertain events.

Question 4.
In spite of many advantages, state how planning can be detrimental?
(a) Planning is detrimental as it increases creativity
(b) Planning is detrimental as it involves zero cost
(c) Planning is detrimental as it leads to rigidity
(d) None of the above
Answer:
(c) Planning is detrimental as it leads to rigidity

Hint:
A specific plan made in an organisation clearly indicates the objective to be achieved and the ways of doing work. Since, a manager may not be able to change these plans, it leads to rigidity.

Question 5.
An ideal plan would be one which is most profitable, most feasible and has the least
(a) positive consequences
(b) negative consequences
(c) alternatives
(d) None of these
Answer:
(b) negative consequences

Question 6.
“As per the manager of comprehensive group, changes in business environment restrict freedom of planning for the management.” In a fast changing environment, management has a little control over external events.
Which limitation of planning has been highlighted in the quoted line?
(a) Planning reduces creativity
(b) Planning involves huge cost
(c) Planning may not work in a dynamic environment
(d) Planning is a time consuming process
Answer:
(c) Planning may not work in a dynamic environment

Hint:
Changes in business environment restrict freedom of planning for the management, as business environment consists of social, economical, legal and other factors that keep on changing. The organisation has to adapt itself to such changes. But, planning cannot assess future trends exactly and thus, fails in a dynamic environment.

Question 7.
Mention the step, in which each course of alternatives is to be weighed against each other.
(a) Setting objectives
(b) Evaluating alternative courses
(c) Follow up action
(d) Implementing the plan
Answer:
(b) Evaluating alternative courses

Question 8.
What are derivative plans and why they are formulated?
(a) Derivative plans are the supporting plans, which are formulated for executing the primary plan
(b) Derivative plans are the developing plans, which are formulated for executing the developed plan
(c) Derivative plans are the controllable plans, which are formulated for executing the controlled plan
(d) None of the above
Answer:
(a) Derivative plans are the supporting plans, which are formulated for executing the primary plan

Question 9.
Identify the concept of management involved at the initial stage.
(a) Planning
(b) Staffing
(c) Co-ordination
(d) Controlling
Answer:
(a) Planning

Hint:
The concept of management involved in the given situation is planning as the manager is planning to increase the profits.

Planning Class 12 Important Questions and Answers Business Studies Chapter 4

Question 10.
Mention the steps involved in the above process by quoting the lines from the question.
(a) Setting objectives
(b) Evaluating alternative courses
(c) Developing premises
(d) All of the above
Answer:
(d) All of the above

Question 11.
To complete the process of the concept identified, what further steps does the manager have to take?
(a) Implementing the plan
(b) Selecting an alternative
(c) Follow up action
(d) Both (a) and (c)
Answer:
(d) Both (a) and (c)